Army Ammunition:

The Mississippi Plant Will Be Closed After Demonstrating Its Production Capability

NSIAD-89-131: Published: May 4, 1989. Publicly Released: May 24, 1989.

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Pursuant to a congressional request, GAO reviewed selected activities at the Mississippi Army Ammunition Plant, focusing on: (1) the plant's history and cost; (2) Army actions to correct deficiencies that limited the plant's production capacity; and (3) the Army's future plans for the plant.

GAO found that the: (1) Army initially estimated that the plant would cost about $397.8 million and would be completed by December 1983; (2) Army now estimates that the plant will cost about $622 million and will not be able to achieve its full planned production capacity until August 1990; (3) Army requested funding for 910,000 M483A1 projectiles, to be produced at the plant, but had to allocate about 69 percent of that production to other plants; (4) plant has incurred higher production costs than other plants, but its average unit production costs are decreasing; (5) Army and the contractor agreed that a mobilization contract the Army awarded to correct deficiencies at the plant would be timely completed; (6) contractor guaranteed that the plant would achieve its full planned production capacity of 120,000 projectiles monthly by August 1990; (7) Army plans to place the plant on standby status after the contractor has demonstrated full production capability, at a cost of $50 million to $75 million; and (8) Army will not consider modifying the plant to produce other types of projectiles.

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