SAN DIEGO, March 5, 2010 -- The U.S. Navy has selected Northrop Grumman Corporation (NYSE:NOC) for the development phase of the U.S. Navy's Consolidated Afloat Networks and Enterprise Services (CANES) program. CANES will streamline and update shipboard network systems to improve interoperability and affordability across the fleet.

A team led by Northrop Grumman received a $17.4 million indefinite-delivery/indefinite-quantity, cost-plus-incentive-fee, cost-plus-fixed-fee and firm-fixed-price contract, one of two CANES Common Computing Environment system development contracts awarded by the Program Executive Office C4I, Tactical Networks Program Manager (PMW-160) in San Diego on March 4.  Work under the contract is expected to be complete in April 2011.

If all options are exercised, the contract will include system production through September 2014 and be valued at $775 million.

IBM Global Business Services, Bethesda, Md., is Northrop Grumman's major technology and services partner on CANES.

The CANES program is an investment in a modernized command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) architecture that will increase security while significantly reducing development, deployment and lifecycle costs.

"As the Navy elevates information to a core warfighting capability and effects full maritime domain awareness, the foundational infrastructure must be based on a secure, reliable and interoperable network," said Linda A. Mills, corporate vice president and president of Northrop Grumman Information Systems sector. "The Northrop Grumman team is honored and 'at the ready' to take on this vital effort for information age operations."

Northrop Grumman builds more ships, in more ship classes, than any other U.S. naval shipbuilder. The company also has more than 40 years of C4ISR experience and has fielded the majority of the Navy's C4ISR applications.

"Our team's approach focuses on providing required C4ISR infrastructure capabilities at minimal total ownership cost. We designed a technically and financially superior solution by applying the Northrop Grumman-developed Modular Open Systems Approach - Competitive™ (MOSA-C (TM) ) process, an enduring, vendor- and product-neutral, model-based architecture that leverages our in-depth knowledge and domain experience across the Navy," said Michael Twyman, vice president for Integrated Command, Control, Communications and Intelligence Systems at Northrop Grumman.

Northrop Grumman's MOSA-C (TM) is a strategic business and engineering process that realizes the life-cycle benefits of open-systems architecture and commercial off- the-shelf (COTS) components and software. Applying MOSA-C (TM) , the company verified "plug and play" modularity and the ability of multiple COTS and open source products to meet CANES current and future requirements, providing a low-risk solution verified through extensive testing. Northrop Grumman also integrated a service-oriented architecture and C4ISR applications with its CANES approach, reducing the risk in deploying the next generation of C4ISR solutions for the Navy.

The Northrop Grumman-led team also includes key small-business partners Atlas Technologies, Charleston, S.C.; Beatty and Company Computing, Juno Technologies, and Syzygy Technologies, Inc., all based in San Diego; and CenterBeam, Inc., San Jose, Calif.

The CANES program office for the Northrop Grumman team will be located in San Diego.

Northrop Grumman Corporation is a leading global security company whose 120,000 employees provide innovative systems, products, and solutions in aerospace, electronics, information systems, shipbuilding and technical services to government and commercial customers worldwide.

  CONTACT: Janis Lamar
         Northrop Grumman Information Systems
         (703) 345-7046