Alliant Techsystems Inc. (ATK) said the U.S. Army has awarded it a $50 million follow-on contract to manufacture the Mortar Guidance Kit (MGK). The contract awarded under the U.S. Army’s Accelerated Precision Mortar Initiative (APMI) program followed an Army urgent Operational Needs Statement (ONS).
As a result of this contract more precision mortars will be supplied to U.S. forces in Afghanistan. Alliant Techsystems was previously awarded a contract in June 2010 to supply an initial quantity of rounds under the Army’s ONS.
Alliant’s design for the current Army order is based on its Precision Guidance Kit technology for the artillery. The company’s MGK is capable of transforming existing 120mm mortar bodies into precision guided munitions. This puts organic, precision engagement capability into the hands of local battlefield commanders.
Earlier, Alliant was awarded a contract in April 2010 for Phase II of the APMI program having successfully completed the Phase I. This four-month design, maturation and demonstration program concluded with Alliant winning a competitive “shoot off” at the Yuma Proving Grounds in Arizona.
With the end of the shoot-off, Alliant’s MGK was selected as the best-value solution to meet the requirements of the Army’s APMI. The feat was achieved by the company’s mortars achieving a consistent hit within a narrower 10 meter radius versus conventional mortars regestering hits within a wide area of 136 meters.
Alliant Techsystems’ program-design and management headquarters is at its Plymouth, Minnesota facility. The company conducts production at its facility near Elk River, Minnesota and also in Rocket Center, West Virginia.
Alliant Techsystems specializes in developing innovative, advanced weapon systems that provide affordable precision and effectiveness for artillery, mortars, tanks, naval gun systems, and tactical aircraft. The core capability of Alliant’s business is to deliver precision at affordable costs. The company uses its expertise in guidance, fuzing, and gun-hardened electronics, to attain reduction in the timeline and cost of producing a precision weapon.
We retain our long-term Neutral recommendation on the stock. Also, Alliant currently has a short-term Zacks #3 Rank (Hold), which is in line with its closest peers General Dynamics Corp. (GD) and Raytheon Co. (RTN).
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