Date:Aug 29, 2005

Army awards second-source small arms contract

PICATINNY, N.J. -- Aug. 29, 2005 -- The U. S. Army Field Support Command (AFSC), Rock Island, Ill., in support of the Army Program Executive Officer for Ammunition and the Project Manager, Maneuver Ammunition Systems (PM-MAS) here, awarded a five-year contract to General Dynamics Ordnance and Tactical Systems, (GDOTS), St. Petersburg, Fla., as the second source prime contractor for small caliber ammunition on Aug. 23.   

The contract award to GDOTS is for delivery of 300 million cartridges in various types and configurations conforming to U.S. technical data packages and military specifications.

The company subsequently announced that the initial award is for $171 million dollars with a total potential value of approximataely $1.2 billion if all options are exercised.

Through this contract, the Army has the ability to procure up to 500 million cartridges annually.

The contract represents execution of the second step of a four-step strategy developed by PM-MAS for acquiring small caliber ammunition as a result of the Global War on Terrorism and a significant increase in requirements that was briefed to industry beginning in May 2004.

In early fiscal year 2005, the Army completed step 1 of its strategy when it awarded a contract for 1.2 billion cartridges to Alliant Techsystems, the primary U.S. producer of small caliber ammunition and the operating contractor at Lake City Army Ammunition Plant (LCAAP).

In addition to this award, the Army also is increasing total plant capacity at Lake City Army Ammunition Plant (LCAAP) to 1.5 billion cartridges.

In the very near term, the Army anticipates executing step 3 of this strategy, an action that could mean an award to ATK LCAAP of up to 300 million cartridges.

The fourth step of the Army strategy is the ability to surge production, when needed, up to an additional 200 million cartridges.

This second source contract award constitutes step 2 of the strategy. Through this contract, the Army has the ability to procure quantities up to 500 million cartridges annually.

Execution of Steps 1, 2, and 3 will give the Army a flexible means to procure up to 1.8 billion selected small caliber cartridges in fiscal year 2005.