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A lot of surplus is just over produced ammunition. Whoever ordered it at the time wanted X amount of ammo, but when delivery time comes up, they decide that they didn't shoot all of their previous stock of ammo, and so decides to take less then what was agreed upon. BUT, these are contracts, so, the manufacturer gets paid their original agreed upon amount (usually). Think of it like when you pay for Internet or cable. You pay a set amount regularly and use whatever you use. Some months you'll use a shit ton, but others you'll hardly use at all. This is how it goes. But of course there are some rejected batches. I.E. 1 in every 1k or so is defective beyond a set parameter(pick a reason). FYI, it's about a 1:5 of every round will be a flyer if you're shooting on paper target with M855.
He'll most of it isn't even from batches that were submitted to their respective DOD/MOD as the manufacturers are just keeping up production for "in case of emergency"(military related) which has happened a couple times for the DOD in the past 15 or so years.
