Friday, April 3, 2015

Smith & Wesson Takes Aim at Army Contract

Where do you think the surplus is going to end up?

"Smith & Wesson takes aim on Army pistol contract" by Callum Borchers, Globe Staff  March 20, 2015

For Springfield gun maker Smith & Wesson Holding Corp., the target doesn’t get any bigger than this.

The Army is shopping for hundreds of thousands of handguns for officers, military police, and other soldiers, in the service’s biggest wholesale pistol replacement in a generation. It’s a rare shot at a lucrative new contract during a period of reduced defense spending, and it could be just the seed of a money tree.

What are they doing with the ones being replaced?

If other military branches follow suit, as some specialists expect, the Pentagon’s upfront order could approach 500,000 weapons. Including ammunition and accessories, the initial deal could be more than $500 millionwith additional payments likely to follow, as the military often rolls over contracts for years to come. The Army’s current handgun supplier, Italian manufacturer Beretta, has held the contract since 1985.

A foreign firm was making handguns for the U.S. military?

Beyond a slice of the federal defense budget, the Army handgun contract will give the winning manufacturer considerable clout in selling to police departments, foreign militaries, and civilian gun owners.

Yeah, right, as the government tries to limit and end that last set of people.

“I don’t think you can overstate the importance of a contract like this to a pistol maker,” said Brian Anse Patrick, a communications professor at the University of Toledo who studies guns in popular culture.

Smith & Wesson has shown that it’s serious about the competition. Shortly after the Army published a draft request for proposals last fall, the company said it would partner with defense giant General Dynamics Corp., a veteran of Washington’s contract wars, to pursue the handgun deal. Most other manufacturers have kept mum about their interest.

Chief executive James Debney said in a statement at the time that General Dynamics “brings us a wealth of experience . . . in federal government contracting.”

The company declined to comment further, so it’s unclear how winning the contract would affect employment in Springfield, where Smith & Wesson has about 1,500 workers and does most of its manufacturing. But when Smith & Wesson tripled pistol manufacturing between 2010 and 2013, churning out roughly 600,000 more guns per year, the company added 350 employees.

One of the few $ucce$$es in this economy, I don't care what they tell you.

The Army pistol contract alone could roughly match a full year of revenue for Smith & Wesson, which projects 2015 sales to total between $532 million and $536 million. Smith & Wesson’s share price has risen more than 40 percent since the company announced its pursuit of the Army pistol contract.

Smith & Wesson has the advantage of being an American company and an iconic brand, cemented in popular culture in the 1971 movie “Dirty Harry,” in which the Clint Eastwood character declared the company’s .44 Magnum “the most powerful handgun in the world.”

“If you’re talking about who is viewed by the gun community as [being among] the leading contenders, Smith & Wesson is right there at the top,” said Richard Feldman, a former regional political director for the National Rifle Association who is now president of the Independent Firearm Owners Association in Rindge, N.H.

In the past, Smith & Wesson has supplied firearms to the FBI and US Marshals, but its last federal contract came in 1996, according to the Federal Procurement Data System.

The Army’s formal request for proposals, originally expected in January, could come any day. The competitive bidding process will narrow the field to three finalists, with a winner selected in 2017. So far, guidance on what the Army desires in a handgun has been mostly limited to the draft request, which reflected soldiers’ complaints about the M9, Beretta’s 9mm pistol that many troops carry as a backup to their rifle or use in close-range combat.

The Army said it wants the new handgun to have “increased lethality, increased accuracy, improved ergonomics, and a higher degree of reliability/durability.” The Army also has said it will consider guns that fire larger bullets, such as .40- or .45-caliber rounds.

A spokesman for the Army’s Program Executive Office Soldier, which procures equipment and small arms, did not respond to a request for information.

Firearms industry publications and message boards are rife with speculation about contenders, including Sig Sauer Inc.; Glock Inc.; and Sturm, Ruger & Co.

One industry site,, reported 20 manufacturers participated in preliminary meetings with Army officials in October. Another,, reported the Army already has ruled out a new version of Beretta’s M9. A Beretta spokesman did not respond to a request for comment.

Beating the field, and Glock in particular, would represent a massive validation of Smith & Wesson’s revamped business strategy. Known as a maker of revolvers for most of its 163-year history, Smith & Wesson launched a line of clip-loaded handguns made of polymer in 2005, branded as M&P pistols, short for military and police.

The move came largely in response to Glock’s dominance in the law enforcement market, Debney told the Globe in a 2013 interview. Smith & Wesson’s share of the police market in the mid-2000s was “virtually down to nothing,” he said. “It was time to reinvent ourselves.

“In terms of where we’re investing our resources and most of our capital expenditures to increase capacity, it’s all behind the M&P polymer family,” Debney said.

Smith & Wesson has not identified the model it will pitch to the Army but has said it will come from the M&P line. The pistols typically retail for between $600 and $800 each, not including ammunition, holsters, sights, and other accessories.

Smith & Wesson manufactured 872,106 pistols in 2013, the last year for which data were available from the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is now the third-largest pistol maker in the United States — and Debney has his sights on being top gun.

The Army contract would help Smith & Wesson get there, but the competition among gun makers will be fierce, predicted William D. Hartung, director of the Arms and Security Project at the Center for International Policy, a Washington think tank.

Gun makers will “pull every lever they have,” said Hartung, who has studied and written about defense contracting. “With that much at stake, I’m sure there will be political contributions. I’m sure they’ll recruit experts, former Army people, to speak and lobby on their behalf.”