He has vast power over our "shortages" to date. CCI can manufacture TONS of rifle primers, so why aren't they doing so? Politics surpasses manufacturing ability.
Well, here's a big part of it. The DoD has a need for 2 billion rounds of ammo a year. ATK, the prime contractor, could deliver 1.4 billion a year. ATK let out a contract to a subcontractor, did some expansion etc, and kicked the number up to about 1.6 bil.
That still left about 400 million rounds short. The DoD then let out some overrun contracts paying (according to several articles I read) 35 cents a round for 5.56.
General Dynamics won that in around 2005 if I remember correctly, but only recently began delivering. GD subcontracted a lot of this out to smaller firms.
35 cents a round is a very high price and it's from a guaranteed customer, Uncle Sam. Smaller ammo and component makers that generally would not have been able to participate in a government job were able to go after this one as suppliers to General Dynamics.
So, component and ammo makers retooled to make 5.56 and cut way back on their production of other calibers and left little to sell to the civilian market.
It's not a conspiracy by anyone to keep primers out of people's hands, it's simple cash flow for the ammo companies.
They have a customer with bottomless pockets wanting to pay absolute top dollar for their product so they are taking advantage of it.
GD is building their own facility in Florida to open in 2010. In the meantime they are subcontracting like mad, throwing lots of money at the problem.
It is possible that after GC finishes it's own production facility in Florida that the smaller companies will be cut back out of the loop.
If that happens they will be looking for customers in a bad way, and that is us. Hopefully we would see availability skyrocket and price decrease drastically if that happens. So, we'll see in 2010 I guess but until then things are going to be tight.
From ATK:
The Army’s “1-2-3-4 acquisition strategy creates a path to acquiring as much as 2.0 billion rounds of small-caliber ammunition annually. The first 1.2 billion rounds of ammunition each year will come from ATK Lake City, followed by an additional 300 million rounds from a second source. The next 300 million rounds increment each year will again come from ATK Lake City and, if the Army needs an additional 200 million rounds, it will be provided by ATK and/or the second source. “This strategy clearly places a priority on procuring ammunition from ATK, said DeYoung.
From Defense Industry Daily, an industry magazine:
General Dynamics Ordnance and Tactical Systems Inc. in St. Petersburg, FL received a $171.2 million firm-fixed-price contract for Establishment of the Small Caliber Ammunition Second Source Prime Contractor for the Production of 5.56mm, 7.62mm, and .50 Caliber Ammunition. Work will be performed in St. Petersburg, FL and is expected to be complete by Aug. 23, 2010. Bids were solicited via the World Wide Web on Jan. 18, 2005, and two bids were received.
