The 2020 German Assault Rifle System tender () refers to the 2017–2020 tender for the replacement of the Heckler & Koch G36 assault rifle as used by the Bundeswehr (the German armed forces). To replace the G36, the German Federal Ministry of Defence issued the "Assault Rifle System" tender. Although the Haenel MK 556 initially won the contract, the planned purchase was withdrawn on 9 October 2020 due to suspected breaches of public procurement law and alleged patent infringements by C.G. Haenel to the detriment of the competing bidder, Heckler & Koch.The German Federal Defence Minister Annegret Kramp-Karrenbauer (CDU) communicated this to the Defence Committee of the German Federal Parliament. The decision followed a crisis meeting with representatives of the procurement office, which will reassess the bidders' offers in light of this background.
On 14 October 2020, media reports emerged doubting patent infringements regarding the Bundeswehr MK 556 versions being offered by C.G. Haenel to the detriment of Heckler & Koch. Furthermore, reports regarding patent infringements by Haenel's German box magazine sub-supplier Oberland Arms to the detriment of Magpul Industries emerged. Oberland Arms polymer box magazines were commercially launched to European consumers in 2009. German media have tried to obtain more information from Magpul Industries and C.G. Haenel, but since 13 October 2020 no new information has appeared to substantiate magazine patent litigation.
On 2 March 2021, the German Federal Ministry of Defence officially announced that, after evaluating all submitted documents, it had excluded C.G. Haenel's offer from the award procedure and informed the company. The Ministry now intends to award the contract to Heckler & Koch. C.G. Haenel announced on 3 March 2021 that the federal government's decision would be reviewed and "all necessary legal steps will be taken to protect our interests". According to public procurement lawyers, the final decision on the new assault rifle could be delayed until all legal actions are exhausted. This may lead to compensation payments and delay any future contract award for years until the matter is settled. Within a week, German media started reporting on initiated legal actions as a result of the award revocation.
Background to tender On 21 April 2017, the German Ministry of Defence began its program by putting out a tender to look for a service rifle to replace the Heckler & Koch G36, which has been standard issue in the Bundeswehr since the 1990s. The main issue cited regarding the G36 was that it became inaccurate when overheated, either from continuous fire or extreme ambient temperatures.
The System Sturmgewehr Bundeswehr tender was calling for up to 120,000 new rifles including accessories with an estimated total worth of €245 million without VAT (the annual German defence budget for 2020 is €45.646 billion.) For the rifle to see production, a parliamentary consensus is required. The first set of rifles was scheduled for delivery in the final week of October 2020, while the weapons' laser sights, optics, and other attachments were expected in mid-December.
Tender requirements Some of the requirements in the tender were a rifle chambered in 5.56×45mm NATO or 7.62×51mm NATO with: Ambidextrous controls A maximum weight of without a magazine and aiming optics Box magazines with an empty maximum weight of A receiver service life of at least 30,000 rounds (barrel 15,000 ball or 7,500 hard-core rounds) Interchangeable long- and short-barrel variants. Accessories including bayonet, sound suppressor, drum magazine, bipod, forward grip, special bolt for training cartridges, cartridge case catching bag, cleaning kit, carry sling, and transport bag. Being able to function in areas with climate categories A1-3, B1-3, C0-3, and M1-3 according to STANAG 4370 Environmental Testing Procedures without restriction (except electrical components).
The "Assault Rifle System" tender also stipulated that the technology used in the offers should not be subject to foreign approval or regulations from the International Traffic in Arms Regulations, an American set of laws that dictate the export of defense and military related technologies.
Tender participants Several companies participated, including SIG Sauer with the SIG MCX and Rheinmetall/Steyr with the RS556, but both dropped out early. According to Die Zeit, SIG Sauer asserted that the tests were not impartial and that the company was given insufficient testing ammunition in response to its complaints. The only remaining companies were Heckler & Koch with two separate rifles, the HK416 (selected in October 2017 in a separate tender for limited use by the German KSK and KSM special forces), and the HK433, which combines features of the G36 and the HK416 families of assault rifles, and C.G. Haenel with the (second generation) MK 556.Waldemar Geiger: "System Sturmgewehr Bundeswehr – C.G. Haenel gewinnt Ausschreibung um die G-36-Nachfolge" soldat-und-technik, 14 September 2020
In October 2018, none of the weapons submitted met the required technical criteria. Heckler & Koch and C.G. Haenel were given a deadline for further development. The tests of the improved weapons began on 18 February 2019 and were completed in the autumn of 2019, according to the modified plan. In 2019, Heckler & Koch criticized the Ministry of Defence for its strict requirements, claiming that no 5.56×45mm NATO-chambered rifle could meet them, while also alleging a lack of expertise and neutrality in the proceedings.
On 8 November 2019, the Federal German Armed Forces Technical Center for Weapons and Ammunition (WTD 91) stated in a final report that all the weapons presented had successfully passed the technical tests and met the Bundeswehrs technical requirements.
Tender result In September 2020, the MK 556 won the "Assault Rifle System" tender for the future service rifle of the Bundeswehr.
According to the German Press Agency (DPA), "C.G. Haenel presented a weapon that, in extensive tests, was somewhat better tailored to the requirements of the military and also proved to be economically advantageous."
The decision for the MK 556 was announced on 15 September 2020."Bundeswehr wählt Sturmgewehr von Haenel" Der Spiegel, 15 September 2020 The same day the decision was announced, the Ministry of Defence released an official statement:"Assault Rifle System Bundeswehr": Winner of the tender when awarded
Berlin, 15 September 2020
The "assault rifle" (System Sturmgewehr Bundeswehr) award procedure has made another major step forward. From the now completed evaluation of the offers by the registration office of the procurement office in Koblenz, C.G. Haenel GmbH, limited liability company, emerged as the winner of the tender.
On 14 May 2020, the bidders remaining in the System Assault Rifle Basic Weapon award procedure were asked to submit a Best And Final Offer (BAFO); the bid submission deadline ended on 15 June 2020. Meanwhile, the contracting authority has evaluated the bids received.
From this evaluation, the C.G. Haenel GmbH, a limited liability company, emerged as the winner of the tender. The result of the evaluation is not yet legally effective. Legal recourse is always open to unsuccessful bidders.
The decision of the registry is also subject to parliamentary approval in the context of the €25 million bill. The documents required for this are currently being prepared, with the aim of a parliamentary referral at the end of 2020.On 21 September 2020, C.G. Haenel announced it wanted to manufacture the rifles mainly in Germany. The German production share should be 90 percent and benefit the economic region in southern Thuringia.
Legal challenges
On 15 September 2020, Heckler & Koch announced that it was examining legal steps regarding the decision.
On 24 September 2020, Heckler & Koch announced that the company had lodged a complaint with the procurement office against the outcome of the bidding process. The complaint can also be used later by the unsuccessful bidder to pursue further legal action against the award. According to Heckler & Koch, it had set a price well below the maximum volume, but Haenel had undercut it by a further €51 million.
On 29 September 2020, the Deutsche Presse-Agentur reported that Heckler & Koch took further legal action, effectively suspending the process. According to the DPA, Heckler & Koch's initial bid was €235 million, which was ultimately reduced to €179 million. The final offer from Haenel undercut Heckler & Koch's bid by about €50 million.
According to Business Insider, a leaked report issued on 5 October 2020 stated that Haenel offered the MK 556 assault rifles, including accessories, for around €152 million, including 19 percent VAT. Heckler & Koch offered their rifles for €179 million, making Haenel's final offer €27 million or 18 percent cheaper.
Regarding the choice, the secret report says: The main criterion is the lower price, with a technically comparable performance.The offered rifles all passed the Federal German Armed Forces Technical Center for Weapons and Ammunition (WTD 91) tests. The procurement office experts assess the overall project risk as "medium".
The intended contract with C.G. Haenel apparently includes several stringent clauses and regulations to protect the Bundeswehr against risks.
On 9 October 2020, the German Federal Ministry of Defence withdrew their intended award decision, seemingly leaving the potential remaining G36 replacements as either the HK416, HK433 or MK 556 after concluding a re-entered evaluation phase.
Regarding this decision, the Ministry of Defence issued the following statement (machine translated from German):Assault rifle of the German Armed Forces: Status of the award procedure (published on 09.10.2020)
Based on the request for a review by the company Heckler & Koch received by the 1st Federal Procurement Chamber at the Federal Cartel Office on 30 September 2020, the Federal Procurement Office (BAAINBw Federal Office for Equipment, Information Technology and Use of the Bundeswehr) for the first time verified a possible patent infringement by the company C.G. Haenel GmbH with limited liability knowledge. The internal examinations conducted thereupon led to the conclusion that a corresponding patent infringement by the bidder C.G. Haenel GmbH with limited liability, at the expense of the bidder Heckler & Koch, could not be ruled out.
Against this background, the federal awarding authority was required to send the information letter (Section 134 GWB) to the bidders about the intended award of the contract to the company C.G. Haenel GmbH with limited liability.
The federal awarding authority will thus re-evaluate the offers, taking all aspects into account.Since then, it has remained completely open which supplier will receive the "Assault Rifle System" contract and when a decision will be made.
C.G. Haenel announced in late November 2020 that they had initiated appropriate legal steps. According to a letter to Bild from Haenel managing director Olaf Sauer, the MK 556 is a different rifle with different design features compared with the CR 223 and not addressed in the patent lawsuit. The patented technology is not used in the MK 556.According to a video produced by Heckler & Koch, important breech components of the CR 223 are interchangeable with the HK416. The video supports Heckler & Koch's allegation that the MK 556 infringed on its intellectual property rights.
To legally clarify whether Heckler & Koch's allegations were relevant to the Bundeswehr tender, an evidence preservation drive occurred at C.G. Haenel's headquarters in December 2020, under the orders of the Düsseldorf Regional Court, so that evidence could be secured for a patent lawsuit.