I'm not seeing the issue. Your groups reflect the ammo used. Add in less than ideal sighting hardware for doing small groups rather than practical hits and you're getting perfectly good results. I'd honestly be amazed if you got 2" or better at 100 with that stuff and a normal barrel. Sometimes a really good barrel can make lousy ammo look decent, but that's hit or miss.
I think a lot of people cherry pick groups when they use what amounts to blasting ammo. "see, I got this great three shot group" but if they had shot the other 2 or 7 rounds it would have turned into the same size as they normally get. In my experience, Federal XM193 is some of the worst "mil-spec" ammo. I don't know if it's true, but I heard a rumor that XM193 was actually ammo that passed all the QC checks EXCEPT the accuracy. They boxed that lot up as XM instead and off it goes to people that treat mil-spec as a goal not a starting point. Like I said, no idea if that's true or not, but given the results I've personally gotten I could believe it.
If you want better results, buy better ammo. Unfortunately, that is likely to cost more. I am ragging on Federal, but even the best M193 isn't exactly precision ammo. Folks suggested some options and I'll probably try a few myself, but I reload even my plinking ammo these days, the M193 is just part of the ammo fort.