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  • Predictive Analytics for Improved Cost Management

Korean Multi-Role Helicopter Program Standardizes Bidder Proposalswith PRICE Systems: PRICE Cost Estimating Models will ensure cost consistency in multi-billion dollar military program

MT. LAUREL, New Jersey - April 21, 2004 -PRICE Systems, the world leader in Program Affordability Management solutions for the global Federal market, today announced that the Korean Multi-Role Helicopter (KMH) Program has mandated that all systems integrators and contractors bidding on the program use PRICE's suite of cost estimating tools. The KMH Program can thus ensure a common basis from which the proposals can be evaluated. Systems integrators will be required to support the cost estimates in their proposals using PRICE's Software, Hardware (development) and Hardware Lifecycle (maintenance) cost models.

The KMH Program is aimed at developing next-generation military helicopters that will replace Korean Armed Forces' current inventory of aging aircraft for the ROKG (Republic of Korea Government). The Program, with an estimated budget of 15 - 30 trillion Won (approximately US$30 - $50 billion), was initiated in 2003 and is slated for an in-service date of 2009. Several agencies within the ROKG are overseeing the KMH Program, including the Ministry of National Defense and the Agency for Defense Development, both of which are PRICE customers.

"Previous experience in using PRICE's estimating tools has shown us that we will have credible and consistent cost data we can rely on in our bidder evaluations," said General Jung Won Mo, Chief of Planning and Coordinating Office. "Our estimating development effort was reduced by more than 2/3, so the bidders can expect to gain such efficiencies as well."

Both Korean-based contractors and global systems integrators are involved in the KMH Program. It is estimated that seven systems integrators will develop proposals, which are due in June. More than 100 individual companies will support the bids using PRICE's TruePlanning Estimating tools to specify costs for hardware, electronic and other components. By July, the evaluation will narrow to three contractors for follow-on negotiations. The finalist will be announced in September.

"Our mission is to ensure that our customers can successfully evaluate, select, control and deliver complex projects," said Anthony DeMarco, president of PRICE Systems. "The use of PRICE tools in proposal development will provide the KMH Program with transparency and consistency in evaluating proposals and a consistent benchmark that can then be tracked as the program progresses. This is a great example of the principles of Program Affordability Management applied throughout the entire lifecycle."

PRICE Cost Models serve as automated cost "catalogs" - mathematical models of cost objects researched from military and civilian projects and the associated cost elements of the project components. Based on the principles of Activity-Based Management, planners work through the inputs to identify and capture critical project attributes and schedules, which are then translated to required resources, their associated costs, and milestones. TruePlanning Cost Models provide more credible and comprehensive Total Ownership Cost based on predictive calculations, rather than simply on benchmarks of current data. Completed projects using PRICE's Cost Models have been shown to be accurate to within 5% of the initial estimate.

KMH will replace aged UH-1H, 500MD, and AH-1S currently being used in operations for the purpose of reinforcing military potentials and developing domestic aerospace industries. The utility version will be used in missions for troop transport, command & control, and the Attack version for anti-tank, combat, ground suppression, and other multi-role missions. The KMH will be developed with Korean unique-configuration by incorporating advanced systems & technology including advanced avionics, integrated glass cockpit, composite bearing-less rotor system, twin engines and high-performance transmission, etc.

"Our goal is to help ensure program success for KMH. We are pleased to be able to provide the KMH Program - and its bidders - with the tools they need to ensure consistent and credible cost estimates," said Dr. Choi Kyu Meyung, president of Prigent Corporation, the Korean distributor for PRICE Systems.