United Defense Awarded Contract Modifications for FCS Manned Ground Vehicle SDD Program Transition Effort

Contact:
Herb Muktarian
Ground Systems Division
herb.muktarian@baesystems.com
(717) 225-8004

SANTA CLARA, CA, June 20, 2005 - United Defense Industries, Inc. (NYSE:UDI) has been awarded contract modifications worth up to $471 million for the transition effort for Manned Ground Vehicles for the U.S. Army's Future Combat Systems.

United Defense was awarded the modifications to its previous Future Combat Systems (FCS) Manned Ground Vehicle (MGV) contracts issued in 2003 by The Boeing Company, the FCS Lead Systems Integrator (LSI) for the U.S. Army.

"United Defense, as part of the FCS One Team, is working to develop and field a family of highly deployable Manned Ground Vehicles that will be key supporting systems linked through the overarching network that will enable the FCS-equipped Units of Action to effectively complete their missions," said Raj Rajagopal, Vice President and FCS Program Director for United Defense.

These modifications augment the original FCS MGV contracts awarded in December 2003 for the development and demonstration of a family of MGVs for FCS. The current modification extends the contract period of performance from FY09 to FY12, and increases the total potential value to $2.57 billion.

The current modifications call for a transition effort intended to mitigate risk while accelerating the fielding of the Non-Line-of-Sight Cannon (NLOS-C) increment 0 vehicles and providing engineering support for the FCS Recovery and Maintenance Vehicle (FRMV). Overall program prototype quantities have been increased due to an additional quantity of Medical Vehicle (MV), Non-Line-of-Sight Mortar and FRMV prototypes. United Defense is scheduled to deliver an increment of NLOS-C prototypes by December 2008, and develop all MGV prototypes by mid-2010.

This modification calls for key technologies and selected component maturation to be accelerated to enable the FCS program to spiral out mature technologies for early deployment to the Current Force.

Under the FCS MGV contract, United Defense has responsibility for five MGV variants: NLOS-C; Infantry Carrier Vehicle (ICV); Medical Vehicle (MV); Non-Line of Sight Mortar (NLOS-M), and FRMV.

NLOS-C has been identified by the Army as critical and integral to the FCS-equipped Units of Action. The highly successful NLOS-Cannon system demonstrator has been undergoing successful live fire testing and mobility testing at Yuma Proving Ground, and recently fired its 1,000th round.

United Defense is teamed with General Dynamics to lead the MGV development effort, and has formed integrated design teams to develop and demonstrate a family of eight manned ground vehicles featuring a common platform design with common components and subsystems, with unique mission modules and all the variants linked together by networked battle command. These new vehicles are to be significantly smaller and lighter than the systems they replace and are designed to fit inside a C-130 transport aircraft.

Within the common design team, United Defense has the lead for Crew Stations, Propulsion, Armor, Survivability, Active Protection, Countermeasures, Signature Management and Defensive Armament. United Defense also leads the software architecture and development environment across all elements of MGV design.

About United Defense Industries
United Defense designs, develops and produces combat vehicles, artillery, naval guns, missile launchers and precision munitions used by the U.S. Department of Defense and allies worldwide, and provides non-nuclear ship repair, modernization and conversion to the U.S. Navy and other U.S. Government agencies. 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 Annual Report on Form 10K for the year ended December 31, 2004, and 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.