company scores $42 mil deal for grenade launchers

by Andrew Johnson - Jan. 23, 2010 12:00 AM
The Arizona Republic

The U.S. Marine Corps plans to buy thousands of new portable grenade launchers from a growing Tucson weapons maker.

Milkor USA Inc. beat out two competitors for a five-year contract for $42.2 million.

While relatively small compared with the weapons programs valued at more than a $100 million-plus, held by larger defense manufacturers such as Raytheon Co. and Lockheed Martin Corp, the deal is a boon for Milkor.

"Milkor's a fairly young company," President and CEO Gary Abrams said.

"Most of the contracts that (we have) dealt with are done in the million and a half to two million (dollar) range. This contract is . . . far and above the largest thing Milkor's ever done."

Abrams said the firm did $1.6 million in sales last year.

The Marine Corps' first order under the contract, worth $19.2 million, calls for Milkor to supply about 2,200 grenade launchers during the next 16 months, he said.

The multishot grenade launchers are a lighter alternative to the high-range variety the military used in Iraq and Afghanistan, which require multiple people or a vehicle to transport, said John Pike, director of GlobalSecurity.org, a defense research firm in Alexandria, Va.

The military uses other "man-portable launchers" but they are installed as attachments on rifles and fire single rounds, Abrams said.

"Their problem is they can shoot one at a time in a pump action . . . but they don't have the accuracy that the Marine Corps was looking for," he said.

"It's like the difference between a single-shot shotgun and a semiautomatic shotgun."

The Milkor launcher will fire up to six 40mm rounds in three seconds up to 400 meters in range, Abrams said.

The launcher can fire with greater accuracy at 150-meter ranges, according to the Pentagon contract announcement.

"In the urban-type warfare and mountainous warfare that they're currently fighting, the 40mm multishot (launcher) fills a gap," Abrams said.

Milkor will handle a small amount of the manufacturing but most parts will be provided by a subcontractor Abrams owns called Abrams Airborne Manufacturing Inc.

Milkor and Abrams Airborne, which has 210 employees, share headquarters but are set up as separate companies. Their headquarters are 8 miles north of downtown Tucson.

Milkor, which employs six people, likely will hire eight to 10 more workers in the next three months to handle increased work, Abrams said.

The Marine Corps Systems Command, in Quantico, Va., is administering the contract.

It solicited bids in April.

About 10 companies expressed interest in the program, according to the contract documents available at FedBizOpps.gov.

Three companies, including Milkor, submitted bids.

Representatives of the Marine Corps Systems Command could not be reached for comment.

Milkor originally was based in Florida.

Abrams, whose other company was doing subcontractor work for Milkor several years ago, bought and moved the business to Tucson in 2006 and has been developing the multishot grenade launcher ever since, he said.

Reach the reporter at andrew .johnson@arizonarepublic.com or 602-444-8280.