1. The USCG Integrated Deepwater System FY 02 Accomplishments FY03/04 Status & Future Plans View of Upcoming Milestones 11 March 2003

2. Integrated Coast Guard Systems Proprietary InformationPage 2 Deepwater Supports National Priorities Core Missions Homeland Security and National Defense Search and Rescue Alien Migrant Interdiction Drug Interdiction Fisheries Protection Marine Environmental Protection Current Systems 91 Ships 206 Aircraft Associated C4ISR (Command & Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) Shore side Command & Control (C2) Support Infrastructure Future Systems 91 Ships 58 Fast Response Cutters 25 Off-Shore Patrol Cutters 8 National Security Cutters 124 Boats 42 Long Range Interceptors 82 Short Range Prosecutors 49 Modified 123’ Patrol Boats 244 Aircraft 168 Manned 76 Unmanned Enterprise C4ISR (Command, Control, Computers Communications, Intelligence, Surveillance & Reconnaissance) Performance-Based Logistics Deepwater is a performance-based acquisition project to replace ships, aircraft, command and logistics systems based upon a 20-year implementation plan

3. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 3 FY02/03 Accomplishments and Milestones Deepwater is off and running being jointly executed by Coast Guard and ICGS, a strong partnership Program Facilities established Program Management Offices in Rosslyn, VA; Moorestown, NJ; and Avondale, LA Design, Integration and Test Center in Moorestown, NJ Major Program Milestones National Security Cutter Manning Analysis Requirements - Oct02 Maritime Patrol Aircraft Analysis of Alternatives - Dec02 Integrated Cost Performance Report and Performance Metrics Digital Dashboard - Dec02 123’ Patrol Boat Critical Design Review - Dec02 C4ISR Preliminary Design Review - Nov02 Production Readiness Review - Jan03 Matagorda arrived for Conversion to 123’ - Feb03 System of Systems In Process Review - Jan03 Integrated Baseline Review - Feb03

4. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 4 FY02 Plan and Contract Funding Focus AreaFY02 Budget Authority Under Contract Aviation Maritime Patrol Aircraft Preliminary Design Vertical Take-Off & Landing Unmanned Air Vehicle $35.7M$37.0M Surface National Security Cutter 110’ - 123’ Patrol Boat Upgrade Short Range Prosecutor $36.7M$22.8M Logistics C4ISR / ILS Upgrades $17.3M$19.7M C4ISR Common Command & Control (C2) Preliminary Design Design, Integration and Test Center (DITC) $106.5M$121.3M System-of-Systems IDS System Level Engineering and Management $53.9M$53.0M Legacy maintenance/supportability (non contract) Government Program Office Total $39.8M $30.3M $320.2M $28.5M $30.3M $312.3M * * Contracts pending for $7.9M delta

5. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 5 FY03 Milestones Vertical Take-Off & Landing Unmanned Aerial Vehicle (VUAV) Preliminary Design Review - Sep03 National Security Cutter (NSC) Initiate Detailed Design and Incorporate Homeland Security Requirements - Mar03 Order Long Lead Material: Engines, Gears & Weapons - Mar03 Preliminary Design Review - Mar03 Critical Design Review - Jun03 378’ High Endurance Cutter; 270’ and 210’ Medium Endurance Cutters Upgrade for improved operational effectiveness - Jul03 110’ - 123’ Patrol Boats Continue Matagorda Upgrade Start Upgrades on 4 Legacy Assets - Feb03 Deliver Prototype Short Range Prosecutor - May03 Deliver Production Short Range Prosecutor for Matagorda - Sep03 Upgrade Shore Sites Communications and Logistics Capabilities - Jul03

6. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 6 FY04 Milestones Begin Procurement for Air Station - Aug03 Exercise Option for Lease of 10 Aircraft – Sept 03 Logistics Information Management Systems (LIMS) Installation First Legacy Ship - Oct03 Matagorda Upgrade Delivery - Nov03 Short Range Prosecutor First Boat Delivery - Nov03 Second Boat Delivery - Dec03 Vertical Take-Off & Landing Unmanned Air Vehicle (VUAV) Preliminary Design Review - Dec 03 Communications Station Upgrade - Mar 04 National Security Cutter Production Readiness Review – Apr04 Begin Construction First Unit - Sep04 C4ISR Critical Design Review - Jul04 Production and Deployment of Short Range Prosecutor (SRP)

7. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 7 FY03/04 Plan Focus AreaFY03 Budget Authority FY04 Budget Authority Aviation Maritime Patrol Aircraft $147.3M$0.0M Surface National Security Cutter 110’ - 123’ Patrol Boat Upgrade Legacy Cutters $196.4M$219.4M Logistics C4ISR / ILS Upgrades $17.9M$39.9M C4ISR 378, 270, 210 Legacy Upgrades Intel Upgrades to National Security Cutter $10.6M$66.2M System-of-Systems IDS System Level Engineering and Management $43.7M$42.1M Legacy maintenance/supportability (non contract) Government Program Management Total $34.1M $28.0M $478.0M $98.4M $34.0M $500.0M

8. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 8 Deepwater Program Funding Shortfall Key capability milestones have been established for the first five years of the program, to include new asset delivery and legacy system upgrades resulting in significantly enhanced performance Program Funding Levels Continue to Fall Behind Plan The original 20 year implementation plan is off track as there is already $322M shortfall 20% under funding has occurred in just 3 years Filling the Funding Gap Is Critical Towards Accomplishing Program Objectives Within the 20-year Plan Timeframe At current rate of shortfall, 20 years becomes 30+ for project implementation. The Gap Continues to Widen, Causing Significant Impacts to CG Operational Capabilities and Dramatically Increased Maintenance Costs Maintenance spiral will force choosing between re- capitalization and current missions

9. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 9 M$ Deepwater Plan Appropriated President’s Budget Deepwater Program Funding Shortfall- Continued

10. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 10 Funding Shortfall Synopsis What’s Delayed? 110’ to 123’ Conversions Reduced From 19 to 9 Maritime Patrol Aircraft Reduced From 8 to 2 Vertical Take-off and Landing Unmanned Air Vehicle Eliminated, Will Miss National Security Cutter Deployment Shore C4ISR and Integrated Logistics Support Upgrades Reduced From 24 to 6 Delivery of National Security Cutter 2 Is Likely to Incur 12 Month Delay Major Impact: Legacy Asset Sustainment and Safety Costs Are Rising Exponentially, Threatening the Re- capitalization or the Mission System Effectiveness Is Dropping Below Legacy Levels What’s Not Been Done? Navy Type Navy Owned, Weapon System Manager Upgrade Legacy Cutters Implementation of Upgraded Command & Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance Capabilities Replacement of Maintenance Intensive, Costly Legacy Assets What Also Should Be Done Given the Post 9/11, Homeland Security Environment? Accelerate Global Hawk Introduction Enhanced Intel and C4ISR Increment Acceleration Establishment of Maritime Domain Awareness Cubans Entering Key West - Undetected

11. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 11 Impact of Funding Shortfall Proposed Plan Current Funding Impact Number of 110 ft PB Conversions 199 Maritime Patrol Aircraft 82 VUAV IOC 2007 (ready for 1st NSC) IOC 2008 (miss 1st NSC del.) Shore C4ISR and ILS Upgrades 246 NSC #2 IOC 2008IOC 2009 Existing USCG Fleet Utilization is Increasing as Modernization is Delayed

12. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 12 USCG Reality Op-Tempo of Atlantic assets increased 25% Legacy asset sustainment and safety costs are rising Eight (8) PB’s, One (1) 378 ft. Cutter, One (1) Buoy Tender sent to support war with Iraq Post 9/11 requirements combined with Deepwater funding shortfall further impact USCG performance Presence along east coast diminishing Two (2) undetected Cuban Landings Increasing Mission Requirements vs Decreasing Recapitalization Funds (In Real $) Recap. Finding (Real $) Mission Requirements

13. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 13 Potential Activities Pending Additional Funding – CG DRAFT 3/7/03 FY 03 Supplemental Focus AreaValueCongressional Stakeholders Company Navy Type Navy Owned (NTNO) Weapon System Manager (WSM) Upgrade $60.0MMARaytheon C4ISR upgrades and acceleration 8 Deployed Patrol Boats C4ISR Field Upgrade C4ISR - Surface Ship Legacy Upgrades C4ISR - Intelligence Upgrade $95.0M ($10.0M) ($30.0M) ($55.0M) MD, LA, NJBollinger, Curtis Bay, LM Vertical Take-Off and Landing Unmanned Air Vehicle (VUAV) Low Rate Early Production Development Test/Early Test $100.0M ($80.0M) ($20.0M) TXBell Helicopter National Security Cutter Homeland Security Upgrades Chemical, Biological & Radiological (CBR) Sensitive Compartmented Information Facility (SCIF) Combat Management System Interoperability capabilities $45.0M ($8.0M) ($20.0M) ($17.0M) LA, NJNG, LM Fast Response Cutter (FRC) Design and First Article Delivery 2 Production FRCs $90.0M ($45.0M) LA, MSNG, Bollinger FY 04 Plus-Up Focus AreaValueCongressional Stakeholders Company High Endurance Unmanned Air Vehicle (HEUAV) capability$41.0MCANG

14. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 14 Summary and Asking Reverse the cumulative effect $431M under-funding over the first three years of the program Need $390M in F/Y ‘03 Supplemental Appropriations Allows for procurement of VUAV’s, necessary C4ISR implementation, post-9/11 capability upgrades to NSC, Patrol Boats. Need $41M in F/Y ‘04 Plus-ups Allows for acquisition of High Endurance Altitude UAVs Additional funding significantly enhances the USCG’s Ability to meet increasing, time-critical Homeland Security needs Port Security and related activities of particular importance to National Security

15. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 15 Backup

16. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 16 Supplemental & Plus-Up Talking Points Navy Type Navy Owned (NTNO) Weapons System Manager (WSM) Replaces funding to have been provided by the Navy, but which was deleted inadvertently from their FY03 budget request Failure to provided funding for the NTNO WSM will result in the first National Security Cutter (NSC) being delivered without an integrated combat management system, significantly reducing its ability to defend against Anti-Ship Cruise Missiles Required during FY03 to ensure incorporation of the WSM into Detailed Design and subsequent production of the first NSC The Coast Guard has deployed eight Patrol Boats (WPB-110s) to the Middle East at the request of the U.S. Navy, in support of potential military operations Accelerate selected portions of the Integrated Deepwater System (IDS) planned Command & Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) upgrades for these deployed cutters, significantly enhancing their ability to operate in a high intensity and potentially hostile environment Upgrades would be accomplished in-theater, greatly improving WPB-110 interoperability with DOD during deployed operations by improving their ability to receive, manage, and safeguard classified messages and other information

17. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 17 Supplemental & Plus-Up Talking Points - Continued Legacy cutter C4ISR upgrades Enhances classified message and data management and improves interoperability with DOD and other government agencies, providing more timely sharing of threat information and other data Provide increased internal and external data management capabilities, and are required to support new Homeland Security and Homeland Defense mission requirements for major legacy cutter fleets VUAV Ensure system linkage with NSC delivery in FY06 by earmarking $80M over FY03-04 Decreased/lack of funding by end of FY04 prevents NSC/VUAV capability to provide optimal “maritime domain awareness” and “common operating picture” $15M in concept design spent from FY02 NSC Homeland Security upgrades Incorporate design changes required to meet new HLS-driven operations and interoperability requirements Detailed design and actual incorporation in the first NSC Required to allow the NSC to meet its updated Command and Control platform requirements under post-9/11 threat conditions through upgraded CBR and self- defense capabilities, as well as enhanced handling of sensitive information and classified materials Also improve interoperability with DOD forces and aircraft in support of Homeland Defense and deployed operations Funding is necessary in FY03 to permit incorporation in NSC Detailed Design (included in the FY03 budget) and NSC hull number 1.

18. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 18 Supplemental & Plus-Up Talking Points - Continued Global Hawk Provide enhanced Surveillance and Detection capabilities in the off- and near-shore regions, in response to increased Homeland Security mission requirements Provide initial long range UAV capability approximately ten years earlier than initially planned due to increased surveillance requirements C4ISR INTEL New requirements as a result of 9/11 demand an improved capability to optimize the assets involved in the Deepwater system and in the myriad of assets associated with that system. The resulting Maritime Domain Awareness and shared Common Operating Picture will dramatically increase the Operational Effectiveness of the assets involved in any operation. Accelerates implementation of improved sensors and enhanced connectivity underlying development of the IDS Common Operational Picture Enhance Coast Guard, DHS, and national Maritime Domain Awareness through improved and expedited sharing of critical Maritime Homeland Security threat information.

19. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 19 Supplemental & Plus-Up Talking Points - Continued C4ISR - Legacy Surface Ship Upgrades Enhances classified message and data management and improves interoperability with DOD and other government agencies, providing more timely sharing of threat information and other data Provide increased internal and external data management capabilities, and are required to support new Homeland Security and Homeland Defense mission requirements for major legacy cutter fleets 110’ to 123’ Patrol Boat Conversions Accelerate the return of two new Patrol Boats to the fleet and will assist in making up for the eight boats that were sent to the Persian Gulf With eight boats deployed and at least one other boat in the shipyard for conversion, moving the conversion of two boats forward serves to improve the Coast Guard’s readiness for its missions in both Homeland Security and its traditional Coast Guard mission set Fast Response Cutter (FRC) Provides increased capability/operational effectiveness to fleet New assets needed to replace deployed cutters/patrol boats at end of service life Recapitalize vs. maintain—build new assets vs. repair old ones; save maintenance costs, lowering total ownership cost

20. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 20 Surging Operational Requirements Operational Requirements A Changing Operational Environment Sept 11, 2001 Traditional Responsibilities  Search and Rescue  Alien Migrant Interdiction  Fisheries Protection  Marine Environmental Protection  National Defense Post Sept 11 Added Responsibilities  Lead Federal Agency for Maritime Homeland Security  Federal Maritime Security Coordinator for US Ports  Supporting Agency to FEMA  Support US Gov’t Interagency Domestic Terrorism Operations Plan  Support Military Operations Conducted Under Title 10 Traditional Mission Responsibilities Continue As the Lead Federal Agency Responsible for Maritime Homeland Security, the US Coast Guard’s Role and Associated Operational Demands Have Greatly Increased in the Post Sept 11 th Environment th

21. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 21 Program Status Contract Awarded 25 June 2002 Post Award System Evaluation – Complete 15 Delivery Orders awarded including: Systems Integration and Program Management National Security Cutter (NSC) Concept Design Legacy C4ISR Upgrades Vertical Take-Off and Landing Unmanned Aerial Vehicle (VUAV) Concept Design Upgrade of legacy 110’ Patrol Boat to 123’ Patrol Boat Maritime Patrol Aircraft (MPA) Concept Design Common CG-C2 Command and Control System Development Logistics Information Management System Deployment

22. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 22 FY02 Plan and Contract Funding Focus AreaFY02 Budget Authority Under Contract Aviation Maritime Patrol Aircraft Preliminary Design Concept & Technology Development Analysis of Alternatives Vertical Take-Off & Landing Unmanned Air Vehicle Concept & Design $35.7M$37.0M Surface National Security Cutter Lead Ship Concept Design 110’ - 123’ Patrol Boat Upgrade Lead Ship Detailed Design and Construction Short Range Prosecutor Production and Deployment $36.7M$22.8M Shore C4ISR / ILS Upgrades Common logistics system and management Logistics Information System Development Operations Center in Coast Guard Headquarters Aircraft Repair & Supply Center (Elizabeth City, NC) Engineering Logistics Center (Curtis Bay, MD) Maintenance & Logistics Command - Atlantic (Portsmouth, VA) Operations Systems Center (Martinsburg, WV) $17.3M$19.7M

23. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 23 FY02 Plan and Contract Funding, Continued Focus AreaFY02 Budget Authority Contract Funding C4ISR Common Command & Control (C2) Preliminary Design Increment Communications Area Master Station Low Rate Initial Production Legacy Asset Modifications 270’ Cutters 210’ Cutters 378’ Cutters Design, Integration and Test Center (DITC) Phase 1 Production $106.5M$121.3M System-of-Systems IDS System Level Engineering and Management Modeling & Simulation Operations Analysis Architecture Development System Level Test and Evaluation $53.9M$53.0M Legacy maintenance/supportability (non contract) Government Program Office Total $39.8M $30.3M $320.2M $28.5M $30.3M $312.3M

24. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 24 FY03/04 Plan Focus Area FY03 Budget Authority FY04 Budget Authority Aviation Maritime Patrol Aircraft $147.3M$0.0M Surface National Security Cutter Detailed Design Production Drawings Manufacturing Aids Order Long Lead Materials 110’ - 123’ Patrol Boat Upgrade Upgrade four hulls Legacy Cutters Upgrade Mission Capabilities $196.4M$219.4M Logistics C4ISR / ILS Upgrades Infrastructure Upgrades $17.9M$39.9M

25. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 25 FY03/04 Plan, Continued Focus Area FY03 Budget Authority FY04 Budget Authority C4ISR 378, 270, 210 Legacy Upgrades Intel Upgrades to National Security Cutter $10.6M$66.2M System-of-Systems IDS System Level Engineering and Management Modeling & Simulation Operations Analysis Architecture Development System Level Test and Evaluation $43.7M$42.1M Legacy maintenance/supportability (non contract) Government Program Management Total $34.1M $28.0M $478.0M $98.4M $34.0M $500.0M

26. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 26 Subcontract Management Plan and Status Initial “Letter Contract” Awards DefinitizeDefinitize5yr Base SubcontractorProduct, ServiceDateValueEst Value Agusta: ItalyHitron (Armed Helicopter) LeaseJan03: $17.0M $78.0M SIGMON: VAILS Process Re-EngineeringJan03: $1.0M$2.3M MA&D: FLCrewing & ModelingFeb03: $1.0M$1.5M Prosoft: VATraining/C4ISR ArchitectureFeb03 : $1.0M$7.5M Metron: CAOperations Analysis SoftwareFeb03: $1.0M$5.5M LM M&DS Comms: PASatellite Communication SystemFeb03:$130.0M$42.9M LM M&DS: PAIntelligence SystemsFeb03: $5.0M$33.3M EADS CASA: Spain Maritime Patrol Aircraft (MPA) Mar03:$12.0M$589.5M MES: LALegacy Communications SystemsMar03: $1.5M$31.4M ARINC: MDLegacy Command & Control, Computers Communication Intelligence, Surveillance and Reconnaissance (C4ISR) Air InstallationMar03: $1.8M$15.4M WBB: VAConcept of OperationsMar03: $1.0M$4.7M Teledyne Brown: ALTest & EvaluationMar03: $1.0M$3.4M Bell Helicopter: TXVertical Take-Off and Landing Unmanned Air Vehicle (VUAV)Apr03:$11.0M$166.0M NGIT: VALegacy Integrated Logistics Support (ILS)Apr03:$6.0M$45.6M LMTS: NJAsset disposalApr03 : $1.0M$34.7M EDO: CAElectronic Support Measures SystemMay03: $0.3M $30.0M L3 Communications: NJIntegrated Communications SystemMay03:$22.0M$183.0M

27. 11 March 2003Integrated Coast Guard Systems Proprietary InformationPage 27 Subcontract Management Plan and Status Next Steps DefinitizeDefinitize5yr Base SubcontractorProduct, ServiceDateValueEst Value FLIR Systems: OR/MAElectro-Optical/Forward Looking Infra-Red SystemsFeb03: $0.8M $48.0M Mincom: VAILS Process Re-Engineering Apr03:$1.3M $5.6M Open Competition Legacy C4ISR InstallationsApr03:$0.2M$1.0M Raytheon IFF: MDIdentification Friendly or Foe Air/SurfaceMay03:$0.1M $13.0M Sierra Nevada: NVSurface Unmanned Common Automatic Recovery SystemMay03:$2.0M $28.0M Raytheon SeaVue: TXMPA RadarJun03:$5.0M $37.0M Open CompetitionVUAV RadarJun03:$9.9M $19.0M Open CompetitionMPA Mission SystemNov03:$3.7M $63.0M EADS GmbH: Germany National Security Cutter RadarNov03: $8.0M $34.0M Open CompetitionSurface Direction Finding SystemJun04:$0.4M $1.2M