BAE Systems wins big US Army ammo plant contract

BAE Systems wins big US Army ammo plant contract
May 13 (Reuters)

Britain's BAE Systems (BAES.L) said on Friday it had won a 10-year, $850 million contract to operate and maintain the U.S. Army's Radford ammunition plant in Virginia, the only domestic producer of a key material used in explosives and propellants.
BAE beat out long-time incumbent Alliant Techsystems (ATK.N) to win the contract, which also includes three 5-year options that could extend the award through 2036 and add significant new revenues, the company said.
Radford Army Ammunition Plant is a 6,900-acre government-owned, contractor-operated facility first built during World War Two that employs more than 850 people.
The facility, which sits on two sites straddling Virginia's New River, is the only domestic producer of nitrocellulose, the feedstock for explosives and propellants used by the military, police officers, hunters and other recreational shooters.
ATK had managed the facility since 1995.
BAE already operates the U.S. Army's Holston ammunition plant in Kingsport, Tennessee, under an Army contract awarded in 1998 that runs through 2023.
The contract win comes at an important time for BAE, which announced last month that it was laying off 600 workers at its Sealy, Texas plant, after losing a big Army truck contract.
The company managing the plant is allowed to sell ammunition to the private sector, as long as the U.S. military gets the bomb, bullet and mortar materials its forces need. By allowing commercial sales, the government is able to pay a lower price for what it buys from the plant operator.
BAE is one of the major subcontractors to Lockheed Martin Corp (LMT.N) on the $382 billion F-35 fighter program. (Source: Reuters)


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