BAE Systems secures $8.8bn US Army contract

(Sharecast News) - British defence group BAE Systems has secured an $8.8bn contract to run an ammunition plant for the US Army. The 10-year contract, which runs from 1 January 2024 and has a ceiling value of $8.8bn, is to maintain and operate the Holston Army Ammunition Plant in Tennessee, which produces explosives for the US military.

BAE has been running the government-owned plant, which was opened during World War II, since 1999.

During that time, BAE said it had created a "safer workplace" at the plant as well as developing "reliable" munitions and introducing more environmentally-friendly practices.

John Swift, vice president of BAE Systems Ordnance Systems, which is managing the contract, said: "Our team is proud to continue our work as the operating contract.

"BAE is committed to delivering safe, reliable products for our customers at a time when it matters most, while modernising [the plant] to meet increased demand."

As well as the Holston plant, BAE has operated the Radford Army Ammunition Plant in Virginia since 2012. The Radford plant manufacturers propellants for the US military.

As at 1015, shares in BAE Systems were up 1% at 1,064.6p.