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U.S. Army Small-Caliber Ammo Award Establishes General Dynamics As Second Source for Critical Small Caliber Ammunition

ST. PETERSBURG, Fla. – The U.S. Army Field Support Command, Rock Island, Illinois, has awarded General Dynamics Ordnance and Tactical Systems, a business unit of General Dynamics (NYSE: GD), a five-year contract to supply small-caliber ammunition to the U.S. armed forces. The initial award under the contract is for $171 million for approximately 300 million rounds. The contract has a total potential value of approximately $1.2 billion if all options are exercised.

This contract establishes General Dynamics as a second-source prime contractor for the production of various types of 5.56mm, 7.62mm and .50 caliber ammunition. The company is already a leading supplier of medium- and large-caliber ammunition and bomb bodies to U.S. forces.

This award will expand the U.S. Defense Dept.’s small-caliber production base without incurring additional expense for upgrades to the existing government-owned, contractor-operated infrastructure. Members of the General Dynamics team are already filling emergency small-caliber ammunition orders for the U.S. government. Through this program, General Dynamics will serve as a flexible second source to quickly respond to growing demands in small-caliber ammunition for up to 500 million rounds per year.

Michael S. Wilson, president of General Dynamics Ordnance and Tactical Systems, said, “General Dynamics is pleased to be selected for this critical role of providing small caliber ammunition to the U. S. soldier. With our successful track record as a leading prime contractor for medium- and large-caliber ammunition, we look forward to delivering the highest-quality ammunition to U.S. warfighters in the most timely and cost-efficient manner.”

General Dynamics Ordnance and Tactical Systems will be the prime systems contractor and logistics manager for the program, with its St. Marks Powder subsidiary providing BALL POWDERâ propellant. A team of domestic and international partners will support General Dynamics Ordnance and Tactical Systems, including Olin Corporation’s Winchester Division; SNC Technologies, Inc. of Canada; Israel Military Industries Ltd. (IMI); and General Dynamics Santa Bárbara Sistemas, Madrid, Spain.

General Dynamics, headquartered in Falls Church, Virginia, employs approximately 70,800 people worldwide and had 2004 revenue of $19.2 billion. The company is a market leader in mission-critical information systems and technologies; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and business aviation.

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Any "forward-looking statements" contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

General Dynamics Corporation (ticker: GD, exchange: NYSE)
News Release - Tuesday, August 23, 2005
Press Contact: (727) 578-8144