The U.S. Army awarded BAE Systems a $146.5 million contract modification to construct and commission a new facility to increase the capacity of the Holston Army Ammunition Plant in Kingsport, Tenn., the company said Thursday.

The project plans to build the Insensitive Munitions Weak Nitric Acid Recovery Facility as part of a multi-year effort to increase the production capability of Insensitive Munitions eXplosives (IMX). IMX are designed to be more stable and safer to handle than conventional munitions.

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The Holston plant, currently operated by BAE, produces a range of explosive formulations for various applications to support the military, commercial mining, and oil operations. The new facility will recycle spent nitric acid generated at the plant and provide strong nitric acid to produce a range of IMX fills, the company said.

“The construction of this facility is strategic in eliminating current IMX capacity constraints. Once operational, it will position BAE Systems and the Holston plant to meet current and future IMX demands, both domestically and abroad,” Reed McPeak, vice president and general manager of BAE’s Ordnance Systems, Inc.

Work on the newest facility is set to begin in October with an expected completion date of July 2019.

BAE has provided total program management for modernization projects at the Holston plant on behalf of the U.S. Army since 1999. The management program includes modernization planning, project management, design, construction, and projects to enhance capabilities.