Army ‘considering terminating’ General Dynamics’ oversight of new 155mm production lines

WASHINGTON — The US Army is considering scrapping General Dynamics Ordnance and Tactical Systems (GD-OTS) management of three new 155mm artillery round production lines in Mesquite, Texas, according to a “show cause” letter obtained by Breaking Defense.

Following Russia’s invasion of Ukraine in 2022 and the heavy use of artillery, the Army rushed to bolster 155mm production and produce 100,000 shells per month. As part of that broader push, it opened a new government-owned facility in Texas, tapping GD-OTS to operate it and stand up three Universal Artillery Projectile Lines (UAPL) to produce the metal parts for artillery projectiles, including the shell casings.

That work, though, has not gone smoothly, and the service is now “considering terminating” the GD deals for all three UPLA lines, according to a June 13 letter from Army Contracting Command (ACC) to the company.

“GD-OTS has failed to complete the projects on time or make meaningful progress towards meeting the required completion dates of design and installation of the three (3) UAPLs,” the Army wrote in the letter. A show cause letter is a formal document requiring an individual or company to detail why specific actions or inactions should not result in consequences — in this case, termination of the three production line deals.

As of mid-June, the service noted that GD-OTS had missed period of performance completion dates for both UAPL lines 1 and 2 — Nov. 22, 2024, and April 16 of this year, respectively — while noting that while the line 3 deadline doesn’t occur until March 3, 2026, that appears likely to slip too.

“Because GD-OTS has failed to meet significant milestones for UAPL 1, leading to six (6) missed First Article Test dates spanning April 2024 through June 2025, resultant schedule impacts have continued to extend [to] UAPL 2 and UAPL schedules,” the Army explained. “Specifically, for Line 3, since January 2025 alone GD-OTS’ estimate for equipment installation slipped three (3) months, thus extending total installation timeframe and subsequent line prove-out activities into 2027.”

Additionally, the service said that even after it was determined that Line 1 equipment did not meet “technical requirements of the contract,” the company continued shipping Line 3 equipment. As a result, there is a “significant risk” that similar Line 3 equipment will also not be up to snuff. Compounding the issue, on May 29 GD-OTS notified Army officials that it had halted work on UAPL 3 “on its own accord,” a decision taken without direction or concurrence from the service.

All taken together, the Army wrote, GD-OTS “is failing to make progress” on the third line. 

“Because GD-OTS has failed to perform the UAPL Task Orders… within the timeframe required by the contractual terms, the USG is considering terminating” the deals but a final decision has not been made, the Army added. The letter does not go into detail about what other companies could be tapped to replace GD-OTS.

The letter gave GD-OTS 10 days to respond in writing and affirm if it is capable of completing the design and installation for the first two lines and produce either 10,000 M795 or M1128 projectile metal parts per month, and 10,000 M795 parts per month for that third line.

While an ACC official declined to discuss specifics of that show cause letter, they told Breaking Defense today that GD-OTS’s deadline has now been extended to July 10.

“We won’t get into specifics in the discussion with GD-OTS, but we have communicated to them that they have received an approved extension until 10 July to provide information on how they plan to fulfill their obligations on this contract,” the service official wrote in a brief statement. “ACC supports Army readiness and modernization by using best practices and expert-level oversight to provide warfighters with premier contracting support.”

A GD-OTS spokesperson confirmed that the show cause letter was referring to work at the Mesquite, TX facility but deferred to the Army for any other comments about the evolving situation.

Aaron Mehta contributed to this report.