leupold sig sauer USSOCOM contract dispute
Courtesy SIG SAUER
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Back in 2018, SIG SAUER was awarded a $12 million contract to supply USSOCOM with a version of their TANGO6 1-6X24 second focal plane rifle scope. All seemed well and good. But military procurement being what it is, after the contract was awarded, USSOCOM — through the Navy Surface Warfare Center – Crane, which handles the contracting process — changed its mind.

They decided that they’d really rather have a different reticle than the one specified in the original solicitation. As Soldier Systems reports, USSOCOM decided that, upon further reflection, they’d really rather have a Horus Tremor8 etched illuminated reticle which would accommodate 6.5 Creedmoor in addition to 5.56 ammo. The Tremor8 reticle didn’t exist when the original contract was awarded. That meant a change to the contract. A big one.

The result was NSWC-Crane awarding a new sole-source $9 million contract to SIG SAUER to upgrade the scopes USSOCOM originally wanted.

Leupold & Stevens, which had competed for the original contract, has called foul. In a protest letter to the Government Accounting Office, Leupold claims . . .

As Leupold’s letter of protest lays out . . .

The contract modification should have been separately competed because specialized reticles were not included in the scope of the Contract. The scope of work at issue is the inclusion of a glass-etched reticle in the S-VPS.10 Reticles are replaceable parts over the life of a rifle scope. The Solicitation specifically required that the S-VPS must be designed so that, when changing the reticle, no other design changes were necessary to the S-VPS.11 It also directed bidders that the S-VPS should be designed to accommodate other reticle designs.12 The scope of work did not identify that the bidders would be asked to create the additional reticle designs. If the Agency did not require the S-VPS manufacturers to allow for alternate reticle designs in the design of the S-VPS, the Agency could have been tied to a single manufacturer for the life-cycle of the S-VPS. These restrictions are calculated to allow the Agency flexibility in the future when it comes to procuring future reticles. Now, when procuring future reticles, the Agency undid the intended flexibility and awarded the reticles on a sole-source basis.

The price of the reticle work also substantiates that the specialized reticle design is beyond the scope of work of the original contract. Sig Sauer’s original contract price was $12,077,565, which included a standard reticle. The modification to provide a specialized reticle was for $9,338,800 and increased the contract price approximately 77%. Contract modifications are not intended to help the contractor “get well” after an improvident bid. Sig Sauer was significantly lower than either LSI or Nightforce. This contract modification for new work allows Sig Sauer to bring its price in line with its competitors without having to compete for the increased scope. The significant percentage increase in contract price, in addition to the language in the Solicitation, compel a finding that the contract modification is out-of-scope and should have been competed.

You can read Leupold’s full protest letter here (PDF).

To be clear, Leupold isn’t disputing the original contract award or the quality of the Tango6 scope. No one is alleging that SIG SAUER did anything out of bounds. Leupold’s beef is with USSOCOM, NSWC-Crane and the subsequent sole-source contract award.

As Soldier Systems writes . . .

Leupold asserts that Crane improperly modified its contract with Sig Sauer and that the changes made to the contract were so substantial that the contract should be terminated and a new competition conducted for the modified requirements. The additional funding of the contract modification is so much when added to SIG’s winning bid that Leupold feels someone else would have been awarded the contract instead of SIG.

This is a good illustration of one of the reasons why the military spends many multiples of the price consumers pay for much of the weaponry and gear it purchases. Your tax dollars at work.

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    • They’re right. Sig won by undercutting the competition only to end up charging more after the reticle change, meaning Leopold likely would have ultimately provided a cheaper scope, which is the whole point of having a bidding process.

      • So SIG magically knew that there would be a reticle developed in the future that SOCOM would want to spend money on?

        It’s kinda basic. You sign contract for product X. If you want to modify product X beyond the scope of the original contract, before or after delivery, it will cost you extra.

  1. Leopold is absolutely correct about using Change Order pricing as a method to make a profit on what was previously a low margin base bid/contract.

    Where is Sig making their scopes and lens?

    • Funily enough they’re making them right down the road from Leupold if I remember right. Sig optics is based out of Tigard Oregon which shares a border with Beaverton.

      • Is there no chance at all that they could move production to America, or at least to a non-communist country?

  2. If the Tango scope has to be modified by the manufacturer and the specifications called for a field replaceable reticle, then it should have been rejected at the trial as unresponsive to the requirements in the request for bid.

    Or did someone tip off Sig that this change order was going to be coming, so put in a lowball price for the initial buy and make it up later when the mod was issued? Who is Sig’s friend on the inside? This reminds me of the scandal over the Air Force tanker program.

  3. Is SIG a US company or subsidiary of the Swiss company SIG was/is?

    Does SIG actually make those scopes or are they, like their red dots, some Chinese Halo Sun type of Scope?

    I am not a huge fan of spending US tax payer dollars on foreign made/owned equipment for the US military.

    It seems to me SIG has been basically buying these contracts by being the lowest bidder and then something goes wrong after the fact and they make up the money in “cost overruns”.

      • That’s nothing. I’ve seen contracts where pre or post delivery modifications doubled the cost of the contract. It’s rather silly. SOCOM signed a contract. They want to go back and change the product to be delivered beyond the original scope. That’s just stupid. Stupid costs money. But if it doesn’t set off an entire half decade of additional paperwork and testing, it might have just saved them money.

        Don’t forget they are on the hook for a pile of scopes they don’t want either way. If they save 20 million on trials and paperwork, it makes sense to just modify the existing contract.

  4. To hell and be damned that Sig was given the opportunity to bring the reticle up to muster for what SOCOM actually wanted. If Leupolds beef is the fact that Sig is now charging what Leupold originally bid that’s not an argument. The only argument that is viable is being able to offer the exact same quality of scope and reticle at the same price or lower than what Sig is able to do it. If Leupold couldn’t beat Sig in the original contract how could they then say they could offer a Hourus Tremor8 reticle for the same price? My thinking is Leupold is pissed because they have competition in the tactical scope market and they don’t like it. Leupold still thinks their glass is the gold standard and no other manufacturer can compete. For the money there are just as good if not better options out there now.

    • Because the reticle change doesn’t actually cost $9,000,000, it was just put in to give them an excuse to pay Sig more after they lowballed the original offer.

  5. Former Fed:

    I can tell you based on years of experience enduring the competitive bidding process REQUIRED by federal law that Leupold has a good point here. The Inspector General/GAO will decide. Neither SOCOM nor any other federal entity can do sole-source procurements like this…

  6. This IS NOT why government procured products are expensive. This IS an example of a program manager not understanding procurement law. Period.

    This is not a question of which manufacturer offered a better product.

  7. Wow. This sounds EXACTLY like what Sig did to win the modular handgun contract. Thinking that if Sig is gonna profiteer off the taxpayers like this, we should should all get a Sig handgun free of charge.

  8. Because a first Focal plain reticle at 1X would difficult to see. I have a 4.5X30X56 34mm tube and 4.5X2750 30mm tube both first focal plain scopes and the reticles are not easy to see at 4.5 and I have 20/15 vision. I have 1×6 second focal that is easy to see at 1X. It’s also calibrated for ranging at 6X which is where I would want it anyway. If I’m using 1X I want a clear easy to see reticle with a wide field of view so everything is as fast as possible. First focal is not the do all, end all, be all. Second focal still has its uses.

  9. If the government changed the contract by$9,000,000 on a $12,000,000 original contract, seems to me the only fair way to go is to start over and rebid the contract.
    Personally I had rather have a NightForce.

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