Army not producing enough ammunition: aging stockpile and shortage of suppliers pose long-term risks, experts contend.

At a time when precision strike warfare dominates U.S. military tactics and strategy, the Army is facing a sobering reality: its ammunition stockpile is becoming outdated and is woefully short of the modern "smart" munitions needed for current and future conflicts, officials said.

The Army's predicament is not new by any means, nor is it directly tied to massive expenditures of ammunition in the war in Iraq. The problem is not that the Army is running out of bullets, but rather that it has too much old ammunition in its war reserves and not enough precision-guided munitions. Even though the Army has numerous smart missiles in its inventory--such as Hellfire, Javelin, TOW and the Tactical Missile System--it has failed to get into production gun-fired guided munitions. A number of programs went through fits and starts and ended up getting the budget ax before they could go into production.

"The Army needs ammunition, but lacks the resources," said Col. James Naughton, former deputy chief of staff for ammunition at the Army Materiel Command. "It's safe to predict that by 2010, most of the ammo we have today will be unserviceable or of limited utility."

Less than 6,000 tons of war reserve ammunition was produced last year. That is only 1 percent of the Army's requirement of 600,000 tons, Naughton said in an interview. That has been the average production level during the past decade.

The Army's budget for ammunition last year was about $1.2 billion. Although the Army manages conventional ammunition programs for the entire Defense Department, each service keeps its own separate budget.

"We do have war reserve ammunition in hand," Naughton said. It is not necessary to produce all 600,000 tons to get ready for war. But the Army should be concerned that, unless production rates go up, the existing stockpile will get too old and increasingly "suspect" when it comes to reliability and performance, he said.

Not only is the Army not buying enough ammo, but it is spending most of its ammunition dollars on training rounds, rather than war-fighting ammunition. "What we are producing does not resemble, by any stretch of the imagination, what we would like to shoot in a war," said Naughton. Current annual production of training ammunition is nearly 60,000 tons--10 times higher than the production of war reserve ammo.

AMC estimated two years ago that the Army would need $16 billion to make up for its conventional war reserve ammunition shortfall. Billions more would have to be added for the smart munitions. Maj. Gen. William L. Bond, the deputy for systems management at Army headquarters, wrote in Army Magazine that the "current cost estimate to fix the Army munitions problem is approximately $26 billion."

Ammunition accounts have been on a downslide for at least 15 years, so the current situation should be no surprise to anyone, said Col. Nathaniel Sledge, program manager for combat ammunition systems. "The Army has taken risks in its munitions investments," Sledge told a Defense News precision warfare conference. He estimated that the Army would need $6 billion more worth of ammunition to be able to fight in two conflicts (one major war and one low-scale contingency), as stipulated by Pentagon strategy.

Some experts, meanwhile, contend that the Army often inflates its ammunition requirements. One industry source said that projected ammunition needs are drawn from war-games, which in some cases are based on flawed assumptions. Another source said that the Army's situation merely reflects the realities of Pentagon budgets. During peacetime, "we don't buy many of those smart munitions. We divert the funding to platforms," he said.

Naughton seemed skeptical about the prospect of higher budgets for ammunition. "If the war in Iraq lasts a long time and stresses the ammunition stockpile, then quite possibly we'll see some rethinking of the problem," he said. Two weeks into the conflict, Congress approved a supplemental appropriation of $3.7 billion to replenish munitions used by all the services. During peacetime, however, ammunition generally is not a top priority in the budget process.

The Army's heavy emphasis on procuring training ammunition at the expense of war reserve rounds, meanwhile, has profound implications both for future operations and for the industrial base, Naughton explained.

Having enough bullets for training is important, for obvious reasons. But training ammo is different from the war-fighting ammo. Training tank rounds, for example, are made of aluminum, rather than depleted uranium. DU bullets are environmental hazards, so the Army does not use them in training exercises. The upshot is that soldiers never get to fire the war reserve ammo until they actually go to war. "They often have not seen that ammunition fired before," said Naughton. "In general, the behavior of the training ammunition when fired is different than the war reserve. ... They load it and shoot it the same, but the signature is different, the recoil is different, the noise is different. It's a different experience the first couple of times you shoot it.

Because smart munitions are scarce and costly, we don't train with precision weapons in any great numbers," said Naughton.

Another consequence of the current buying strategy is that the industrial base largely is producing training ammunition, not war reserve. Most of the tank ammo made today is for training only, said Naughton. "You have to have an industrial base that will create that war reserve ammunition. You will need to buy that war reserve ammo steadily during peacetime." The Army currently lacks the resources to do that, he said. "We don't seem to be able to get the war reserve ammunition into production at a sustained, steady level. ... Instead, we do a little bit here, a little bit there, in very small quantities."

Many of the components that are necessary to make war reserve ammo are not in production, except cartridge case stubs and collapsible cartridge cases. "Everything else is being produced just for the training ammunition and is a different design and manufacturer than those for the war reserve," he said. If and when the Army decides to start buying war reserve ammunition, there would likely be "short-term problems getting components that haven't been built in years."

AMC estimated that there is only one supplier for 71 out of 302 "critical components" needed for ammunition manufacturing.

It's a reality of the business world that when the market dries up, vendors flee. The ammunition sector is no exception. "We went from 20 fuze suppliers to five in four years," said Naughton. While there were seven missile manufacturers less than a decade ago, there are now two. "The industrial base will naturally size itself to what you are buying," he said.

Army Industrial Base

The Army owns and operates several industrial facilities nationwide where ammunition and parts can be manufactured, but much of the equipment is technologically outdated. Some of the Army plants are managed by contractors. The secretary of the Army is reviewing a study by a government-industry group on how to reshape the ammunition industrial base to meet future needs. The Army must decide whether to continue running those plants--and make the appropriate capital investments--or to privatize them.

Regardless of what the Army decides to do with its industrial base, the fundamental issue does not change: the Army needs to produce more war reserve ammunition, Naughton said. Time is running out, he said. "Most of the ammunition in the stockpile today was built 20 years ago during the Cold War buildup." Most rounds are designed to have a shelf life of 20 years. "We are outside the envelope of the shelf life on 40 percent or more of our existing ammunition. The rest is rapidly approaching the end of its shelf life."

Ammunition does not "go bad" overnight, after it reaches a certain age, but once it's over 20 years old, the reliability rapidly degrades," said Naughton. Within a few years, it will become increasingly difficult to shoot it. "You can predict that you'll lose 7-8 percent of the ammo after the 20-year mark."

To replace the obsolete rounds, the Army would have to produce 100,000 tons of war reserve ammunition a year for the next seven years. Past that point, it would need 50,000 tons to 60,000 tons a year to sustain the stockpile. That represents about "half the level of the Cold War buildup," he said.

Those who question whether the United States really needs that much ammunition pose legitimate concerns, Naughton said. "These are national-level decisions" that require answers to key questions, such as, "Has the world changed? Which way has it changed? What risks are we going to take?"

As far as smart munitions go, the Army has a lot of catching-up to do, Naughton said. "We have a challenge with any kind of smart weapons program." Historically, the Army has not been able to keep programs alive. Examples include the Sense-and-Destroy anti-tank munition, the Brilliant anti-tank munition, the MSTAR guided rocket and the TOW fire-and-forget missile, all of which were cancelled "You have to build a constituency and the program has to last long enough to get it into production."

The biggest hurdle for the Army is coming to grips with the high cost of precision-guided ammunition. "People go into sticker shock," said Naughton. While a conventional tank bullet may cost $2,000 a copy with a production run of less than 1 million, a smart munition may cost $20,000 or $30,000 a piece, but the production runs would be much smaller.

"With missiles, we do a better job at curtailing our appetite for the munitions by keeping the requirements small.... Yet, the result is that the unit price is higher. Longbow Hellfire is over $150,000 a piece."

Even though the prices of missiles can be staggering, "we seem to he more successful at convincing ourselves we need the missile, as opposed to gun-launched precision munitions."

A retired Army general who managed munitions programs said the culture stands in the way of innovation. "There is a mindset that precision-guided munitions will replace conventional ammo." That will never happen, he said, because the Army always will need unguided ammunition. "There is no concept of operations that articulates how smart and dumb ammunition can be used together." That makes the cost of smart ammo prohibitive.

Seeking to preempt an ammunition crisis, the Army's deputy chief of staff for programs has developed a "strategy for the transformation of Army mutations," Bond wrote in Army Magazine. "To address the problem of reduced production and increased costs, the strategy [emphasizes the use of] common components to increase production quantities ... [such as] fuzes, propellant, guidance systems, submunitions and warheads." The idea is to "achieve the economies of scale that were previously available only with the large procurement quantities associated with dumb munitions," Bond said.

The Air Force also anticipates future problems in ammunition production. Current manufacturing capabilities may not be suitable to "rapidly respond to a surge request," said Air Force Col. Pamela Arias, commander of the armament product directorate at Eglin Air Force Base. "The new environment will call for a mix of weapons that we don't have to have in large inventories," she said. The ideal situation would be to "simply go back to the contractor and they can quickly reconfigure a production line for a particular item. ... If we could move in that direction, it would be easier for companies to not carry quite as much overhead and excess capacity."