Justin Hammer was extremely confident about his prized weapon *"Ex-Wife"*

> 
> These are the Cubans, baby. This is the Cohibas; the Montecristos. This is a kinetic-kill, side-winder vehicle with a secondary cyclotrimethylenetrinitramine RDX burst. It's capable of busting a bunker under the bunker you just busted. If it were any smarter, it'd write a book, a book that would make Ulysses look like it was written in crayon. It would read it to you. This is my Eiffel Tower. This is my Rachmaninoff's Third. My Piéta. It's completely elegant, it's bafflingly beautiful, and it's capable of reducing the population of any standing structure to zero.
> 
> 
> 

Why didn't it work when Colonel Rhodes fired it?

I'm pretty sure the answer isn't what Tony said: "Hammer Tech?". Weapons are subjected to tests. Hammer certainly wouldn't say all that about his weapon without having tested it, and his guns all work fine. While his prototype suit is shown malfunctioning early on, that's a much more complex piece of technology, and he wasn't trying to sell it at the time.