Attachment 0031 - Final FY25 Ammo Plant Mod.pdf

CUI

HEADQUARTERS, DEPARTMENT OF THE ARMY

REPORT TO CONGRESS

Army Ammunition Plant

Modernization Plan

April 2025

The estimated cost of this report for the Department of Defense (DOD) is approximately $185,120.00.

This includes $1,000.00 in expenses and $184,120.00 in DOD labor.

Table of Contents CONGRESSIONAL LANGUAGE ................................................................................................................I EXECUTIVE SUMMARY ........................................................................................................................ III

1.0 INTRODUCTION

1.1 2025 AAP Modernization Plan Updates

1.2 Background

1.3 INDUSTRIAL BASE MANAGEMENT – SINGLE MANAGER FOR CONVENTIONAL

AMMUNITION (smca)

2.0 MODERNIZATION CHALLENGES, OBJECTIVES, AND PLANNING APPROACH

2.1 Modernization Challenges

2.1.1 Dangerous and High-Risk Operations

2.1.2 Automation and Emerging Technology Solutions

2.1.3 Regulatory Compliance

2.1.4 Cybersecurity

2.1.4.1 Risk Management Framework

2.1.4.2 AAP Cybersecurity Progress

2.1.4.3 Continuous Monitoring and Metrics

2.1.4.4 Collaboration, Awareness, and Training

2.1.4.5 Incident Response

2.1.5 Rising Costs

2.1.6 Supply Chains and Material Sourcing

2.1.7 Surge Production Capacity Challenges

2.2 Modernization Key Objectives

2.3 Modernization Planning Approach

2.4 Modernization Execution Methodology

2.5 Cost Estimating Process

3.0 RESOURCING

3.1 Historical Resourcing

3.2 GOCO AAP Modernization Resourcing

3.3 Life Cycle Pilot Process Resourcing

3.3.1 Project Selection

3.3.2 Program Status

3.3.3 Resourcing Summary

3.4 Armament Retooling and Manufacturing Support (ARMS) Resourcing

4.0 CAPITAL INVESTMENT PLANS

4.1 Holston Army Ammunition Plant

4.1.1 Core Capabilities

4.1.2 Modernization Summary

4.1.3 Modernization Progress

4.1.4 Supplemental Funding Impacts

4.1.5 Advances in Automation and Emerging Technology Solutions

4.1.6 Modernization Requirements FY 2025 through FY 2031

4.2 Iowa Army Ammunition Plant

4.2.1 Core Capabilities

4.2.2 Modernization Summary

4.2.3 Modernization Progress

4.2.4 Supplemental Funding Impacts

4.2.5 Advances in Automation and Emerging Technology Solutions

4.2.6 Modernization Requirements FY 2025 through FY 2031

4.3 Lake City Army Ammunition Plant

4.3.1 Core Capabilities

4.3.2 Modernization Summary

4.3.3 Modernization Progress

4.3.4 Supplemental Funding Impacts

4.3.5 Advances in Automation and Emerging Technology Solutions

4.3.6 Modernization Requirements FY 2025 through FY 2031

4.4 Quad Cities Cartridge Case Facility

4.4.1 Core Capabilities

4.4.2 Modernization Summary

4.4.3 Modernization Requirements FY 2025 through FY 2031

4.5 Radford Army Ammunition Plant

4.5.1 Core Capabilities

4.5.2 Modernization Summary

4.5.3 Modernization Progress

4.5.4 Supplemental Funding Impacts

4.5.5 Advances in Automation and Emerging Technology Solutions

4.5.6 Modernization Requirements FY 2025 through FY 2031

4.6 Scranton Army Ammunition Plant

4.6.1 Modernization Summary

4.6.2 Modernization Progress

4.6.3 Supplemental Funding Impacts

4.6.4 Advances in Automation and Emerging Technology Solutions

4.6.5 Modernization Requirements FY 2025 through FY 2031

5.0 EXTENDED PLANNING PERIOD

6.0 PRODUCTION CAPACITY AND SCALABILITY

7.0 ANALYSIS OF CONSTRUCTION FOR NEW, MODERN FACILITIES AS AN ADDITIONAL ALTERNATIVE

8.0 SUMMARY

9.0 ABBREVIATION AND ACRONYM LIST

10.0 REFERENCES AND AMMUNITION AUTHORITIES

11.0 APPENDICES

11.1 Appendix A: PBS Modernization Requirements FY25-31 and EPP by Facility

11.1.1 HSAAP PBS Modernization Requirements FY25-31

11.1.2 HSAAP Strategic PBS Modernization Requirements EPP

11.1.3 IAAAP PBS Modernization Requirements FY25-31

11.1.4 IAAAP Strategic PBS Modernization Requirements EPP

11.1.5 LCAAP PBS Modernization Requirements FY25-31

11.1.6 LCAAP Strategic PBS Modernization Requirements EPP

11.1.7 QCCCF PBS Modernization Requirements FY25-31

11.1.8 RFAAP PBS Modernization Requirements FY25-31

11.1.9 RFAAP Strategic PBS Modernization Requirements EPP

11.1.10 SCAAP PBS Modernization Requirements FY25-31

11.2 Appendix B: PBS Modernization Requirements by Fiscal Year

11.2.1 FY 2025 PBS Modernization Requirements

11.2.2 FY 2026 PBS Modernization Requirements

11.2.3 FY 2027 PBS Modernization Requirements

11.2.4 FY 2028 PBS Modernization Requirements

11.2.5 FY 2029 PBS Modernization Requirements

11.2.6 FY 2030 PBS Modernization Requirements

11.2.7 FY 2031 PBS Modernization Requirements

11.3 Appendix C: PBS Modernization Projects in Execution

11.3.1 HSAAP Projects in Execution

11.3.2 IAAAP Projects in Execution

11.3.3 LCAAP Projects in Execution

11.3.4 RFAAP Projects in Execution

11.3.5 SCAAP Projects in Execution

11.4 Appendix D: Capacity and Scalability Data

11.4.1 HSAAP Capacity and Scalability Data

11.4.2 IAAAP Capacity and Scalability Data

11.4.3 LCAAP Capacity and Scalability Data

11.4.4 QCCCF Capacity and Scalability Data

11.4.5 RFAAP Capacity and Scalability Data

11.4.6 SCAAP Capacity and Scalability Data

LIST OF FIGURES

Figure 1. Digital Engineering Maturity Scale with Assessments Figure 2. DOD IT Systems RMF Process Figure 3. GOCO AAP RMF Life-cycle Roadmap Figure 4. Project Scoring Criteria Figure 5. Quantitative Scoring Formula Figure 6. GOCO AAP Contract Roadmap Figure 7: GOCO AAP Historical and Current Funding – PAA, PIF Figure 8. The LCPP Project Selection Process Figure 9. LCPP Project Transition Status Figure 10. HSAAP Products Figure 11. HSAAP’s Condition and Modernization Status Figure 12. IAAAP LAP Products Figure 13. IAAAP’s Condition and Modernization Status Figure 14. LCAAP Products Figure 15. LCAAP’s Condition and Modernization Status Figure 16. RFAAP Products Figure 17. RFAAP’s Condition and Modernization Status Figure 18. SCAAP Products Figure 19. SCAAP’s Condition and Modernization Status

LIST OF TABLES

Table 1. GOCO AAPs Table 2. Modernization Objectives and Project Scoring Alignment Table 3. FY25–FY31 Requirements Table 4. Examples of Out-Year Strategic Modernization Projects Table 5. LCPP Funding FYs 2023–2028 Table 6. Summary of Annual Investment and Savings Table 7. Summary of Annual Benefits Table 8. GOCO Facility Summary Table 9. FY 2024 Supplemental Appropriation for HSAAP Table 10. FY 2024 Supplemental Appropriation for IAAAP Table 11. FY 2024 Supplemental Appropriation for LCAAP Table 12. FY 2024 Supplemental & FY 2025 Hurricane Helene Supplemental Appropriations for

RFAAP

Table 13. FY 2024 Supplemental Appropriation for SCAAP Table 14. GOCO AAP Modernization Requirements i

Congressional Language

This report is in response to language found in Section 2834 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Public Law 117-81), Section 2888 of the NDAA for FY 2024 (Public Law 118-31), and the FY24 Senate Appropriations Committee-Defense Report 118-81 which read:

FISCAL YEAR 2022 NDAA, SECTION 2834:

“SEC. 2834. MASTER PLANS AND INVESTMENT STRATEGIES FOR ARMY

AMMUNITION PLANTS GUIDING FUTURE INFRASTRUCTURE, FACILITY, AND

PRODUCTION EQUIPMENT IMPROVEMENTS.

(a) SUBMISSION OF MASTER PLANS AND INVESTMENT STRATEGIES—Not later than March 31, 2022, the Secretary of the Army shall submit to the congressional defense committees a report containing the following:

(1) The master plan for each of the ammunition organic industrial base production facilities under the jurisdiction of the Secretary of the Army (in this section referred to as an ‘‘ammunition production facility’’) that was developed to guide planning and budgeting for future infrastructure construction, facility improvements, and production equipment needs at the ammunition production facility.

(2) An investment strategy to address the facility, major equipment, and infrastructure requirements at each ammunition production facility in order to support the readiness and material availability goals of current and future weapons systems of the Department of Defense.

(b) ELEMENTS OF MASTER PLAN — To satisfy the requirements of subsection (a)(1), the master plan for an ammunition production facility must incorporate the results of a review of industrial processes, logistics streams, and workload distribution required to support production objectives and the facility requirements to support optimized processes and include the following specific elements:

(1) A description of all infrastructure construction and facility improvements planned or being considered for the ammunition production facility and production equipment planned or being considered for installation, modernization, or replacement.

(2) An explanation of how the master plan for the ammunition production facility will promote efficient, effective, resilient, secure, and cost-effective production of ammunition and ammunition components for the Armed Forces.

(3) A description of how development of the master plan for the ammunition production facility included input from the contractor operating the ammunition production facility and how implementation of that master plan will be coordinated with the contractor.

(4) A review of current and projected workload requirements for the manufacturing of energetic materials, including propellants, explosives, pyrotechnics, and the ingredients ii for propellants, explosives, and pyrotechnics, to assess efficiencies in the use of existing facilities, including consideration of new weapons characteristics and requirements, obsolescence of facilities, siting of facilities and equipment, and various constrained process flows.

(5) An analysis of life-cycle costs to repair and modernize existing mission-essential facilities versus the cost to consolidate functions into modern, right-sized facilities at each location to meet current and programmed future mission requirements.

(6) A review of the progress made in prioritizing and funding projects that facilitate process efficiencies and consolidate and contribute to availability cost and schedule reductions.

(7) An accounting of the backlog of restoration and modernization projects at the ammunition production facility.

(c) ELEMENTS OF INVESTMENT STRATEGY — To satisfy the requirements of subsection (a)(2), the investment strategy for an ammunition production facility must include the following specific elements:

(1) A description of the funding sources for such infrastructure construction, facility improvements, and production equipment, including authorized military construction projects, appropriations available for operation and maintenance, and appropriations available for procurement of Army ammunition in order to support the readiness and material availability goals of current and future weapons systems of the Department of Defense.

(2) A timeline to complete the investment strategy.

(3) A list of projects and a brief scope of work for each such project.

(4) Cost estimates necessary to complete projects for mission essential facilities.

(d) ANNUAL UPDATES—Not later than March 31, 2023, and each March 31 thereafter through March 31, 2026, the Secretary of the Army shall submit to the congressional defense committees a report containing the following:

(1) A description of any revisions made during the previous year to master plans and investment strategies submitted under subsection (a).

(2) A description of any revisions to be made or being considered to the master plans and investment strategies.

(3) An explanation of the reasons for each revision, whether made, to be made, or being considered.

(4) A description of the progress made in improving infrastructure, facility, and production equipment at each ammunition production facility consistent with the master plans and investment strategies.

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(e) DELEGATION AUTHORITY — The Secretary of the Army shall carry out this section acting through the Assistant Secretary of the Army for Acquisition, Logistics, and Technology.

FY24 NDAA, Section 2888:

“SEC. 2888. EXTENSION AND MODIFICATION OF ANNUAL UPDATES TO MASTER

PLANS AND INVESTMENT STRATEGIES FOR ARMY AMMUNITION PLANTS.

Section 2834(d) of the Military Construction Authorization Act for Fiscal Year 2022 (division B of Public Law 117-81; 135 Stat. 2201) is amended--

(1) in the matter preceding paragraph (1), by striking “March 31, 2026” and inserting “March 2030” and

(2) by adding at the end the following new paragraph: “(5) A description of any changes to a master plan for an ammunition production facility made in response to global events, including pandemics and armed conflicts.”

FY24 SENATE APPROPRIATIONS COMMITTE-DEFENSE REPORT 118-81, Page 108

“The Committee directs the Secretary of the Army to submit an updated Army Ammunition Plant Modernization Plan with the submission of the fiscal year 2025 President's budget request that includes production capacity and scalability along with the current six objectives. Given the scale and severity of infrastructure needs across the facilities, the Committee directs the Secretary to include an analysis of construction or contracting for new, modern facilities as an additional alternative. This analysis shall include cost estimates and proposed schedules.”

EXECUTIVE SUMMARY

The Army has developed a comprehensive Army Ammunition Plant (AAP) Modernization Plan. The AAP Modernization Plan addresses the request in the House Armed Services Committee (HASC) Fiscal Year 2022 National Defense Authorization Act (NDAA) report, Section 2834, that directs the Secretary of the Army, through the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA(ALT)), to submit an AAP Modernization Plan to the congressional committees no later than 31 March 2022, with annual updates each subsequent year for five years. Annual update requirements were amended by Section 2888 of the FY 2024 NDAA which extends the annual submission requirement through 31 March 2030. In addition, this update addresses requirements in the FY 2024 Senate Appropriations Committee-Defense Report 118-81, Page 108. The AAP Modernization Plan was submitted in March 2022, as required, and each year since.

This document provides the FY 2025 update, incorporating recent changes in project priorities at our facilities. It also considers the ongoing effects of global events, including:

the lasting impact of the COVID-19 pandemic; support for international partners; global supply chain disruptions and efforts to onshore production, and rising material costs and inflation. These factors have influenced our project priorities and are reflected in this updated document.

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The purpose of the AAP Modernization Plan is to provide a strategy to modernize facility infrastructure and production capabilities by capitalizing on state-of-the-art manufacturing equipment and technologies while maintaining production continuity. The AAP Modernization Plan provides an investment strategy focused on achieving the following objectives and associated end state:

1. Increase manufacturing safety and readiness to meet current and future requirements.

2. Isolate energetic mass from people.

3. Ensure graceful degradation and resilient operations.

4. Improve flexibility, maintainability, and sustainability.

5. Reduce cost of operations.

6. Secure supply chains.

Executing this AAP Modernization Plan will result in improved safety, resiliency, compliance, and operational effectiveness. The AAP Modernization Plan addresses increasing automation to minimize human exposure to hazardous environments and the application of digital manufacturing methods. Modernization efforts discussed within this report address seven Government Owned, Contractor Operated (GOCO) ammunition production facilities, as identified in Table ES-1 below.

TABLE ES-1. GOCO AMMUNITION PRODUCTION FACILITIES

GOCO Facility Operating Contractor Location

Holston Army Ammunition Plant

(HSAAP)

BAE Systems – Ordnance Systems Inc.

(BAE OSI)

Kingsport, TN

Iowa Army Ammunition Plant

(IAAAP)

American Ordnance (AO) Middletown, IA

Lake City Army Ammunition Plant

(LCAAP)

Olin Winchester Independence, MO

Milan Army Ammunition Plant

(MLAAP)

AO* Milan, TN

Quad City Cartridge Case Facility

(QCCCF)

U.S. Army Combat Capabilities Development Command (DEVCOM) maintained;

no current Facility Use Contract**

Rock Island, IL

Radford Army Ammunition Plant

(RFAAP)

BAE OSI** Radford, VA

Scranton Army Ammunition Plant

(SCAAP)

General Dynamics Ordnance and Tactical Systems (GD-OTS)

Scranton, PA

* No active production at MLAAP.

** A solicitation for a competitive operating contract is planned in FY 2025.

The GOCO facilities serve a vital role in protecting our nation’s security—keeping them modernized is necessary for enabling continued ammunition production. Sustaining modernization and maintaining warm ammunition production lines at GOCOs is also necessary when requirements reduce. Procurement of Ammunition, Army (PAA) funding has enabled the Army to execute modernization improvements and recapitalization projects at the GOCO AAPs.

The modernization planning process includes characterizing each GOCO AAP’s operating conditions and useful life of core processes, infrastructure, and support v systems. This characterization data is used to develop “Heat Maps” that provide a visual representation of these assessments and assist in requirements prioritization by indicating the required time frame for modernization to avoid production disruptions or catastrophic failures. This assessment helps prioritize and plan the required design phases that support modernization project execution and budget formulation.

Modernization projects are identified and prioritized based on scoring calculated from weighted criteria and considerations such as criticality of the requirement (e.g., safety and/or environmental compliance), a facility’s ability and capacity to execute the work, and the time remaining on a facility contract.

Project ranking is a critical process because the total annual requirements identified for all the facilities exceed the projected budget availability. Projects that fall within the Total Obligational Authority (TOA) are included in the budget submission; projects that fall outside the TOA are planned for the Extended Planning Period (EPP). Table ES-2 provides a summary of the PAA Provision of Industrial Facilities (PIF) funding spent from FY 2003 through FY 2024, requirements planned for FYs 2025–2031 and projected requirements for FY 2032 and beyond.

TABLE ES-2: PRODUCTION FACILITY PAA PIF FUNDING REQUIREMENTS SUMMARY

GOCO

Ammunition

Facility Core Processes

FYs 2003–2024

($M)

FYs 2003–2024

COCO ($M)

FYs 2025–2031

($M)

FYs 2032+ ($M)

HSAAP (TN) Explosives–HMX, RDX, IMX, TATB 3,007.636 0.000 946.582 897.300

IAAAP (IA)

Load, Assemble, and Pack (LAP) – Mortars, 40mm Cartridges, Tank/Artillery, C-4 Extrusion, Warheads

1,084.804 0.000 657.429 1,070.58

LCAAP (MO) Small and Medium Caliber 1,594.127 0.000 1,262.401 2,678.14

MLAAP (TN) Inactive 21.844 0.000 0.000 0.000

QCCCF (IL) Large Caliber Cartridge Cases 2.205 0.000 11.250 0.000

RFAAP (VA)

Propellant Manufacturing (Rocket, Artillery, Tank, Med Caliber, Nitrocellulose (NC) for all Propellants)

1,842.711 0.000 1,734.573 2,519.18

SCAAP (PA) Large Caliber Metal Parts–Artillery/Mortars 680.963 0.000 270.176 154.863

All Facilities

Maintenance of Inactive Facilities (MIF), Layaway of Industrial Facilities (LIF), Planning and Design (P&D), Engineering Support, QWE, Emergent Maintenance

715.162 1,212.856 712.645 0.000

TOTAL 8,949.452 1,212.856 8,949.452 7,320.06

Several strategic construction projects that are not currently resourced through FY 2031 could potentially be moved to the left if additional resourcing becomes available.

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TABLE ES-3: EXAMPLES OF OUT-YEAR STRATEGIC MODERNIZATION PROJECTS

GOCO Ammunition Facility Strategic Project Investment by Facility Rough Order of Magnitude Cost

($M)

HSAAP (TN) Flexible Explosive Production Facility & Infrastructure CL-20 435-535

HSAAP (TN) ANSOL Thermal Destruction: Construction 150-250

IAAAP (IA) Direct Fire Munitions Facility (Tank Line) 400-600

LCAAP (MO) Modernized Metal Parts Facility 400-500

LCAAP (MO) Consolidated Chemistry & Energetics Process Laboratory 200-300

RFAAP (VA) Solventless Propellant Facility: Design & Construction 700-800

RFAAP (VA) NG-3 (Nitroglycerin) Facility: Construction 600-700

RFAAP (VA) Utilities Modernization & Permanent Energy Center 500-600

Figure ES-1 graphically depicts historical PAA funding and projected requirements for GOCO AAP modernization. It also shows years where additional funding was provided by Congress in the NDAA or with supplemental appropriations. As indicated in Figure ES- 1, significant additional funding was provided in FY 2023 to increase artillery production capacity. FY 2024 Supplemental funding was also used to increase production capacity.

FY 2025 Supplemental funding was requested to restore operations from Hurricane Helene damage at RFAAP.

*Supplemental funding in FY 2024 was used to increase capacity and was not used to modernize the GOCOs.

FIGURE ES-1: GOCO AAP HISTORICAL AND PROJECTED FUNDING–PAA, PIF

1,000

1,250

1,500

1,750

2,000

2,250

2,500

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

F Y

M

Base Congressional Tranche Supplemental COCO

GOCO AAP Historical and Projected Funding

• No. of AAPs Funded by PAA, PIF vii

Figure ES-1 does include Contractor Operated Contractor Owned (COCO) facilities.

Although the Army’s modernization efforts to date have resulted in an improved industrial base, critical infrastructure and manufacturing process upgrades are still required to support the Warfighter’s ammunition requirements, address continued facility deterioration, and ensure a safe working environment. Facilities that can meet ammunition production requirements while ensuring workforce safety, especially in inherently dangerous explosive operations, are critical. Recent years have seen a significant amount of modernization funding aimed at recapitalizing the GOCOs. Many buildings and production lines within our GOCO facilities are facing significant challenges.

Key parts are becoming obsolete, unplanned downtime is increasing, and the facilities themselves have exceeded their lifespan. As a result, maintenance and upgrades are no longer sufficient to address these issues. Therefore, constructing new facilities is essential to ensure the continued production of ammunition. It is anticipated that funding levels required to maintain the GOCOs will remain at higher levels based on production requirements and the amount of recapitalization necessary to modernize. In addition, applying transformational solutions such as Digital Engineering (DE), automation, modeling and simulation, and intelligent inspection systems, as well as addressing regulatory and Department of Defense safety and environmental requirements will drive higher modernization costs.

This report describes key modernization objectives and the Army’s approach to modernization planning, a summary of the project identification and prioritization process, and a summary of the requirements for modernization activities for each ammunition production facility. Details are provided for AAP projects planned in FYs 2025–2031, and this report also presents strategic investments planned in FY 2032 and beyond. The modernization planning process assumes approximately $700M per year of PAA funding;

however, several projects could be moved to the left if additional resourcing becomes available.

1.0 INTRODUCTION

The Army has developed a comprehensive Army Ammunition Plant (AAP) Modernization Plan. The AAP Modernization Plan addresses the request in the House Armed Services Committee Fiscal Year (FY) 2022 National Defense Authorization Act (NDAA) report, Section 2834, that directs the Secretary of the Army, through the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA(ALT)), to submit an AAP master plan and investment strategy to the congressional committees no later than 31 March 2022, with annual updates each subsequent year for five years. Annual update requirements were amended by Section 2888 of the FY 2024 NDAA which extends the annual submission requirement through 31 March 2030. In addition, this update addresses requirements in the FY 2024 Senate Appropriations Committee-Defense Report 118-81, Page 108. The purpose of the AAP Modernization Plan is to outline the strategy for modernizing facility infrastructure and production capabilities which capitalizes on state-of-the-art manufacturing equipment and technologies while maintaining production continuity. The AAP Modernization Plan provides an investment strategy focused on achieving the following objectives and associated end state:

1. Increase manufacturing safety and readiness to meet current and future requirements.

2. Isolate energetic mass from people.

3. Ensure graceful degradation and resilient operations.

4. Improve flexibility, maintainability, and sustainability.

5. Reduce cost of operations.

6. Secure supply chains.

The AAP Modernization Plan is updated annually, and the investment strategy is continually reassessed to address shifting priorities, project cost variances, program funding adjustments, and national defense initiatives. Executing this AAP Modernization Plan will result in improved safety, resiliency, environmental compliance, and operational effectiveness. The AAP Modernization Plan addresses increasing automation to minimize human exposure to hazardous environments and the application of Digital Engineering (DE). Further use of these emerging technologies, tools, and practices will reduce risk during facility modernization and commissioning, improve production quality, and reduce operational costs.

1.1 2025 AAP MODERNIZATION PLAN UPDATES

Several changes were made to the investment priorities presented in the 2024 AAP Modernization Plan. These updates reflect project priority changes at the facilities, as well as impacts from global events; support to foreign partners and allies; global supply chain issues with materials from foreign suppliers; the strategic desire to onshore production and domestically source raw materials; and increasing material costs and rising inflation.

These rapidly changing variables are impacting project costs and schedules, and resulting in shifts to planned funding years. These variables also impact which projects are prioritized among the facilities and when they are planned for funding. The revised project listings are included in Appendices A and B.

1.2 BACKGROUND

As identified in Army Regulation (AR) 700-90, Army Industrial Base Process, the Army’s industrial base vision is a complementary and synergistic industrial base (both commercial and government-owned) that has the capability to satisfy the Joint Warfighter’s ammunition life-cycle requirements in peacetime, wartime, and during national emergencies.

Ammunition must remain available, reliable, and affordable. To ensure this, ammunition component and end-item production capabilities must also remain available, reliable, and affordable. Procurement of Ammunition, Army (PAA) funding through the Provision of Industrial Facilities (PIF) Budget Line-Item Number (BLIN) has enabled the Army to execute modernization projects that ensure Government Owned, Contractor Operated (GOCO) AAPs avoid catastrophic failures and continue to produce quality ammunition.

Modernization efforts are discussed within this report for the following GOCO AAPs (see Table 1).

TABLE 1. GOCO AAPS

*A solicitation for a competitive operating contract is planned in FY 2025.

GOCO Facility Core Capabilities Operating Contractor Location

Holston Army Ammunition Plant

(HSAAP)

Explosives–HMX, RDX, IMX, TATB

BAE Systems–Ordnance

Systems, Inc. (BAE OSI) Kingsport, TN

Iowa Army Ammunition Plant (IAAAP)

Load, Assemble, and Pack (LAP) – Mortars, 40mm

Cartridges, Tank/ Artillery, C-4 Extrusion, Warheads

American Ordnance (AO) Middletown, IA

Lake City Army Ammunition Plant

(LCAAP)

Small and Medium Caliber Olin Winchester Independence, MO

Milan Army Ammunition Plant

(MLAAP)

Inactive AO Milan, TN

Quad City Cartridge Case Facility

(QCCCF)

Large Caliber Cartridge Cases

U.S. Army Combat Capabilities Development

Command (DEVCOM) maintained; no current Facility Use Contract*

Rock Island, IL

Radford Army Ammunition Plant

(RFAAP)

Propellant Manufacturing (Rocket, Artillery, Tank, Med Caliber, Nitrocellulose (NC) for all Propellants)

BAE OSI* Radford, VA

Scranton Army Ammunition Plant

(SCAAP)

Large Caliber Metal Parts– Artillery

General Dynamics Ordnance and Tactical Systems

(GD-OTS)

Scranton, PA

1.3 INDUSTRIAL BASE MANAGEMENT – SINGLE MANAGER FOR

CONVENTIONAL AMMUNITION (SMCA)

The Secretary of the Army is designated as the SMCA and assigned authority for Public Law 105‐261, Section 806, Procurement of Conventional Ammunition, of the Strom Thurmond NDAA for FY 1999 (herein referred to as Section 806). SMCA authorities are delegated to the Army’s Joint Program Executive Office Armaments and Ammunition (JPEO A&A) located at Picatinny Arsenal, NJ. The Army is the primary entity responsible for acquiring ammunition for the Armed Services and has the authority to restrict ammunition procurements to sources within the National Technology and Industrial Base (NTIB). The SMCA’s goal is to achieve the highest possible degree of effectiveness and efficiency in the Department of Defense (DOD) operations that are required to obtain top‐ quality ammunition for United States Armed Forces. By utilizing the Army as the SMCA rather than having the Military Services separately manage their own ammunition, the DOD achieves economies of scale and other managerial efficiencies.

Policies and responsibilities for the SMCA are identified in DOD Instruction 5160.68. The SMCA’s responsibilities cover the entire range of the ammunition life cycle, from providing support for Research, Development, Test, and Evaluation (RDT&E) activities to demilitarization (demil) of conventional ammunition. DOD Instruction 5160.68 defines SMCA and Service responsibilities across the following functional areas: RDT&E;

Production Base; Acquisition; Supply; Maintenance; Demilitarization and Disposal;

Quality Assurance; Technical Data and Configuration Management and Control;

Transportation and Handling; Safety; Security; Financial Management and Planning, Programming, Budgeting and Execution; Implementing Regulations and Assessment;

Personnel and Unit Training; and Security Assistance. DOD Instruction 5160.68 requires the SMCA to annually identify and prioritize production base deficiencies and then formulate corrective actions to mitigate those deficiencies. The SMCA continually assesses customer satisfaction through an annual customer survey, which is subsequently documented in a published report.

2.0 MODERNIZATION CHALLENGES, OBJECTIVES, AND

PLANNING APPROACH

This AAP Modernization Plan is structured to transform the AAPs by utilizing the latest manufacturing technologies and processes to achieve the Army’s modernization objectives. It also seeks to overcome a variety of challenges facing these GOCO facilities, such as regulatory compliance, cybersecurity requirements, rising project costs, raw material and equipment sourcing issues, and international conflicts.

2.1 MODERNIZATION CHALLENGES

The GOCO AAPs face several challenges that impact their modernization investment requirements. The useful life of production lines, buildings, and infrastructure presents a planning challenge. Likewise, modernizing while maintaining production requires complex schedule and logistical considerations. One goal of modernization is to prevent catastrophic production failures or significant production disruptions. This includes inserting automation and other emerging technologies for increased efficiency and to reduce operations-related risks. Maintaining environmental compliance, anticipating future regulations, and planning a path for continued regulatory compliance is critical to ensuring production continuity. Establishing cybersecurity strategies and ensuring that GOCO AAP cyber-vulnerabilities are mitigated also pose a new evolving challenge. The proliferation of drones by commercial industry, foreign actors and the public is also of concern across Army facilities. Drones can introduce a physical vulnerability as well as a cyber security threat, assessing these impacts to Army facilities will require additional funding to effectively mitigate potential threats. Accurately estimating the construction cost of unique, high volume manufacturing capabilities is difficult as inflationary pressures, increasing regulatory compliance, defense-unique safety and facility siting requirements, labor shortages, stressed supply chains, and requirements for Continental United States (CONUS) sourced raw materials are significantly driving up construction and material costs. In addition, Government Explosive Safety Standards are not comparable with commercial industry and current Government requirements and standards result in significant increased costs and schedule for projects at Government facilities.

2.1.1 DANGEROUS AND HIGH-RISK OPERATIONS

Many ammunition production processes are inherently dangerous due to the use of hazardous chemicals and operations involving energetics. The highest modernization priority is improving safety, especially for the most dangerous operations involving human exposure. Another facet of high-risk operations is ergonomics. AAP production operations involve a lot of manual material handling that requires heavy lifting and repetitive motions.

Funds have been aligned to requirements identified as dangerous or high-risk, but a solution is not always readily available. In these situations, analysis and design will be conducted so a path forward can be developed. While pursuit of these solutions will reduce existing operational hazards, no modernization effort will be able to remove all risks associated with the inherently dangerous nature of ammunition production operations.

2.1.2 AUTOMATION AND EMERGING TECHNOLOGY SOLUTIONS

This section discusses some elements of transformational modernization that incorporate automation and emerging technology solutions. These types of technologies not only address safety issues and assist with removing personnel from dangerous and high-risk operations but also improve production and operational efficiencies. Although many of these technologies are widely used by commercial chemical and manufacturing industries, actual application is highly process-specific and necessitates specific technology and equipment development. Operations involving energetics introduce another layer of complexity to the design requirements.

Manufacturing Automation

Manufacturing system automation needs data integration and digital connectivity between equipment and operations, thus moving away from traditional islands of automation approaches. To aid this system-level manufacturing automation strategy, the Plan requires digitization of plant processes and operations. Digitized manufacturing processes and systems can rapidly adopt related technologies like Artificial Intelligence (AI) and Machine Learning (ML) in the future. The AAPs can utilize AI to integrate and analyze data to produce meaningful insights into manufacturing processes that can aid decision-making across the AAP and production equipment. ML sorts and analyzes large data sets to identify patterns and trends. ML then uses these patterns and trends to build models that accurately predict scenarios, such as equipment maintenance intervals based on current production outcomes, as well as product quality degradation in connection with those maintenance intervals. AI-driven maintenance prediction will significantly reduce equipment downtime, allowing the Operating Contractor to proactively repair equipment and shift manufacturing flow to limit production disruptions.

ML algorithms, coupled with AI-based root cause analysis for anomaly detection within the munitions, will be a key tool to optimize each product’s manufacturing process and provide data for incorporation into future munitions designs.

Modern, automated processes must be introduced in a specific manner to ensure success. First, the new process is inserted at a GOCO facility in parallel with current production to mitigate any loss of production and develop contractor comfort with the new process. Once the new processes are in place and vetted, the legacy system is removed, leaving a fully integrated modern system, which reduces costs and risks.

Flexible and Intelligent Inspection and Manufacturing In-Process Monitoring

Monitoring the manufacturing flow will be vital to ensure traceability, repeatability, and product/process quality assurances. Manufacturing process monitoring has historically used off-line technologies or methods that pause operations for inspection and monitoring. Even though these methods may be automated (e.g., robots that provide off-line inspections), these methods do not provide the required continuity of flow and interoperability between manufacturing equipment, stages, and processes. To ensure flexibility in an automation strategy, the Modernization Plan implements intelligent manufacturing in-process monitoring and inspection that will be integrated with the manufacturing operations. Such measurement includes product parameters specified by the Technical Data Package (TDP) and process parameters that capture how the product is made, and machines are operating. This creates a solidified foundation of the production processes that enables earlier detection of anomalies and troubleshooting in the event of product failures.

Robotics and Mobile Transportation Platform Systems

Stationary robots combined with a mobile transportation platform can replace most human jobs that are dangerous, repetitive, and labor intensive. These technologies can be used for jobs like forklift operations and material handling in hazardous environments.

A major challenge of using robots and mobile platforms is weighing the cost and benefits of such a large investment and its ability to be used in energetic environments.

Modeling and Simulation

Modeling and simulation can be used to evaluate current production system efficiencies and aid in the planning and implementation of new processes. As manufacturing operations become more digitized and networked, modeling and simulation technology will benefit almost every aspect of the manufacturing life cycle including design, process planning, testing, and maintenance. There are several opportunities to include modeling and simulation tools in GOCO modernization and automation strategies. For example, material filling and solidification processes demonstrate how modeling and simulation can play a key role in optimizing processes that have traditionally been run based on experience and operator intuition. One example of planned funding for modeling and simulation is for metal parts fabrication at SCAAP. A simulated production environment was developed to assist with determining an optimized and efficient equipment layout to increase metal parts capacity. This effort included a laser scanning survey of the existing facility to produce a digital, editable model. This model was used to design new production lines, optimize work-in-progress storage and simulate material flow throughout the facility.

Additive Manufacturing Insertion

Additive manufacturing offers many advantages over traditional manufacturing processes. It can significantly reduce material waste by adopting optimized minimum weight product design and reduce on-hand inventory by producing desired parts on demand. Due to its short life cycle time, production with additive manufacturing can be easily scaled up or down based on demands, such as to meet surge capacity requirements. Selected processes can be seamlessly integrated between the existing processes. An ongoing Life Cycle Pilot Process (LCPP) project is evaluating additive manufacturing approaches to produce 155mm metal parts. If successful, this technology could be implemented at SCAAP through a future modernization project.

Digital Engineering

As defined by the Defense Acquisition University, DE is “an integrated digital approach that uses authoritative sources of systems' data and models as a continuum across disciplines to support life-cycle activities from concept through disposal.” This data- and model-centric approach has begun transforming the industrial base, its operation, and the Government’s ability to manage it proactively. Execution of the Plan is ongoing, and significant progress has been made in areas such as the development of digital system models, digital twins of the ammunition portfolio, a digital thread, and a DE Ecosystem

(DEE).

The interconnected DEE enables the digital thread, which is an extendable, configurable component of enterprise-level framework that seamlessly connects authoritative technical data, software, information, and knowledge in the enterprise data-information-knowledge systems. It enables decision makers to access, integrate, and transform disparate data into actionable information. To gain value from the DEE and the digital thread, a digital system model of the product and product line is required.

During FY24, these models continued to serve as a digital representation of the manufacturing lines at the facilities and defined specific activities and considerations throughout the system or product life cycle. The process models are created, maintained, and simulated all within the SysML-based Cameo MagicDraw software. These models have allowed the government to regain previously uncaptured manufacturing process knowledge that can be used to simulate what-if scenarios and perform predictive analyses for throughput and bottlenecks. Creation of the process models of each major GOCO is ongoing. However significant progress has been achieved over the last year, where the focus has been on the entire M795 artillery shell production loop from metal parts at SCAAP to Load, Assemble, and Pack (LAP) at Iowa. During this maturation period, simulations to identify bottlenecks, perform throughput analysis, and run what-if scenarios were developed and tested. These capabilities provide Project Lead Joint Services (PL JS) a crucial tool to inform future modernization initiatives and investments. For example, the Iowa Army Ammunition Plant (IAAAP) M795 process model was baselined in June 2024. The executable SysML model focuses on the Line 3A at Iowa which contains every building involved in the LAP process for the M795 shell. The model includes a high-level block diagram that summarizes the activities within each building. The user can select any block within the model and explore the internal block diagram containing the lower-level activities for an increased detail view of the operations. The simulation can perform predictive analysis for any work shift scenario (8hr, 24hr, or even 45 days) and show the net throughput of the shells manufactured over that time. The simulation utilizes a token to represent a shell, cart, or cart string moving through the manufacturing process. During the simulation, a series of tokens are tracked and as bottlenecking occurs, a numeric counter appears on the block signaling a problem area within the manufacturing flow. To address the bottlenecking experienced during the simulation, a what-if scenario may be run in which the configuration of the line may be altered by incorporating additional equipment. By completing this scenario over the desired shift schedule, the user will have the appropriate data to confirm alleviation of the bottleneck(s) as well as the theoretical throughput if the investment of additional equipment is made. This is a key example of how the simulation model is an invaluable tool to inform investment decisions to increase plant efficiencies, verify and validate prospective modernization project designs, as well as inform leadership on the facility impacts for a variety of capacity needs. The status of the ongoing initiatives includes the following:

• Foundational Efforts:

o After establishing a baseline of all facilities and associated operations through the DE Maturity assessments (reference Figure 1 for the maturity assessment scale and example), reassessment at a defined cadence is necessary. Reassessments will allow the models to remain current and maintain the level of fidelity required to run the simulations to further support modernization and sustainment investment decisions from leadership.

FIGURE 1. DIGITAL ENGINEERING MATURITY SCALE WITH ASSESSMENTS

o The evaluation, implementation, and integration of DEE solutions began in FY 2023 and continued into FY 2024. PL JS continued the exploration of four (4) candidate solutions by the U.S. Army Combat Capabilities Development Command Armaments Center (DEVCOM AC) who performed a robust, hands-on evaluation of the Aras Innovator, Syndeia, SBE Vision, and Interoperability and Integration Framework (IoIF) software solutions.

Research is underway for a fifth software evaluation which is estimated to occur in early CY 2025.

o Phase II Small Business Innovation Research for a DEE software solution was awarded in May 2024. This software will be the first ecosystem to be developed specifically utilizing PL JS’s System Requirements Document (SRD) which was a byproduct of the System Requirements Review that was completed late FY 2023. The SRD is the authoritative document of the future DE platform which will integrate models and engineering tools throughout the DE platform life cycle.

o The development of a site-specific DE requirements template was completed with the underlying goal to be applied at various levels. First example use case is when recompeting an AAP operating contract, the Government will utilize the set of requirements to establish the objectives for the overall DE implementation at the plant. Another use case is during the planning phase of a modernization investment, the requirements can be used to ensure the project scope is aligned with the DOD DE Strategy to include critical DE components such as user interfaces, data collection, etc.

• Dynamic DE Effort:

o The first M795 process model for SCAAP was completed in FY 2023 and subsequent versions of the model are underway in FY24. As mentioned above, the M795 LAP process model at IAAAP has been baselined and the simulations are undergoing maturation to include delay, maintenance, and explosive limit logic. LCAAP, RFAAP, and HSAAP modeling were well underway in FY 2024.

2.1.3 REGULATORY COMPLIANCE

Modernization projects are planned at all the GOCOs which ensure regulatory compliance. One example of a potentially more stringent regulation being considered for the GOCOs is the reduction of open burning and open detonation (OB/OD) practices.

OB/OD is permitted and conducted at the GOCO facilities for waste explosives as an exception to the federal ban on open burning practices so long as no other safe method of disposal or treatment exists. There are several projects reflected in the Modernization Plan that address OB/OD and the implementation of alternative technologies. While these projects will reduce OB/OD use, OB/OD must be maintained as capabilities at the GOCOs for safety reasons even after implementation of the alternative technologies.

2.1.4 CYBERSECURITY

Cybersecurity within a production environment is a complex and challenging issue with immediate impacts to all sectors of the Organic Industrial Base (OIB). Cybersecurity is required to protect information and maintain availability of operational technologies across the enterprise. In an increasingly digital production environment, cybersecurity requirements often evolve and continue to mature. The cybersecurity requirement is further complicated by requirements for automation. Incorporating advanced automation within the facilities, operations, and processes as specified in this Plan will increase the facilities’ digitized footprint. Digitizing manufacturing requires integration and connectivity between equipment and operations. This requires increasing cybersecurity processes, controls, and technologies to protect against potential threats and system vulnerabilities.

Recognizing the paradigm shift from analog manufacturing systems and processes to digitized and automated manufacturing systems, AAPs are planning for additional cybersecurity requirements. To this effect, the AAPs are in the process of implementing a comprehensive cybersecurity program as required per Department of Defense Instruction (DODI) 8500.01, “Cybersecurity,” DODI 8510.01 “Risk Management Framework for DOD Systems,” and Army Regulation 25-2, “Army Cybersecurity.” The protection and security of information technology (IT), operational technology (OT) and their associated capabilities are of the utmost priority. The strategy outlined below ensures the long-term success and sustainability of the cybersecurity program across the GOCO enterprise.

2.1.4.1 Risk Management Framework

The risk management framework (RMF) defined in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-37, IAW directive DODI 8510.01, “Risk Management Framework For DOD Systems” is a six-step process: categorize, select, implement, asses, authorize, and monitor (see Figure 2). The RMF process will identify and mitigate potential threats by implementing appropriate cybersecurity controls.

Cybersecurity controls need to be carefully designed and implemented through a layered approach to mitigate the risks of both inside and external threats. There should be a long-term strategy to align each AAP with a tailored implementation of the RMF as they finalize their cybersecurity modernization efforts as outlined in Section 2.1.4.2.

FIGURE 2. DOD IT SYSTEMS RMF PROCESS

2.1.4.2 AAP Cybersecurity Progress

The AAPs are undergoing a three-phased modernization strategy to prepare them for a tailored implementation of the RMF life cycle. The three phases are: (1) asset mapping and identification, (2) design and construction, and (3) active defense/monitoring. Each AAP is at a different point in the timeline (see Figure 3). SCAAP is nearing the end of mapping and inventorying their assets for Phase 1 and has started some preliminary design work for Phase 2.