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

2. OUTLINE GOVERNMENT SMALL CALIBER AMMO PRODUCTION BASE HISTORY SMALL CAL BASE CAPACITY ARMY TRAINING AMMUNITION REQUIREMENTS / FUNDING TRENDS SMALL CAL AMMO SCENARIOS SMALL CAL BASE RISKS INDUSTRIAL BASE ACTIONS

3. Government Small Caliber Ammo Production Base 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 – 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 1.877B/mo 100M/mo PEAK OUTPUT WW II Cal. 30 900M/mo Cal.30 carbine 227M/mo Cal.45 ball 250M/mo Cal. 50 500M/mo 1877M/mo

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

5. Small Cal Base Capacity Base Capacity 1.550B 0 1.5 0.3 0.6 0.9 1.2 Lake City Other Sources (Built to US TDP) Non-TDP Sources* * Emergency 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 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 Ctgs in B GOCO

6. ARMY TRAINING AMMUNITION REQUIREMENTS / FUNDING TRENDS CALS GROWTH: 1995 – 30 full 2001 – 73 full, 29 monitor Current – 110 full, 33 monitor CALS GROWTH: 1995 – 30 full 2001 – 73 full, 29 monitor Current – 110 full, 33 monitor $1.5B FY88FY90 FY95 FY05FY00 $.5B $1.0B FY10 $1.56B FY88 RQMT $1.088B FY11 $2.0B $2.245B FY06 RQMT $2.467B FY11 FY07 RQMT $2.295B MAJOR COST DRIVERS: Modernization Stockpile depleted Force structure changes STRAC / POI changes Available Inventory $2.5B Total Training Ammo Rqmt (Unconstrained) Validated Rqmt (Critical) Funding Level (Yr of Execution Ammo Used Inventory or funding required to fill gap.

7. SMALL CAL AMMO SCENARIOS POM FUNDING (ALL SERVICES) DESIRED SURGE CAPABILITY GOAL ALL SERVICES GOCO PLANNING CAPACITY ALT. SOURCE UNFUNDED REQUIREMENTS

8. 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

9. 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)