Follow-up On DOTC Discussion From October 2008 ICAP February 3 rd, Munitions Executive Summit - ICAP

DoD Ordnance Technology Consortium DoD Laboratories National Warheads & Energetics Consortium OUSD (AT&L) LW&M Department of The Army Department of the Navy Department of the Air Force Department of Energy Special Operations Command Other Agencies and Departments Defense Contractors Traditional & Non-Traditional Academic Institutions Not-for-Profits Organizations Section 845 Other Transaction Rapid & Agile Acquisitions DoD and NWEC… Partnering to Leverage Capabilities and Investment

Program Director Explosives Govt Co-Chair NWEC Co-Chair Demilitarization Govt Co-Chair NWEC Co-Chair Pyrotechnics Govt Co-Chair NWEC Co-Chair Fuze Govt Co-Chair NWEC Co-Chair Warheads Govt Co-Chair NWEC Co-Chair Propellants Govt Co-Chair NWEC Co-Chair Research Sub-Committees Executive Committee Govt Co-Chair / NWEC Co-Chair DOTC Management Structure

 DOTC’s Mission is to Demonstrate Feasibility and/or the Transition of Advanced Explosives, Propellants, Pyrotechnics, Warheads, Fuzing and Demilitarization Prototype Technologies - Advocate a critical mass of world-class technologists to meet the Department of Defense needs for conventional energetics (explosives, propellants, pyrotechnics), warheads, fuzes and demilitarization - Operate as an “open” center in which industry, academia, and other Government organizations and departments can freely participate - Be a focal point to rapidly transfer technology to the war fighter - Develop strong working affiliations with private and public energetics, warhead, fuze and DEMIL facilities and technology organizations - Leverage governmental and private sector research and development resources to maximize return on investment Promote non-traditional defense contractor involvement Promote innovation DOTC Mission

Questions to Industry  Are you aware of DOTC and its Mission?  Does your company participate in DOTC?  Have you considered DOTC Contracting but declined to do so? If this is the case, why did you decide not to participate in DOTC?  List areas where using DOTC might benefit you and the government.  How do we as industry deal with IP ownership issues as they relate to DOTC?

Industry Feedback Comments:  DOTC participation is significant, broad-based and is considered beneficial to both Industry and the government; 121 current industry members  “…DOTC mission has worked pretty well in the area of Warhead design, development and testing”  “…an effective tool to provide collaboration and partnerships between industry and the government” Concerns:  “Today there are more requirements to address and for the First-time supplier it might seem overwhelming.”  “We must sort out the IP ownership issues for technologies developed under these types of contracts.”  “The biggest deal is that you are now required to team with “non-traditional defense contractors.”  “ We really need to get an understanding of the contracting mechanism for FY 2010 and beyond. We need to also understand what the revenue opportunities will be as we go forward.”

DOTC Changes FY2010 and Beyond  One Other Transaction Agreement (OTA) and a Single Point Contracting Arrangement - Advanced Technology Institute (ATI) will represent NWEC members - Approved D&Fs for OTA for 7 years with a ceiling of $700M  New Terminologies - “Request for Project Proposals” replaced with “Request for Ordnance Technology Initiatives” - Ordnance Technology Base Agreement will reflect flow down of the terms and conditions of the OTA; agreement signed by consortium manager (ATI) and the NWEC company receiving the award  Money Flow-downs - Funding from Picatinny to ATI - ATI sends funds to respective company - ATI fee will be 8% - 10% of the contract value

National Warheads & Energetics Consortium

Summary  Those who know and understand the DOTC process like it, but are very interested in the new changes and how the changes will affect them. Opportunity to educate industry to better understand this process.  Those who don’t like DOTC are concerned about IP and future funding. The consortium must address this concern.  The requirement to use non-traditional defense contractors as partners on DOTC contracts was a concern. May not be an issue in Opportunity to define and address these concerns.