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The applicability of lessons learned from the privatization of Canada's ammunition manufacturing to the U.S. ammunition industrial base was the goal of this study. While not an exact analog of the privatization possibilities open to the U.S. Department of Defense, the privatization of Canada's ammunition industry does offer important insights about the factors of a successful privatization. Specifically, it seems clear that the private sector in both nations can and will respond to demand for government ammunition. The Canadian example shows that a privatized industry will maintain an industrial capability when required and resourced by the government--but not without oversight. The companion report is W. Michael Hix, Ellen M. Pint, John Bondanella, Bruce Held, Michael Hynes, David Johnson, Art Pregler, Mike Stollenwerk, and Jerry Sollinger, Rethinking Governance of the Army's Arsenals and Ammunition Plants, Santa Monica, Calif.: RAND, MR-1651-A, 2003, www.rand.org/publications/MR/MR1651/.

The research described in this report was sponsored by the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center supported by the Office of the Secretary of Defense, the Joint Staff, the unified commands, and the defense agencies.

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