Original Date: 02/24/1997
Revision Date: 04/14/2003
Information : Armament Retooling and Manufacturing Support
With the Armament Retooling and Manufacturing Support (ARMS) program, Army facilities are reused by commercial industry until the facilities are again needed to support the mission of the Army. Commercial companies receive incentives to use available facilities and equipment. By considering available facilities as assets rather than liabilities, the Army is able to keep the facilities viable and available for future use, while obtaining a return on the investment in these facilities (Figure 2-1).
With reduced world threats, the Army was facing the prospect of closing or downsizing many of its facilities. Many of the facilities would have required extensive expenditures to meet environmental standards, and maintenance and rehabilitation costs. The ARMS Act - P.L. 102-484, which encourages the commercial reuse of mission required plants, allowed the Army to award contracts to businesses that would use the assets. The facility contractor is contracted to maintain and manage the building(s) and equipment. The Army liability is limited through contract clauses. The arrangement reduces the product costs of the activity due to the reduced overhead and the income from the leasing firm. The personnel previously employed by the Army are typically employed by the leasing firms, maintaining the skill base in the area in the event the facility needs to be reopened in the future. Eleven plants participate in the ARMS program; nine are inactive plants and two are active. The Industrial Operations Command (IOC) plans to expand the arrangement to include depots, Government Owned-Contractor Operated (GOCO) facilities, and labs. The value of a facility is much greater when the facility has tenants currently occupying the space. Since 1994, more than 1,000 ARMS proposals have been evaluated. The initial expenditure for starting the program was $99 million. The break-even point is 4.8 years, or 9.9 years if only the guaranteed returns are included. The benefits to the Army may be used for environmental remediation, reduction of maintenance costs, reduction of product costs, as well as other projects necessary for facility operation. Examples include $14 million of overcost being absorbed by one facility in 1997, with two inactive plants operating at no cost to the Army. Additional savings at active plants will occur as ARMS projects are completed.
The ARMS reduces the costs of ownership and divestiture to the Army. The communities benefit from the reutilization of the facilities, and by keeping jobs in the area. The Army benefits by keeping the facilities and equipment available for future use and maintaining skills needed for any future re-opening of the facility.
Figure 2-1. Commercial Contracts
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