Quoted:
1,2,3 are basically correct.

Don’t think of non-government bought product as second tier. While that can be true it’s certainly not the normal case.  Think of it in terms of “plant capacity.”   We can run X amount.  Gov buys Y. What’s left the operator can fill with commercial orders.

Federal (Vista) doesn’t run Lake City.  Northrop currently does (they bought the company that had the expiring contract). Federal currently gets most of the excess capacity...sort of a first right of refusal thing but not exactly.  (Further complication and some source of confusion is Federal’s company was part the company Northrop bought at in the past.  That leads to the confusion that Federal currently is anything but a customer of Northrop.

Olin buys current M193 capacity from Lake City. Federal has no part in that transaction.

Olin Winchester will have the plant starting October 1st.  What they choose to do with extra capacity will be their choice.

Make sense?