Army Affirms ATK As Manager Of Vital Ammunition Plant

If you happen to be traveling along U.S. Highway 70 through the town of Independence, Missouri, you will pass by the entrance to the Lake City Army Ammunition Plant (LCAAP). Built in 1941 as a part of the defense industrial mobilization that preceded U.S. entry into World War II, LCAAP is now the sole production facility in the United States for military quality small caliber ammunition. It is now one of but a handful of defense industrial “crown jewels,” a unique facility built more than half century ago that could not be replicated today and on which the military is dependent for a wide range of munitions. LCAAP is a government-owned, contractor-operated (GOCO) installation which means that the government owns the plant and most of the equipment but awards contracts to private firms both to run the facility and produce ammunition.

Prior to 9/11, the ammunition industrial base had experienced more than a decade of decline. With little money to spare and a belief that future wars would be fought at long-range with precision munitions, the Army had only bought limited amounts of small caliber ammunition and provided no funding to modernize this part of the defense industrial base. After 9/11, as the U.S. military became embroiled in two large-scale counterinsurgency operations, the demand for small caliber ammunition went through the roof. ATK, the company that had won the management and production contracts for LCAAP only months before, successfully responded to this increase in demand. LCAAP increased its production from around 300 million rounds a year to 1.2 billion rounds.

ATK did more than just turn the crank on government machines. It invested its own resources and talents to improve production processes and speed up the flow of ammunition to the warfighter. In addition, on its own initiative and using its own funds, ATK acquired and from a bankrupt company moved to LCAAP the last machines available for stamping out the metal links needed to make ammunition belts for 50 caliber machine guns. As the ground fighting heated up in both Iraq and Afghanistan, U.S. forces came increasingly to rely on their 50 calibers to outgun the insurgents. Had ATK not taken the risk, U.S. soldiers and Marines would have been denied a critical tactical advantage.

The Army recently acknowledged ATK’s success at LCAAP, albeit indirectly. A couple of weeks ago, after a full and open competition, the Army announced that it had again awarded ATK both the management and production contracts for LCAAP. The new contract will run for ten years if all options are exercised. The challenge for ATK will be to operate this aging facility efficiently and profitably even as the demand for small caliber ammunition declines from the highs of the last decade.