Corrosion Is An Enemy! CHP is a Weapon! CS/CSS TASK FORCE Meeting Corrosion Is An Enemy! CHP is a Weapon! LOGIS-TECH

Use Of CHP Can Be A Significant Part Of The Solution The Reality CORROSION COST DOD $20 + BILLION ANNUALLY! COST OF CORROSION TO ARMY VEHICLES $2.4 BILLION ANNUALLY COST OF CORROSION TO ARMY MISSILES $1.6 BILLION ANNUALLY! COST OF CORROSION TO ARMY AVIATION $1.2 Billion ANNUALLY! 20% OF ALL ELECTRONIC COMPONENT FAILURES RESULT FROM MOISTURE INDUCED CORROSION! “At a time when the nation faces increased financial constraints, it is important for both DOD and Congress to be in a position to weigh the trade-offs between competing requirements and risk associated with degraded equipment readiness, so that they can make sound investment decisions on the use of the funding” GAO Report GAO-07-814 Use Of CHP Can Be A Significant Part Of The Solution

ARNG Maintenance Mission Taking Care of Equipment~Takes Care of Soliders~ CHP “A Readiness Stabilizer” ARNG Maintenance Mission Varies with Mobilization & Deployment The CHP Program Reduces Maintenance Backlog Caused by Moisture Induced Corrosion, Unfinanced Technician Manning Levels, and Increased Requirements from Fielding Modern Maintenance-Intensive Systems Military Tech 40-50% MILTECH CHP SOLIDERS CHP “IS” the 3rd Pillar of Maintenance Traditional Guardsmen 5%

BOTH CHP APPLICATIONS ALLOW UNLIMITED ACCESS TO EQUIPMENT! Sheltered (LTP/MLTP) and Unsheltered (OP) Sheltered CHP uses a new or converted shelter as the protection envelope. Fort Pickett, VA Ft Riley, KS Unsheltered CHP (OP) uses the vehicle or aircraft to create the protection envelope. BOTH CHP APPLICATIONS ALLOW UNLIMITED ACCESS TO EQUIPMENT!

CHP Shelter Applications Provide: Protection for entire vehicle and installed equipment from corrosion damage. Regulatory Compliant deferral of all MAINTENANCE ACTIONS while in CHP for up to 60 months. Regulatory Compliant Reporting - Mission ready equipment in CHP remains reportable as mission ready. Significant Cost avoidance in manpower and parts.

STORAGE CHP SHELTER FACILITY

Reducing the Impact on the Supply and Maintenance Pipe Line through Reduced Component Requirements The M1A1 Tank Turret contains electronic components – Total Value – $596,837.00. Cost of a Controlled Humidity Protection (CHP – OP) System for 20 M1 Tanks – $100,000.00. Total value of electronic components protected by a single CHP system - $11,936,755.00. Failure data shows that USMC II MEF’s 72 M1s experienced and average of 59 failures of these components per year at an annual value of $1,793,964.00. Studies confirm 20% of ALL electronic failures result from moisture induced corrosion and that CHP is confirmed as eliminating moisture induced corrosion. Reducing LRU failure costs by 20% provides an annual $358,792.00 of cost avoidance in parts alone per OP Line. CHP system provides stabile low humidity air to entire turret area

CHP OPERATIONAL SYSTEM

NGB CHP Program Initiated as SBIR Phase II Demonstration by ARNG LOG in 1994 at MN and MS to access CHP capability to: ** Reduce maintenance costs ** Reduce corrosion damage ** Conserve limited resources ** Sustain or Increase readiness ARNG expanded into full program in 1996 with implementation continuing today. ANG initiated demonstration of CHP in 2005 based on ARNG realized success and need to reduce impacts of corrosion related damage on ANG systems. ** F-15/KC135/ AGE at Hickam AFB in 2005 ** ANG continued implementation in SC for F-16s/C-130 ARNG Aviation demonstration initiated in 2010 in VA and SC but full usage delayed due to deployments. On continuous CHP contract since 1994 with contract in effect today. ** W9133L-08-D-0017

Government Confirms Ten-Year CHP 9:1 ROI is Conservative DOD and DHS Expand CHP Implementation to Gain Resource Control In Constrained Environment USMC – 102 Systems for tanks, artillery, vehicles at 19 Sites world wide provides improvements in total readiness while reducing total cost of corrosion. USAF – Implemented 75 systems for F-22, C-130s, F-15s and Pave Hawks at 3 sites with 41 additional systems in approval process. USCG – Implemented 101 systems at 28 sites with plans to outfit entire 211 AC fleet. Dispatch rates up 9% and LRU failures down 4.65% / 1000 flight hrs. USA – Four systems at two sites for Strykers and PREPO Ship Prep. Navy – 16 systems at 12 sites for V22 and EP3 aircraft and electronic equipment storage. Government Confirms Ten-Year CHP 9:1 ROI is Conservative

Leveraging Controlled Humidity Protection Through Enterprise Integeration REQUIRED ACTUAL THE CHP ADVANTAGE 100% of assets 100% of assets Adaptive systems SVESS ESS® equipment staging ESS® operational Protects equipment when not In use Requires less maintenance Requires less repair parts < 100% of personnel Low equipment usage Fewer maintainers 100% of personnel Bottom Line: Improves Materiel Readiness While Reducing The Logistics Footprint

BACK UP SLIDES

Controlled Humidity Protection Army National Guard Realized a $1.2B dollar cost avoidance benefit for a $75M investment. CHP cited as the most beneficial component of the Corrosion Prevention Program.   Ohio NG reported a $32M manpower cost avoidance between FY96-FY08 at Ravenna Depot. In comparing two Avenger units, the unit utilizing controlled humidity protection had 83% fewer Single Stock Fund expenditures.   USCG achieved 9% improvement in “dispatch rates” and a reduction of 4.34 failures per 1000 flight hours for 6 avionic components. Implementing CHP fleet-wide. The USMC identifies CHP as a key component of a total Corrosion Prevention Program stating that it: Reduces the need for corrective maintenance, Increases equipment usability and safety, Increases opportunity for training and operations, Reduces the overall total cost of equipment ownership to the Marine Corps, and Improves readiness and decreases maintenance costs. PACAF increasing CHP utilization to meet corrosion-related readiness challenges.

What Could That Cost Avoidance Buy Annually? ARNG CERTIFIES INITIAL 10 YEARS OF CONTROLLED HUMIDITY PROTECTION IMPLEMENTATION PROVIDED $1.2 BILLION in O&M COST AVOIDANCE What Could That Cost Avoidance Buy Annually? 2,000 additional man years for NGB Maintainers 900 M1A1 Fire Control Computers 1,153 Fire Control Transmitter Sub-Assemblies for F-16 Replacement of the Top10 LRU Failures in each of 143 ANG F-15s 36 Million Gallons of JP8 6 New UH-60 Helicopters 4 New F-15 Eagles 120 Turn-Key, 10,000 sq ft, CHP Shelter Systems 27 turn-key CHP flight line systems to protect 324 ANG Aircraft 1200 turn-key CHP OP systems to protect 24,000 NGB vehicles

Environment Stabilization System-ESS® Envelope (New or Existing Structures or the Equipment Body) 2. Air Dehydration Units (Fixed, Mobile and Single) 3. Super Flight Line Electrical Distribution System (SFLEDS) 7 12 12 12

CHP Stops Corrosion Verifiable Performance 4. Data Acquisition and Control Systems CHP Stops Corrosion Rate Of Corrosion and provides Verifiable Performance AVG. RH IN U.S. 0 25 50 75 100 % RH 09 Apr 12 -15 May 12 GuardianTM Data Acquisition and Control System Remote Monitoring Via Internet

5. Full Service Support Network Established Worldwide Over 1350 dehumidification systems installed at 355 sites in 43 States and 15 overseas locations Service Site Service Office Corporate HQ Field Office 5,443,459 s.f. sheltered CHP and 5223 vehicles OP/SVESS® Greece Bahrain Germany South Korea Japan Taiwan Okinawa Puerto Rico Diego Garcia Virgin Islands Qatar Spain Guam Iraq Afghanistan