Refs.: (a) Presidential communications to the Secretary of Defense and heads of other Federal agencies, March 4, 1970 and April 16, 1973

(b) DoD Directive 1400. 20, "DoD Program for Stability of Civilian Employment," August 13, 1971

(c) DoD Directive 5410. 10, "Coordination and Clearance
of Announcements of Personnel Reductions, Closures
of Installations, and Reductions of Contract
Operations Within the United States," February 2,
1960

(d) DoD Directive 5410.12, "Policies and Procedures for
Minimizing Economic Impact on Communities Result-
ing from Adjustments in Defense Programs,"
October 20, 1961 (hereby cancelled)

(e) ASD(I&L) memo to Secretaries of the Military
Departments and Director, Defense Supply Agency,
subject: "Utilization of Excess Personal Property in
the Defense Economic Adjustment Program,"
March 15, 1966 (hereby cancelled)

(f)

Federal Property Management Regulations (Part
101-47), issued by General Services Administration

(g) Armed Services Procurement Regulation (Section
8-202)

I. PURPOSE

This Directive establishes policy guidance, assigns organizational responsibilities, and provides procedures for carrying out an Economic Adjustment Program to minimize the economic impact on communities resulting from changes in Defense programs.

This Directive applies to the Military Departments, the Defense Supply Agency, and the Office of the Secretary of Defense (hereinafter referred to as "DoD Components").

III. DEFINITIONS

A. Defense Economic Impact is the adverse effect on the economy of a community or geographical area that may result from:

1. Complete or partial closure of a military installation.

2.

3.

4.

Cutback in Defense personnel (civilian or military).
Termination of major military procurement contracts.

A general decline in the level of military prime and
sub-contract awards.

B. Economic Adjustment Committee (EAC) is the interagency committee established by the President (reference (a)) to coordinate Federal efforts to assist Defense-impacted communities (see membership, Enclosure 4).

C. EAC Team is a task force selected from the member agencies of the Economic Adjustment Committee to provide specialized assistance to an impacted community.

D. A Reconnaissance Visit is an on-site survey of the affected community undertaken by the staff of the Office of Economic Adjustment, ASD(I&L) (OEA) (see V., below), to appraise the economic impact of a Defense action, evaluate available resources, and explore the need and potential for a community economic adjustment program.

E. A Team Visit is an on-site community survey by an EAC team to assist community leaders in evaluating the community needs and resources and to help formulate a development strategy and a community economic adjustment program to achieve desired objectives.

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G.

recommendations prepared by the Office of Economic
Adjustment following each reconnaissance or team visit.

Community Economic Adjustment Program is an organized
effort by local leaders in cooperation with an EAC team to
plan and carry out a development strategy and a series of
development actions designed to alleviate the effects of a
Defense economic impact on a community.

IV. POLICY

The President's memoranda of March 4, 1970 and April 16, 1973 (reference (a)) to the Secretary of Defense and heads of other agencies directed the Secretary of Defense to chair an interagency Economic Adjustment Committee (EAC) to assist Defense-impacted communities. In consonance with this objective, DoD components will develop implementing instructions which are consistent with the following policies.

A. General. DoD decisions and actions can have a significant economic impact on individual communities. Concern for such Defense economic impacts will be reflected as follows:

B.

1. When it is known or anticipated that a DoD action will seriously affect the economy of a community, every practical consideration will be given to implementing the action in a manner that will minimize the local economic impact.

2.

When a serious economic impact from a Defense action is
unavoidable, the DoD will take the leadership responsibil-
ity for bringing the resources of the Federal Government
(DoD and other Federal Departments and agencies) to
bear on the alleviation of the problem.

Resource Assistance. Community economic adjustment assist-
ance will be directed toward helping impacted communities to
help themselves, using the combined resources of the Federal,
State, and local governments and of the private sector in
support of local initiatives. To this end, a community economic
adjustment program will emphasize:

1.

2.

3.

4.

Identification of a responsible community leadership group with which an EAC team, the State, and the private sector can work effectively.

Formulation of a development strategy which will help to diversify the local economy and reduce dependence on Defense-related activities.

Identification of, and fixing of responsibility for, specific development actions to implement the development strategy.

Formulation and implementation of plans for productive
civilian use of all or part of excess DoD installation
property in the area.

C. Displaced DoD Employees. Assistance to Department of Defense employees displaced by base closures, consolidations, transfer of functions, and reductions in force will be provided under DoD Directive 1400. 20 (reference (b)).

D. DoD Personal Property. Consistent with legislation (which has recognized that a national need exists for educational, health, recreational and airport facilities and which has authorized conveyance of surplus real and related personal property under a public benefit allowance or discount for these purposes), DoD will seek to maximize conversion of excess DoD installations in Defense-impacted communities to productive civilian use. To this end, a community adversely affected by the closure or cutback of a DoD installation will be afforded an opportunity to develop a use plan for DoD property expected to become available. In the interim DoD components will cooperate with the community by identifying related personal property that could be reported to the General Services Administration (GSA) at the same time the real property is reported excess to DoD requirements (reference (f)). As provided in Enclosure 1, DoD components will limit the removal of personal property from such installations until community requirements have been identified and considered by appropriate Federal agencies.

E. Defense Procurement. To ensure timely notice of the need for community economic adjustment assistance resulting

V.

F.

military contract awards, an "early warning" system will be established and maintained as outlined in Enclosure 2.

Announcements and notifications of Defense actions generating Defense economic impacts will be prepared and coordinated as required by DoD Directive 5410. 10 (reference (c)).

RESPONSIBILITIES

A.

The Assistant Secretary of Defense (Installations and Logistics)
is assigned overall responsibility for the Defense Economic
Adjustment Program consistent with the policies outlined in
IV. above. He will co-chair the Economic Adjustment Commit-
tee established by the President (see IV. above) to coordinate
Federal efforts in assisting Defense-impacted communities.
To help carry out his overall responsibility, the Assistant
Secretary of Defense (Installations and Logistics) will designate
an operating organizational element under his jurisdiction as
the DoD Office of Economic Adjustment, with the following
responsibilities:

1. Assuring that DoD Components and EAC member agencies participate in the Economic Adjustment Program.

2.

3.

4.

Determining the extent of the Defense economic impact upon a community on request of community leaders or a member of Congress and, when appropriate, assisting local leaders in undertaking a community economic adjustment program.

Assuring that each community economic adjustment program is carried out in a timely, effective manner in cooperation with the responsible DoD Component and the appropriate EAC members and such other Federal agencies as may be required.

Providing adjustment assistance at a level commensurate with the need in individual communities and terminating the assistance at the earliest practicable time.