ATK [ATK] yesterday said it has been selected by the Army over a BAE SystemsOlin Corp. [OLN] joint venture for continued operation and maintenance of the Lake City Army Ammunition Plant (LCAAP) in Independence, Mo.The Army also picked ATK for ammunition production.

The initial contracts period is seven years and, if all award terms are exercised, the contracts would cover a 10-year period with a maximum potential value of approximately $8.5 billion.

“ATK is proud to continue our collaboration with the U.S. Army, building on more than a decade of direct operational experience, to assure the continued health and vitality of the small-caliber ammunition enterprise,” said Mark DeYoung, president and CEO. “Our vision for Lake City reasserts our commitment to deliver safe, affordable solutions that ensure LCAAP remains the most responsive military industrial asset in the world.”

BAE and Olin Corp.’s Winchester Ammunition Division formed joint venture, U.S. Munitions LLC, to compete for LCAAP in January (Defense Daily, Jan. 24).

In January, ATK lost out to BAE for operating and managing the Radford Army Ammunition Plant, Va. BAE was awarded a 10-year, $850 million contract to run the plant.  ATK filed a protest, which was denied (Defense Daily, Jan. 25, Aug. 22, 2011).

Since 1999, BAE has run the Holston Army Ammunition Plant in Kingsport, Tenn., under an Army contract that runs through 2023 (Defense Daily, May 16).

Lake City began production in 1941 and now provides small-caliber military ammunition for both training and combat. The plant also is a national and regional test center for ammunition performance and weapons firing (Defense Daily, Oct. 11, 2011).

The Lake City plant has delivered more than 11 billion rounds since ATK began operating the plant in April 2000, the company said. The company has invested $370 million in plant and production equipment modernization. Lake City and its approximately 2,700 employees produce 5.56 mm, 7.62 mm, .50 cal and 20mm ammunition. Through modernization, ATK said it has reduced costs for a cumulative savings of $1 billion.

President of ATK Defense Mike Kahn said: “We are honored with the responsibility to continue operating this key military industrial base capability. ATK is committed to the future success of our warfighters by optimizing and sustaining LCAAP,” said. “We are fully committed to delivering to our customer a lean, scalable and sustainable operation that will serve our nation for years to come.”