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Small-Arms Ammunition Production and Acquisition: Too Many Eggs in One Basket?

The United States continues to conduct operations in two major theaters while simultaneously engaging in contingency operations around the world and training the remaining, undeployed forces for subsequent operations. In light of this challenging environment, President George W. Bush in 2007 requested and received an authorization from Congress to increase the Army by approximately 75,000 Soldiers.1 This growth, coupled with the continued high operating tempo of the operational force, requires additional resources. At the heart of these increasing requirements are small-arms munitions.

This paper examines the United States’ small-arms ammunition acquisition strategy for meeting the Army’s current operational and training requirements, as well as for the increase in the future force structure. It compares the current operational requirements for small-arms ammunition with present production capabilities and limitations in order to determine if the defense industrial base needs to make changes to the acquisition strategy.

Lake City: Production and Sources

The acquisition strategy for small-arms ammunition is based on the Government-owned, contractor-operated (GOCO) ammunition plant at Lake City, Missouri. Alliant Techsystems, Inc. (ATK), operates this GOCO facility for the Government. As a GOCO, the facility is commanded by an Army lieutenant colonel, but ATK is responsible for production operations and output capabilities. This relationship allows the Government to reduce its manpower costs and invite private-sector business initiatives to promote efficiency and improve production.2

Over 99 percent of all small-arms bullets (5.56-millimeter [mm], 7.62-mm and .50-caliber) consumed by the Army under its Title 10 responsibility to supply and equip its forces are manufactured at the Lake City Army Ammunition Plant. Production demand is driven by current operational requirements; any production shortfalls at Lake City are outsourced to private companies within the United States.3 Logisticians will argue that this strategy lacks adequate redundancy and responsiveness, especially when one considers that the Lake City facility was built in 1941.

The Army’s small-arms ammunition production is affected by more than the output of the Lake City facility. As with any manufacturing system, the supply chain is an integral piece in the production output process. Each small-arms-ammunition cartridge (single round) contains several components. The main ammunition used by virtually every Soldier and Marine is the 5.56-mm cartridge. Its design includes the cartridge case, the bullet or shot, propellant, and primer. Each of these components is fabricated from different commodities. The Army requires ATK to maintain a minimum of three suppliers for each of the components.4

The lead and steel for the bullet’s penetrator are obtained from sources located in the United States.5 The brass for the cartridge case is primarily supplied from companies within the continental United States (CONUS). Lake City purchases brass in the form of brass case cups and bullet jacket cups from a U.S.-based source. During the manufacturing process, these cups are pulled from their original configuration and reconfigured into the appropriate small-arms ammunition cartridge type. Alternative suppliers have been identified; however, they account for less than 5 percent of the total purchased.6 Lake City has taken the initiative to recycle unused and waste brass during the manufacturing process to reduce costs.

The main ingredient used in all small-arms ammunition propellants is nitrocellulose. The Radford Army Ammunition Plant in Virginia is the sole producer of this essential ingredient for all propellants used throughout the Army’s ammunition industrial base. Radford has an acid-concentrator facility that produces the nitric and sulphuric acids that, when combined with cellulose, make nitrocellulose. Ninety-nine percent of all small-arms ammunition used in Afghanistan and Iraq contains nitrocellulose produced at this facility.

Finally, the primer in most cartridges is made from over 13 different chemicals, which are mixed at the Lake City plant. Lake City manufactures the primers for all small-arms ammunition produced at its facility. ATK continues to seek additional sources of supply for the primer mix chemicals. All suppliers are based in the United States. However, the U.S. suppliers obtain these chemicals from Canada, Europe, Mexico, India, Brazil, and China as well as the United States.7

One final component unique to machinegun ammunition is linkage belts. Before Operation Iraqi Freedom, Lake City relied on suppliers for linkage belts using 5.56-mm, 7.62-mm, and .50-caliber ammunition. Because of the large increase in demand for this ammunition, the plant invested in upgrading its facilities and manufacturing equipment. This included purchasing, moving, and installing the sole surviving production line for linkage belts for 5.56-mm, 7.62-mm, and .50-caliber machineguns.

Production Capabilities and Requirements

The chart above shows the levels of production by the Lake City Army Ammunition Plant over the last decade. The Army almost doubled its total requirements for small-arms ammunition from 2003 to 2004. The resulting increase in Lake City’s production requirements caused ATK and the Army to initiate a modernization and process improvement program to increase efficiency and production capabilities.8

Initially, the need for greater output was addressed by increasing the operating hours of the plant and adding another work shift for production. ATK now uses a process improvement management technique modeled after what the Toyota Corporation uses.9 Despite the current modernization and process improvement efforts by the Army and ATK, the plant’s production capability is physically limited to 1.6 billion small-arms ammunition rounds annually.10

Three Scenarios for Analysis

Can the defense industrial base support small-arms ammunition production for current and future operations, as well as the increase in the Army’s force structure? In order to answer this question, we applied gap analysis to the Army’s small-arms ammunition requirements and its production capabilities.

We first identified the total requirements for small-arms ammunition as determined by the Joint Munitions Command. The requirements depicted represent a range of three existing and possible situations. Next, the current defense industrial base’s small-arms ammunition production capability was compared to the differing situational requirements. Finally, the Lake City Army Ammunition Plant’s supply chain was analyzed to determine potential points of failure and possible shortfalls. The interpretation and implications of these results are offered at the end of this article.

The chart below summarizes the total small-arms ammunition required by the Army for the three existing and possible situations. The first situation represents requirements for peacetime operations and training occurring after the end of the Cold War and before the terrorist attacks of 11 September 2001. This time period reflects a force structure similar to today’s Army, but during a period in which no major combat operations occurred.

The second situation is fiscal year 2005, which represents requirements based on the “1−4−2−1 force sizing construct” and the “simultaneity stack” developed as part of the Total Army Analysis (TAA). The TAA is a biennial process that determines the forces needed to execute the national strategy based on higher-level planning guidance like the Quadrennial Defense Review. Under the 1−4−2−1 force-sizing construct, the United States plans to defend the Nation (“1”); maintain forces that can fight in four critical regions (“4”); maintain the ability to defeat opponents in two regions simultaneously (“2”); and decisively win one of those conflicts at the U.S. initiative (“1”).

The 1−4−2−1 force-sizing construct produced a simultaneity stack (resourcing priorities) in six major categories: homeland security, deter aggression, major combat operations, small-scale contingencies (non-critical), transformation, and generating force structure.11

Fiscal year 2005 was selected for two reasons. First, we believe it provides a valid representation of current, and likely future, operations since fiscal year 2005 required the most small-arms ammunition under the current force-sizing construct. Second, current small-arms ammunition requirements could not be released by the Joint Munitions Command because of their sensitivity. This baseline is also predicated on the assumption that Army requirements for two major combat operations will remain constant despite the announced drawdown of forces in Iraq.

The third situation selected is the small-arms ammunition requirements during World War II.

The total requirements for small-arms ammunition represented by these three time periods clearly reflect the types of operations occurring at each time. The first time period, pre-11 September 2001, reflects the “peace dividend” brought about by the end of the Cold War and the reduction in forces following the Gulf War. U.S. military leaders and policymakers clearly believed in a smaller, more technologically advanced force that could end conflicts rapidly. The requirement for the production of large amounts of small-arms ammunition no longer seemed to be great.

However, the simultaneous operations in Afghanistan and Iraq, classified in the force-sizing construct as two simultaneous major combat operations, changed the requirements for ammunition. Although the data do not reflect the use of each type of small-arms ammunition, much of it was used in training before deployments to Afghanistan and Iraq. So fiscal year 2005 was used to represent the highest annual requirement under the current force-sizing construct.

We chose to represent data from World War II to highlight worst-case scenario requirements. These data represent total mobilization of the force during war. Although this “black swan”12 is not necessarily probable based on the current threat picture, we believe it is valid to compare its demands against small-arms ammunition production capabilities.

Sources of Supply

The production capability represented only accounts for the sole GOCO facility at the Lake City Army Ammunition Plant. It does not represent outside contracted sources of production. These contracted sources account for approximately 300 million rounds annually. The Joint Munitions Command has awarded contracts to General Dynamics Ordnance and Tactical Systems as the second source supplier.13 General Dynamics Ordnance and Tactical Systems has procured contracts through various sources, including Olin Corporation’s Winchester Division.

Before the current contract, the Joint Munitions Command had acquired small-arms ammunition from foreign sources, such as Israel Military Industries Ltd., for similar amounts in 2005.14 Members of the acquisition community, along with ATK, are actively pursuing a strategy involving 100-percent contracted sources for small-arms ammunition.15 This was reinforced when the Deputy Secretary of Defense ordered that “to the maximum extent feasible, [the Army will] transition Government-owned ammunition production assets to the private sector.”16

The Lake City Army Ammunition Plant is currently operating at maximum production capacity and cannot significantly increase munitions production, even after the current modernization effort ends in fiscal year 2011. The chart below depicts, by ammunition type, Lake City’s total production capability.

Lake City cannot significantly increase its production of an ammunition type by refitting another ammunition type’s production line. For example, the plant cannot shut down the 7.62-mm production line, reconfigure it to produce 5.56-mm ammunition, and then produce 230 million additional 5.56-mm rounds. The only option to significantly increasing small-arms ammunition production at Lake City would be to construct additional facilities and production lines.17 However, no current or future plans exist to construct additional facilities at Lake City, or anywhere else for that matter.

We also analyzed Lake City’s supply chain for each small-arms ammunition cartridge type. Each component uses the same key commodities, but different sources of supply are used for each of these commodities for each cartridge type. The chart below depicts each key input commodity involved in manufacturing the cartridge components and the sources of supply used
by ATK at Lake City.

Each small-arms ammunition type uses brass for the cartridge casing. ATK purchases over 95 percent of its casing brass from the Olin Brass Company in the form of brass case cups and bullet jacket cups. This purchase is a fixed-price, fixed-time agreement. Olin Brass also supplies U.S.-based commercial ammunition manufacturers with brass sheet metal for cartridge casings.18 During the fiscal year 2005 production surge, Olin Brass met the increased demands without causing any disruption of small-arms ammunition production at Lake City.

ATK also purchases the brass for two cartridge types from ND PressTec GmBH, which is located in Germany. Another alternate supplier for brass is Luvata Buffalo, Inc., in New York. ATK recently solicited Luvata for a 4-year proposal, but Luvata did not bid.19 Research on this commodity did not find any issues with supplying ATK with the materiel needed to produce the case component for each small-arms ammunition cartridge type.

ATK identifies St. Marks Powder, Inc., as the primary source of supply for the propellant used in each type of small-arms ammunition. Based in Crawfordville, Florida, this division of General Dynamics Ordnance and Tactical Systems is the single source of propellant for Lake City. ATK continues to seek alternative suppliers, but it has yet to find a qualified sourcing candidate because of U.S. Government risk mitigation policies and production quality and quantity standards.

Research data on propellant did reveal an issue with one of the key commodities and its source of supply. This commodity is nitrocellulose, and it is found in every propellant and explosive used by the U.S. military, from small-arms ammunition to bombs. As noted before, the only manufacturer capable of producing the quantity and quality of nitrocellulose required by the military is the Radford Army Ammunition Plant in Virginia. Radford is constructing a new acid concentrator and nitrocellulose facility in 2011 to 2013 to replace the existing facility, which was built in 1941.20 The new facility will not expand the production capacity for nitrocellulose.

The next key commodity for each cartridge is the lead used in manufacturing the bullet. ATK identifies two suppliers of lead, both of which are located in CONUS. The primary supplier uses a proprietary technique to extract lead from used vehicle batteries and then reformulates it to be sold. The lead is purchased in ingots that are configured at Lake City for each cartridge. No supply issues exist in the purchasing of lead for the bullet cartridge component.

Another key commodity for the bullet is the steel penetrator for each cartridge type. ATK has identified three primary U.S. sources of supply for this key commodity. These suppliers acquire steel from various locations around the world. This particular commodity does not present a supply issue for Lake City. However, ATK has identified other sources of supply for the steel penetrator if needed.21

The final key commodities in manufacturing cartridges are the primer and the primer mix. All small-arms ammunition manufactured at the Lake City Army Ammunition Plant receives primers from an on-site manufacturing facility. Over 40 ATK facilities can provide primers to the Lake City plant.

The chart below identifies the primer mix chemicals, the suppliers to ATK, and the country of origin. All 13 chemicals for primer mix are formulated by U.S.-based commercial companies, but 10 chemicals have origins outside of the United States. Of these 10 identified chemicals, 4 have origins solely in China, 2 others are only found in Mexico, and 1 is only found in Brazil. Three other chemicals share origins among the United States, European countries, India, China, and Mexico.

Despite the chemicals having origins outside of CONUS, ATK has not identified any of these chemicals as presenting a supply problem for the formulator.22 However, we find potential issues with the countries of origin for some of the identified chemicals. These potential issues are primarily political in nature. Although trade agreements do exist with China, India, and Brazil, these countries may become trade adversaries in the future.

An adversarial relationship may very well become a reality in light of the growing protectionist policies enacted by Congress. Recently, a minor trade disagreement between the United States and China began over an increase in the tariff on tires imported from China.23 Although this measure by the Office of the United States Trade Representative was meant to protect the U.S. tire industry, it pushed China to reciprocate tariff action. Furthermore, obtaining the chemicals found in Mexico may become problematic as the government of Mexico struggles with native indigenous groups, drug cartels, and disillusioned citizens.

Challenges and Vulnerabilities

So, can the defense industrial base support small-arms ammunition production for current and future operations as well as an increase in the Army’s force structure? The answer to this question is, yes. However, the small-arms ammunition requirements for the Army exceed the capacity of production at the Lake City Army Ammunition Plant. Government-owned capacity was lost through the systematic deactivation of munitions plants that began shortly after World War II. Although a modernization program has been implemented at Lake City, it will not increase the plant’s production capacity enough to meet Army requirements, leaving the United States vulnerable to a “black swan” total-war type of scenario. And this does not even account for the Marine Corps’ ammunition requirements met by Lake City.

Shortfalls in production capability have forced the Joint Munitions Command to award additional sourcing contracts to General Dynamics Ordnance and Tactical Systems. Despite the efforts of the command, Lake City and the contract with General Dynamics Ordnance and Tactical Systems will not be sufficient to deliver enough small-arms ammunition to meet a worst-case total war scenario. If total war were to occur, the United States would be vulnerable if it had to depend on foreign sources to make up the total munitions shortfall.

The research on ATK’s supply chain operations at Lake City shows a strong and stable supply of most commodities needed for the manufacturing of each type of small-arms ammunition. However, a few key cartridge commodities have sourcing vulnerabilities. Sole-source providers of necessary chemical materials from countries such as China, India, and Mexico may prove problematic. The small-arms ammunition supply chain does not have alternatives for these key chemicals. Any disruption of supply, whether induced by economics, politics, or physical dislocations, would have a significant adverse effect on the ability of Lake City to produce small-arms ammunition.

The defense industrial base must prepare for a possible disruption in the supply chain by either stockpiling the identified key chemicals or by designing a cartridge that does not rely on chemicals found outside the United States. ATK should also require its suppliers to identify their total dedicated demand-surge capacity. This would indicate in advance the potential bottlenecks to Lake City reaching its full production capability.

Of further concern is the fact that all ammunition roads lead through the Radford Army Ammunition Plant because it is the sole Government-grade producer of nitrocellulose. Although modernization programs will supplant the aging facility currently used there, the Army and its sister services cannot afford to lose this plant’s ability to produce nitrocellulose.

In a paper he delivered in 2009 at the Defense Acquisition University, Colonel John Ferrari focused on reversing the trend toward privatization based on historical private-sector behavior in declining industries.24 He argued that the munitions industrial base fits the definition of a declining industry in that revenues have declined by almost 80 percent and more than 70 percent of the companies disappeared from 1985 through 2001.25 Although revenues have temporarily grown because of current operations, this increase is only temporary. Since this declining industry is subject to national policy that blocks overseas outsourcing, the military’s total reliance on the private sector is highly problematic and dangerous.26

We believe that the current ammunition production and acquisition strategy has placed too many “eggs into one basket.” The defense industrial base must enhance its own production and supply chain capacity in order to circumvent foreign dependence and ensure against any production degradation at Lake City. Only by taking these steps will the Army ensure that it can provide all the required ammunition to warfighters now and in the future.

Major Mark W. Siekman, USAR, is an Active Guard/Reserve officer assigned as a planner in the Support Operations Office of the 310th Expeditionary Sustainment Command. He holds a B.S. degree from Ball State University and an M.M.A.S. degree from the Army Command and General Staff College.

Dr. David A. Anderson is a retired Marine Corps logistics officer. He is a professor of strategic studies at the Army Command and General Staff College and an adjunct professor at Webster University.

Allan S. Boyce is an assistant professor of logistics and resource operations at the Army Command and General Staff College. A retired Army lieutenant colonel, he holds an M.S. degree in logistics management from Florida Institute of Technology and an M.S. degree in public administration from Central Michigan University. He is a graduate of the Army Command and General Staff College.

1. Grow The Army, Department of the Army, Washington, DC, 2007, www.army.mil/growthearmy, accessed 4 May 2009.
2. Ibid.
3. Richard G. Palaschak, Director of Operations for the Munitions Industrial Base Task Force, before the House Armed Services Subcommittee on Tactical Air and Land Forces, 24 June 2004.
4. Ibid.
5. Ibid.
6. Ibid.
7. Ibid.
8. Lieutenant Colonel Christopher Day, Lake City Army Ammunition Plant commander. Briefing to author during Lake City tours, May and October 2009.
9. Ibid.
10. Ibid.
11. Total Army Analysis (TAA) Primer 2009, Army Force Management School, Fort Belvoir, VA, www.afms1.belvoir.army.mil/pages/primers/TAAPrimer24April2009.pdf, accessed 16 December 2009.
12.The term “black swan” represents a worst-case scenario in which the President of the United States authorizes total mobilization of the military, include mobilization of the industrial base.
13. Laurie VanBrocklin, General Dynamics Awarded Small Arms Ammunition Contract, www.pressmediawire.com/article/Investor_Relations/Contracts
, accessed 22 October 2009.
14.Andrew Buncombe, The Independent, 2005, www.commondreams.org/headlines05/0925-02.htm, accessed 21 October 2009.
15. Day.
16. Department of Defense Directive 5160.65, Single Manager for Conventional Ammunition (SMCA), 1 August 2008, p. 4.
17. Day.
18. Larry Smith, Lake City Army Ammunition Plant purchasing manager (ATK). Briefing to author during Lake City tour, October 2009.
19. Ibid.
20. Justine Barati, “Radford Looks to New Plant,” www.army.mil/-news/2009/01/22/15990-radford-looks-to-new-plant, accessed 4 September 2009.
21. Ibid.
22. Ibid.
23. Douglas A. McIntyre, “US Imposes Big Tariffs on Chinese Tires, Beijing,” Daily Finance, 12 September 2009, www.dailyfinance.com/story/us-imposes-big-tarriffs-on-chinese-tires/19159125, accessed 2 November 2009.
24. Colonel John Ferrari, “Transferring Conventional Munitions Industrial Base Capabilities to the Public Sector,” Defense Acquisition University, 2009.
25. Ibid.
26. Ibid.


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