US Ammo Shortage: GD Now A Second Source Prime as it Delivers Guns, Ammo
In July 2005, “Pass The Ammunition: Army Taking Action on Small-Cal Shortages” began covering some of the steps the US Defense Department was taking to address this issue. Few reserves, a low production rate, and some of the oldest assembly-line machines on the supply side, coupled with skyrocketing demand, had made for a difficult situation. The Us military went on the invest substantial funds, in order to help modernize the World War 2 era Lake City ammunition plant, which had become the USA’s sole source of small caliber military ammunition.
Even so, the situation was creating both front line shortages, and strategic risk. In 2005, therefore, the Army took steps to move General Dynamics into an important second source supply role, and awarded GD OTS a substantial contract…
Contracts & Arrangements
Unless otherwise noted, U.S. Army Field Support Command in Rock Island, IL manages these contracts, which are issued to General Dynamics Ordnance and Tactical Systems, Inc. in St. Petersburg, FL. General Dynamics Armament and Technical Products Inc. in Burlington, VT is the second-source supplier – and also makes the guns that fire it. This article will cover the ammunition only.
ATK, which acts as the prime source for American small caliber ammunition, originally protested this award but withdrew its protest in late October 2005. The US Army’s overall “1-2-3-4 acquisition strategy” sourcing agreement will work as follows:
- The goal is for production of as much as 2.0 billion rounds of small-caliber ammunition annually.
- The first 1.2 billion rounds of ammunition each year will come from ATK Lake City
- Followed by an additional 300 million rounds from a second source.
- The next 300 million rounds increment each year will again come from ATK Lake City
- If the Army needs an additional 200 million rounds, it will be provided by ATK and/or the second source.
July 2/10: An $11 million basic order agreement with firm-fixed-price delivery orders, under the terms of the existing basic ordering agreement for the small caliber ammunition second source prime contractor for the production of 5.56mm ammunition used in M4 carbines, M16A2 rifles, and M249 light machine guns; 7.6mm ammunition used in M240 series machine guns; and Caliber .50 small arms ammunition used in M2 and other heavy machine guns.
Work is to be performed in Saint Petersburg, FL, with an estimated completion date of Oct 27/11. Bids were solicited on the World Wide Web, with 2 bids received (W52P1J-05-G-0002).
May 13/10: A $20.5 million basic ordering agreement with firm-fixed-price delivery orders, under the terms of the existing basic ordering agreement as the small caliber ammunition second source prime contractor.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 11/07. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
June 16/08: A $7.4 million Basic Ordering Agreement (BOA) with firm fixed price delivery orders, for 5.56mm, 7.62mm, and Caliber .50 small arms ammunition. Delivery orders from FY 2007 on have an Economic Price Adjustment the insulated manufacturers against rises in raw material costs for copper.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 23/10. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
March 10/08: An $87.8 million basic ordering agreement with firm-fixed price delivery orders contract, as the small caliber ammunition second source prime contractor.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 23/10. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
Feb 20/08: A $20.6 million firm-fixed-price contract for small caliber ammunition. Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 23/10. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
Feb 2/07: The full delivery order amount of $77.7 million, under a firm-fixed-price contract for 5.56mm, 7.62mm, and caliber .50 small arms ammunition.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 23/10. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
Aug 15/06: A delivery order amount of $187.8 million as part of a $213 million firm-fixed-price contract for production of 5.56mm, 7.62mm, and .50 caliber small arms ammunition.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 11/07. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
March 2/06: General Dynamics Ordnance and Tactical Systems Inc. in St. Petersburg, FL receives a $25.3 million delivery order as part of a $196.4 million firm-fixed-price contract for .50 caliber Ammunition.
Work will be performed in St. Petersburg, FL, and is expected to be complete by Aug 23/10. Bids were solicited via the World Wide Web on Jan 18/05, and 2 bids were received (W52P1J-05-G-0002).
Aug 30/05: General Dynamics Ordnance and Tactical Systems Inc. in St. Petersburg, FL received a $171.2 million firm-fixed-price contract for Establishment of the Small Caliber Ammunition Second Source Prime Contractor for the Production of 5.56mm, 7.62mm, and .50 Caliber Ammunition.
Work will be performed in St. Petersburg, FL and is expected to be complete by Aug. 23, 2010. Bids were solicited via the World Wide Web on Jan. 18, 2005, and two bids were received. The U.S. Army Field Support Command in Rock Island, IL issued the contract (W52P1J-05-G-0002).
