Out of curosity, from your post 49, I cannot figure out how m-16s are manufactured then sold to the US govt.
How could these new guns be legally possesed by the manufacturer?
Regards,
922(o) "does not apply with respect to...a transfer to or by, or possession by or
under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof."
The phrase in bold is the loophole, I guess. Whoever jumps through the right hoops is exempt, apparently.
Here's the regulations (see section 179.105).