U.S. Naval Sea Systems Command Awards VSE Potential $1.5 Billion Contract for International Fleet Support Program

Robust Naval Ship Transfer and Repair (N*STAR) Team Poised for Continued Service

ALEXANDRIA, Va.-- 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.”

N*STAR Team members

Raytheon; Science Applications International Corporation (SAIC); Thales Naval, Inc.; Lockheed Martin; Computer Sciences Corporation (CSC); BAE SYSTEMS; General Dynamics; DRS (a Finmechanica company); Gibbs & Cox, Inc.; CDI Marine Co.; American Systems Corporation; Propulsion Controls Engineering; George G. Sharp, Inc.; Colonna’s Shipyard, Inc.; McKean Defense Group, LLC; Phoenix Group of VA; Sullivan & Associates, Inc.; Atlantic Ordnance International; 3Phoenix, Inc.; Logistics Support, Inc.; Delex Systems; The GBS Group; Gryphon Technologies; Valkyrie, Inc.; The McHenry Management Group; HEBCO; Walashek, Inc.; Detyens Shipyard Inc.; ESN, Inc.; Guam Industrial Services, Inc.; and Orion Solutions, LLC.

VSE International Group

VSE’s International Group provides global field engineering, logistics, and program management services to the US military and other government agencies. The International Group also provides total program support for surface ships and system’s transferred to foreign countries under the U.S. Navy's Foreign Military Sales program, ship modernization, refurbishment and repair; and aircraft sustainment for all DoD services. Through its work with the US Department of Treasury, the group provides seized and forfeited material management that generates revenue for various government agencies. For more information about the International Group’s services please see our website at www.vsecorp.com or contact Spence Miller at (703) 329-4601.

About VSE

VSE is Federal Services Company of choice for solving issues of global significance with agility, integrity and value. VSE marked its 50th year as a government contractor in January 2009 and is dedicated to making our clients successful by delivering talented people and innovative solutions for program management, logistics, engineering, IT services, construction program management and consulting. For additional information on VSE services and products, please see our web site at www.vsecorp.com or contact Randy Hollstein, Corporate Vice President of Sales and Marketing, at (703) 329-3206.

VSE encourages investors and others to review the detailed reporting and disclosures contained in VSE public filings with the Securities and Exchange Commission for further information and analysis of VSE’s financial condition and results of operations. The public filings include additional discussion about the status of specific customer programs and contract awards, risks, revenue sources and funding, dependence on material customers, and management’s discussion of short and long term business challenges and opportunities.

VSE Corporation
News Contact:
Sylvia Gethicker, 703-329-4610
or
Investor Relations:
Christine Peters, 703-329-3263

Source: VSE Corporation

Released October 3, 2011