Big Win For Winchester

The Department of Defense announcement of the contract award:

Olin Winchester LLC, East Alton, Illinois, was awarded a $28,313,481 fixed-price with economic-price-adjustment contract for production of small caliber ammunition and the operation, maintenance, and modernization of the Lake City Army Ammunition Plant. Bids were solicited via the internet with three received. Work will be performed in Lake City Army Ammunition Plant in Independence, Missouri, with an estimated completion date of Sept. 27, 2029. U.S. Army Contracting Command, Rock Island Arsenal, Illinois is the contracting activity (W52P1J-19-F-0742).

From the official release by Olin Corporation:

CLAYTON, Mo., Sept. 27, 2019 /PRNewswire/ — Olin Corporation (NYSE: OLN) announced today that its ammunition division, Olin Winchester, LLC (“Winchester”), has been selected by the U.S. Army to operate and manage the Lake City Army Ammunition Plant in Independence, Missouri.  Following a one-year transition period, Winchester will assume full operational control of the Lake City plant on October 1, 2020.  The contract has an initial term of seven years and may be extended by the U.S. Army for up to three additional years. 

“Winchester is honored to have been selected by the Army to operate, maintain and modernize this unique, strategic asset of the U.S. Government’s munitions industrial base,” said Brett Flaugher, President of Winchester. “Our team is fully prepared and 100% committed to the safe, reliable, and responsible operation of Lake City, in the best interest of and service to the U.S. Military.”

The Lake City Ammunition Plant has a workforce of approximately 1,900 employed by Northrup Grumman. The Army itself has one officer and 27 civilian employees at the plant. Olin Winchester had managed the plant from 1985-2000.

Soldier Systems Daily notes an interesting wrinkle in this contract award. The military is in the development process of the Next Generation Squad Weapon (NGSW) which would replace the 5.56 NATO M4A1 and M249 SAW with something in an as of yet undetermined 6.8mm cartridge. Olin Winchester has teamed with AAI Textron in the competition to produce the new ammunition and the NGSW. The other competitors are General Dynamics teamed with True Velocity for ammunition and SIG Sauer (both ammo and firearm).

They note:

Due to the costs associated with a wholesale change in both weapons and ammunition, the Army is understandably concerned with controlling costs by owning Intellectual Property associated with these designs. They are going to want as much of the data rights as possible transferred to them. Imagine the huge advantage Team AAI Textron will now have during final negotiations because their ammunition producer is running the factory it will be produced in.

One might argue that this contract award was made in a vacuum. After all, Program Executive Office Soldier owns the NGSW program and Joint Program Executive Office Armaments and Ammunition owns Lake City. But thanks to the Army’s recent Futures Command reorganization, both PEOs have representatives on the Lethality Cross Functional Team and are fully aware of one another’s activities, combining efforts of many programs, with special emphasis on NGSW. Remember, it’s really an ammunition program.

What’s more, LCAAP is old. It requires constant upkeep and the transition to a new ammunition for NGSW will require an entire new wing of the plant to be manufactured. Estimates are rumored to be around three-quarters of a billion Dollars to accomplish these capital improvements. If you look at the award, Winchester will hold the contract for the next decade. The Army plans to start rolling out NGSW in 2022.

The entry for the NGSW ammunition from the AAI Textron-Olin Winchester team is a cased, telescoping round similar to a shotgun sabot. The requirements for this round from the Army is that it have performance similar to the .270 Short Magnum and be 20% lighter than existing ammunition.

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