ARTICLE

September 2004

U.S. Army Considers Changing Acquisition Strategy for Small-Caliber Ammunition

by Roxana Tiron

Facing soaring demand for small-caliber ammunition, the U.S. Army is turning to industry to dramatically increase the production of rifle and machine gun rounds.

The plan is for the Army to select a “lead systems integrator” that will coordinate the procurement of ammunition from multiple domestic and offshore vendors. The LSI proposal is intended to diversify the supplier base at a time when the Army is consuming large quantities of small-caliber ammunition.

Critics contend, however, that by including foreign vendors in the mix, access to ammunition and reliability could be compromised by shifting political circumstances.

So far, the plan to have a commercial integrator has strong support and commitment from top leadership, Lt. Col. Matthew Butler, the product manager for small- and medium caliber ammunition at Picatinny Arsenal, N.J., told National Defense.

Currently, the Army-owned facility in Lake City, Mo., operated by Alliant Techsystems, is the only entity in the United States capable of producing a large volume of small-caliber ammunition. ATK won a contract four years ago to supply the U.S. military with all of its 5.56 mm, 7.62 mm and .50 caliber rounds. The Army is the single manager of conventional ammunition for all services.

“We have a requirement that exceeds our organic base, which is the government-owned plant,” Butler said. Current combat engagements and training for operations have been eating through the supply.

Lake City produces 1.2 billion rounds a year, but the Army estimated that troops would be using at least 1.5 billion rounds annually for the next several years. Ultimately, the service has to be ready to respond to a potential surge of 2 billion rounds a year, Butler said.

By selecting an integrator, the Army is planning to complement the yearly production with at least another 300 million rounds, for five years. A prime contractor would assemble qualified domestic and foreign sub-contractors.

Meanwhile, there is an ongoing discussion about upgrading and expanding the capabilities of the Lake City plant so that more ammunition can be produced should the need arise. Part of the government strategy is to restore some production lines that were closed and add new equipment, said Richard Palaschak, director of operations for the Munitions Industrial Base Task Force, a trade association.

Under the new acquisition plan, the first 1.2 billion rounds would be produced at Lake City, and the next 300 million would be the responsibility of the systems integrator. Should the demand rise to two billion rounds, the following 300 million rounds would be supplied by Lake City and the final 200 million rounds by the integrator. So, ultimately the lead integrator’s team has to be able to produce 500 million rounds a year, while Lake City could potentially go up to 1.5 billion.

The Army plans to publish a draft request for proposals for the LSI this month and have the final RFP by October, said Butler. The service expects to award a contract at the latest in April 2005, he said.

General Dynamics Ordnance and Tactical Systems already has assembled a team to compete for the award. So far, the Winchester Division of the Olin Corporation, Israel Military Industries Ltd. (IMI), and SNC Technologies, Inc., of Canada, are part of the team, according to a General Dynamics release.

ATK also is in the run, said Karen Davies, the president of Alliant Lake City Small Caliber Ammunition Company, during a House Armed Services Committee hearing.

To satisfy future needs, the Army must have multiple commercial sources for ammunition, said Palaschak. The Army is “getting ahead of the shortfalls,” he said in an interview.

Since no single commercial supplier would be able to satisfy the Army’s requirements outside of the Lake City plant, the service would have to resort to multiple companies to amass the needed ammunition, Butler said. The LSI would have to decide which companies best meet the Army’s needs.

It is inefficient for the Army to have different contracts, Butler said. “From a commercial supplier standpoint, we want to go through a systems prime to make a long-term contract attractive.”

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