ATK Security and Sporting developed the special operations ammunition in partnership with the Naval Surface Warfare Center-Crane Division under the Special Operations Science and Technology ammunition program.
The ammunition, with improved accuracy, stronger barrier penetration and a lower muzzle-flash, will be manufactured in 5.56x45mm and 7.62x51mm calibers and is short-barrel optimized.
The rounds are designed for use with the MK16 and MK17 Special Operations Combat Assault Rifle Weapon System.
ATK said production will be performed at ATK's Federal Premium Ammunition plant in Anoka, Minn. Deliveries are expected to be completed in 2015.
The contract is worth $49 million.
"ATK is the clear leader in developing new ammunition technologies for commercial use," said Ron Johnson, president of ATK's Security and Sporting group. "We are now applying our research and development capability to satisfy the needs of our special operation forces."