Alliant Techsystems Inc. (ATK) has entered into a fixed price five-year Indefinite Delivery/Indefinite Quantity (:IDIQ) contract with the U.S. Army. Per the agreement, the company will manufacture Mk248 Mod 0, 190-grain and Mk248 Mod 1, 220-grain 300 Winchester Magnum (Win Mag) rifle ammunition for the army.
The contract has a maximum potential value of $20 million with a total of five 12-month ordering periods. Alliant Techsystems is expected to receive its first delivery order during the award period.
Alliant Techsystems’ Sporting Group will be responsible for this contract. The company will roll out the deliveries from its Federal Premium Ammunition factory, Anoka, MN.
Alliant Techsystems will use the aforesaid products at its M2010 Enhanced Sniper Rifle (ESR). The utilization of the products will enable the army to beat the specific targets at greater ranges with enhanced accuracy.
In addition to winning high-value contracts, these types of small ticket-size deals will enable Alliant Techsystems to maintain a steady cash inflow. Further, the contract will help to strengthen the company’s ongoing alliance with government organizations.
It is evident from past records that Alliant Techsystems has a strong business association with the U.S. defense establishment and is continuously supporting their different missions. In Jan 2014, the U.S. Army selected Alliant Techsystems’ BLACKHAWK SERPA Tactical Holster for its Improved Modular Tactical Holster Program.
We believe Alliant Techsystems’ proven track record of product and service standards will enable it to become a trusted partner for several national and overseas defense missions. In addition, it will play a vital role to win more contracts in the future.
Alliant Techsystems currently has a Zacks Rank #2 (Buy). Some other stocks in the industry looking equally good are CAE Inc. (CAE), Curtiss-Wright Corp. (CW) and Hexcel Corp. (HXL). All of them carries a Zacks Rank #2 (Buy).