Colt's M4 contract expired. Army acquires rights to M4.

[Bartholomew Roberts]

No, Colt owned the M4 TDP. Under a "special" agreement with the Army, the changes that Colt made to the M16 were agreed as proprietary.

To be fair to the Army, it isn't as if they wanted to make that deal. The Army went to Colt and had them do up a version of the 14.5" M16 they sold Abu Dhabi. Colt designed the TDP for the M4 and then the Army said "Thanks" and handed the TDP to three other manufacturers and asked them if they could build it cheaper.

You see the Army took the position that the M4 was covered by the older M16 TDP that the Army already owned and so they could do whatever they like with it. Colt sued the Army and the settlement agreement was the exclusive contract on the M4 that just expired.

 

[nicholst55]

Looks like Colt is going to have to start making money other ways now.

Maybe they will start making revolvers again.

Colt Defense LLC is a separate entity from Colt Sporting, and never did make revolvers. My guess is that Colt Defense will go belly-up, unless Yomama gives them a bailout.

 

[Maelstrom]

Beretta and FN have made nice so far, but they might not stay that way.

Something tells me that the Belgians, at the very least, are still appreciative to the US for their existence for the last 60-someodd years.

A quick refresher, what were the Italians doing in WWII? Everyone comes down on Japan and Germany but no one seems to remember that they had a third ally.

 

[woodybrighton]

thats because to be fair they were the comedy sidekick
Ribbontoff " in the next war Italy will on on our side"
Churchill "seems only fair they were on our side in the last one "

claiming a foreign firm thats built huge premisies in the US is going to turn round and stiff the largest defense buyer on the planet is unlikely. Even if they did the plants in the states the blueprints are there nationalization simples.
maybe in north Korea guns are us were offering to suppl;y the us army:banghead: you'd have a point.

 

[earlthegoat2]

In the end though I wouldnt be surprised if Colt gets their contract renewed because of "political" reasons more than economic or logistical reasons.

 

[HorseSoldier]

Nah -- they'll lose the contract, but then Barry-O will give them a bail out and the tax payers will get to foot the bill.

 

[HoosierQ]

So who fields the M16 today? I saw a photo if troops in South Korea and they seemed to have M16's. Do the "desert warriors" get all the M4's and M16's see duty elsewhere?

 

[c5_nc]

Our department just ordered Colt M4s (Full Auto) they were like $780 each (LE price). I doubt they are going to see huge savings. We maybe could have saved $25 or so going with a full auto DPMS or something. Civilians line up to drop $1300+ on the semi auto version b/c they "think" they are getting some much better, or just want the Colt name. Not sure what the military pays but I imagine much less, and I think the costs among brands will be relatively close.

 

[TheFallGuy]

Will the Green Berets get their HK416's back now!? The Army took them away after Colt pitched a fit that they weren't special forces and that Colt's exclusive rights were being violated.

green berets are special forces. rangers wear tan (used to be black before the army switched every body to black). red/maroon is for airborne.

I don't recall seeing or hearing about SF getting HK416's but had heard of 1st SFOD-D (Delta Force for those not familiar) fielding them but I am not sure if that is true as most of what you hear about Delta is rumor and hear say. I am not saying SF never had them-I just have not seen a picture of it or heard of it before. I sent an email to an SF medic friend of mine asking about equipment he uses and will update when I get a reply.

 

[rbernie]

No, Colt owned the M4 TDP. Under a "special" agreement with the Army, the changes that Colt made to the M16 were agreed as proprietary.

This follows two Government behaviors

Rule One: Maximize the profits of the politically well connected and
Rule Three: Take the path of least resistance

So the Government guaranteed that Colt would be sole source for something like ten years, and then paid out the ying/yang for the M4 TDP.

The Federal Acquisition Regulations (FAR) are very clear on how this works.

Unless otherwise specified in the contract (Statement of Work, or SOW), the contractor gets the Intellectual Property (IP) rights to the product if they pay for the non-recurring engineering (NRE) needed to design the product/modifications and the .mil gets the IP rights if they pay for the design work. In other words, whoever pays for the engineering work gets to claim the IP rights for that work.

No company in the world would spend their own money designing a product (even changes to an existing product) and then give away that design knowledge to the marketplace unless covered by a patent or other legal protection.

Why would anyone expect Colt to do so?

To be fair to the Army, it isn't as if they wanted to make that deal. The Army went to Colt and had them do up a version of the 14.5" M16 they sold Abu Dhabi. Colt designed the TDP for the M4 and then the Army said "Thanks" and handed the TDP to three other manufacturers and asked them if they could build it cheaper.

You see the Army took the position that the M4 was covered by the older M16 TDP that the Army already owned and so they could do whatever they like with it. Colt sued the Army and the settlement agreement was the exclusive contract on the M4 that just expired.

In the end, the .mil agreed that Colt had paid NRE costs that entitled them to IP protection. The settlement codified that, and the rest (as they say) is history.

 

[Darthbauer]

“Now that the sole-source era is over, we hope to see free and open competition of any interim or long-term solution for the service rifle or carbine for the American soldier,” said Jason Schauble, vice president of the military products division of Remington. “Now there is a chance to get something better in the hands of the soldier. Why not do it?....... ”

Remington? Maybe the ACR might be getting in there. Probably not but I can hope.

 

[Slamfire]

In the end, the .mil agreed that Colt had paid NRE costs that entitled them to IP protection. The settlement codified that, and the rest (as they say) is history.

An interesting read on the M4 TDP legal fight.

http://www.pepperlaw.com/publications_article.aspx?ArticleKey=198

But the bigger question is, and should be, why is DoD wedded to Colt?

Another interesting read

: http://www.defensereview.com/colt-m4-carbines-future-uncertain-dark-clouds-forming/

Excerpt:

Perhaps the single most exciting thing that happened at NDIA International Infantry & Joint Services Small Arms Systems Symposium 2008–away from the firing range, of course–was a confrontation between Jim Battaglini (Retired Marine Corps Maj. Gen. James R. Battaglini) of Colt Defense and U.S. Air Force Col. Robert Mattes, the director of the Comparative Test Office for the Deputy Undersecretary of Defense for Advanced Systems and Concepts, while was giving a speech and promoting the idea of an open competition to determine the best infantry/assault carbine that can be supplied to U.S. military infantry warfighters. Specifically, the purpose of the competition would be to determine whether or not the Colt M4 Carbine is still the best carbine solution for our warfighters, and if there might be a better (i.e. more reliable and combat-effective) carbine out there than the M4

Perish the thought that there might be a better carbine than the Colt M4.

And perish the Colonel who suggests that there ought to be an fair and open "shoot -off".

Did you notice where Major Generals go when they retire? They end up being advocates for Defense Contractors. Something they were doing before they retired, but now the salary comes direct from the Contractor.

 

[HorseSoldier]

I don't recall seeing or hearing about SF getting HK416's but had heard of 1st SFOD-D (Delta Force for those not familiar) fielding them but I am not sure if that is true as most of what you hear about Delta is rumor and hear say. I am not saying SF never had them-I just have not seen a picture of it or heard of it before. I sent an email to an SF medic friend of mine asking about equipment he uses and will update when I get a reply.

CAG/Delta/whatever adopting the HK416 is pretty much past the rumor level -- even the Army Times has reported the acquisition.

Some white-side Special Forces units got their hands on 416s (some of our ODAs had them), some still use the M4, and some have the SCAR fielded. SCAR should eventually clean up the mess, barring incident, but right now there's a lot of variation in systems fielded.

The guys who lost their 416s were, as I noted up thread, the Asymmetric Warfare Group, who don't wear specific beret colors since they interfere with their a$$hats .

 

[SHvar]

Delta helped to design and test the 416, and bought the first 500 on the production line, that was years ago.
There are a few SF units that were aquiring the 416 uppers to use on their M4 lowers to save a bit of money.
Remains to be seen what happens for the next big contract, hopefully the choice is a good one regardless of what it is.

 

[Eightball]

A quick refresher, what were the Italians doing in WWII? Everyone comes down on Japan and Germany but no one seems to remember that they had a third ally.

From my understanding, a large chunk of Italy switched sides mid-war to the winning side, after already using up the Afrika Korps and losing Africa.

I'll stop with my historical musings now

 

[SHvar]

"what were the Italians doing in WWII?"
Depends, at one time their entire navy was required to stay in port for their own safety. That was when they had one of the most powerful navys, the Brits wiped most of it out with a few airplanes, of course the Japanese traveled to Italy to study the attack to plan one of their own, any guesses which one?
I personally think some of what the Italians produce as far as firearms go, is mostly just overpriced, and some of it pretty to look at. Ill stick with my Austrian handgun.

 

[Pizzagunner]

There's a reason that Beretta has a factory in Maryland, SIG in NH, and FN in SC. If you want to sell guns to Uncle Sugar, he has to be able to nationalize your factory in a pinch.

The Germans paid a royalty to the British on every Maxim machinegun as developed by Germany. They paid it into escrow and then paid the money as reparations, but they paid it. Germany even made a counter claim against Britain for the latter's deliberate copying of Krupp developed delayed artillery fuses, but got snubbed. In the unlikely event of war with Italy, Beretta would eventually be compensated for the seizure of their plant if the US took it.

As to Italian firearms in general, they make several world class products, especially pistols and shotguns, several of which have been tremendously innovative. Collectively, Italians could be said to be the most forward thinking shotgun designers and manufacturers on the planet.

 

[Tim the student]

Asymmetric Warfare Group, who don't wear specific beret colors since they interfere with their a$$hats

Indeed they do.

 

[RedLion]

What would a company like Beretta, Sig, HK, or any other large Law enforcement/military contractor want with cutting off supplies to the largest purchaser of Law enforcement/military goods? Do you think it might put their company in quite a bind?

Anyways Pratt and Whitney makes a bunch of jet engines for our airplanes, but we'd better be careful right, i mean they lost in 1812, they could want revenge at any moment....

Italy, Germany, England, Japan, and any other boogieman country you can think up already lost their own respective wars against the U.S. and either they learned the easy way that the U.S. is their best bet on survival, or they learned the hard way that the U.S. is not one to be messed with.

Plus as someone said above, all military arms factories are in the U.S. so the foreign companies can't shut them down, and rifles don't win wars, bombs and artillery do.

Back on topic, I doubt colt will lose their contract just because of the amount of work they've already put into the M4. I don't think that FN can really compete with it, especially with the cost. And with the new administration, I don't think the Army's going to have a lot of money to burn.

 

[Owen]

oh, I think just about everyone that bids will underbid Colt. M4 cost is way over $1000. M-16 cost is around $400. FNMI is going to eat Colt's lunch (and dinner, and breakfast, and snack, and probably high tea too...)

When you accept a government contract to also agree that the military may nationalize your production facilities at will if you fail to deliver on a war critical item. One day, you have your regular CEO, the next day you have an O-6 from a procurement activity.

 

[Trebor]

Daniel Watters has some interesting commentary on this. Evidently there's more to it then what the Army Times article says. Watter's knows his stuff, so I know his info is good.

Watters posted this as a comment over at Michael Bane's blog:

https://www.blogger.com/comment.g?blogID=8293484&postID=6299269411333389033

Daniel E. Watters said...
It is a bit of an exaggeration to say the Army has control of the TDP. As of July 1, the Army merely gained limited license rights to use the M4 TDP to second source production, as an extension of the 1967 licensing agreement for the M16. Until the end of calender year 2050, the Army will have to pay 5% in royalties to Colt for every M4 procured from second sources. The TDP will remain Colt proprietary data, and any second source M4 contractor will no doubt be required to sign non-disclosure/non-use agreements just as they do for the M16.

This is not the end of Colt's current .mil contract for the M4. The current contract allows new delivery orders to be placed to the end of calender year 2010. As it now stands, the current delivery orders stretch production out to Spring 2011.

And this comment:

Daniel E. Watters said...
One correction: Another source claims that the US Army will only have to pay royalties until December 24, 2037. That is still a mighty long time, and even after that the Army will only be able to second source for governmental purposes.

The companies receiving second source M4 contracts will only be able to use the Colt M4 TDP to supply the US government. Whether or not the US government can then turn around and export these carbines is a matter of the 1967 license agreement and subsequent amendments. Certainly, FN-made M16 are being contracted by the US Army on behalf of the Iraqi military.

The non-disclosure/non-use agreements for accessing the TDP will forbid the other companies from using Colt's proprietary data for commercial sales. Once their military contract ends, the company will be required to be destroy all of the TDP information provided to them.

The following link provides the US Army's standard non-disclosure/non-use agreement for contractors accessing the M16 TDP:

https://aais.ria.army.mil/AAIS/Solinfo/Standard_Attachments/Colt-M16_Non_Disclosure_Agreement.doc


And here's a link to Watter's write up on the M-16 and 5.56 round over at The Gun Zone. It's worth a read.

http://www.thegunzone.com/556dw.html

 

[SHvar]

Stands to reason that with an agreement such as that with colt, that the M4 may be replaced because of colts greed, or replaced with a rifle almost the same, but named different, and a few minute changes to make it legally different enough. Colt may have bitten themselves in the butt with such greed.
Time will tell, but then again the government and colt are long time bed partners, they may around for a while yet.

 

[Jaws]

I agree. With that contract, they may be better off with a different rifle.

 

[hwp]

The cost on a M4 is NOT 1K+ nowhere close.

Police depts (as stated in this post) can my M4's for under $800

 

[Daniel Watters]

The current military contract M4 and M4A1 from Colt run right around $1,184. However, this includes the M4 ARS and BUIS. With standard handguards and detachable carry handle, the .mil contract price runs just shy of $940. These prices include only one magazine.