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BAE SYSTEMS Receives $5.1 Million Contract For The Fitting Out Availability Of The USS San Antonio (LPD 17)

06 Oct 2005

BAE Systems has been awarded a $5.1 million cost-plus-award fee contract by the Naval Sea Systems Command for the Fitting Out Availability (FOA) of the USS San Antonio (LPD 17), the first of the new LPD 17 class of ships. The vessel is an amphibious transport dock ship to be home ported in Norfolk after commissioning this fall.

The work is scheduled to begin in January 2006 and will be completed in February. The contract also includes options for Post Shakedown Availabilities (PSA) for the USS San Antonio, USS Mesa Verde (LPD 19) and USS New York (LPD 21). The total value of the contract could reach nearly $35 million if all options are exercised.

The USS San Antonio will replace three classes of amphibious ships -- LPD 4, LSD 36 and LST 1179 -- that have reached the end of their service life.

We are excited to have been awarded this contract and pleased that the Navy recognized that our shipyard provides best value for the repair and maintenance of its ships,said Alex Krekich, president, BAE Systems Ship Repair. Our workforce has extensive experience in performing FOAs and PSAs on amphibious assault ships and destroyers, and this contract award is a testament to the expertise of our people.

New construction requires firm adherence to schedule and budget. The USS San Antonio, the lead ship in its class, underwent engineering design changes during construction. Certain changes, such as environmental and system upgrades and technology enhancements, could potentially become costly and disruptive during the construction process. In order to maintain production schedules and minimize additional costs during the initial construction phase, specific changes, which do not affect the operational capability of the ship, are deferred to either the FOA or the PSA period after the ship is completed.

During the eight-week FOA at BAE Systems Norfolk Ship Repair, the ship will be loaded out with much of the equipment, tools, spare parts, food, fuel and everyday items required to conduct its mission -- to support primary amphibious warfare missions of U.S. Marines and equipment. The contract also includes engineering and management support of the FOA and PSA, labor and procurement of material to accomplish system upgrades and tests, post repair sea trials and material to complete emergent repairs.

Inspections, tests and underway sea trials are required to be performed by the facility which built the ship. The PSA, a post construction period, is designed to correct any deficiencies found during sea trials. After a new ship leaves the building yard, it undergoes a shakedown period. For a lead ship, this is a time to determine how well the ships design performs to expectations. The routinely required adjustments and upgrades are accomplished during the PSA phase, usually occurring nine months to a year after the ship is delivered by the construction yard. The adjustments and upgrades are applied to the construction design of all subsequent ships in the class.

About BAE SYSTEMS

BAE Systems is an international company engaged in the development, delivery, and support of advanced defence and aerospace systems in the air, on land, at sea, and in space. The Company designs, manufactures, and supports military aircraft, combat vehicles, surface ships, submarines, radar, avionics, communications, electronics, and guided weapon systems. It is a pioneer in technology with a heritage stretching back hundreds of years and is at the forefront of innovation, working to develop the next generation of intelligent defence systems. BAE Systems has major operations across five continents and customers in some 130 countries. The Company employs over 90,000 people and generates annual sales of approximately 14.8 billion through its wholly owned and joint-venture operations.

For further information, please contact:

Jackie Kreisler, BAE Systems
Tel: 619-557-4289 Cell: 619-992-3351
jackie.kreisler@baesystems.com



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