1. Triad Panel IOC - Transforming INDUSTRIAL POWER into MILITARY READINESS IOC - Transforming INDUSTRIAL POWER into MILITARY READINESS MG Joseph Arbuckle 12 Jan 00

2. The Evolution in Ammunition Our challenge... Efficiently and effectively transition the base from conventional to smart/brilliant munitions! Percent of Ammunition Stockpile (TONS) 100% - 0% - '99'01'03'05'07'09'11'13'15'17'19'21'23'25'27'29 Smart/brilliant Conventional BUDGET LEGACY WEAPON SYSTEMS Product improvement 2 of 6

3. Paradigms Under Review 80% of legacy systems will remain in the inventory through 2025, impacting retention of organic base capability CSA vision will change munitions mix Approximately 62% of funded production requirements support training If unfunded portion received - 75% of production requirements will support training. Modernization funding will pace stockage of smart munitions Organic base has value added in: - sunk costs, QD, environmental permits - replenishment capacity - unique processes and backup capacity 3 of 6

4. War Reserve Conventional Ammo FY 02-07 POM Procurement AP Land MineAP Land Mine MACSMACS +WAM Ctg 120mm M829A3Ctg 120mm M829A3 MOFAMOFA Proj 155mm RADMProj 155mm RADM Proj 155mm XM982Proj 155mm XM982 All OtherAll OtherTotal67442330829427996284832,585 $ Million ITEM Smart munitions in POM limited to WAM 12% of total Note: FY 2007 under review at DCS for Ammo and ODCSOPS 4 of 6

5. Army War Reserve Requirements Conventional Ammunition and Missiles MTW West 1% by tons are Smart Munitions: SADARM Stinger TOW HELLFIRE MTW East 5% by tons are Smart Munitions: Stinger TOW HELLFIRE Requirements from most recent OPLANs 5 of 6 REQUIREMENTS ONLY

6. Organic base still needed to support legacy systems Smart ammo system contracts likely commercial Achieving Balance Organic Commercial Quantity/Distance Capacity Unique capabilities Control, insurance Environ permits Unique capabilities Workforce Flexibility Modern facilities Balance point shifts with transition from conventional to smart munitions 6 of 6