BAE SYSTEMS Awarded $27.2 Million Contract Modification to Reset Bradley Combat Systems Vehicles for U.S. Army.

YORK, Pa. -- BAE Systems has received a $27.2 million contract modification from the U.S. Army Tank-Automotive and Armaments Command Life Cycle Management Command to reset 43 Bradley A2 Operation Desert Storm (ODS) vehicles returning from Iraq.

When combined with a $227.2 million award for 361 Bradley vehicles announced in March and a $27.2 million contract for 44 more vehicles awarded in June, the modification brings the total fiscal year 2006 Reset contract value to $281.6 million. Work on the new contract will begin immediately with deliveries scheduled to begin in July 2007.

BAE Systems, in partnership with Red River Army Depot, will return a total of 43 Bradley Combat Systems to a combat ready status and provide Blue Force Tracking mounting provisions and Fleet Standard modifications for all 43 vehicles. Disassembly and component overhaul work will be performed at the depot and BAE Systems' facility in Fayette County, Pa. Final assembly, integration and test will be conducted by BAE Systems in York, Pa. The Company will field the Bradley vehicles directly to the unit at its location and conduct any necessary training and technical support.

"BAE Systems is committed to providing the U.S. Army with world class platforms and systems, coupled with through life capability management," said Andy Hove, director of Bradley Combat Systems. "We, and our partners at Red River Army Depot, realize how critical it is to quickly return combat ready Bradley vehicles to our soldiers."

Bradley Combat Systems vehicles continue to provide outstanding survivability, mobility and lethality to U.S. soldiers in all types of close-combat urban scenarios and in open-combat, open-terrain scenarios over three completed rotations. The Bradley fulfills five critical mission roles - infantry, cavalry, fire support, battle command and engineer squad - for the Army's Heavy Brigade Combat Teams (HBCTs).

Bradley Combat Systems have played a critical role in the success of the Army's HBCTs that have faced some of the most challenging missions in Iraq since the conflict began in March 2003. During Operation Iraqi Freedom, Bradley operational readiness has exceeded 94 percent in urban and cross-country missions that have covered more than 8 million miles. The Bradley moves with maneuver forces across rough terrain at speeds up to 38 mph, and can negotiate narrow streets and tight corners in urban areas.

The C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) -equipped, network-ready Bradley vehicles feature a proven set of armor solutions designed to protect soldiers against a wide variety of threats, and are readily equipped with the Bradley Urban Survivability Kit.

BAE Systems has been awarded a total of 545 Bradleys to date under fiscal year 2006 funding, totaling $501 million, to provide both reset, and remanufactured and upgraded vehicles. Last year, the Army contracted with BAE Systems to remanufacture and upgrade 450 Bradley A3, 50 A2ODS and 33 BFIST vehicles under fiscal year 2005 funding (June 2005). Approximately 595 Bradley A3 vehicles have been delivered against the Army's requirement for 2,545 total Bradley A3s planned for the fleet.

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 100,000 employees worldwide, had 2005 sales that exceeded $28 billion.