US Naval Sea Systems Command Awards VSE Potential $1.5 Bn Contract

VSE Corporation's (Nasdaq GS: VSEC) GLOBAL Division has been awarded a one-year $277 million cost-plus-award-fee, indefinite-delivery, indefinite-quantity contract by the U.S. Naval Sea Systems Command for continuous lifecycle support of naval vessels bought, sold, or otherwise transferred to Foreign Military Sales customers through the International Fleet Support Program. This contract includes options, which, if exercised by NAVSEA, would bring the cumulative five-year maximum potential value of this contract to $1.5 billion. VSE will lead its Naval Ship Transfer and Repair (N*STAR) team with services to foreign customers and allies to include design, configuration management, field engineering, maintenance planning, maintenance, spare parts support, training, casualty, and depot-level repair. The VSE N*STAR team will also provide engineering, technical, procurement, logistics, test, inspection, calibration, repair, maintenance, equipment upgrade installation, and overhaul support services, including reactivation to safe-to-sail status. No funds are being obligated at this time. "We are pleased to extend our fifteen year partnership with NAVSEA's FMS team," said VSE CEO/President/COO Maurice "Mo" Gauthier. "VSE's N*STAR team is comprised of the best firms in our industry, with a long history of working together in this challenging area. Our team's past performance ensures NAVSEA and its international clients will continue to receive the exceptional service they have come to expect." VSE has been performing Ship Transfer and Follow-on Technical Support (FOTS) work for the Naval Sea Systems Command since 1995. During that time, VSE has managed the successful transfers of 44 ships ahead of schedule and under budget, and provided service to 24 nations on six continents. VSE is currently supporting the transfer of the Coastal Mine Hunters ex-USS Oriole and ex-USS Falcon to Taiwan. VSE-led transfer and FOTS services have included a large variety of ships supported, from guided missile destroyers to floating dry docks. Support work includes complex follow-on technical support to host nations; establishment of state-of-the-art multi-media training facilities; installation of coastal surveillance systems; industrial upgrade programs for ex-US Navy ships and systems; and mission capability enhancements, including insertion of modern combat systems upgrades (SM2 Block IIIA). VSE's International Group President Harry Flammang commented: "We have a long history of delivering excellence across the spectrum of the NAVSEA FMS Supportability program. Our experience, global relationships, and N*STAR team put us in an outstanding position to continue fulfilling the requirements and meeting the challenges of this program in support of NAVSEA and its customers."

Source: VSE Corp.
Date: Oct 4, 2011