United Defense Wins System Technical Support Contract for M109A6 PALADIN, M992 FAASV and Other M109 Vehicles

Contact:
Herb Muktarian
United Defense
herb.muktarian@udlp.com
(717) 225-8004

YORK, PA, January 17, 2003 - United Defense Industries, Inc. (NYSE: UDI) has been awarded a five-year contract for M109 Family of Vehicles Systems Technical Support (STS) from the U.S. Army's Tank-Automotive and Armaments Command worth up to $30 million.

The effort will include production support, post-production sustainment, system modernization and system improvement activities for the entire M109 family of vehicles.

This contract combines work previously covered in three separate contracts into one effort led by United Defense. As the prime contractor and M109 Original Equipment Manufacturer, United Defense has teamed with Barnes & Reinecke, Inc. (BRI) of Arlington Heights, Ill., a wholly owned subsidiary of United Defense Industries, Inc., and VSE Corporation of Alexandria, Va. to provide full-spectrum support to the Army's self-propelled cannon artillery fleet.

"The team of United Defense, BRI and VSE will provide our customers with a unified approach to M109 STS, ensuring coordinated activities for addressing key issues such as obsolescence, technology insertion, systems modernization and systems improvements - across the entire fleet" said Woody Witczak, Paladin Program Manager. "The consolidation of activities into a single contract will also result in significant cost savings to the Army."

The majority of the work on the contract will be performed United Defense's York, Pa. facility, BRI's facilities in Arlington Heights, Ill. and Warren, Mich. and VSE's headquarters in Alexandria, Va.

About United Defense
United Defense is a leader in the design, development and production of combat vehicles, artillery, naval guns, missile launchers and precision munitions used by the U.S. Department of Defense and allies worldwide, and is America's largest non-nuclear ship repair, modernization and conversion company. To learn more about United Defense, visit http://www.uniteddefense.com.

Forward-Looking Statements
Information in this release may involve guidance, expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to United Defense Industries, Inc. as of the date of the release, and we assume no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Please refer to the Company's Quarterly Report on Form 10Q for the quarter ended September 30, 2002 ad in our other reports filed from time to time with the Securities and Exchange Commission for a further discussion of the factors and risks associated with our business.