BAE Systems, U.S. Army Sign Public-Private Partnership for M109 Family of Vehicles.

WASHINGTON -- BAE Systems and the U.S. Army have signed a memorandum of understanding that will establish a Public-Private Partnership (P3) to develop and sustain the Army's M109 Family of Vehicles throughout their lifecycle. Parties to the memorandum signing include BAE Systems leaders, the U.S. Army Tank Automotive & Armaments Command (TACOM), the Program Executive Office for Ground Combat Systems, the U.S. Army's Project Manager - Heavy Brigade Combat Team (PM-HBCT), and the Anniston Army Depot (ANAD). The memorandum was signed during the Annual Meeting and Exposition for the Association of the U.S. Army in Washington, D.C.

The establishment of a P3 will capitalize on the strengths and capabilities of each organization to ensure the cost-effective and on-time reset of the current fleet of M109A6 Paladin self-propelled howitzers and M992A2 Field Artillery Ammunition Supply Vehicles (FAASV), as well as the planned production of the M109A6/M992A2 Paladin Integrated Management (PIM) program unveiled earlier this week.

"This partnership was established for the benefit of the American soldier," said COL. Paul Lepine, Army PM-HBCT. "The M109 family plays a critical role in the success of the HBCT and we are pleased to partner with BAE Systems and ANAD to ensure these systems continue to provide the performance our Soldiers need to be successful on the battlefield today and into the future."

The M109 reset activities will be managed by the PM-HBCT, with the goal of creating an integrated, seamless partnership to bring the best value to the soldier, while maintaining necessary skills and competencies in the public and private industrial base.

Through the P3, ANAD will retain labor and lead the majority of the program, with BAE Systems responsible for materials management.

"ANAD has proven time and again to be a dedicated workforce focused on meeting the needs of our soldiers through effective combat vehicle reset programs," said Raj Rajagopal, president, Ground Systems, BAE Systems. "We're proud to partner with ANAD and the PM-HBCT to leverage our efficient materials management processes to make M109 FOV reset even more effective, and to work closely as a team to rapidly provide the M109A6-PIM to our soldiers."

The M109A6-PIM production process will also be led by the PM-HBCT with a direct contract to BAE Systems, who will oversee system design, development and production. ANAD will be integrated into the PIM Integrated Product Development Teams (IPDTs) structure during the design phase and will support the manufacture of the prototype vehicles which will be delivered to the Army for test and evaluation in 2009. Following test and evaluation, ANAD will overhaul the prototype vehicles to ensure the depot has the demonstrated capability to meet their M109A6/M992A2-PIM mission requirements. ANAD will be a partner in PIM production, responsible for induction of vehicles, overhaul of critical components such as the main armament, as well as modification & upgrade of the cab structure. The partially assembled cabs, along with overhauled components, will be provided to BAE Systems for integration with the PIM chassis - designed and built around commonality with the Bradley family of vehicles.

For more information about the M109 Family of Vehicles, please visit BAE Systems AUSA Press Kit (http://www.baesystemspresskit.com/ausa2007).

About BAE Systems

BAE Systems is the premier global 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 96,000 employees worldwide, had 2006 sales that exceeded $27 billion on a pro forma basis, assuming BAE Systems had owned Armor Holdings, Inc. for the whole of 2006.