something liek this
Before I explain it, let me say I’m going be calling them bullets even though they’re technically rounds. But everyone understands what is meant when I say bullets, so that’s what I’ll use…
The factory that makes the bullets is owned by the government, but the operation of it is contracted out to another company. When the contractor bid for the contract to operate the facility, they probably gave a low offer price so the government would pick them. They made the low offer with the expectations that they can use the facility to produce more bullets than they’re required to produce for the government, and will then make up the lost revenue by selling those bullets on the market. With this change, the contractor could start losing money, and as such could go back to the government for more money saying they changed the terms of the contract
Here’s an example with made up numbers.
Let’s say there are two companies bidding for the contract, and they both estimate that the cost to operate the facility for a year will cost $80k.
Company A submits a bid saying they’ll run the factory for $100k a year. They figure $80k will go to operations, and $20k will be their profits.
Company B submits a bid saying they’ll run the factory for $75k a year (technically less than what it will cost them to run it for a year). They do this not expecting to take a loss, but rather they see that if instead of making bullets for five 8-hour shifts (Mon-Fri), if they operate five 10-hour shifts, they can produce 25% more bullets than what the government requires in the contract, and they estimate that it’ll only cost them $10k more a year in operational costs. So technically they’re losing money on the contract, but they take the extra 25% they produce a year, and sell it on the non-government market making $40k a year. So now they’re making $115k a year ($75k from the government, and $40k from the non-governmental market), after taking out $90k for their expenses for the year, they’re profiting $25k a year, which is more than Company A expected to profit with their bid that was more expensive then Company B.
Yes, this is vast over simplification of it. But I’m not saying that’s exactly how it was done, I’m just using a made up example to help explain was I said in my previous reply
You’re talking about Lake City, right?
They are in no way the only manufacturer of 9mm or 5.56 ammo out there.
So long as there is demand then there will be supply. And as far as I know ammo manufacturers are running existing production lines all three shifts trying to keep up with demand.
The thing, though, is how much of the demand is people stocking up & hording for political reasons? If the demand is political, read that ARTIFICIAL, then that demand could vanish overnight. So none of the manufacturers are willing to do the capital investment in additional equipment so they can run more production lines.
For us end users, ammo is non-perishable. Buy it when it’s available, and stack the boxes in your closet, floor to ceiling