Developed by Alliant Technosystems and Heckler and Koch, the OICW consists of a semiautomatic 20mm smart-grenade launcher, an underslung 5.56mm assault carbine based on the HK G36, and a top-mounted computer-assisted sighting system with integrated laser rangefinder, thermal night vision capabilities, and up to 6x optical telescopic zoom.

The history of the one of the most ambitious projects in the history of small arms, began late in 1986, when the US Army Infantry School at Fort Benning published a military paper, named "Small Arms System 2000" (SAS-2000). Despite the current trends towards caseless and fleschette ammunition and appropriate weapons, researched and developed under the ACR program (see HK G11 and Steyr ACR entries for some details), this paper stated that the conventional small arms had already reached their technological peak, and the only way to increase the hit probability in small arms is to introduce a weapon that will fire explosive and fragmentation warheads, combined with the smart fusing and sighting/aiming technologies. While most small arms research during the late 1980s in the USA was conducted under the ACR program, the idea first developed in SAS-2000 was supported by another US military paper, published in 1989 by the US Army TRADOC (Training & Doctrine) center. This paper, called "The Small Arms Master Plan" (SAMP), requested for a family of infantry "Objective" weapons, namely the Objective Individual Combat Weapon (OICW), Objective Personal Defense Weapon (OPDW), and the Objective Crew Served Weapon (OCSW). The SAMP stated that such weapons must utilize the latest developments in computers and visual technologies, as well as in small arms, and combine both high explosive warheads and traditional bullet firing capabilities in a single weapon, that should be fielded circa 2000. Of course, the timelines and most of the weight and cost requirements set in this paper looked unrealistic from the start, but the development of the Objective weapons series began in the early 1990s.

During the early stages of research and development in the mid-1990s one out of the two teams was selected as a winner for further development contract. This team was lead by the US based Alliant Techsystems corporation (ATK), with Heckler-Koch (Germany), Brashear and the Omega companies (both of USA) as the other team members. ATK was responsible for system integration, and also developing the 20mm Air Burst munitions; HK was responsible for both the 5.56mm rifle and the 20mm grenade launcher; Brashear worked on the sighting equipment and Omega provided the training means. The resulting weapon was type-classified by the US Army as the XM-29 circa 2002, and is scheduled to enter the service during the year 2008 in limited numbers. It will be then consequently upgraded with the new technologies then available. Present plans for fielding the XM-29 are to issue four units per one infantry squad of 9 men. Early in 2002 the XM-29 test weapons were successfully tested with the newest 20mm HEAB (High Explosive Air Bursting) munitions, which will be a major "kill factor" for the XM-29 weapon. At the same time the "kinetic energy" part of the XM-29 was type-classified as the XM-8 light rifle, and, in the near future, could possibly replace the current Colt M4 carbines as a standalone compact conventional small arms.

XM-29 OICW Description. The XM-29 is a combination weapon, which has the 20mm semi-automatic, magazine fed grenade launcher as its primary part, and the 5.56mm compact assault rifle as its secondary part. Both parts are assembled into the single one-man portable unit, with the addition of the target acquisition / fire control system (TA/FCS), which is an essential part of the whole system. The XM-29 will become an integral part of the future Land Warrior system, capable of communicating with the other parts of this system, including the tactical computers and helmet-mounted displays.

The grenade launcher is capable of firing in semi-automatic mode only, and is gas operated. It has a bullpup layout with the detachable box magazine located in the butt of the weapon. The rifled barrel is used to launch the 20mm grenades up to 1000 meters with good accuracy. In the standard configuration most of the fire controls for the grenade launcher part are located on the rifle part, including the single trigger for both firing modules. It is quite possible, however, that the separate stock will be developed for the grenade launcher part, so it will be possible to use it without the rifle part attached. The launcher has the provisions for the TA/FCS system to be mounted on its top, and the appropriate interfaces, so the data provided from the TA/FCS can be used to program the 20mm grenade fuses. These fuses, used for the 20mm HEAB ammunition, has multiple modes of detonation, including the direct impact mode and the Air Burst mode. In the latter mode the fuse is pre-programmed to explode the warhead at the preset range, which is calculated during the flight by counting the number of the grenade's rotations. This allows the round to defeat targets without direct impact, using the blast and fragmentation effect of the high explosive warhead. This is a major advantage over present small arms, which in most cases require a direct hit on the target to be effective, as it allows for greater aiming errors, and also makes possible to defeat targets in defilade, like trenches and so. The high explosive warhead also has the advantage of not being dependent on its velocity to be effective, so unlike with the bullets, its effectiveness does not decrease with the increase of range. The disadvantages of this system is the extreme complexity of the electronic fuses, which results in the high price of a single round of ammunition. The present plans stated that one HEAB round must cost about US $25, and it is still to be seen what will be the actual price when the M29 system is fielded. It is interesting that the present design of the HEAB ammunition actually has two small HE warheads at the front and at the rear of the projectile, with the electronic fuse module located between them. While the HEAB is considered a primary round for the 20mm grenade launcher, it is entirely possible do develop a low cost, direct hit only anti-armour 20mm round with Shaped Charge warhead, which will be effective against lightly armored vehicles (APC, MICV and like) and various hardened targets.

The rifle, or "kinetic energy" part of the XM-29 system, on the other hand, is a fairy conventional, short-barreled assault rifle, derived from the Heckler-Koch G36 assault rifle. The basic rifle part of the XM-29 has no buttstock and no own sights, and thus can be used separately from the whole system only as emergency, personal defense weapon. While being mounted to the whole system, it can be used for close quarters work, both defensive or offensive (the 20mm grenade launcher has it minimum range of fire of about 50-100 meters), or as an low-cost, low intensity medium range offensive weapon. Most of the XM-29 system controls are built into the rifle part, around the trigger guard.

The target acquisition/fire control system (TA/FCS) is the most expensive and complicated unit of the whole system, since it must combine day and night vision capabilities, laser rangefinding unit, ballistic computer and various interfaces to the grenade launcher and external systems. It is used to find the targets in any light and weather conditions, determine the range to the target, calculate and display the aiming data, so the grenade or bullet could be fired to the desired point of impact, and then supply the data to the grenade launcher, so the range could be preset into the grenade fuse. In the case of damage to the TA/FCS the 20mm grenade launcher still can be used in the direct impact mode, as well as the rifle part of the system.