Over the past few weeks, three separate issues have come to our attention regarding EOTech’s line of Holographic Weapon Sights (HWS). While we initially thought they weren’t related as they came up one by one, we realized they were all connected once we had looked into all three. Consequently, we believe they should be presented together, along with the source documentation.

Safety Of Use Message Issued

Although it’s the last one we uncovered, we’ll begin with the most glaring piece of information. On 14 September, the SOF Weapons Program Management Office at NSWC Crane released a Safety of Use Message regarding issues with EOTech’s Enhanced Combat Optical Sights (ECOS), which is how they refer to HWS. This certainly caught our attention as the PMO is responsible for USSOCOM weapons. That message ultimately serves as the linchpin, tying together the other two issues we’ll soon address.

This critical bit of information would have been a stand-alone article, but it added credence to the others and offered coherence to some otherwise inexplicable issues. It also allowed us to concentrate on the facts presented in the various documentation. We will introduce the other issues after you get a chance to read the SOUM, which was obtained by Soldier Systems Daily. The Message has no date-time-group but was transmitted via official email traffic to SOF units on 14 September, 2015 and there are no markings limiting distribution.

Click to view .pdf

While there is a great deal of information in the SOUM, two glaring issues stick out. The first is the reliability of the HWS in extreme temperatures, referred to as “Thermal Drift”. The PMO has noted a +/- 4 MOA shift at -40 Deg F and 122 Deg F. Second, is the concern over the claim by EOTech that their HWS are parallax free which was the subject of a previous Safety of Use Message from the same office issued 16 March, 2015. In this case they noted between 4 and 6 MOA parallax error depending on temperature conditions. Despite the PMO working with EOTech to rectify the issues, they still have not been resolved.

EOTech Updates User Manuals

EOTech seems to have officially backed off their previous claims regarding operational temperature ranges as well as parallax free attributes. Upon investigation, we noted that EOTech had changed the public specs for their HWS. Specifically, they published new manuals in June, 2015 which are available from the individual product listing pages on their website. Normally, this wouldn’t be that big of an issue by itself, but taken in conjunction with the other two pieces of information and what was removed from the manuals, it becomes so.

For example, they no longer claim that the Optics are “Parallax free”. They’ve also eliminated the temperature range from the manuals which is a pretty important factor for military operations. In the updated manuals, EOTech didn’t alert users to issues at extreme temperatures. Instead, they deleted references to operational temperature range altogether. Interestingly, both of these issues are addressed in the PMO’s Safety of Use Message we referenced earlier.

Although not addressed in this SOUM by the PMO, we also noticed in the latest versions (June 2015) of the user manuals that each click of sight adjustment is now “Approx. 0.5 MOA” rather than the more reassuring “0.5 MOA” cited in older manuals.

Here are some examples of old and new user manuals:

EXPS3 User Manual January 2011

EXPS3 User Manual June 2015

L3 Communications SEC Filing

The last issue we’ll address is actually the first one that came to our attention. In L3 Communications’ most recent 10-Q SEC Quarterly filing of early August for Q2, they mention issues with the HWS. This is a document prepared by EOTech’s parent company L3 Communications, advising their investors of any issues, good or bad, which might affect their investment. While companies obviously put on a public face, SEC filings have weight because they are legal submissions to the government. They must be accurate, regardless of the news.

L3 mentions recognizing “an aggregate liability of $26 million in anticipation of a settlement related to a product specification matter regarding a holographic weapon sight product in the Warrior Systems sector of the Electronic Systems segment.” As we are unaware of any pending civil suits regarding the HWS, the question remains as to whom EOTech might owe such a large sum of money. We must point out that the government has acknowledged issues with the HWS in at least two SOUM from the SOF Weapons PMO. We’d also like to mention that the Quarterly filing talks of possible consequences if the company is implicated in wrongdoing regarding government contracts.

The SEC filing goes on to state that while, “The Company does not currently anticipate that any of these investigations will have a material adverse effect, individually or in the aggregate, on its consolidated financial position, results of operations or cash flows. However, under U.S. Government regulations, an indictment of the Company by a federal grand jury, or an administrative finding against the Company as to its present responsibility to be a U.S. Government contractor or subcontractor, could result in the Company being suspended for a period of time from eligibility for awards of new government contracts or task orders or in a loss of export privileges. A conviction, or an administrative finding against the Company that satisfies the requisite level of seriousness, could result in debarment from contracting with the federal government for a specified term.” They also recognize that, “Foreign government contracts generally include comparable provisions relating to terminations for convenience or default, as well as other procurement clauses relevant to the foreign government.” This can be pretty serious stuff.

The SEC Quarterly filing can be found here.

Putting It All Together

As you can see, the three pieces of information certainly seem related when presented together. In the same quarter, EOTech changed their HWS user manuals and acknowledged in an SEC filing, “aggregate liability of $26 million in anticipation of a settlement related to a product specification matter regarding a holographic weapon sight product…” In the next quarter, USSOCOM issues a Safety Of Use Message that addresses the very information removed from the HWS user manuals.

Data Was Right There In The Open

The documentation was readily available prior to its publication here, to anyone who knew where to look. While EOTech has made no public statements so far, regarding the issues with the performance of their family of HWS, they certainly haven’t hidden them either. To the contrary, we wouldn’t have discovered the issues so easily if they’d tried to hide them. They’ve published new versions of their user manuals and made them available to the public, as well as making an SEC filing which is public record and acknowledges there is an issue afoot. While it would be nice to see EOTech publicly acknowledge the issue, it would be interesting to find out how long they’ve known about it. Regardless, the only thing that remains up in the air, is whether L3 Communications will be required to pay that $26 million, to whom they would pay it, and if there will be any additional stipulations.

Let’s Hope They Fix It

In closing, we suggest that both commercial and military users of EOTech HWS read the SOUM, since EOTech has still not specifically addressed its customers regarding the issues. We hope that they do soon and offer a solution to rectify these issues.

Tags: EOTech, L3 Warrior Systems