Munitions are the currency of exchange in armed conflicts. The existing acquisition and procurement process exposes the defense industrial base to significant short- and long-term risks: hampering America’s capacity to surge production and impairing military effectiveness in a sustained peer or near-peer conflict. At present, the availability of ammunition is becoming a key determinant of which side has the advantage in the Russo-Ukrainian War. Wargames conducted by the Center for Strategic and International Studies call into question the ability of the United States and its partners to sustain high rates of fire because of significant equipment losses, limited munition inventories, and low munition production rates.
The U.S. government’s investment in munition manufacturing, storage, inspection, and maintenance ebb and flow has been based on conflict engagements, a cycle consistently leaving the defense industrial base unable to immediately meet production surges. The health of the U.S. defense industrial base was also undermined by decades of consolidation, inconsistent funding, capital diversification, supply chain fragility, labor limitations, and disruptions — raising concerns amongst analysts about its ability to rise to challenges.
Scholars have warned that pursuit of innovation under growing security demands may produce gaps in existing military capacities. Thus, limitations in U.S. and allied munition production — just to satisfy Ukraine’s ammunition demand — is a precursor of industrial limitations that may hamper U.S. military effectiveness if engaged with an adversary, such as China, that inflicts severe equipment and personnel losses. The acute inability to manufacture munitions is typified by the U.S. defense industrial base’s lack of manufacturing capacity to supply NATO rounds like 155 mm artillery ammunition, buying South Korean ones, and shipping U.S. stockpiles stored in Israel to Ukraine. Given its existing commitments and preparations for eventualities in Asia, the United States is also running low on stockpiled missiles from the Stinger to the High Mobility Artillery Rocket System.
Munition manufacturing is a concern in the United States and across NATO allies. NATO’s initiative to coordinate allied ammunition warehousing will not overcome current production limitations, which for the United States, according to analysis by the Center for Strategic and International Studies, may stretch into 2027 and beyond for multiple critical systems. Additional congressional funding for production of artillery shells is emblematic of Ukrainian demand instead of U.S. strategic industrial policy. Furthermore, Soviet/Russian rounds like the 122 mm and 152 mm, as well as anti-tank and surface-to-air missiles — which are still primarily used by Ukraine — are increasingly scarce on the international arms market. It is also clear that Eastern European manufacturers of these types of ammunition and missiles will take a couple of years to ramp up production.
Increasing munitions production is key to supporting U.S. grand strategy, specifically with regards to great-power competition. Our analysis and policy prescriptions divide munitions into two types — high-tech and low-tech — to demonstrate that current efforts to shore up munition production, such as additional funding, multi-year contracts, and no-bid contracts — which may reduce military effectiveness — are necessary but insufficient changes to ensure rapid increases in both high-tech precision and lower-tech munitions.
Besides supporting prior recommendations regarding easing contracts, we also recommend that the United States expand industrial collaboration with allied nations on advanced munitions (e.g. precision-guided munitions) and include allies’ manufacturing bases as part of the U.S. defense industrial base itself. With regards to low-tech munitions manufactured in government-owned, contractor-operated facilities overseen by the Joint Munitions Command, the Department of Defense should fund modernization efforts at facilities. The government should also secure the entire supply chain (particularly metal fabrication supplies), increase audits and formulate specific quality and efficiency data analytics. Finally, it should fund the sustainment of production facilities even after current demand inevitably declines.
Why is the United States Facing a Shortfall?
For the United States, the current shortfall in munition production necessary for sustained, attritional warfare is the result of two decades-long trends. The first cause was the absence of a rival at the Cold War’s conclusion, leading to the drawdown of the U.S. military, defense industry consolidation, and budget realignment necessitated by new funding priorities. Second were decisive conventional military victories, such as in Iraq in 1991, and the post-9/11 prioritization of counter-terrorism operations wherein the U.S. military enjoyed overwhelming superiority in weapons and ammunition. The conflicts during the 1990s and 2000s seemed to confirm the “revolution in military affairs” and its prioritization of technology over rate-of-fire concerns.
As noted by Col. Harry F. Ennis in 1980, even at the peak of the Cold War, budget constraints hindered production and maintenance of the ammunition stockpile, and despite drops in the production rate, the reduced defense industrial base was expected to supply military demands. Another study notes how U.S. stockpiles of air-delivered ammunition were dangerously lowered by resupplying Israel via Operation Nickel Grass during the 1973 Arab-Israeli War.
The trend lines of post-Cold War munition production difficulties were evident after the first Gulf War. In 1993, Lt. Col. David Whitfield warned that the characteristics of ammunition production — industry consolidation, expensive startup costs, dangerous manufacturing processes, and monopsony demand — would create a scenario where there would be insufficient numbers of private companies to surge production when needed. When coupled with government policy changes, these production hurdles produced an industrial base with limited surge capacity. For example, the Clinton administration’s Bottom-Up Review identified sufficient ammunition stockpiles for two major regional contingencies and changes in military focus. The Obama-era defense budget cuts justified by the strategy of one regional contingency, counter-terrorism, as well as deterring Iran and China, did the same.
Second, America’s military and technological dominance over adversaries’ conventional forces perhaps elevated the view that technology, organization, doctrines, and initial firepower can lead to quick victories. One has only to look at the plethora of analysts, think tanks, and others’ predictions of a quick Russian victory in Ukraine to see the major flaws in Russia’s military. Many analysts expected an insurgency to develop in Ukraine, but Russia’s failure to win the conventional war re-confirms that conventional military capabilities are a combination of arms, doctrine, and belligerents’ national will, and other factors.
As a result of this historical context, production of significant munitions and components is now managed by the U.S. Army Joint Munitions Command’s government-owned, contractor-operated facilities. Limited market competition, constricted demand to the U.S. government and partners, and industry consolidation eroded U.S. munition manufacturing capacity. Now-retired Maj. Gen. John Ferrari argued in 2009 that these market dynamics prioritize contractor interests over production capacity. Yet, in a 2004 report, RAND recommended full industry privatization.
What Can Be Done?
There is broad agreement among policymakers and analysts that a primary lesson of the Russo-Ukrainian War is that the United States and its allies should invest in the manufacturing of ammunition and precision-guided missiles. A recent Heritage Foundation report summarizes three core areas of improvement: rebuilding the manufacturing base to raise production levels by offering multi-year contracts; bypassing time-consuming contract competition requirements; and simplifying the Foreign Military Sales process to encourage rapid co-production. However, such policy recommendations do not account for the organization of ammunition manufacturing.
While we believe that the broad suggestion is correct, we divide munition and component manufacturing into two broad categories: sophisticated precision-guided munitions and unguided munitions. We make these broad distinctions because the markets for sophisticated and unsophisticated munitions are different, and the government should adopt different policies. Sophisticated munitions and the development of future capabilities require market competition and innovation. Precision-guided munitions are capital and technology intensive with opportunities for market-based competition between manufacturers. The private sector, through contractor-owned, contractor-operated facilities, will continue to manufacture the more research-intensive and higher profit margin precision-guided munitions, such as those for the High Mobility Artillery Rocket System (made by Lockheed Martin) and the Javelin (made by Lockheed Martin and Raytheon).
Thus, improving the production of high-tech munitions will require adjustments to export regulations, facilitating licensing agreements, and increasing the capacity to modify systems to suit U.S. policy objectives. Specifically, we propose that the defense industrial bases of NATO member states and treaty allies should be considered as part of the U.S. defense munition manufacturing industrial base for planning purposes. This proposal is similar to current thinking regarding the United Kingdom and Australia as instantiated by the AUKUS agreement. This can be accomplished by licensing agreements to internationalize production of currently limited munitions such as Javelin and other anti-tank missiles, howitzer rounds, and some other missiles. The ability to license production by allied countries, such as Turkey, expands the industrial base to states with the technical sophistication to manufacture components or systems and comparative advantages provided by lower labor costs, all without threatening U.S. jobs.
Congressional support to modify the Industrial Traffic in Arms Regulations is necessary to expedite arms exports and enable industrial collaboration. These regulations are designed to protect U.S. intellectual property and ensure that U.S. technology advantages are maintained. The munitions and systems demanded in Ukraine have relatively limited exposure to advanced U.S. technology but are nevertheless still covered by bureaucratic red tape. Other policy changes such as sunset clauses on certain systems and ammunition would facilitate contractors establishing vertically integrated production chains. Congressional support would be more forthcoming if these modifications to existing laws came with safeguards for the intellectual property rights of U.S. firms, which in turn require updates to the U.S. legal system to address existing and future concerns of the digital era.
Improvement in low-tech munitions manufacturing, like Ukraine’s insatiable use of 155 mm shells, requires mobilization and expansion of the existing government-owned, contractor-operated facilities — among others — overseen by the Joint Munitions Command. In addition to the Government Accountability Office’s recent recommendations for the Army to revise its governing documents to enable more effective decision-making and establish mechanisms to collect, analyze, validate, and share common lessons learned, we make four additional specific recommendations.
First, the Department of Defense should fund planned facility modernization. The government should also provide additional specific and directed funding to replace outdated equipment and upgrade manufacturing processes, even if existing contracts place the responsibility on the contractor to do so. Munition manufacturing is essential to U.S. national security and the additional investment does not unfairly favor specific firms. Competition to operate government-owned, contractor-operated facilities does occur — several of the facilities have changed contractors through competitive awards over the last 20 years. Government investment in contractor-operated facilities is essential for safety and efficiency. For example, updating World War II-era facilities at McAlester Army Ammunition Plant is not simply replacing Department of Defense civilian-mixed explosives with robotic capabilities, but also upgrading the transportation and storage facilities on base. Upgrades at government-owned, contractor-operated facilities, which may unfairly benefit the current contractor, are also necessary. For example, there is modernization underway at the Lake City facility to manufacture the 6.8 mm ammunition for the Next Generation Squad Weapons. The recent modernization of the nitrocellulose manufacturing facility at the Radford Army Ammunition Plant is another example.
Second, the Department of Defense should internationalize aspects of low-tech munition production by securing the entire supply chain of necessary materials. Low-tech munitions are manufactured at the “speed of steel,” a reference to the idea that metal fabrication is the constraint on production. The U.S. government should explore and utilize international partners for part components to develop multiple lines of production. These additional international partners would add resiliency to existing U.S. supply chains while bolstering surge capacity. Because transportation costs are significant, final assembly, inspection, and testing could all be completed at U.S. facilities. In this vein, the Department of Defense should also secure the supply chain of machine tools needed to manufacture such ammunition. In addition to the United States, four out of the top six producers of machine tools are allies, with two being NATO members: namely Japan, South Korea, Germany, and Italy.
Third, the Department of Defense should increase audits of government-owned, contractor-operated facility operators. Existing contracting processes include audits and reviews. Comprehensive analysis of ammunition quality, efficiency, and delivery necessitates significant improvement in data-collection efforts and design to enable internal and external experts in strategy, management accounting, and logistics to improve production processes. Unfortunately, responsibilities and documentation remain opaque. Ensuring a capacity to surge production will require different contract vehicles and standardization of the operating contracts known as Performance Work Statements across all government-owned, contractor-operated facilities.
Finally, the Department of Defense should consider the costs of idling production if and when demand for munitions declines. Maintaining capacity and supporting salaries when not in demand is politically unpopular, and history suggests that munition production is a frequent target of budget cuts. Current efforts to surge supply — including competition between General Dynamics and American Ordnance for a nearly billion-dollar contract and a prior $522 million contract to manufacture artillery rounds — should not disrupt future efforts to sustain the existing government owned, contractor operated production model. As noted by the Government Accountability Office, contractors operating government-owned facilities sell ammunition to third parties: Additional policies governing how much profit beyond existing minimums must be re-invested in facility infrastructure are necessary. The United States would be well served in remembering the difficulty in supplying munitions in support of Ukraine, not even as a combatant, in a war of attrition.
There is no one silver munition to resolve the current crisis, but a number of concrete steps could go a long way. The government should put forward a policy package that eases contracts, includes allies in the manufacturing base, expands and modernizes existing government-owned, contractor-operated facilities, and encourages research to save costs and incentivize private reinvestment.
Such a multi-faceted prescription would set the United States up for longer-term success with regards to ensuring its own military effectiveness, building transportable defensive capabilities, and ensuring timely and effectively support for partners like Taiwan. Whatever contingencies may arise in the future, Washington will want to have enough ammunition for them.
Vasabjit Banerjee is an associate professor of political science at Mississippi State University.
Benjamin Tkach is an assistant professor of political science at Mississippi State University.
Image: U.S. Army photo by Sgt. Randis Monroe