The Small Arms Production Base

1. The Small Arms Production Base William Sanville Project Manager Maneuver Ammunition Systems (PM-MAS)

2. Government Small Caliber Ammo Production Base Korean War 6 Plants Lake City Ordinance Plant St. Louis Ordinance Plant Twin Cities Ordinance Plant Frankford Arsenal New Haven PEP Bridgeport PEP Viet Nam 5 Plants Lake City Army Ammunition Plant Twin Cities Army Ammunition Plant Frankford Arsenal New Haven PEP Bridgeport PEP Today 1 Plant Lake City Army Ammunition Plant Peak Output 1.2B/yr WW II 16 Plants Lake City Ordinance Plant – Remington Arms Twin Cities Ordinance Plant – Federal Cartridge Co. St. Louis Ordinance Plant – Western Cartridge Co. Frankford Arsenal – Government Denver Ordinance Plant – Bridgeport PEP – Remington Arms New Haven PEP – Winchester Western Des Moines Ordinance – Utah Ordinance – Eau Claire Ordinance – East Alton Ordinance – Kings Mills Ordinance – Evansville Ordinance – Milwaukee Ordinance – Allegany Ordinance – Lowell Ordinance – PEAK OUTPUT WW II Cal. 30 900M/mo Cal.30 carbine 227M/mo Cal.45 ball 250M/mo Cal. 50 500M/mo 1877M/mo 1.877B/mo 100M/mo

3. GOCO Production History WWII 1941-1945 VIETNAM 1966-1975 KOREA 1950-1953 15 Plants 6 Plants 5 Plants 1 Plant ATK USA Olin Remington Arms Note: Peak Production all 16 plants approx. 1.8 B rds/ month

4. Small Cal Base Capacity • Sources Available • GOCO Primary Producer at Current 1.2B Capacity • Identified 350M Commercial Capacity of US Spec Ammo • Identified 500M Additional Sources NATO and Similar Capacity 1.5 Base Capacity 1.550B 1.2 0.9 Ctgs in B 0.6 Lake City 0.3 0 GOCO Other Sources (Built to US TDP) * Emergency Capacity Non-TDP Sources*

5. $2.295B FY07 RQMT $2.245B FY06 RQMT ARMY TRAINING AMMUNITION REQUIREMENTS / FUNDING TRENDS • CALS GROWTH: 1995 – 30 full • 2001 – 73 full, 29 monitor • Current – 110 full, 33 monitor $2.467B FY11 $2.5B • MAJOR COST DRIVERS: • Modernization • Stockpile depleted • Force structure changes • STRAC / POI changes • Available Inventory $2.0B $1.56BFY88 RQMT Inventory or funding required to fill gap. $1.5B $1.0B $1.088B FY11 $.5B Total Training Ammo Rqmt (Unconstrained) Validated Rqmt (Critical) Funding Level (Yr of Execution Ammo Used FY95 FY88 FY90 FY00 FY05 FY10

6. SMALL CAL AMMO SCENARIOS POM FUNDING (ALL SERVICES) DESIRED SURGE CAPABILITY GOAL ALL SERVICES UNFUNDED REQUIREMENTS ALT. SOURCE GOCO PLANNING CAPACITY FUNDING DURING YEAR OF EXECUTION WON'T WORK IN THE FUTURE

7. Small Cal Base Risks • Age • Most GOCO plant buildings, part of equipment and infrastructure date to WW II • Single Point Risks • TNR reactor • DISRUPTION OF PRIMER PRODUCTION LONGER THAN 3 WEEKS • Most efficient operation drives many sole/single source • Unique TDP • Ammo planned for use in a wide variety of weapons • Ammo required to function all over world • Changes in weapons platforms offer opportunity to adjust TDP for more affordable production • Preservation of current investment • Mechanism needed to preserve current capacity when requirements go down in future • Funding to layaway and maintain current capacity will be needed or base will shrink once again • Each time it becomes more difficult to bring back • Future Planning • Need to define production line needs to deal with fluctuating requirements • A long term plan needs to be developed for flexible and sustainable small caliber production base

8. Industrial Base Actions • Industrial Base • LCAAP Modernization • Update production equipment • Automate primer manufacture • Increase automatic inspection systems • Capacity expanded to 1.5B per year • Second Source • Establishes ready access to elements of the commercial base through a previously contracted agent • Capacity established at 300M to 500M per year • TDP Improvements – reduce unnecessary production costs • Tolerance study bullet and case • Metallurgical requirement evaluation. • Ignition train review (alternate propellant study)