Diversification & Modernization
Diversification & Modernization Program Activity Lead
The Office of Local Defense Community Cooperation’s Diversification & Modernization program presents states and communities with the opportunity to plan and carry out strategies: 1) to lessen local dependencies on defense spending; and/or, 2) to leverage civilian infrastructure and services to enable a more capable installation and/or modernized manufacturing/defense industrial base ecosystem. This program replaces OLDCC’s former Industry Resilience program and includes the activities that were previously supported under that program. States and communities can expect Diversification & Modernization support to enable local organizing, planning, and implementation actions to benefit the local economy as well as the Department’s modernization mission -- allowing the communities, workers, and businesses that sustain our nation’s defense to collaboratively develop initiatives to maintain the nation’s competitiveness.
States and communities are eligible to request support to plan and carry out these community adjustment and economic diversification activities if a substantial portion of a geographic area’s economy and/or labor force is dependent on defense expenditures. The technical assistance starts with a dedicated project manager who serves as an applicant’s go-to resource, providing guidance throughout the entire process, including bringing other Federal agencies and Department of Defense components to the table.
The program allows project managers to work with potential grantees in determining what program activity is most appropriate for a community, and then to provide guidance during the application process.
Eligibility and Requirements
Eligible recipients for Diversification & Modernization assistance are states, counties, municipalities, tribal nations, territories, and other political subdivisions of state, special purpose units of a state or local government, or other instrumentalities of a state or local government.
Eligibility for assistance is determined on whether a substantial portion of the economic activity and/or labor force of a geographic area is dependent on defense expenditures. For purposes of eligibility determination, an area is considered defense-dependent if it can demonstrate:
(1) Direct military and civilian employment totals at least one and a half times the national level of defense employment as a percentage of the total U.S. labor force OR
(2) defense-related expenditures comprise at least one and a half times the defense percentage of gross domestic product.
Communities are encouraged to contact the Office of Local Defense Community Cooperation for assistance in calculating an area’s defense dependency.
The relevant Assistance Listing numbers (previously referred to as Catalogue of Federal Domestic Assistance, or CFDA) are:
Details About Program Activities
Eligible activities may include (but are not limited to):
- Reviewing local economic strengths, weaknesses, opportunities, and threats;
- Understanding local dependencies on Defense spending and their vulnerabilities;
- Outreach to businesses, workers, community and other stakeholder interests;
- Regional supply-chain mapping of the local defense industrial base;
- Asset mapping to support diversification and modernization activities;
- Economic data collection and analysis to identify regional comparative advantages;
- Preparation of diversification plans to lessen economic dependency on defense expenditures, or enable companies to understand and adapt to new defense requirements;
- Facilitation of new or incumbent workforce development/training to address current or future defense priorities;
- Community planning for public infrastructure and services such as housing and transportation to recruit and retain a skilled workforce;
- Provision of business planning and market exploration services for defense contractors and sub-contractors that seek modernization or diversification assistance;
- Staffing, operating, and administrative costs for an organization;
- Economic cluster development;
- Planning for the enhanced use of excess or under-utilized DoD property; and,
- Other innovative approaches
Commonwealth of Pennsylvania – Modernization through Tech Transfer from DoD Manufacturing Institutes to Firms in the Delaware Valley
Since 2017, the Pennsylvania Department of Community and Economic Development has partnered with the Delaware Valley Industrial Resource Center to foster a regional and national ecosystem to support and strengthen small- and mid-sized manufacturers in the defense supply chain, spur innovation, and enhance manufacturers’ capabilities and competitive advantages. This project has brought together a diverse set of partners, including designers, makers, and hardware entrepreneurs, institutions of higher education, and third-party technology integrators. The Delaware Valley Industrial Resource Center’s marketing team developed and delivered advanced manufacturing technology-related education and training materials to companies to support their decision-making about investing in these technologies, and developed or expanded working relationships with several Manufacturing USA Institutes (America Makes, ARM, MxD, and NIIMBL). Between April 2020 and April 2022, the project completed 17 Advanced Manufacturing Technology assessments and started or completed 20 company engagements; supported four SBIR applications; placed four interns with four different small- and mid-sized manufacturers; and completed a labor market supply and demand study.
State of Indiana – Modernization through Company Assessments and Customized Assistance
The Purdue University Manufacturing Extension Partnership is providing technical assistance to improve the capabilities of at least 36 Indiana small Defense industrial base companies; increase supply chain awareness; adapt to the requirements of government and industry prime contractors; and identify strategic growth opportunities. To date, more than 50 Indiana companies have benefited from the grant program in areas such as increased productivity, workforce training, cybersecurity, and technology adoption. This project stimulates cooperation between statewide and local adjustment and diversification efforts making the industrial base more resilient to fluctuations in defense spending.