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BAE SYSTEMS AWARDED A $251 MILLION CONTRACT MODIFICATION FOR M88A2 HERCULES RECOVERY VEHICLES

11-16-2006

YORK, Pa. – BAE Systems has been awarded a $251 million contract modification from the U.S. Army TACOM Life Cycle Management Command to remanufacture 113 M88A2 HERCULES recovery vehicles, provide spare parts and extend system technical support for the U.S. Army.

"These combat proven vehicles will help the Army meet the projected fielding of the modular Heavy Brigade Combat Teams,” said Ron McCleaf, M88A2 program manager for BAE Systems.

Work will begin immediately at the company's York, Pa. facility, with vehicle deliveries scheduled to begin in December 2007 and continuing through November 2009 and is the largest continuous production run of M88A2 vehicles since the program began.

The contract provides for two options worth up to an additional $18.9 million to remanufacture eight additional vehicles for the U.S. Army and two for the U.S. Marine Corps.

HERCULES has provided unmatched capabilities during Operation Iraqi Freedom. To date, 157 HERCULES vehicles have been fielded against a total U.S. Army requirement of more than 500 vehicles. The U.S. Marine Corps has fielded 60 vehicles in the M88A2 configuration. An additional 114 vehicles have been delivered to allied nations.

HERCULES provides unparalleled capability for recovering today's 70-ton combat vehicles and answers the need for cost-effective, self-supporting heavy recovery performance. Key upgrades from the M88A1 include improved power-assisted braking, improved steering, improved electrical system and increased engine horsepower, providing soldiers and Marines with 25 percent more towing muscle, 40 percent more lifting strength and 55 percent more winching power in meeting any mission requirement.

About BAE Systems
BAE Systems is the premier trans-Atlantic defense and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. BAE Systems, with more than 86,000 employees worldwide, had 2005 sales that exceeded $28 billion.

For further information, please contact:
Herb Muktarian, BAE Systems
Tel: 717-225-8004 Pgr: 800-797-1593
herb.muktarian@baesystems.com


Shannon Smith, BAE Systems
Tel: 703-907-8257 Cell: 703-967-3854
shannon.n.smith@baesystems.com



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