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U.S. Air Force Awards Lockheed Martin $32.7 Million for Paveway II Laser-Guided Bomb Kits


June 12, 2006

ARCHBALD, PA, -- Lockheed Martin [NYSE: LMT] has been selected to receive a competitive contract award of $32.7 million to deliver Paveway II Laser Guided Bomb (LGB) GBU-10 and -12 kits to the U.S. Air Force.

The contract reflects the U.S. Air Force’s continued need for Paveway II LGBs and highlights Lockheed Martin’s commitment to delivering the most cost-effective precision-guided weapons. Lockheed Martin Paveway II systems have been used extensively in Operation Iraqi Freedom (OIF). The delivery to the U.S. Air Force is scheduled to begin in the fourth quarter of 2006.

“This award stands as testament to the dedication and commitment of the entire team that delivered stellar performance while maintaining a passion for continuous product improvement,” said Cynthia Sailar, vice president and general manager at Lockheed Martin Missiles and Fire Control in Archbald, PA. “The recent refinements in our Paveway II LGB products continue the Lockheed Martin tradition of providing our warfighters with one of the most accurate and best-value weapon systems available today.”

Lockheed Martin’s Paveway II system was recently re-qualified through extensive joint service testing in accordance with U.S. Navy and U.S. Air Force joint service performance requirements, and confirms the confidence of the U.S. Air Force in the performance of the Lockheed Martin Paveway II GBU-10, -12 and -16 laser-guided weapon system.

“The 100-percent award on GBU-10 Air Foil Groups (AFG) demonstrates to our international customers, the U.S. Government’s full confidence of the quality, reliability and performance in our 2,000-lb MK-84 capabilities,” said John Pericci, director - business development and precision guided systems at Lockheed Martin Missiles and Fire Control. “The Computer control Group (CCG) and GBU-12 AFG award is a direct result of the Air Force’s split-share requirement and need for complete interchangeability and interoperability of their laser-guided bomb inventory components. This interoperability provides our customers the flexibility to manage their Paveway II components, minimize costs and maximize currently available weapon systems.”

Lockheed Martin, a 2005 recipient of the Shingo Prize for Manufacturing Excellence, is qualified to produce and support all three variants of the Paveway II MK-80 series LGBs and has delivered more than 35,000 kits to the Air Force, Navy and international customers. GBU-12 kits are used on 500-lb bombs, while GBU-10 and GBU-16 kits are used on 2,000- and 1,000-lb bombs, respectively. Lockheed Martin kits can be used by all Air Force, Navy and international aircraft currently authorized to carry and release LGBs. These kits have been used successfully in Operation Iraqi Freedom and the war against terrorism.

In November 2005, the U.S. Navy awarded Lockheed Martin $65 million and a five-year procurement with a potential value of $266 million to develop, qualify and produce the Paveway II Dual Mode Laser Guided Bomb (DMLGB) kits, the next-generation precision-guided weapon system. The program calls for upgrades to the Navy’s inventory of legacy Paveway II kits by replacing an existing CCG system with an Inertial Navigation System/Global Positioning System (INS/GPS), an all-weather guidance system that provides dual-mode guidance capability. The technology to be developed under this program will be directly applicable for integration and upgrade of the U.S. Air Force inventory of Lockheed Martin Paveway II LGBs.

In addition to the Paveway II LGB and DMLGB precision-guided systems, Lockheed Martin designs and manufactures a COTS-based Laser Guided Training Round (LGTR). The LGTR benefits from the unique distinction of being the only worldwide solution for live-fire Paveway II training and represents the most economical, effective, precision air-to-ground training system. Over the past fifteen years, Lockheed Martin has delivered over 50,000 LGTR units to the Navy and numerous international users further enhancing the air-to-ground proficiency of their warfighters.

Headquartered in Bethesda, Md., Lockheed Martin employs about 135,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The corporation reported 2005 sales of $37.2 billion.

Jennifer Allen, (407) 356-5351


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