Hawaiʻi Defense Economy
Defense Economy of Hawaiʻi
As a sector of our State’s economy, military related spending is second only to tourism and contributes to thousands of jobs in our islands.
Defense Economy of Hawaiʻi
The Department of Defense (DoD) spends billions of dollars in Hawaiʻi each year. As a sector of our State’s economy, military related spending is second only to tourism and contributes to thousands of jobs in our islands. The Department of Business, Economic Development and Tourism (DBEDT) is committed to understanding the importance of DoD spending and its effects upon our economy as well as working with our local businesses in fostering resiliency efforts should DoD spending change.
In conjunction with the DoD’s Office of Economic Adjustment, DBEDT has undertaken an effort to further study military spending in Hawaiʻi and the effects it has on various segments of our economy. In partnership with Bättra LLC, DBEDT is focused on providing accurate information with regards to direct DoD employment, total dollars spent by DoD in Hawaiʻi, the indirect benefits of those dollars spent on various business segments, and the challenges faced by local businesses who work with DoD.
We will be updating the Hawaiʻi Defense Economy website with current data, developing a survey to be sent to businesses with a history of working with DoD, and working with business resource partners to foster resiliency efforts to assist local businesses in the event of decreases in DoD procurement spending. For more information on DBEDT’s efforts, please contact John Greene via email: john.j.greene@hawaii.gov or phone: 808-587-2773.
Quick Defense Facts
People, Places and Money
The Department of Defense has a long and rich history in Hawaiʻi. From nuclear submarines to armored brigades, the military provides the Aloha State with both tangible as well as intangible benefits.
This report will provide a brief overview of those benefits as well as a look at the number of active duty, reserve, retired, and DoD support personnel that call Hawaiʻi home.
Bases
Perhaps the most visible aspect of the military are the bases from which they operate. No other metropolitan area in the country can claim such a diverse representation of our nation’s military. All branches of the Department of Defense are located within Honolulu County as well as the United States Coast Guard. Below is a brief description of the major military bases located on Oʻahu.
Joint Base Pearl Harbor Hickam (JBPHH)
Home to the US Navy and the US Air Force in Hawaiʻi, JBPHH, located on the Leeward side of the island, serves as the headquarters for several vital military commands. Pacific Air Force, Submarine Forces Pacific, Commander Navy Region Hawaiʻi, Pearl Harbor Naval Shipyard, Fleet Logistics Center, and the Defense Logistics Agency are all located on JBPHH. Commander United States Pacific Fleet, Naval Facilities and Engineering Command Pacific and Hawaiʻi, and Defense Information and Technology Pacific are all located within 1 mile of JBPHH.
Ships currently homeported at Pearl Harbor:
Surface:
- USS Wayne E. Meyer (DDG 108)
- USS William P Lawrence (DDG 110)
- USS John Paul Jones (DG 53)
- USS Port Royal (CG 73)
- USS Chung-Hoon (DDG 93)
- USS Hopper (DDG 70)
- USS Preble (DDG 88)
- USS Chafee(DDG 90)
- USS Michael Murphy (DDG 112)
- USS Halsey (DDG 97)
There are also six surface ships currently in production designated as being homeported within the Pacific Fleet. One of those (USS Daniel Inouye DDG 118) will more than likely be homeported at Pearl Harbor.
Submarines:
- USS Olympia (SSN 717)
- USS Louisville (SSN 724)
- USS Jefferson City (SSN 759)
- USS Springfield (SSN 761)
- USS Charlotte (SSN 766)
- USS Columbia (SSN 771)
- USS Greeneville (SSN 772)
- USS Cheyenne (SSN 773)
- *USS Texas (SSN 775)
- *USS Hawaiʻi (SSN 776)
- *USS North Carolina (SSN 777)
- *USS Missouri (SSN 780)
- *USS Mississippi (SSN 782)
- *USS Illinois (SSN 786)
* denotes the submarine is a Virginia Class SSN.
Camp H.M. Smith
Located in Halawa and overlooking JBPHH, Camp Smith serves as the Headquarters for the US Indo Pacific Command; the largest geographical combatant command in the world. Also located on Camp Smith are Marine Forces Pacific, Special Operations Command Pacific, and Joint Interagency Task Force West.
Fort Shafter
Situated just to the West of downtown Honolulu, Ft. Shafter is home to Commander US Army Pacific, and the Army Corps of Engineers Honolulu District.
Schofield Barracks
The largest Army base in Hawaiʻi, Schofield Barracks is approximately 16 miles north-west of Honolulu. Schofield Barracks is home to the 25th Infantry Division and the 8th Theater Sustainment Command. Schofield Barracks also serves as a training ground for infantry, aviation, and artillery regiments.
Wheeler Army Airfield
In close proximity to Schofield Barracks, Wheeler Army Airfield is also located to the north-west of Honolulu. Wheeler Army Airfield is home to the headquarters for US Army Garrison Hawaiʻi, the Hawaiʻi Air National Guard, and the Defense Information Systems Agency.
NCTAMS Pacific
Naval Computer and Telecommunications Area Master Station Pacific is located in Wahiawa, to the North of Schofield Barracks. NCTAMS serves as the communication center for both the Navy as well as other DoD components.
Kaneohe Marine Corps Base
Located on the Windward side of the island, Kaneohe Marine Corps Base is home to the Third Marine Regiment, as well as the Navy’s Helicopter Maritime Strike Squadron 37. Kaneohe Marine Corps Base is the largest Marine Corps base in Hawaiʻi.
Personnel
Each branch of the military, in additional to their fixed base locations, is responsible for thousands of active duty, civilian, and contractor personnel. In addition to those military members on active duty, as of December 2018, Hawaii is also home to over 18,000 military retired personnel, with over 17,000 of them receiving monthly pension payments.
Retirees
For those military service members who have completed at least 20 years of active or reserve duty, the military offers a lifetime retirement income. For active duty, retirement income is determined by the number of years x 2.5 of base pay (or the average of the last 36 months base pay prior to retirement date if the member entered military service after 8 September 1980). For military reserve members, retirement pay is determined by a point system. Total points/360 x 2.5 = the percentage of base pay. Similar to active duty, retirement pay is determined by the date the member entered military service. Reserve retirement typically begins at age 60.
According to the Office of the Actuary, US Department of Defense, monthly payments to military retirees in Hawaiʻi, as of December 31, 2018, total $43,987,000 per month or over $527 million dollars per year. Military retired pay is not subject to Hawaiʻi State income tax.
Veterans
Per 2017 US Census Bureau data, there are over 106,000 veterans who reside in Hawaiʻi. That figure accounts for roughly 7.5% of Hawaiʻi’s population.
Per the SBA’s Dynamic Small Business Search, there are currently 298 Veteran-owned small businesses in the State of Hawaiʻi. However, only 55 are actively certified by the Department of Veterans’ Affairs Center for Verification and Eligibility. Service disabled veteran owned small businesses are eligible for specific set-asides in federal contracting totaling 3% of all federal contracting dollars. Both veteran owned and service disabled veteran owned businesses are eligible for set-asides in VA contracting.
Active Duty
Statistics on active duty, DoD employees, and reserve and National Guard were obtained from the Defense Manpower Data Center quarterly reports.
Hawaiʻi maintains a large contingent of active duty personnel for all 4 branches of the military and the United States Coast Guard. These active duty personnel contribute to our local economy by spending their direct pay and housing allowances on local businesses. Below are the figures for active duty strength for each branch of the military and the Coast Guard as of September 30, 2019.
- Army: 15,346
- Navy: 13,558
- Marine Corps: 6,453
- Air Force: 5,403
- Coast Guard: 1,260
Total Active Duty personnel in Hawaiʻi: 42,020
This represents a decrease of 961 active duty personnel form the same period in 2018.
Federal Employees
The Department of Defense maintains a large workforce who support the military mission. These employment areas range from budget and accounting, contract specialists, heavy equipment operators, to intelligence analysts and computer programmers.
As of September 30, 2019, there are 19,591 DoD civilian employees in the State. This represents an increase of 527 employees over the same period in 2018.
Reserve and National Guard
In conjunction with Active Duty personnel, the military reserve and National Guard play a vital role in performing the military mission of each branch of the Department of Defense. Typically, reserve and National Guard members drill one weekend per month and perform a 2 week active duty assignment during the fiscal year. There are instances when reservists and National Guardsmen spend significant amounts of time on Active Duty when either recalled for deployment or assigned to fill a critical shortfall of the active duty component.
Figures for Reserve and National Guard and Air National Guard as of September 30, 2019:
- Army: 2,986
- Navy: 691
- Marine Corps: 311
- Air Force: 765
- Coast Guard: 116
- Army National Guard: 2,986
- Air National Guard: 2,339
Total Guard and Reserve: 9,637
This represents an increase of 247 personnel over the same period of 2018.
Payroll Figures
Using the FY2017 Office of Economic Adjustment as the baseline for direct payroll figures for all personnel associated with DoD:
- FY17: Total personnel = 63,824 = $4.7 billion direct payroll
- FY19: Total personnel = 71,248 = $5.2 billion direct payroll
Hawaiʻi Defense Economy Webpage
A Community and Business Resource
The Hawaiʻi Defense Economy project is focused on enhancing understanding of the economic impact of U.S. Department of Defense (DoD) contracts and grants awarded in the state of Hawaiʻi. With approximately $2 billion in total value of defense contracts in Hawaiʻi annually, any changes in DoD spending will have an impact on the economy. It is critical that the state proactively prepare for any changes the future may bring to Hawaiʻi’s defense economy.
The Hawaiʻi Defense Economy project is undertaken by the State of Hawaiʻi, through the Department of Business, Economic Development and Tourism and is funded by the DoD – Office of Economic Adjustment. This project has been tasked with analyzing the impact of DoD contracts and grants awarded in Hawaiʻi and fostering resiliency among local businesses in the event DoD procurement spending changes. It does not include other types of defense spending such as payroll of military personnel.
Dual Use Technology Task Force
The Dual Use Technology Task Force is chartered to diversify the Hawaiʻi economy by growing and strengthening the Dual Use sector. The Task Force was formally convened in 2021 pursuant to Act 121, Session Laws of Hawaiʻi 2021. The Task Force is comprised of representatives across State Government, Industry, and Academia. The mission of the Task Force is to develop a roadmap to build a tangible, enduring asset that will meaningfully grow the Dual Use sector. The Task Force will solicit inputs from the Hawaiʻi Dual Use sector which includes Federal and State Government stakeholders, Academia, and Industry members across the state. A total of 8 facilitated meetings will be convened in 2021 and 2022 to build the roadmap.
Task Force Meetings
Meeting Agendas, Minutes, and Materials
| February 23, 2022 | Meeting Agenda | No minutes available. | Meeting Materials |
| December 16, 2021 | Meeting Agenda | Meeting Minutes | Meeting Materials |
HiSTEP Survey for Defense Contractors
Meet the Primes Conference
A Forum on Subcontracting
It is anticipated that the Department of Defense will spend over $2 billion on work in Hawaiʻi in 2023-2024. To meet the requirements of federal regulations and team with small businesses, large prime and sub-prime contractors are anxious to work with local small businesses. This conference is designed for those local small businesses to hear directly from large prime contractors about upcoming local projects, with the opportunity to meet one-on-one with prime contractors, federal contracting offices, and local resource partners. It is also a chance to network with other local small business on defense contracting.
Presentations
| 7:00 – 8:00 | Exhibitor set-up |
| 8:00 – 8:15 | Welcome remarks and acknowledgment of sponsors Gen. Mark Hashimoto, USMC INDOPACOM |
| 8:15 – 9:15 | Strategies Around Government Contracting Jayme Nagao, Deputy Director, NAVFAC Pacific OSBP Ailie Souriolle, Director, PACAF Small Business Program |
| 9:15 – 9:45 | DoD Insights from NAVFAC CAPT Cameron J. Geertsema, Commanding Officer, NAVFAC Hawaiʻi View Presentation PDF |
| 9:45 – 10:15 | DoD Insights from Army Corps LTC Ryan Pevey, District Commander, US Army Corp of Engineers View Presentation PDF |
| 10:15 – 10:30 | Break |
| 10:30 – 12:00 | Large Contractors Panel Maurice Anstead, DMI and Army Markets Lead, Booz Allen Hamilton Neal Faradineh, Business Development Director-INDOPACOM, Peraton Dry Dock V CAPT Stephen T Padhi, Commanding Officer, NAVFAC PACIFIC |
| 12:00 – 12:45 | Lunch |
| 12:45 – 1:45 | Navy OSBP presentation Arveice Washington, Deputy Director, DoN OSBP View Presentation PDF |
| 1:45 – 2:00 | Break |
| 2:00 – 5:00 | One-on-one meetings (Concurrent with the below presentations) |
| 2:00 – 3:00 | SBA/PTAC/SBDC presentation Hazel Beck, Deputy District Director, SBA Cynthia Yamasaki, Oahu Center Director, SBDC Micolas Ogawa, Counselor, PTAC |
| 3:00 – 3:15 | Break |
| 3:15 – 4:15 | Small Business Success Stories Lia Young Hunt, President, Goldwings Supply Service Christine Lanning, President, IST Kat Mashima, President, Mashima Electric Cariann Ah Loo, President, Nakupuna Services |
| 4:15 – 4:30 | Hawaiʻi Defense Alliance Update Jason Chung, VP Military Affairs Council, COCH |
| 4:30 – 5:00 | Closing remarks |
| 5:00 – 7:00 | Networking Social |
