BAE Wins Overhaul Contract

Maritime Activity Reports, Inc.

July 6, 2007

BAE Systems won a contract by the U.S. Navy's Military Sealift Fleet Support Command for a 60-day overhaul of the fast combat support ship USNS Arctic (T-AOE 8). The contract includes options which, if exercised, would bring the cumulative value of the work package to $7.9 million. All work on the Military Sealift Command ship will be performed at BAE Systems Norfolk Ship Repair starting in July and is expected to be completed in September 2007.

USNS Arctic's primary mission is to rapidly replenish Navy task forces and carry more than 177,000 barrels of oil; 2,150 tons of ammunition; 500 tons of dry stores; and 250 tons of refrigerated stores. The ship receives petroleum products, ammunition and stores from shuttle ships and redistributes these items simultaneously to carrier strike group ships.

"This award comes on the heels of our drydocking Military Sealift Command's cargo transport ship, USNS Brittin," said Al Krekich, president, BAE Systems Ship Repair. "It allows BAE Systems to play an even greater role in ensuring the nation's important logistics ships are ready to conduct their missions at a moment's notice."

BAE Systems' work on the Arctic includes drydocking the ship; cleaning and painting the underwater hull and freeboard area; opening, cleaning, gas freeing and testing tanks; overhauling sea valves; and accomplishing various electrical, communication and navigation equipment repairs, along with U.S. Coast Guard inspection items, machinery inspections and repairs and underway replenishment equipment repairs.

BAE Systems Ship Repair is the United States' leading non-nuclear ship repair, modernization and conversion company - focused on dry dock and ship repair services for the U.S. Navy, other defense agencies and commercial customers. It has major operations in Norfolk, San Diego, San Francisco and Hawaii.

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