United Defense Industries, Inc. (NYSE:UDI) announced recently a teaming agreement between its Southwest Marine (SWM) shipyard in San Diego, Calif., and Bath Iron Works (BIW), a subsidiary of General Dynamics (NYSE:GD), for accomplishment of the Post Shakedown Availability (PSA) work on USS CHAFEE (DDG 90).

The cost-plus-award-fee contract was recently awarded to BIW by Naval Sea Systems Command (NAVSEA). As a team member, SWM anticipates receiving a substantial share of the work under this contract. The first three-month availability, to be accomplished in Pearl Harbor, begins in May 2004. If the Navy exercises all options included in the contract, SWM could receive additional work through 2007.

Honolulu Shipyard, Inc. (HSI), partnering with SWM since 2001, is also part of the BIW "shipyard in the homeport" team. "We are very excited to have the opportunity to provide our skilled HSI workforce and to integrate the workforce of all the other ship repair contractors in Hawaii to support the BIW/SWM Team in accomplishing the USS CHAFEE PSA," commented Bill Clifford, president of Honolulu Shipyard. United Defense recently announced the expansion of its ship repair presence in Hawaii through the acquisition of HSI. When the purchase is complete, SWM-Hawaii and HSI, under the name Hawaii Shipyards, Inc., will continue to provide the Navy with enhanced capabilities and an established location in Pearl Harbor.

For the USS CHAFEE availability, SWM and HSI are providing local material support, selected production management, work crews and first-line supervision. HSI is also providing access to their local shipyard production and warehouse facilities located in Naval Station Pearl Harbor.

"I am pleased to have been selected to be on the Bath Iron Works Team and to help the Navy shift to the One Shipyard concept. This teaming arrangement among BIW, SWM, Todd, HSI and the government is a perfect example of the significant progress toward maximizing assets that can be accomplished when the public and private sectors join together. The strengths and skills of each company help reduce duplication of efforts and increase workforce flexibility. Together we can control costs more effectively and focus heavily on quality and scheduling. The changes in the way the Navy is approaching ship maintenance increase fleet readiness," said Bob Kilpatrick, SWM's president and general manager.

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 10-K for the year ended December 31, 2002 as well as its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2003, 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.