ATK Loses $850M Army Contract to British Company
Eden Prairie-based Alliant Techsystems, Inc., lost an $850 million contract to maintain and operate the Radford Army Ammunition Plant in Radford, Virginia-a government-owned facility that ATK has operated since 1995.
The 10-year contract was instead awarded to London-based BAE Systems, which will start operating the plant after a six-month transition period. ATK's contract for the plant reportedly expires in September.
“We look forward to a debriefing from our government partners on this outcome,” Bryce Hallowell, ATK's vice president of corporate communications, said in a statement. “We remain committed to operating the facility at the highest level of dedication to quality, safety, and environmental stewardship throughout the transition period.”
The Radford Army Ammunition Plant was established in 1941 and manufactures propellants for military munitions. According to ATK's annual report, revenues from the plant represented about 5 percent of its total sales during its 2010 fiscal year, which ended in March 2010.
According to Hallowell, the plant has about 1,300 employees. He said that BAE will determine those employees' future once it takes over operations, and a BAE spokesman reached Monday by phone said that the company does not have any major staffing changes planned at the facility.
Shares of ATK fell more than 6 percent on Friday, the day that BAE announced that it was awarded the contract. The company's shares were up about 3 percent in Monday morning trading.
ATK has two other contracts for government-owned, contractor-operated facilities-the Lake City Army Ammunition (LCAAP) plant in Independence, Missouri, and the Allegany Ballistics Laboratory (ABL) in Rocket Center, West Virginia. ATK's LCAAP contract expires in the company's 2014 fiscal year, which ends in March 2014. The ABL contract expires in 2021 with a possible 10-year extension to 2031.
ATK employs about 18,000 people and is among Minnesota's 20-largest public companies based on revenue, which totaled $4.8 billion for the fiscal year that ended in March 2010. Financial figures for the fiscal year that ended in March 2011 have not yet been released.