The Army’s Modular Handgun Procurement

The Army’s Modular Handgun Procurement

June 19, 2018
The Army’s Modular Handgun Procurement
The Army Modular Handgun System (MHS) is a weapon
Previous Replacement Effort: A 13-Year
system produced by Sig Sauer that is to replace the Beretta
Process
M9/11 pistol, which has been used by the U.S. Army since
The Army started a replacement program for the Beretta in
1986. The MHS will fire a 9mm bullet and comes in two
2004 (then-called the Future Handgun System). Shortly
sizes, full and compact. The Army is also procuring
thereafter, the Department of Defense decided to combine
customized ammunition to increase accuracy and reliability
this effort with the U.S. Special Operations Command’s
over the life of the handgun.
Combat Pistol program. This combined effort resulted in
the Joint Combat Pistol program. The Army eventually
The Army launched its effort to replace the Beretta in 2004,
removed itself from this program in September 2006 to
adopted the Capabilities Production Document from the Air
pursue its own effort.
Force in 2013, released the Request for Proposal in August
2015, and awarded a contract in January 2017.
Criticisms of the Procurement Process
Frustrated with the extended time the procurement of the
The Contract
handgun had required, Army Chief of Staff General Mark
The MHS contract with Sig Sauer is a 10-year, firm-fixed-
Milley reportedly stated in a March 10, 2015, address,
price, indefinite delivery, indefinite quantity contract with a
“We're not figuring out the next lunar landing. This is a
cap of $580 million. A firm-fixed-price contract provides a
pistol. Two years to test? At $17 million? You give me $17
unit price that is not subject to any adjustments based on the
million on a credit card, and I'll call Cabela's tonight, and
contractor’s costs in meeting the contract requirements.
I'll outfit every soldier, sailor, airman and Marine with a
Indefinite quantity means the Army can order as many or as
pistol for $17 million. And I'll get a discount on a bulk
few units as it requires, up to the $580 million contract cap.
buy.”
To date, the Army has obligated approximately $8 million.
Echoing frustration over how the procurement was being
Under the terms of the contract, the Army cannot release
executed, a report from Senator John McCain, America’s
unit price data. However, the contract sets the price for the
Most Wasted: Army’s Costly Misfire, highlighted a number
handguns, associated ammunition, supporting accessories,
of issues, including length of procurement effort, length of
training devices, and technical data.
time the Beretta had been in service, lack of clarity within
the request for proposal (RFP) regarding weapon caliber,
The purchase of one MHS includes spare magazines,
and concerns over having a single vendor for both the
instructions, weapon-specific tools, a holster, and
weapon and ammunition. Ultimately, the report
ammunition pouches. The separate training device kit
recommended the suspension or cancellation of the RFP
allows the use of man marker rounds and blanks during
until the caliber issue was resolved. (The RFP was not
training situations. The ammunition and suppressor kits’
cancelled.)
prices are fixed and they are available for purchase through
the contract.
The May 2017 Section 809 Panel Interim Report also
criticized the Army’s handgun procurement for the length
Planned Quantities
of the procurement process from start to finish, number of
The Army currently plans to buy 238,215 systems. A
pages in the request for proposal, and the cost of proposal
breakout of the number of full size versus compact versions
development which reportedly led some leading weapons
to be purchased is based on the Army Modified Table of
manufacturers to decline to compete for the contract.
Organization and Equipment per unit. The ammunition
quantities are to be comparable to the required amount per
Counterpoint
Army Standards in Training Commission.
In responding to an inquiry by the Congressional Research
Service about the various criticisms, the Army discussed
The other military services intend to use the Army’s
the time required and complexity of the MHS process. The
contract to buy weapons. The Air Force announced that it
Army explained that the entire process was focused on
will buy 130,000 compact weapons and the Navy intends to
vendor inclusion, flexibility, and presenting the opportunity
field 70,000 compact versions of the weapon. While the
for industry to present multiple submissions utilizing a wide
Marine Corps has not officially announced its intentions,
range of technologies. They emphasized that the intent was
the proposed FY2019 budget has allotted funds to buy
always to get the best equipment to the soldiers.
35,000 compact systems.
Some observers argue that acquisition statutes and
regulations exacerbated the procurement process through
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required bureaucratic processes that delay decision-making,
Ammunition
Total
and contract clauses that add numerous pages and clauses to
Year
Weapons
Rounds
Cost
the RFP, and add administrative costs.
7
52,054
72,875,600
$ 59,315,014.92
Price Determination and Extrapolation
8
52,054
83,286,400
$ 62,021,822.92
While cost data for the Army contract is not publicly
9
52,054
93,697,200
$ 64,728,630.92
available, the cost of similar weapons, accessories, and
ammunition can be found at major firearm sellers.
10
52,054
104,108,000
$ 67,435,438.92
Based on these assumptions, the services could spend
CRS compared the total cost of the current MHS contract to
approximately $38 million annually for handgun systems.
the prior Army contract with Beretta. CRS also compared
The ammunition purchase increases over the 10-year period
the MHS contract to a similar purchase at Cabela’s, the gun
with year 1 requiring approximately $2.7 million for
retailer mentioned by General Milley.
ammunition and increasing annually with year 10 requiring
$27 million for ammunition. This would result in a total of
The Army’s 1985 contract for the Beretta M9 was for
approximately $552 million dollars on weapons and
315,930 weapons for approximately $75 million and by
ammunition over the life of the 10-year contract.
1988 had been increased to 321,260 weapons for
approximately $77.3 million. With inflation, this contract in
The MHS contract with Sig Sauer is capped at $580
2018 would be approximately $178.9 million. The contract
million, approximately $28 million (5%) above Cabela’s
did not include ammunition.
current price. However, this analysis does not account for
any commercial price increases over the next ten years. If
Cabela’s sells the Sig Sauer P320 full-size pistol for
Cabela’s increased its costs by 1% annually just for the
$799.99 and a Sig Sauer P320 compact pistol for $649.99.
handguns, the commercial cost comes to approximately $10
Additional prices researched were for the holster ($49.99)
million below the Army’s cost cap.
and ammunition ($.26 per round). The P320 closely
approximates the Army MHS.
The Army contract also contains items not included in a
standard commercial purchase, including training, training
Table 1 reflects an estimated purchase quantity of weapons,
equipment, and customized ammunition. In addition, the
rounds of ammunition, and total cost for the services. This
Army contract includes the purchase of technical data. The
analysis is based on the following assumptions.
technical data allows the services to maintain, modify,
potentially upgrade, and extend the service life of the
1. The military services purchase their full
weapons and ammunition.
requirement, plus an additional 10% for
weapons lost/damaged.
Was the Army Successful?
2. Ammunition is estimated at 200 rounds
From an acquisition perspective, many analysts consider the
per weapon.
MHS requirements timeline, bureaucratic burdens, and
excessive paperwork a signal example of all that can go
3. Weapons purchases are allocated equally
wrong with defense acquisition.
over the 10-year contract with
corresponding ammunition purchases
Based on the final cost of the weapon program, the Army
made annually.
appears to be procuring the weapon at a competitive cost,
Table 1. Proposed Weapon/Ammunition Annual
particularly if the value of the intellectual property is
Procurement Cost
included.
Ammunition
Total
Year
Weapons
CRS did not examine the capability of the weapon system
Rounds
Cost
or whether it fulfilled Army requirements.
1
52,054
10,410,800
$ 43,074,166.92

2
52,054
20,821,600
$ 45,780,974.92
3
52,054
31,232,400
$ 48,487,782.92

4
52,054
41,643,200
$ 51,194,590.92
Moshe Schwartz, Specialist in Defense Acquisition
5
52,054
52,054,000
$ 53,901,398.92
Jason A. Purdy, U.S. Air Force Fellow
6
52,054
62,464,800
$ 56,608,206.92
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The Army’s Modular Handgun Procurement

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