Report to the Honorable David R.Obey, 

Ranking Minority Member, Committee 

on Appropriations, House of 

Representatives 

United States Government Accountability Office

GAO

July 2005 DEFENSE 

AMMUNITION 

DOD Meeting Small 

and Medium Caliber 

Ammunition Needs, 

but Additional Actions 

Are Necessary 

GAO-05-687 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-687.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Ann CalvaresiBarr at (202) 512-4281 or 

calvaresbarra@gao.gov. 

Highlights of GAO-05-687, a report to the 

Honorable David R. Obey, Ranking 

Minority Member, Committee on 

Appropriations, House of Representatives 

July 2005

DEFENSE AMMUNITION 

DOD Meeting Small and Medium Caliber 

Ammunition Needs, but Additional 

Actions Are Necessary 

DOD’s increased requirements for small and medium caliber ammunition 

over the past several years are largely the result of increased weapons 

training requirements needed to support the Army’s transformation to a 

more self-sustaining and lethal force—an effort accelerated after the 

terrorist attacks of September 11, 2001—and the deployment of forces to 

conduct recent U.S. military actions in Afghanistan and Iraq. 

Between fiscal years 2000 and 2005, total requirements for small caliber 

ammunitions more than doubled, from about 730 million to nearly 1.8 billion 

rounds, while total requirements for medium caliber ammunitions increased 

from 11.7 million rounds to almost 22 million rounds. 

Total Small and Medium Caliber Requirements, Fiscal Years 2000 to 2005 (in millions of 

rounds) 

Small caliber

0

400

800

1,200

1,600

2,000

2000 2001 2002 2003 2004 2005

733.4

775.7 908

1,253.5

1,636 1,790

Medium caliber

Source: PEO for Ammunition data, GAO analysis.

Fiscal year Fiscal year

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005

11.7

16.6

15.9

25.9

21.2

21.5

DOD has initiated several steps to meet the increased demand, including 

funding about $93.3 million for modernization improvements at the three 

government-owned ammunition plants producing small and medium caliber 

ammunition. DOD is currently able to meet its medium caliber requirement 

through modernization efforts at the government-owned ammunition plants 

and through contracts with commercial producers. The government-owned 

plant producing small caliber ammunition cannot meet the increased 

requirements, even with these modernization efforts. Also, commercial 

producers within the national technology and industrial base have not had 

the capacity to meet these requirements. As a result, DOD has had to rely at 

least in part on foreign commercial producers to meet its small caliber 

ammunition needs. 

DOD has taken steps to ensure that the national technology and industrial 

base can meet future small caliber ammunition needs by building flexibility 

into the acquisition system to address fluctuations. In addition, a planning 

process has been put in place to ensure that the base can respond to longerterm DOD ammunition needs, including small and medium caliber 

ammunition. While the process is ongoing, information to effectively 

implement the plan and timely performance measures to ensure 

accountability are lacking. 

Following the end of the Cold War, 

the Department of Defense (DOD) 

significantly reduced its purchases 

of small and medium caliber 

ammunition and reduced the 

number of government-owned 

plants that produce small and 

medium caliber ammunition. Since 

2000, however, DOD’s 

requirements for these types of 

ammunition have increased 

notably. 

Because the success of military 

operations depends in part on DOD 

having a sufficient national 

technology and industrial base to 

meet its ammunition needs, you 

asked GAO to review DOD’s ability 

to assess if its supplier base can 

meet small and medium caliber 

ammunition needs. Specifically, we 

(1) identified changes over the past 

several years that have increased 

the requirement for small and 

medium caliber ammunition, 

(2) assessed the actions DOD has 

taken to address the increased 

requirement, and (3) determined 

how DOD plans to ensure that it 

can meet future small and medium 

caliber ammunition needs. 

What GAO Recommends

GAO is making recommendations 

aimed at strengthening DOD’s 

ability to implement its plan and 

ensure accountability.

In commenting on a draft of this 

report, DOD concurred with GAO’s 

recommendations and provided 

information on its planned steps to 

implement them.
Page i GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Letter 1

Results in Brief 2 

Background 4 

DOD’S Increased Requirements for Small and Medium Caliber 

Ammunition Primarily Driven by Increased Proficiency 

Requirements 8 

PEO Is Meeting Increased Requirements through Modernization 

Efforts Supplemented by Commercial Buys 11 

PEO Is Taking Steps to Meet Future Small and Medium Caliber 

Needs, but Implementation Problems Exist 14 

Conclusions 17 

Recommendations for Executive Action 17 

Agency Comments and Our Evaluation 18 

Appendix I Scope and Methodology 20 

Appendix II Overview of Strategic Plan for Conventional 

Ammunition Industrial Base, by Goal 21 

Appendix III Comments from the Department of Defense 27 

Tables 

Table 1: Examples of Small and Medium Caliber Ammunition and 

Their Uses 5 

Table 2: Small Caliber Requirements, Fiscal Years 2000 to 2005 9 

Table 3: Medium Caliber Requirements, Fiscal Years 2000 to 2005 10 

Table 4: Examples of Modifications at Lake City, Milan, and 

Radford Plants 11 

Table 5: FY 2001-2005 Budget for Small Caliber Ammunition 13 

Table 6: FY 2001-2005 Budget for Medium Caliber Ammunition 13 

Figures 

Figure 1: Major Parts of a Fully Loaded Cartridge 6 

Contents 
Page ii GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Figure 2: Total Small Caliber Requirements, Fiscal Years 2000 to 

2005 9 

Figure 3: Total Medium Caliber Requirements, Fiscal Years 2000 to 

2005 10 

Abbreviations 

DOD Department of Defense 

PEO Office of the Program Executive Officer 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

July 27, 2005 

The Honorable David R.Obey 

Ranking Minority Member 

Committee on Appropriations, 

House of Representatives 

Dear Congressman Obey: 

Following the end of the Cold War, the Department of Defense (DOD) 

significantly reduced its purchases of small and medium caliber 

ammunition. Historically, DOD has procured small and medium caliber 

ammunition from government-owned manufacturing plants. As a result of 

the reduced ammunition needs, the number of these plants has been 

reduced to less than half of what existed during the Cold War. DOD has 

three remaining government-owned plants that produce small and medium 

caliber ammunition. Since 2000, however, DOD’s small and medium 

caliber ammunition requirements have increased notably. 

The Army is the single manager for conventional ammunition acquisition, 

including small and medium caliber ammunition, for all U.S. forces.1

 In 

September 1999, we reported on the need to consolidate the management 

of the Army’s conventional ammunition programs.2

 In early 2002, the Army 

established the Office of the Program Executive Officer (PEO) for 

Ammunition as part of a larger effort to establish greater accountability 

and responsibility in the life-cycle management of DOD’s ammunition 

programs. A year later, the Army designated this office as the executor for 

the single manager for conventional ammunition mission and delegated to 

that office limited authority to make determinations on restricting 

procurements of conventional ammunition as directed by section 806 of 

the Strom Thurmond National Defense Authorization Act for Fiscal Year 

 1

DOD Directive 5160.65, updated April 14, 2004, designates the Secretary of the Army as 

DOD’s single manager for conventional ammunition under the authority of the Secretary of 

Defense. By memorandum dated January 28, 2003, the Secretary of the Army delegated 

single manager for conventional ammunition authority to the Assistant Secretary of the 

Army for Acquisition, Logistics, and Technology. 

2

See GAO, Defense Management: Army Could Achieve Efficiencies by Consolidating 

Ammunition Management, GAO/NSIAD-99-230 (Washington, D.C.: Sept. 30, 1999). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

1999 (Public Law 105-261).3 In addition, the PEO for Ammunition was 

given responsibility for procuring conventional ammunition to meet 

current military requirements. 

Because the success of military operations depends in part on DOD having 

a sufficient national technology and industrial base4 to meet its 

ammunition needs, you asked us to review DOD’s ability to assess if its 

supplier base can meet small and medium caliber ammunition needs. 

Specifically, we (1) identified changes over the past several years that have 

increased the requirements for small and medium caliber ammunition, 

(2) assessed the actions DOD has taken to address the increased 

requirement, and (3) determined how DOD plans to ensure that it can 

meet future small and medium caliber ammunition needs. 

In conducting our work, we spoke with officials from appropriate DOD 

and Army offices. We also reviewed DOD and Army ammunition 

acquisition policies, planning documents, and ammunition budget and 

requirements data. For the purposes of this review, we collected data on 

5.56mm, 7.62mm, 9mm, and .50-caliber small caliber ammunition, and 

20mm, 25mm, 30mm, and 40mm medium caliber ammunition. We 

conducted our review from September 2004 to May 2005 in accordance 

with generally accepted government auditing standards. For more 

information on our scope and methodology, see appendix I. 

DOD’s increased requirements for small and medium caliber ammunition 

over the past several years are largely the result of increased weapons 

training requirements needed to support the Army’s transformation to a 

more self-sustaining and lethal force—an effort accelerated after the 

terrorist attacks of September 11, 2001—and the deployment of forces to 

conduct recent U.S. military actions in Afghanistan and Iraq. Between 

fiscal years 2001 and 2005, total requirements for small caliber 

 3

Section 806 of the Strom Thurmond National Defense Authorization Act for Fiscal Year 

1999 (Public Law 105-261, October 1998) authorizes DOD to restrict its procurement of 

conventional ammunition to sources within the national technology and industrial base if it 

determined that such action would be needed to preserve the base’s capability to meet 

DOD’s conventional ammunition requirements in cases of national emergency or to achieve 

industrial mobilization. 

4

Defined by 10 U.S. Code section 2500(1) as the persons and organizations that are engaged 

in research, development, production, or maintenance activities conducted within the 

United States and Canada. 

Results in Brief 
Page 3 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

ammunitions more than doubled, from about 730 million to nearly 

1.8 billion rounds, while total requirements for medium caliber 

ammunitions increased from 11.7 million rounds to almost 22 million 

rounds. Because a significant portion of this increased requirement is a 

result of the need to increase training to ensure weapons proficiency in 

support of transformation, it will continue into the foreseeable future. 

The PEO took several steps to meet the increased need for small and 

medium caliber ammunition. The PEO began modernizing the three 

ammunition plants that produce DOD’s small and medium caliber 

ammunition, which were built in the World War II era. Between fiscal 

years 2000 and 2005, DOD funded about $93.3 million to replace or 

refurbish outdated manufacturing equipment and make other facility 

improvements. These modernization efforts are planned to continue 

through fiscal year 2011. DOD is currently able to meet its medium caliber 

requirement through modernization efforts at these ammunition plants and 

through contracts with commercial producers within the national 

technology industrial base. However, the modernization efforts at the 

plant that produces small caliber ammunition will only allow the 

contractor to increase the facility’s production capacity to 1.5 billion 

rounds by early 2006—falling short of DOD’s current small caliber 

ammunition requirements. To make up for these shortfalls, DOD has had 

to rely on additional buys of small caliber ammunition in the commercial 

market, both domestic and foreign, and from another nation’s war reserve 

stock. In fiscal year 2004, DOD made additional buys totaling about 313 

million rounds of small caliber ammunition from both domestic and 

foreign sources. 

The PEO is attempting to build flexibility into the acquisition system to 

address fluctuations in near-term needs for small caliber ammunition. For 

example, the PEO plans to select a commercial producer in 2005 that will 

serve as a second source for producing small caliber ammunition. This 

second source producer will begin providing an additional 300 million 

rounds per year of small caliber ammunition in early 2007. In addition, the 

PEO has initiated a planning process to ensure that the conventional 

ammunition industrial base’s capacity could effectively and efficiently 

respond to future DOD ammunition needs, including small and medium 

caliber ammunition. While the process is ongoing, we identified two 

weaknesses that may limit its effectiveness, the lack of (1) information to 

effectively implement certain planning initiatives and (2) performance 

metrics to annually measure progress and ensure accountability. For 

example, the PEO has articulated the need to conduct a business case 

analysis to determine the future size and scope of the government-owned 
Page 4 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

conventional ammunition base; however, implementing that business case 

analysis will require actions outside the PEO’s scope of responsibility. In 

addition, while the PEO has encouraged ammunition program managers to 

submit acquisition plans so that it can determine which items should be 

procured from the national technology and industrial base, as called for by 

section 806, Public Law 105-261, other services’ ammunition program 

managers have not always been forthcoming with the plans. Further, while 

certain performance measures are in place, they are not sufficient to 

monitor progress and ensure accountability. For example, the PEO’s plan 

does not include key results-oriented principles, such as identifying key 

resources needed to meet the plan’s goals and objectives, including costs, 

schedules, and responsible DOD components for individual initiatives. In 

addition, the plan does not include an annual review process to compare 

the actions taken to the desired performance—principles that agencies 

have been encouraged to include in their planning. 

We are making recommendations aimed at strengthening DOD’s ability to 

ensure that a sufficient national technology and industrial base exists for 

cost effectively procuring conventional ammunition. In commenting on a 

draft of this report, DOD concurred with GAO’s recommendations and 

provided information on its planned steps to implement them. 

A DOD directive assigns the Secretary of the Army the mission of the 

single manager for conventional ammunition within DOD. The Under 

Secretary of Defense for Acquisition, Technology, and Logistics is 

responsible for providing policy and guidance for the single manager for 

conventional ammunition’s mission, and ensuring compliance with the 

single manager’s responsibilities. Section 806 of the Strom Thurmond 

National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-

261) vests the single manager with the authority to restrict the 

procurement of conventional ammunition to sources within the national 

technology and industrial base. The Secretary of the Army was authorized 

to delegate, within the Army, this authority. A January 28, 2003, 

memorandum from the Secretary of the Army delegated authority to make 

section 806 determinations to the Assistant Secretary of the Army for 

Acquisition, Logistics, and Technology. In an April 16, 2003, memorandum 

that office re-delegated limited section 806 authority to the Program 

Executive Officer for Ammunition in his capacity as the single manager’s 

executor. 

High-level planning guidance establishes general guidelines for the 

services to determine how much ammunition is needed to conduct 

Background 
Page 5 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

military operations. As the single manager for conventional ammunition, 

the Army is responsible for coordinating with all the military services to 

meet conventional ammunition requirements. Through the PEO for 

Ammunition, the Army manages small and medium caliber ammunition, 

including small arms, mortar, automatic cannon, and ship gun ammunition 

(see table 1).5

Table 1: Examples of Small and Medium Caliber Ammunition and Their Uses 

Weapon Use Ammunition

Small caliber 

Machine gun Mounted on the Army’s Bradley Fighting Vehicle 7.62mm

M2 machine gun Ground or mounted vehicles .50-caliber

M16 rifle Ground 5.56mm

M9 pistol Ground 9mm

Medium caliber 

Cannon Mounted on the Air Force’s F-15 Eagle 20mm

Bushmaster cannon Mounted on the Army’s Bradley Fighting Vehicle, the Marine Corps’ Light Armored 

Vehicle, the Air Force’s AC-130U special operations aircraft, and numerous other Navy 

and Coast Guard surface ships 

25mm

Cannons Mounted on the Air Force’s A-10 close support aircraft 30mm

M203 grenade launcher Infantrymen 40mm

Source: DOD data, GAO analysis. 

All ammunition cartridges are composed of several components that must 

be assembled at different stages of production. See figure 1 for an example 

of a 5.56mm cartridge. It takes, on average, 23-months from the time a 

production order is placed until final delivery. 

 5

Other categories of conventional ammunition managed by the PEO for Ammunition 

include: (1) bombs (including cluster, fuel air explosive, general purpose, and incendiary); 

(2) unguided rockets, projectiles, and submunitions; (3) chemical ammunition with various 

fillers; (4) land mines; (5) demolition materiel; (6) grenades; (7) flares and pyrotechnics; 

and (8) other items used in the previously mentioned categories including explosives, 

propellants, chemical agents, cartridges, propelling charges, projectiles, warheads, fuzes, 

boosters, and safe arm devices in bulk, combination, or separately packaged items of issue 

for complete round assembly. 
Page 6 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Figure 1: Major Parts of a Fully Loaded Cartridge 

Bullet

Case 

Propellant

Primer

Cartridge

Source: ATK, Inc. 
Page 7 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Since World War II, DOD has relied primarily on a government-owned 

base to meet its conventional ammunition needs. During the Cold War, 

there were as many as 34 government-owned plants producing 

conventional ammunition. The end of the Cold War and subsequent 

changes to defense missions resulted in declining requirements. At its 

peak in 1985, funding for conventional ammunition was $4.3 billion; by 

1999, funding had dropped by more than half to about $2 billion. Currently, 

there are 14 government-owned ammunition plants, 11 of which are 

contractor-operated. Three of these 11 facilities—Lake City (Missouri), 

Milan (Tennessee), and Radford (Virginia)—are the government-owned, 

contractor-operated producers of DOD’s small and medium caliber 

ammunition. 

Lake City is the primary producer of small caliber ammunition. Lake City 

is operated by a commercial ammunition producer under a contract that 

runs from fiscal year 1999 through fiscal year 2008. The contract initially 

called for a minimum production capacity amount of 350 million rounds 

and a maximum of 800 million rounds of 5.56mm, 7.62mm, and .50-caliber 

ammunition. The PEO increased the upper capacity requirement to 

1.5 billion rounds per year to be accomplished by early 2006 through 

modifications made to the original contract. 

The PEO relies on annual contracts with three commercial producers 

within the national technology and industrial base for most of DOD’s 

supply of 20mm, 25mm, and 30mm medium caliber ammunition. Currently, 

one of these producers is manufacturing medium caliber ammunition at 

Radford which specializes in the production of propellants and explosives; 

the other two commercial producers manufacture medium caliber 

ammunition at their own facilities. Radford’s current contract was 

awarded in fiscal year 2003 and has been renewed on an annual basis 

through fiscal year 2005. Milan is the government’s primary producer of 

40mm ammunition. The contract with the commercial operator at Milan 

runs from fiscal year 1998 through fiscal year 2006. 
Page 8 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

DOD’s increased requirements for small and medium caliber ammunitions 

have largely been driven by increased weapons training requirements, 

dictated by the Army’s transformation to a more self-sustaining and lethal 

force—which was accelerated after the attacks of September 11, 2001—

and by the deployment of forces to conduct recent U.S. military actions in 

Afghanistan and Iraq. Since 2000, requirements for small caliber 

ammunition have more than doubled, and requirements for medium 

caliber ammunition have almost doubled. 

Over the last decade, the Army began transforming its warfighting 

capabilities to respond more effectively to the growing number of 

peacekeeping operations, small-scale contingencies, and nontraditional 

threats, such as terrorism. According to Army officials, the transformation 

is the most comprehensive change in the Army in over a century and will 

affect all aspects of its organizations, training, doctrine, leadership, and 

strategic plans as well as its acquisitions. As part of its transformation, the 

Army is planning for its forces to be self-sustaining and capable of 

generating combat power and contributing decisively to combat 

operations. Following the September 11, 2001, attacks, the Army 

accelerated its force transformation to mobilize and deploy soldiers in 

support of various missions, most notably war-fighting operations in 

Afghanistan and Iraq. 

To meet its force transformation objectives, the Army began requiring all 

soldiers to gain additional weapons qualifications training after they 

complete initial basic training. The Army also began requiring that 

personnel in all deployed elements, including combat support and combat 

service support units, achieve and maintain greater proficiency in the use 

of specified weapons. For example, beginning in late 2001, the Army 

established a policy requiring each soldier to qualify twice a year on small 

caliber firearms instead of once a year as previously required. According 

to Army officials, in addition to the increased annual training 

requirements, small caliber ammunition needs have increased by an 

additional 66 percent due to a combination of the mobilization of units and 

contingency training, for example, training to react to defend against 

attacks on truck convoys; and, to a lesser extent, due to operations in Iraq 

and Afghanistan. The increased requirements are likely to continue to a 

significant extent beyond current operational deployments due to the 

increased training requirements. 

Between fiscal years 2000 and 2005, total requirements for small caliber 

ammunition increased from about 730 million to nearly 1.8 billion rounds 

(see figure 2). 

DOD’S Increased 

Requirements for 

Small and Medium 

Caliber Ammunition 

Primarily Driven by 

Increased Proficiency 

Requirements 
Page 9 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Figure 2: Total Small Caliber Requirements, Fiscal Years 2000 to 2005 

Note: In millions of rounds. 

The 5.56mm rounds—used in the M16 rifle, the standard weapon used by 

soldiers—accounted for much of the small caliber increase (see table 2). 

Table 2: Small Caliber Requirements, Fiscal Years 2000 to 2005 

In millions of rounds 

Type FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 

5.56mm 626.2 575.6 689 929 1,181 1,353 

7.62mm 47.2 50.7 92.2 136.3 313 282 

.50-caliber 20.4 15.7 22.6 41.8 67 74 

9mm 39.6 133.7 104.2 146.4 75 81 

Total 733.4 775.7 908 1,253.5 1,636 1,790 

Source: PEO for Ammunition data, GAO analysis. 

Medium caliber requirements have also increased over the past few years. 

Between fiscal years 2000 and 2005, medium caliber requirements almost 

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2000 2001 2002 2003 2004 2005

Small caliber

Source: PEO for Ammunition data, GAO analysis.

Fiscal year

733.4

775.7

908

1,253.5

1,636

1,790
Page 10 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

doubled, from 11.7 million rounds to almost 22 million rounds (see figure 

3). 

Figure 3: Total Medium Caliber Requirements, Fiscal Years 2000 to 2005 

Note: In millions of rounds. 

The 40mm rounds represent the bulk of the increases between fiscal years 

2000 and 2005 (see table 3). 

Table 3: Medium Caliber Requirements, Fiscal Years 2000 to 2005 

In millions of rounds 

Type FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 

20mm 2.4 4.1 4.4 6.3 4 4 

25mm 2.6 2.6 3 4.4 0.8 1 

30mm 2.5 5.1 3.9 4.1 5.4 5.5 

40mm 4.2 4.8 4.6 11.1 11 11 

Total 11.7 16.6 15.9 25.9 21.2 21.5 

Source: PEO for Ammunition data, GAO analysis. 

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005

Medium caliber

Source: PEO for Ammunition data, GAO analysis.

Fiscal year

11.7

16.6

15.9

25.9

21.2

21.5
Page 11 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

In an effort to help meet the increased need for small and medium caliber 

ammunition in the near term, the PEO upgraded the equipment at the Lake 

City, Milan, and Radford Army Ammunition plants. While these upgrades 

enabled Milan and Radford—the government-owned, contractor-operated 

producers of medium caliber ammunition—to meet DOD’s requirements, 

Lake City—the small caliber ammunition producer—was unable to meet 

DOD’s fiscal year 2004 requirement of about 1.6 billion rounds of 

ammunition. As a result, the PEO made additional procurements from the 

commercial market to make up for fiscal year 2004 shortfalls. 

The three government-owned, contractor-operated plants that produce 

small and medium caliber ammunition were built in 1941. Between fiscal 

years 2001 and 2005, DOD funded a total of about $93.3 million to upgrade 

these facilities. This included replacement or refurbishment of 

ammunition cartridge production equipment and other facility 

improvements. According to a PEO official, ongoing modernization is 

needed for the Army ammunition plants to continue to operate into the 

future, and in the case of the Lake City Army Ammunition Plant, additional 

equipment and facility upgrades will be needed to increase capacity to 

address future needs. According to a PEO official, the Army plans to 

replace and refurbish ammunition production equipment through fiscal 

year 2011. See table 4 for examples of funded modifications. 

Table 4: Examples of Modifications at Lake City, Milan, and Radford Plants 

Army Ammunition Plant Modifications 

Lake City • Small caliber line upgrades 

• Replacement of die sets for manufacturing 

ammunition components 

Milan • Modernization of temperature humidity control used 

for producing mortars 

• Production support and equipment replacement 

Radford • Upgrading the acid production facilities for propellant 

production 

Source: Army data, GAO analysis. 

According to PEO officials, the national technology and industrial base has 

been able to meet the increased requirements for medium caliber 

ammunition. In an effort to meet DOD’s small ammunition requirements, 

the PEO initiated additional modernization efforts at Lake City to increase 

PEO Is Meeting 

Increased 

Requirements through 

Modernization Efforts 

Supplemented by 

Commercial Buys 
Page 12 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

production from a maximum capacity of 800 million rounds in fiscal year 

2001 to approximately 1.2 billion rounds per year in July 2004.6

 Despite this 

increased production capacity, Lake City was unable to meet fiscal year 

2004 requirements for small caliber ammunition. 

Consequently, the PEO was forced to rely on other ammunition sources. 

While many commercial ammunition producers responded to the PEO’s 

sources sought announcements,7

 few were able to satisfy DOD’s 

ammunition specifications. For example, seven of nine commercial 

producers responding to the PEO’s announcement for a specific type of 

5.56mm ammunition were unable to meet the specifications, such as 

producing metal cartridge cases. For an announcement for different types 

of .50-caliber ammunition, none of the 10 respondents were able to meet 

all of the specifications. Several respondents were foreign ammunition 

producers. According to officials from U.S. commercial ammunition 

producers, the recent surge in DOD’s small caliber ammunition 

requirements could only be met by accessing available worldwide 

capacity. 

The PEO was eventually able to find commercial producers qualified to fill 

DOD’s small caliber ammunition shortfall in fiscal year 2004. These 

included Israel Military Industries and Olin-Winchester—a U.S. 

ammunition producer. According to data provided by the PEO, almost 

313 million rounds of 5.56mm, 7.62mm, and .50-caliber ammunition were 

purchased from commercial ammunition producers in fiscal year 2004.8

According to a PEO official, DOD paid about $10 million more than a 

similar amount of small caliber ammunition would cost from Lake City. 

However, Lake City could not meet the 2004 requirement. Although DOD 

paid a premium as a result of the need to procure ammunition outside the 

government-owned base, we did not analyze whether maintaining a more 

robust base would have been cost-effective. 

According to DOD officials, the increased buys for small caliber 

ammunition are being funded through supplemental appropriations. 

 6

The PEO purchased approximately 120 million rounds of war reserve stocks from the 

United Kingdom in fiscal year 2004. 

7

A sources sought announcement is a type of market survey to identify companies that can 

fill the quantities and types of ammunition being sought. 

8

The PEO purchased almost 2.7 million rounds of armor-piercing 5.56mm and 7.62mm 

ammunition from a commercial producer in Sweden in fiscal year 2004. 
Page 13 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Tables 5 and 6 illustrate how much funding for small and medium caliber 

ammunition acquisitions has been proposed by the President’s Budget, 

and the final funding including supplemental funds for fiscal years 2001 to 

2005. 

Table 5: FY 2001-2005 Budget for Small Caliber Ammunition 

Dollars in thousands 

Fiscal year 

Proposed 

President’s budget 

Final funding including 

supplemental funds 

2001 $123,205 $255,956 

2002 117,728 140,930 

2003 169,928 364,910 

2004 315,186 298,671 

2005 283,500 282,405 

Source: Army data, GAO analysis. 

Table 6: FY 2001-2005 Budget for Medium Caliber Ammunition 

Dollars in thousands 

Fiscal year 

Proposed

President’s budget 

Final funding including 

supplemental funds 

2001 $130,089 $140,589 

2002 105,522 101,119 

2003 114,585 263,782 

2004 148,747 163,062 

2005 150,984 150,401 

Source: Army data, GAO analysis. 
Page 14 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

The PEO has taken certain steps to ensure that the national technology 

and industrial base can meet future small and medium caliber ammunition 

needs. As part of these efforts, the PEO is attempting to build flexibility 

into its acquisition system to address near-term fluctuations in the 

requirement for small caliber ammunition. In addition, the PEO has 

initiated a longer-term planning process to better manage the national 

technology and industrial base for conventional ammunition. However, the 

PEO lacks access to some information needed to effectively implement 

certain planning initiatives, and other initiatives require actions that are 

beyond the purview of the PEO. Furthermore, the PEO has not established 

sufficient performance metrics necessary to ensure accountability. 

The PEO is taking several steps to increase flexibility in the small caliber 

ammunition procurement process. First, the PEO plans to increase Lake 

City’s production capacity to 1.5 billion rounds per year by March 2006 

through additional modernization. Moreover, the PEO is in the process of 

selecting a commercial contractor that will provide an additional 

300 million small caliber ammunition rounds per year. This commercial 

producer will serve as a second source in addition to Lake City, to meet 

small caliber ammunition needs. The contract is to be awarded in mid 

2005, with initial deliveries to start in January 2007. Also, the PEO is 

requiring that this commercial source be able to supply an additional 

200 million rounds of small caliber ammunition, if requirements continue 

to increase. 9

 

In the event that future small caliber ammunition requirements were to 

decrease, which would likely happen if war fighting operations were 

scaled back, the PEO plans to reduce the amount of ammunition produced 

at Lake City, while maintaining the 300 million rounds of ammunition 

production provided by the commercial producer. According to a PEO 

official, the reduction at Lake City will be accomplished by reducing the 

number of work shifts rather than by storing or mothballing equipment. 

Therefore, a future need for increased production could be met by adding 

shifts. By building this flexibility into the production at Lake City, whose 

production the PEO can expand or contract under a new contract starting 

 9

In 2005 the PEO issued a request for proposals for a commercial producer to produce 

300 million rounds per year. The request calls for 300 million rounds for the first year, plus 

four additional 1-year options for 300 million rounds per year. In addition the request 

requires that the commercial producer have the capability of increasing production by an 

additional 200 million rounds within 12 months of an award, if needed. 

PEO Is Taking Steps 

to Meet Future Small 

and Medium Caliber 

Needs, but 

Implementation 

Problems Exist 

PEO Is Attempting to Build 

Flexibility into 

Procurement Process for 

Small Caliber Ammunition 
Page 15 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

in fiscal year 2008, the PEO hopes to avoid the need for future additional 

buys, while retaining the capacity to expand production at Lake City. 

The PEO has initiated a planning process to ensure that the national 

technology and industrial base for conventional ammunition’s capacity 

can effectively and efficiently respond to future DOD ammunition needs, 

including small and medium caliber ammunition requirements.10 While the 

process is ongoing, information needed to effectively implement all 

aspects of the process and performance metrics needed to annually 

measure progress and ensure accountability are lacking. 

In November 2003, the PEO issued a plan11 with the following five goals: 

(1) balance industrial base and acquisition management risk; (2) transform 

to meet current and future requirements; (3) incentivize industry to 

reinvest in capital equipment and processes; (4) modernize required 

manufacturing and logistics capacity; and (5) operate effectively and 

efficiently. In addition to these five goals, the plan establishes 30 initiatives 

that are intended to help meet the goals. (See appendix II for a list of the 

30 initiatives by goal.) 

The PEO has begun taking actions to implement several of the 30 

initiatives to achieve the plan’s goals. For example, the PEO has begun 

implementing initiatives that address determining whether procurements 

of conventional ammunition should be restricted to sources within the 

national technology and industrial base, as provided by section 806 of 

Public Law 105-261. The PEO, the Joint Munitions Command, and the 

Defense Contract Management Agency have worked together to begin the 

development of a risk assessment tool that will include industrial base 

data such as requirements, suppliers, capacities, deficiencies, production 

schedules, and inventories. The tool also will be capable of developing 

reports with “what-if” scenarios to anticipate production problems. To 

date, the Joint Munitions Command and the Defense Contract 

Management Agency have identified hundreds of conventional 

ammunitions items that could not be produced if only one supplier of the 

 10The PEO was tasked with developing a conventional ammunition industrial base strategic 

plan to ensure that the ammunition industrial base could effectively and efficiently respond 

to current and future conventional ammunition requirements. 

11Single Manager for Conventional Ammunition (SMCA) Industrial Base Strategic Plan: 

2015. 

A Planning Process for 

Ammunition Has Been 

Initiated, but Information 

Needed for Effective 

Implementation and 

Measuring Performance Is 

Lacking 
Page 16 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

necessary components needed to build the item would suddenly become 

unavailable. As part of its efforts to implement its section 806 

responsibilities, the PEO is encouraging all ammunition program managers 

to provide acquisition plans for their conventional ammunition needs, as 

required by regulation.12 This process is intended to help the PEO ensure 

that other Army and DOD components are developing procurement 

strategies that adhere to section 806. 

Despite these actions, the implementation of the planning process has two 

major weaknesses. First, the PEO lacks the information needed to 

effectively implement several initiatives. For example, conducting a 

business case analysis to determine the future size and scope of the 

government-owned base to preserve critical capabilities and reduce costs 

is key to meeting the PEO goals. However, implementing the business case 

analysis is outside the PEO’s scope of responsibility. Further, who will 

need to take action and what needs to be done to develop the business 

case have not yet been specified. Further, in the case of the acquisition 

plans, the PEO has encouraged ammunition program managers to submit 

acquisition plans so that determinations can be made as to what should be 

procured within the national technology and industrial base, as called for 

in section 806. Some services program managers (other than Army) have 

not been forthcoming with all the information needed to make these 

determinations. The authority to require program managers to submit 

these plans rests with the Under Secretary of Defense for Acquisition, 

Technology and Logistics. 

Second, the performance measures in place are not sufficient to monitor 

progress made in meeting the plan’s goals and objectives and ensure 

accountability. The Government Performance and Results Act of 1993 

(Public Law 103-62) provides guiding principles that agencies should use 

to gauge progress towards long-term goals. These principles include 

identifying required resources such as staff, schedules, and costs. 

Additionally, the act requires agencies to report actual performance 

against performance goals, the reasons certain goals were not met, and 

future planned actions to meet stated goals. The 30 initiatives included in 

the PEO’s plan establish some accountability for implementation because 

they identify the objectives for each goal and general performance 

measures. Further, the PEO is developing plans for each of the 

30 initiatives—14 of which have been developed. These plans contain 

 12See section 207.103 of the Defense Federal Acquisition Regulation Supplement. 
Page 17 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

information on major activities or actions that must be taken to complete 

an initiative and identify the PEO staff responsible for managing each 

initiative. However, the PEO has not yet completed the development of 

implementation plans. Furthermore, the initiatives in the strategic plan do 

not include key results-oriented principles such as identifying key 

resources needed to meet the plan’s goals and objectives including costs, 

schedules, and responsible DOD components for individual initiatives. In 

addition the plan does not include an annual review process to compare 

the actions taken to the desired performance. Such evaluations could be 

useful in achieving the plan’s goals. 

Ensuring the industrial base can meet DOD’s fluctuating small and 

medium caliber requirements is a significant challenge. Unforeseen events, 

such as the terrorist attacks of September 11, 2001, and subsequent 

military deployments, make predicting future requirements difficult. 

However, it is imperative that the warfighter be provided with sufficient 

ammunition to carry out missions to counter ongoing and emerging 

threats without amassing wasteful unused stockpiles. While DOD has been 

able to meet its near-term ammunition requirements, it has had to rely on 

foreign suppliers to make up for some shortfalls. Implementing a strategy 

for DOD’s long-term ammunition needs should include steps to ensure that 

future ammunition acquisitions are both cost-effective and timely. The 

likelihood that the current strategy will achieve its goals and objectives 

could be enhanced by (1) ensuring that the information needed to 

effectively implement initiatives is provided to those responsible for 

implementation, and by (2) ensuring that the plan identifies key resources 

needed to achieve the plan’s goals and objectives, and developing an 

annual review process to compare the actions taken to the desired 

performance. 

To improve DOD’s ability to manage the national technology and industrial 

base for small and medium caliber ammunition and to address risks to that 

base, we recommend that the Secretary of Defense direct the 

• Under Secretary of Defense for Acquisition, Technology, and 

Logistics to ensure that needed information on planned 

ammunition procurements is provided to the Program Executive 

Officer for Ammunition; and 

• Assistant Secretary of the Army for Acquisition, Logistics, and 

Technology to ensure that the Program Executive Officer for 

Conclusions 

Recommendations for 

Executive Action 
Page 18 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ammunition identifies and provides key resources and develops 

metrics for measuring annual progress in meeting planned goals 

and objectives. 

In commenting on a draft of this report, DOD concurred with both 

recommendations. In response to our recommendation that DOD ensure 

that needed information on planned ammunition procurements be 

provided to the Program Executive Officer for Ammunition, the Under 

Secretary of Defense for Acquisition, Technology, and Logistics plans to 

issue direction to the services emphasizing the need to submit small and 

medium caliber ammunition plans to the Single Manager for Conventional 

Ammunition. In response to our recommendation that the Program 

Executive Officer for Ammunition identify and provide key resources and 

develop metrics for measuring annual progress in meeting planned goals 

and objectives, the Under Secretary of Defense for Acquisition, 

Technology, and Logistics plans to provide direction to the Assistant 

Secretary of the Army for Acquisition, Logistics, and Technology and the 

Program Executive Officer for Ammunition to identify and provide key 

resources and develop/refine metrics for measuring annual progress in 

meeting planned goals and objectives. (See appendix III for agency 

comments.) In addition, DOD provided technical comments that we have 

incorporated as appropriate. 

Copies of this report will be sent to interested congressional committees 

and the Secretary of Defense. We will also make copies available to others 

upon request. In addition, the report will be available at no charge on the 

GAO Web site at http://www.gao.gov. 

Agency Comments 

and Our Evaluation 
Page 19 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Please contact me at (202) 512-4841 if you have any questions regarding 

this report. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this report. Major 

contributors to this report were Thomas Denomme, Marie Ahearn, 

Tony Beckham, Michael Gorin, Arturo Holguín, and Karen Sloan. 

Sincerely yours, 

Ann Calvaresi-Barr 

Director, Acquisition 

 and Sourcing Management 
Appendix I: Scope and Methodology 

Page 20 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

To identify changes over the past several years that have increased the 

requirement for small and medium caliber ammunition and assess the 

actions DOD has taken to address the increased requirement, we reviewed 

documentation and data, and interviewed DOD officials from the Office of 

the Under Secretary of Defense for Acquisition, Technology and Logistics; 

the Office of the Assistant Secretary of the Army for Acquisition, Logistics 

and Technology; the Office of the Army Deputy Chief of Staff for 

Operations and Plans; the Office of the PEO for Ammunition; and the 

Training and Doctrine Command. Specifically, we reviewed policy 

documents governing (1) DOD’s Transformational Planning Guidance, 

(2) Army training requirements, (3) small and medium caliber ammunition 

production requirements, and (4) other major operational requirements 

related to small and medium caliber ammunition needs. We also 

interviewed DOD and Army officials and obtained inventory data to 

determine small and medium caliber ammunition trends and to understand 

how selected policies have impacted the industrial base for ammunition. 

For the purposes of this review, we collected data on 5.56mm, 7.62mm, 

9mm, and .50-caliber small caliber ammunition; as well as 20mm, 25mm, 

30mm, and 40mm medium caliber ammunition. We also spoke to two 

commercial ammunition producers to obtain a better understanding of the 

supplier base. Finally, we examined budget data provided by officials from 

the Office of the Assistant Secretary of the Army for Financial 

Management and Comptroller to determine the funding for small and 

medium caliber ammunition between fiscal years 2001 to 2005. 

To determine how DOD plans to ensure that it can meet future small and 

medium caliber ammunition needs, we interviewed officials from 

previously mentioned DOD offices, including the Office of the PEO for 

Ammunition, to determine the status of their planning efforts. 

Appendix I: Scope and Methodology 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 21 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

Strategic Goal 1: Balance industrial base & acquisition management risk 

4 Synchronize ammunition procurements to maintain 

the required manufacturing capabilities and 

capacities. Define structured decision process to 

facilitate synchronizing. (Keep lines warm.) 

• Ensure critical core 

competencies and capabilities 

are available to meet 

requirements. 

• Balance cost, schedule, and 

performance with the need to 

have capability. 

• Establish right-sized ammunition 

industrial base. 

1. Munitions Readiness Ratings. 

2. Utilized capacity and footprint. 

3. Government-owned, 

contractor-operated/ 

government-owned, 

government-operated 

operating costs. 

4. Strategic outload capabilities 

(facilitization, staffing, and 

skills). 

12 Effectively implement section 806 of Public Law 

105-261 (Strom Thurmond National Defense 

Authorization Act for Fiscal Year 1999). 

 

13 Use science base production and prototyping as 

principal means for attaining surge capabilities and 

emergency requirements. 

 

15 Partner with industry and academia to assist in 

advancing the state of manufacturing readiness. 

 

20 Define and require an industrial base readiness 

assessment into all acquisition plans and strategies.

 

23 Pursue feasibility and overall business case for 

government-owned, contractor-operated Army 

ammunition plants for sell, long-term lease, and/or 

consolidation options focusing on preserving critical 

capabilities and reducing costs. (Pending fiscal year 

2005 Base Realignment and Closure Process 

outcome and Army industrial base transformation 

guidance.) 

 

Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 22 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

Strategic Goal 2: Transform to meet current and future requirements 

3 Develop a replenishment definition to increase 

planning and industrial base sizing consistencies.

• Determine effective 

replenishment requirements 

definition and strategy. 

1. Existence and clarity of 

replenishment definition. 

2. Percentage of acquisition 

strategies/plans utilizing 

industrial base assessment tool 

for planning. 

3. Munitions readiness ratings. 

4. Trend of single point failure 

condition. 

17 Establish an integrated data environment process 

and centralized industrial base assessment tool. 

Assessment tool will include requirements, 

suppliers, capacities, deficiencies, production 

schedules, stockpile, metrics, and “what-if” report 

generation. 

• Optimize acquisition planning 

and industrial base 

preparedness. Increase 

manufacturing capability and 

readiness. 

5. Logistics Modernization Program 

deployment schedule. 

6. Meet combatant command 

operations planning 

requirements. 

7. Correct positioning of ammunition 

stocks to meet peacetime and 

wartime requirements. 

23 Pursue feasibility and overall business case for 

government-owned, contractor-operated Army 

ammunition plants for sell, long-term lease, 

and/or consolidation options focusing on 

preserving critical capabilities and reducing costs. 

(Pending fiscal year 2005 Base Realignment and 

Closure Process outcome and Army industrial 

base transformation guidance.) 

• Reduce government-owned, 

contractor-operated Army 

ammunition plant operating 

costs/footprint and dispose of 

excess Army ammunition plant 

capacity. 

8. Government-owned, contractoroperated/government-owned, 

government-operated operating 

costs. 

9. Utilized capacity and footprint. 

10. Unit cost trends for critical 

ammunition end items. 

30 Sell non-value added, unutilized production 

equipment and utilize revenue for advancing 

manufacturing technology capability, 

environmental remediation, and reducing Army 

ammunition plant operating costs. 

 

18 Utilize science-based production methodologies 

and knowledge transfer/access to Industry for 

ramp-up capability and/or capacity. Alternative 

strategy to laying away facilities/equipment. 

• Develop and ensure 

manufacturing/logistics 

capability and readiness. 

11. Army manufacturing 

modernization investments. 

12. Munitions readiness ratings. 

6 Establish robust manufacturing modernization 

funding lines. 

 13. Logistics critical skills and 

capability sustainment 

assessments. 

14. Strategic outload capabilities 

(facilitization, staffing, and skills). 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 23 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

Strategic Goal 3: Incentivize industry to reinvest in capital equipment and processes 

1 Establish multi-year contracting 

strategies by ammo family (14 

categories). 

• Maintain a financially viable 

industrial base. 

1. Number of suppliers in high-risk 

financial condition. 

2. Financial viability of suppliers of 

critical core capabilities. 

19 Selectively promote initiatives from 

the Armament Retooling and 

Manufacturing Support Act of 1992 

authorizing the Army to permit 

commercial firms to use facilities 

located at government-owned, 

contractor-operated ammunition 

plants for commercial purposes, and 

identify projects for production 

modernization and transformation. 

 

28 Explore and implement 

indemnification on a selected basis. 

 

5 Promote long-term 

relationships/partnerships with 

Industry. 

• Increase industry investment in 

equipment and facilities. 

3. Industry investment applied to 

modernizing manufacturing 

processes, equipment, and 

facilities. 

27 Offer government-owned equipment 

and personnel for supplier use. 

 

7 Initiate a manufacturing 

modernization loan program to 

provide low-interest rates to the 

ammo supply chain. 

 

18 Facilitate use of science based 

production modeling and process 

controls. 

 

14 Award incentive production contracts 

that match government funds for 

contractor investment in capital 

equipment and processes. 

 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 24 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

Strategic Goal 4: Modernize required manufacturing and logistics capacity 

6 Establish robust manufacturing 

modernization funding lines. 

• Increase manufacturing and 

logistics readiness to meet current 

and future requirements. 

1. Munitions readiness ratings. 

2. Manufacturing readiness levels for 

future munitions. 

3. Army and industry’s 

manufacturing modernization 

investments. 

4. Number of single point failures 

adopting science based 

production methodologies. 

9 Identify, consolidate, and prioritize 

production deficiencies in the 

organic and commercial sector, 

aligning priorities with the program 

managers’ needs. 

 

14 Integrate into ammunition contracts 

a percentage required for capital 

improvement initiatives with 

contractor matching. 

 

24 Establish science-based production 

methodologies at critical single point 

failure locations and transfer 

prototyping knowledge/capabilities to 

Industry. 

 

25 Leverage and coordinate Mantech 

and research, development, 

technology, and engineering from all 

services. 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 25 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

Strategic Goal 5: Operate effectively and efficiently 

2 Ensure that military services and 

industry participate in strategic 

planning activities. 

• Maintain open communications with 

all services and industry. 

1. Number of annual meetings with 

industry and services. 

10 Actively participate in industry 

organizations and events; e.g., 

National Defense Industrial 

Association, Munitions Industrial 

Base Task Force, etc. 

 2. Customer satisfaction survey. 

8 Level and consolidate procurement 

buys to the maximum extent 

practicable. 

• Reduce ammunition life-cycle costs.

• Maximize customer satisfaction. 

• Reduce response time in providing 

ammunition to the joint warfighter. 

3. Percentage of identified 

inefficiencies that have been 

corrected. 

4. Utilized capacity and footprint. 

11 Identify operating inefficiencies and 

formulate corrective actions. (This 

initiative was deleted in the 

November 2004 update of the plan.) 

 5. Customer satisfaction survey 

ratings. 

6. Munitions readiness ratings. 

21 Incentivize the implementation of 

best business practices in single 

manager for conventional 

ammunition processes and at key 

government and commercial 

suppliers. 

 7. Number of self-help projects 

implemented by ammunition 

suppliers and associated valueengineering savings. 

23 Pursue feasibility and overall 

business case for governmentowned, contractor-operated Army 

ammunition plants for sale, longterm lease, and/or consolidation 

options focusing on preserving 

critical capabilities and reducing 

costs. (Pending fiscal year 2005 

Base Realignment and Closure 

Process outcome and Army 

industrial base transformation 

guidance.) 

 8. Meet combatant command 

operations planning 

requirements. 

9. Correct positioning of ammunition 

stocks to meet peacetime and 

wartime requirements. 

29 Promote/incentivize contractors to 

pursue state-based, self-help 

programs among ammo suppliers. 

 

16 Promote commonality of 

components across/within ammo 

families. 

 

17 Develop and implement an industrial 

base integrated data environment 

using a web-based assessment tool 

and report generating system that 

captures production data, stockpile 

condition, requirements and specific 

industrial base metrics. 

• Automate industrial base planning 

and processes. 

10. Percentage of production base 

plan converted to integrated data 

environment. 

11. Establishment and completion of 

a logistics industrial base plan. 
Appendix II: Overview of Strategic Plan for 

Conventional Ammunition Industrial Base, by 

Goal 

Page 26 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Ranking Strategic initiatives Objectives Performance measures 

22 Identify and benchmark best 

practices in production and facility 

management. 

• Understand condition and posture of 

the ammunition and logistics base. 

12. Percentage of baseline metrics 

collected. 

13. Munitions readiness ratings. 

26 Baseline, characterize, and monitor 

the state of the industrial base 

supply chain. Utilize Joint Munitions 

Command production base 

readiness measurement scheme to 

characterize risk of industrial base to 

meet requirements. 

 14. Strategic outload capabilities 

(facilitization, staffing, and skills). 

Source: PEO for Ammunition data. 
Appendix III: Comments from the Department 

of Defense 

Page 27 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs 

Appendix III: Comments from the 

Department of Defense 
Appendix III: Comments from the Department 

of Defense 

Page 28 GAO-05-687 DOD Meeting Small and Medium Caliber Ammunition Needs (120373) 
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