Raytheon and UPS Logistics Group Team Awarded $96.8 Million to Provide Phalanx Parts and Services to the U.S. Navy.

Business Editors

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 11, 2000

Under a five-year contract valued at $96.8 million, Raytheon Company (NYSE:RTNA)(NYSE:RTNB), with United Parcel Service's (NYSE:UPS) UPS Logistics Group, will provide Phalanx Close-In Weapon System parts and services to the U.S. Navy under the Navy's Inventory Control Point Direct Vendor Delivery (DVD) initiative.

This is the first DVD initiative to provide the full range of services envisioned by the Navy when it first proposed the DVD concept to industry. The work conducted under this contract will be performed at Raytheon's Missile Systems facility and at the UPS Logistics and Technology Center, both in Louisville.

Under this initiative, the Raytheon-lead team will serve as the government's commercial stock point (CSP) for all Phalanx spares and repairables. As the CSP, Raytheon will perform all inventory management functions for spare parts including spares repair and new acquisition, receiving, shipping, tracking warehousing, reporting and scheduling. The UPS Logistics Group will provide distribution and inventory management services on Raytheon's behalf.

"This award gives Raytheon and our initiative partner, UPS Logistics Group, the opportunity to provide the Navy with a true Center of Life-Cycle Agile Support Services," said Louise L. Francesconi, Raytheon executive vice president and general manager of the company's Missile Systems unit. "We are both setting a precedent and a standard under this agreement. The U.S. Navy is putting its trust in us to provide the most cost-effective and agile system for Phalanx life-cycle support. As this system succeeds, we will be well positioned to provide the same outstanding services for other Navy programs. We look forward to doing so."

"We appreciate the opportunity to utilize our commercial management practices in support of this direct vendor delivery initiative," said Dan DiMaggio, UPS Logistics Group's Chief Executive Officer. "This contract will showcase our logistics systems and physical distribution capabilities."

UPS Logistics Group is a wholly owned subsidiary of United Parcel Service. The company provides global supply chain solutions.

Raytheon Company, based in Lexington, Mass., is a global technology leader that provides products and services in the areas of commercial and defense electronics, engineering and construction, and business and special mission aircraft. Raytheon has operations throughout the United States and serves customers in more than 80 countries.