BAE Systems is competing for a contractor operated Army ammunition plant with a potential value of more than $2 billion in sales over 10 years, going head-to-head against incumbent ATK [ATK] for the second time.
BAE and Olin Corp.’s [OLN] Winchester Ammunition Division yesterday said they formed a joint venture, U.S. Munitions LLC, to pursue the Army’s contract to manage, operate and maintain the Lake City Army Ammunition Plant, Independence, Mo.
ATK intends to bid on the contract as well.
BAE and ATK are awaiting the Army’s decision on which company will operate and maintain Radford Army Ammunition Plant, where last spring BAE won the potential $850 million competition over incumbent ATK. ATK protested and the Government Accountability Office dismissed the protest after the Army decided to reevaluate the bids. ATK is expected to continue operating the Virginia-based plant until the end of June (Defense Daily Aug. 22).
Since 1999, BAE has operated Holston Army Ammunition plant in Kingston, Tenn.
The Lake City plant, which began production in 1941, provides small-caliber military ammunition for both training and combat purposes. The plant also serves as a national and regional test center for ammunition performance and weapons firing.
ATK began work at Lake City in 2000. After the Sept. 11 terrorist attacks, the plant began to ramp up from 300 million rounds a year to last year’s approximately 1.4 billion rounds. As of October 2011, ATK delivered about 11 billion rounds from Lake City (Defense Daily, Oct. 11).
ATK’s plans with the Army allowed the modernization work to be done even as ammunition was produced.
The Army has solicited proposals for the Lake City contract and is expected to reach a decision by October. The new operating contract is scheduled to begin fully on Oct. 1, 2013, following a one-year transition period.
The experience and capabilities of BAE and Winchester Ammunition will allow U.S. Munitions to offer the Army a solid track record of partnering with military customers at government-owned and contractor-operated facilities like the Lake City plant, and bring an exceptional history of performance and accountability in meeting the military’s needs for small-caliber ammunition, which Lake City produces, the companies said in a statement.