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ORLANDO, FL, May 11, 2007 --

The U.S. Army awarded Lockheed Martin [NYSE: LMT] a performance based logistics (PBL) contract, with a potential value of $380 million over four years, to support the Target Acquisition Designation Sight/Pilot Night Vision Sensor (TADS/PNVS™) and Modernized TADS/PNVS (M-TADS/PNVS) systems on the AH-64 Apache helicopter.

This represents a significant step toward continuous improvement in supporting the AH-64 Apache TADS/PNVS and M-TADS/PNVS programs, and is a “first of its kind” achievement on the AH-64 Apache helicopter program for Lockheed Martin.

“The mobility, deployability and sustainability essential to 21st century fighting forces cannot be achieved without a revolution in military logistics,” said Bob Gunning, Apache Fire Control director at Lockheed Martin Missiles and Fire Control. “Among the key elements required to achieve this revolution are assured communications, improved automation and information management systems, and of course, a seamless logistics system that PBL can provide.”

The contract provides complete post-production supply chain management, including spares planning, procurement, repairs, maintenance, modifications and inventory management of fielded systems. Support under this four-year contract will continue through 2010. The first year’s contract value is expected to be approximately $123 million.

For Department of Defense contracting, PBL is a strategy for weapon system product support that employs an integrated, affordable performance package designed to optimize system readiness. PBL is intended to save operating and support costs by having the prime contractor assume responsibility for total performance of a weapon system. Accountability is the true benefit of life-cycle customer support.

“This PBL program will reduce the length of the supply pipeline, enabling the U.S. Army to receive spare parts more quickly,” said Dave Belvin, Lockheed Martin Missiles and Fire Control’s Apache Fire Control product support manager. “More efficient supply management will reduce operation and support cost burdens, providing funds for continuing system modernization and reliability improvements.”

The new Apache PBL program will have a positive impact on fleet readiness. The program has performance metrics that will contribute to reducing the average flying/hour cost, the U.S. Army’s long term inventory investment, and will improve requisition fills, demonstrating Lockheed Martin’s whole system thinking and action – a win/win for the company and the customer.

“The Apache PBL team is in position to provide a winning, cost-effective support solution that meets the expectations of our U.S. customer,” Gunning said. “We understand the importance of this PBL program, and the Apache PBL team will deliver outstanding service and support to our customer, anytime and anywhere in the world.”

Headquartered in Bethesda, Md., Lockheed Martin employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.


Craig Vanbebber, (972) 603-1615

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