Industrial Base: Inventory and Requirements for Artillery Projectiles
(Letter Report, 03/20/95, GAO/NSIAD-95-89).

Pursuant to a legislative requirement, GAO reviewed selected aspects of
the Army's industrial base for the production of artillery projectile
metal parts, focusing on: (1) how Army and Marine Corps inventories of
artillery projectiles compare with stated requirements; and (2) the
Army's plans for procuring advanced artillery rounds and parts.

GAO found that: (1) in November 1994, the Army's inventory of artillery
projectiles totalled 20.8 million at the wholesale level; (2) the Army's
inventory consisted of 27 types of projectiles stored at 32 U.S. and
international locations; (3) over 98 percent of the inventory was
usable, but some projectile types were understocked or obsolete; (4) the
inventory was more than adequate to meet the Army's training and combat
requirements; (5) as of March 1995, the Marine Corps' inventory of 24
projectile types stands at 4 million, of which about 85 percent is
usable; (6) the Marine Corps has also understocked some projectile types
while maintaining some obsolete projectiles; (7) the Army could supply
some of the Marine Corps' understocked needs from its projectile
overstock; (8) because of downsizing and budget constraints, the Army
has reduced its active industrial base for artillery projectiles; (9)
the Army believes that the remaining base is adequate for meeting its
planned procurements; and (10) although the Army plans to produce 3 of
its 4 new advanced artillery projectiles in-house, it has not yet
decided where to produce the projectiles' metal parts.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-89
     TITLE:  Industrial Base: Inventory and Requirements for Artillery 
             Projectiles
      DATE:  03/20/95
   SUBJECT:  Advanced weapons systems
             Ammunition
             Army procurement
             Military inventories
             Combat readiness
             Industrial facilities
             Spare parts
             Military training
             Marine Corps
             Ground warfare
IDENTIFIER:  M60 Projectile
             M548 Projectile
             M449 Projectile
             M404 Projectile
             Multiple Launch Rocket System
             MLRS
             M913 Projectile
             M741A1 Projectile
             M712 Projectile
             M927 Projectile
             XM915 Projectile
             XM916 Projectile
             XM898 Projectile
             Sense and Destroy Armor
             XM982 Projectile
             M864 Projectile
             M444 Projectile
             M549 Projectile
             
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Cover
================================================================ COVER


Report to Congressional Requesters

March 1995

INDUSTRIAL BASE - INVENTORY AND
REQUIREMENTS FOR ARTILLERY
PROJECTILES

GAO/NSIAD-95-89

Artillery Projectiles


Abbreviations
=============================================================== ABBREV

  HERA - high-explosive, rocket-assisted
  SADARM - Sense and Destroy Armor
  ERA - extended range artillery

Letter
=============================================================== LETTER


B-260292

March 20, 1995

The Honorable Ted Stevens
Chairman
The Honorable Daniel K.  Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

The Honorable C.W.  Bill Young
Chairman
The Honorable John P.  Murtha
Ranking Minority Member
Subcommittee on National Security
Committee on Appropriations
House of Representatives

In response to a requirement in the fiscal year 1995 conference
committee report on Department of Defense appropriations (H.R. 
103-747), we reviewed selected aspects of the Army's industrial base
for the production of artillery projectile metal parts.  This report
provides information on (1) the quantity, location, and condition of
artillery projectiles in Army and Marine Corps inventories and these
inventories in comparison to stated requirements; (2) the Army's
production base for artillery projectiles; and (3) the Army's plans
for procuring new advanced artillery rounds. 


   BACKGROUND
------------------------------------------------------------ Letter :1

As the Single Manager for Conventional Ammunition, the Army buys
conventional ammunition for the military services and maintains
active and inactive ammunition production lines for required
conventional ammunition items and components.  The ammunition
industrial base provides the capability for producing 14 munitions
commodity families (such as artillery, bombs, and rockets) and
hundreds of different end items and components. 

There are three categories of industrial base producers: 
government-owned plants operated by the government, government-owned
plants operated by contractors, and contractor plants.  The plants
are classified according to their production capability.  For
example, plants that produce nonexplosive components, such as empty
projectiles, are called metal parts plants, while others that
assemble the metal parts, other components, propellants, and
explosives into complete ammunition rounds are called load, assemble,
and pack plants.  Some have dual capability; that is, metal parts
production and load, assemble, and pack.  Since the break-up of the
Soviet Union and the end of the Cold War, the Army has been reducing
the number of active munitions plants.  The downsizing currently in
process results in an active munitions base for 1995 comprised of 9
government plants (3 operated by the government and 6 operated by
contractors) and about 50 contractor plants. 

The September 26, 1994, fiscal year 1995 conference committee report
on Department of Defense appropriations expressed concern about the
industrial base for production of artillery projectile metal parts
and the ability of this base to respond to requirements, both now and
in the future.  Because of this concern, the conferees requested that
we review the inventory and requirements for artillery projectiles. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

In November 1994, the Army had about 20.8 million artillery
projectiles in its inventory,\1 consisting of 27 different types of
projectiles.  This inventory--stored at 18 U.S.  locations, on 6
prepositioned ships, and in
3 other countries--was more than adequate to meet the Army's stated
training and combat requirements\2 for most artillery projectiles. 
More than 98 percent of the inventory was categorized as usable.  The
Army inventory for 3 artillery projectile types was a total of
172,059 below stated requirements.  On the other hand, the Army no
longer had a need for
4 other projectile types because the Army had newer items in its
inventory.  The Army had in inventory 653,229 of these older
projectiles as of November 1994.  As of March 1995, the Marine Corps
had a total inventory of about 4 million artillery projectiles
compared to a requirement of about 2.3 million projectiles.  About 85
percent of its inventory was usable.  Of the Marine Corps' 24
artillery projectile types, its inventory for 5 types was a total of
407,823 projectiles below stated requirements.  However, the Marine
Corps no longer had a requirement for 7 other artillery projectile
types; the Marine Corps had in inventory 99,909 of these outdated
projectiles as of March 1995. 

Because of decreasing requirements and funding constraints, the Army
has been reducing its active production base for artillery
projectiles and their associated metal parts.  Army officials believe
the reduced production base for artillery projectiles is more than
sufficient to meet the Army's and Marine Corps' planned procurements
of artillery projectiles. 

The Army is developing four new advanced artillery projectiles to
replace existing older rounds--two types each of 105-mm and 155-mm
projectiles--and has recently completed development of another 105-mm
projectile, which it does not plan to procure for its own use.  Three
of the four developmental rounds are to be loaded, assembled, and
packed at Army ammunition plants, and the fourth is to be procured
commercially.  The Army has not decided where to produce the metal
parts for the new projectiles.  When the new projectiles enter
production, the metal parts could be produced at Army ammunition
plants or procured commercially. 


--------------------
\1 This inventory represents stocks stored at the wholesale level and
does not include retail stocks issued to operational commands and
units. 

\2 The combat requirement is the quantity needed to fight and win two
nearly simultaneous major regional conflicts.  The Army's
requirements are classified. 


   INVENTORY AND REQUIREMENTS FOR
   ARTILLERY PROJECTILES
------------------------------------------------------------ Letter :3


      ARMY
---------------------------------------------------------- Letter :3.1

The Army's November 1994 inventory of about 20.8 million artillery
projectiles included 27 different types or configurations of 105-mm,
155-mm, and 8-inch artillery projectiles (see app.  I).  According to
Army records, these projectiles are stored at 32 different locations
within and outside the United States, including 6 prepositioned
commercial ships under contract with the Army (see app.  II), and all
but 371,620 projectiles, or about 1.8 percent, were usable. 

The Army's artillery projectile inventory includes some older items
and items that exceed requirements due to planned force structure
changes.  For example, even though the Army no longer has a
requirement for 105-mm M60 projectiles, 105-mm M548 projectiles,
155-mm M449 projectiles, and 8-inch M404 projectiles--because it has
newer items in its inventory--the Army has about 830,000 of these
older rounds in its inventory.  Although the Army currently has a
requirement for three other types of 8-inch projectiles in its
inventory, it has no procurement plans for them because the 8-inch
howitzer is being phased out of the Army's force structure and it is
being replaced by the Multiple Launch Rocket System.  In November
1994, the Army had about 1.6 million rounds of 8-inch artillery
projectiles in its inventory. 

The Army's November 1994 inventory for three artillery projectile
types--the 105-mm M913, the 155-mm M741A1, and 155-mm M712--was
172,059 below the Army's inventory objectives (the quantity by
artillery projectile type is classified).  However, after the 75,598
M913 projectiles due in from production are delivered, the total
shortfall will be reduced to 96,461 projectiles.  According to an
Army official, the Army has no current procurement plans for M741A1
and M712 projectiles because of funding constraints and the Army's
inventory for other artillery rounds generally exceeds requirements. 
In addition, although Army records show a shortfall for M712
projectiles, the requirement is continuously revised downward to the
inventory level. 


      MARINE CORPS
---------------------------------------------------------- Letter :3.2

The Marine Corps' March 1995 inventory of about 4 million artillery
projectiles consisted of 24 different types of 105-mm, 155-mm, and
8-inch projectiles (see app.  III).  The usable inventory of 3.4
million projectiles was greater than the Marine Corps' requirement of
about 2.3 million projectiles.  The inventory included seven
projectile types for which the Marine Corps no longer has a
requirement.  As shown in table 1, the inventory for five other
projectile types is below the Marine Corps' stated requirements. 



                           Table 1
           
           Marine Corps' Inventories, Requirements,
               and Shortfalls for Five Types of
                    Artillery Projectiles


                                        Requiremen  Shortfal
Item description      Usable  Unusable           t       l\a
------------------  --------  --------  ----------  --------
155-mm M864          165,611         1     426,529   260,918
 Baseburner
 projectile
155-mm M549 high-    128,484    66,938     272,736   144,252
 explosive,
 rocket-assisted
 projectile
155-mm M825 white     96,685    20,126      98,769     2,084
 phosphorus smoke
 projectile
155-mm M712            1,873       894       2,230       357
 Copperhead
 projectile
155-mm M7 dummy           67         0         279       212
 projectile
============================================================
Total                392,720    87,959     800,543   407,823
------------------------------------------------------------
\a Difference between usable inventory and requirement. 

Although the Marine Corps has shortfalls for these five projectile
types, the Army's inventories for the two with the largest
shortfalls--the 155-mm M864 Baseburner projectile and the 155-mm M549
projectile--exceed the Army's requirements.  Therefore, the Army
could satisfy the Marine Corps' requirement from its inventory. 


   ARMY'S PRODUCTION CAPACITY FOR
   ARTILLERY PROJECTILES
------------------------------------------------------------ Letter :4

The Army has load, assemble, and pack production lines for artillery
projectiles at nine locations:  the Iowa, Kansas, Lone Star,
Longhorn, Louisiana, Milan, and Mississippi Army Ammunition Plants;
the Crane Army Ammunition Activity; and the Pine Bluff Arsenal.  The
Army has laid away production lines at the Mississippi plant and is
in the process of laying away some parts of the production lines at
the Kansas, Longhorn, and Louisiana plants.  The Army plans to keep
the production lines at the other locations active to meet projected
artillery projectile requirements.  The five plants to remain active
(Iowa, Lone Star, Milan, Crane, and Pine Bluff) have a combined
capacity to load, assemble, and pack 867,000 artillery projectiles a
month during three 8-hour shifts each day for 5 days a week. 
According to Army officials, this capacity is sufficient to meet
projected replenishment requirements for all artillery projectiles. 

Only three artillery projectile types--two 155-mm and one 105-mm--are
currently in production, and the Army received fiscal year 1995 funds
to begin low-rate initial production of two other 155-mm artillery
projectiles.\3 The 155-mm M864 Baseburner projectile is being
produced at the Milan plant, and its production is scheduled to be
completed in April 1996.  The other 155-mm projectile, the M825 smoke
round, is being produced at the Pine Bluff Arsenal.  Production is
scheduled to be completed in August 1997.  The only 105-mm artillery
projectile currently being produced is the M913 high-explosive,
rocket-assisted (HERA) round, which is being produced at the Iowa
plant.  Its production is scheduled to be completed in the third
quarter of fiscal year 1997.  Twenty-five other types of artillery
rounds were last produced in fiscal year 1994 and prior years. 

The artillery projectile metal parts production base includes Army
and contractor production lines.  The Army's Louisiana, Mississippi,
and Scranton plants\4 have a combined production capacity of 437,600
metal parts a month (based on a schedule of three shifts a day for 5
days a week), and three contractors have a production capacity of
26,100 metal parts a month (using the same schedule).  The Army has
laid away the Mississippi plant, is laying away the Louisiana plant,
and plans to operate the Scranton plant under a facility use
contract.  According to Army officials, the production lines at the
Mississippi and Louisiana plants are no longer needed to meet
projected replenishment demands.  According to an Army official,
future production of metal parts for existing artillery projectiles
may be done at Army ammunition plants or procured from commercial
sources, but no decision has been made. 


--------------------
\3 The Army received fiscal year 1995 procurement funds for XM898
Sense and Destroy Armor and M795 high explosive projectiles.  These
items are not yet in production. 

\4 The Louisiana and Mississippi plants have the capability to load,
assemble, and pack artillery projectiles and produce projectile metal
parts, while the Scranton Army Ammunition Plant only produces metal
parts. 


   PLANS FOR PROCURING NEW
   ARTILLERY PROJECTILES AND THEIR
   METAL PARTS
------------------------------------------------------------ Letter :5

The Army has four 105-mm and 155-mm artillery rounds in various
stages of development at the U.S.  Army Armament Research,
Development and Engineering Center in Dover, New Jersey.  In
addition, in October 1994, the Army completed development of a fifth
round.  The new advanced artillery rounds include (1) the 105-mm M927
HERA projectile; (2) the 105-mm XM915 dual-purpose, anti-personnel,
anti-materiel projectile; (3) the 105-mm XM916 dual-purpose,
anti-personnel, anti-materiel projectile; (4) the 155-mm XM898 Sense
and Destroy Armor (SADARM) projectile; and (5) the 155-mm XM982
extended range artillery (ERA) projectile. 


      M927 PROJECTILE
---------------------------------------------------------- Letter :5.1

The 105-mm M927 HERA projectile was developed as a replacement for
the M548 rocket-assisted projectile.  Although the Army approved the
M927 projectile for troop use in October 1994, it has no current
plans to procure the round for its own use.  However, Army officials
indicated that the Army may produce the projectile for foreign
military sales to South Korea and Canada. 


      XM915 AND XM916 PROJECTILES
---------------------------------------------------------- Letter :5.2

The 105-mm XM915 and XM916 improved conventional munitions rounds are
being developed to replace the older 105-mm M444 round.  Both
projectiles are currently in engineering and manufacturing
development and are scheduled to be approved for low-rate initial
production in the fourth quarter of fiscal year 1996.  The Army plans
to procure components for these rounds from commercial sources and to
load, assemble, and pack the projectiles at the Lone Star plant. 


      XM898 PROJECTILE
---------------------------------------------------------- Letter :5.3

The 155-mm XM898 SADARM projectile is in engineering and
manufacturing development.  It is being developed to provide unique
counterbattery capability and is scheduled to be approved for
low-rate initial production in April 1995.  The Army plans to procure
projectile components from commercial sources and to produce the
projectile metal parts at the Scranton plant.  The completed round is
to be loaded, assembled, and packed commercially. 


      XM982 PROJECTILE
---------------------------------------------------------- Letter :5.4

The 155-mm XM982 ERA projectile is currently a technology base
program.  It is being developed to replace the M864 Baseburner
projectile, is scheduled to enter engineering and manufacturing
development in fiscal year 1997, and is not expected to be approved
for troop use until fiscal year 2000.  Production is scheduled to
begin in fiscal year 2001.  According to Army officials, metal parts
are to be procured commercially and the complete round is expected to
be loaded, assembled, and packed at the Lone Star plant. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :6

During our review, we examined Army and Marine Corps documents on
artillery projectile inventories, requirements, and production
schedules.  We also examined Army documents on production capacities
for artillery projectiles and plans for laying away production lines. 
We did not verify the accuracy of the data the services provided,
such as inventory levels, but compared such information with data
provided in prior years to evaluate its reasonableness. 

In conducting our review, we interviewed and obtained documents from
officials in the Department of the Army and Marine Corps
headquarters, Washington, D.C.; the U.S.  Army Armament Research,
Development and Engineering Center, Dover, New Jersey; the U.S.  Army
Armament, Munitions and Chemical Command, Rock Island, Illinois; and
the Indiana and Mississippi Army Ammunition Plants. 

We did not obtain fully coordinated Department of Defense comments on
this report.  However, we discussed the results of our work with
Office of the Secretary of Defense, Army, and Marine Corps officials. 
They generally agreed with our findings and conclusions, and we have
included their comments in this report where appropriate.  The Marine
Corps provided updated inventory and requirements information. 

We conducted our review between August 1994 and March 1995 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :6.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 15 days
from its issue date.  At that time, we will send copies to the
Chairmen and Ranking Minority Members of the Senate Committees on
Armed Services and Governmental Affairs and House Committees on
National Security and Government Reform and Oversight; the Director,
Office of Management and Budget; the Secretaries of Defense and the
Army; and the Commandant of the Marine Corps.  We will also make
copies available to others on request. 

Please contact me at (202) 512-4841 if you or your staff have any
questions concerning this report.  The major contributors to this
report are Raymond Dunham, Antanas N.  Sabaliauskas, and David A. 
Bothe. 

Thomas J.  Schulz
Associate Director, Systems Development
 and Production Issues


WORLDWIDE INVENTORIES OF ARMY
ARTILLERY PROJECTILES
=========================================================== Appendix I


Item description                  Usable  Unusable     Total
------------------------------  --------  --------  ========
105-mm projectiles:
------------------------------------------------------------
M1 HE without fuze              8,946,61    34,274  8,980,89
                                       6                   0
M314 illuminating                287,669         3   287,672
M60 smoke, WP with point         275,994         0   275,994
 detonating fuze
M548 HE rocket assisted           24,308         0    24,308
M760 HE extended range            99,242       794   100,036
M84A1 HC                         112,070         0   112,070

155-mm projectiles:
------------------------------------------------------------
M692 ADAM-L                       32,971         0    32,971
M731 ADAM-S                      120,271         0   120,271
M718 RAAMS-L                      62,926     3,676    66,602
M485 illuminating                253,676         0   253,676
M116A smoke HC                    19,349         0    19,349
M741 RAAMS-S                     137,259     7,070   144,329
M712 Copperhead                   16,095         0    16,095
M804 practice                     97,530         0    97,530
M741A1 RAAMS                      44,889         0    44,889
M718A1 RAAMS                      21,096         0    21,096
M825 smoke WP\a                  284,619         2   284,621
M107 HE                         2,936,48     1,138  2,937,62
                                       4                   2
M110 smoke WP                    127,658         0   127,658
M449 HE ICM SE                   490,642         0   490,642
M483A1 DPICM                    3,958,14   324,662  4,282,81
                                       9                   1
M549 HE RAP                      372,649         0   372,649
M864 Baseburner\b                147,003         0   147,003

8-inch projectile:
------------------------------------------------------------
M650 HE RAP                      113,622         0   113,622
M509A1 DPICM                     544,715         0   544,715
M106 HE                          861,222         1   861,223
M404 ICM                          39,037         0    39,037
============================================================
Total                           20,427,7   371,620  20,799,3
                                      61                  81
------------------------------------------------------------
\a The inventory does not include 15,821 projectiles in production
but not yet delivered. 

\b The inventory does not include 226,077 projectiles in production
but not yet delivered. 


LOCATION OF ARMY'S WORLDWIDE
INVENTORY OF ARTILLERY PROJECTILES
========================================================== Appendix II


Location                          Usable  Unusable     Total
------------------------------  --------  --------  ========
United States:
------------------------------------------------------------
McAlester Army Ammunition       1,853,70    39,880  1,893,58
 Plant, Okla.                          0                   0
Red River Army Ammunition       1,447,01    33,718  1,480,72
 Plant, Tex.                           0                   8
Hawthorne Army Ammunition       1,173,40    30,188  1,203,59
 Plant, Nev.                           3                   1
Crane Army Ammunition            712,015    43,946   755,961
 Activity, Ind.
Anniston Army Depot, Ala.        658,692    26,793   685,485
Lexington Blue Grass Army        594,753    31,880   626,633
 Depot, Ky.
Tooele Army Depot, Utah          643,376    16,086   659,462
Sierra Army Depot, Calif.        528,033    41,980   570,013
Seneca Army Depot, N.Y.          298,494       664   299,158
Letterkenny Army Depot, Pa.      245,748    20,296   266,044
Savanna Army Depot Activity,     256,659     7,941   264,600
 Ill.
Lone Star Army Ammunition        240,368         0   240,368
 Plant, Tex.
Pine Bluff Arsenal, Ark.         233,739         0   233,739
Iowa Army Ammunition Plant,       94,472       312    94,784
 Iowa
Milan Army Ammunition Plant,      44,990    39,026    84,016
 Tenn.
Longhorn Army Ammunition           9,272         0     9,272
 Plant, Tex.
Louisiana Army Ammunition             96         0        96
 Plant, La.
Kansas Army Ammunition Plant,         61         0        61
 Kans.

Prepositioned ships
------------------------------------------------------------
Jeb Stuart                       353,806         0   353,806
Green Harbour                    348,946         0   348,946
Green Valley                     150,423         2   150,425
Cape Horn                          3,130         0     3,130
Cape Hudson                        3,130         0     3,130
Cape Decision                      3,122         0     3,122

Foreign countries:
------------------------------------------------------------
Korea (6 locations)             8,731,63     4,776  8,736,41
                                       6                   2
Japan                           1,752,60    34,132  1,786,73
                                       0                   2
Italy                             46,089         0    46,089
============================================================
Total                           20,427,7   371,620  20,799,3
                                      61                  81
------------------------------------------------------------

INVENTORIES AND REQUIREMENTS OF
MARINE CORPS ARTILLERY
PROJECTILES, AS OF MARCH 1, 1995
========================================================= Appendix III


                                                  Requiremen
Item description      Usable  Unusable     Total          ts
------------------  --------  --------  ========  ----------
105-mm projectiles:
------------------------------------------------------------
M1 HE without fuze   448,283   230,103   678,386     229,155
M327 HEP-T                 0        12        12           0
M314 illuminating     97,661    18,677   116,338      13,923
M84A1 HC smoke        40,081     4,341    44,422       4,160
M548 HE rocket             0        12        12           0
 assisted
XM629 CS tactical         18       372       390           0
M60 WP smoke         124,467    30,224   154,691      23,408

155-mm projectiles:
------------------------------------------------------------
M692 HE ADAM          30,664     1,225    31,889      29,768
M731 HE ADAM          62,306     3,804    66,110      35,450
M718 RAAM-L           30,359    14,264    44,623      21,456
M485 illuminating    218,094     8,555   226,649      45,493
M116A HC smoke         1,587       792     2,379           0
M741 RAAMS-S          56,352     2,208    58,560      12,010
M712 Copperhead        1,873       894     2,767       2,230
M823 training             37         3        40           0
M825 WP smoke         96,685    20,126   116,811      98,769
M107 HE              800,429    47,140   847,569     493,603
M110 WP smoke         81,701     4,015    85,716      46,966
M7 dummy                  67         0        67         279
M449A1 ICM            10,498     1,590    12,088           0
M483A1 DPICM         960,945   130,406  1,091,35     527,007
                                               1
M549 HE RAP          128,484    66,938   195,422     272,736
M864 Baseburner      165,611         1   165,612     426,529

8-inch projectile:
------------------------------------------------------------
M106 HE               58,728    26,260    84,988           0
============================================================
Total               3,414,93   611,962  4,026,89   2,282,942
                           0                   2
------------------------------------------------------------
