More on the M4 Rights
The other day I noted that the rights to the M4 Cabine had passed to the US Army from Colt, allowing the Army to solicit bids from other manufacturers if it wants to buy more.
Here are a couple of comments from Daniel E. Waters of The Gun Zone:
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 agreements just as they do for the M16.
and
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
Despite a lot of talk about new rifles, I fully expect that more M4s will be purchased. This could be a huge opportunity for another manufacturer.
[...] Murdoc has the skinny [...]
Either way the USG and Soldier win. When the Army competed the M16 and FN won, the price dropped to half what we were paying for an M4.
Colt’s fatal flaw has been a failure to innovate, instead resting on the laurels of their production contract and relying on litigation to preserve their competitive advantage rather than developing newer, competitive products.
The XM8 scared them back to the drawing board, but now I suspect it is too little, too late. If a new carbine gets competed, Colt will not win. If the M4 gets competed, Colt will not win. Dead company walking.
Ironically, I told Colt this in the middle of the XM8 wars in 2004-2005: unless they changed dramatically, immediately, both investing in new engineering and getting price competitive with their competitors, they were out of business. Best case, it woul dbe in 2009 when they gave up the M4 TDP, worst case in 2005 if XM8 became reality.