October 15, 2006

For the SBInet project, the Boeing/Elbit consortium proposed the radical idea of 1,800 towers equipped with cameras and motion detectors stretched across the border. For possibly the first time ever, the words Israel and border are in the same sentence and it doesn’t have anything to do with its own borders. The talent and expertise that Elbit Systems (NASDAQ ELST) has employed for years in protecting Israel’s borders will now be put to use on US borders to keep Americans safe.

Kollsman Inc., an American-based subsidiary of Elbit, has been selected as a member of the winning consortium by the Department of Homeland Security (DHS) for the Secure Border Initiative (SBI) to supply technology to identify threats, to deter and prevent crossings, and to apprehend intruders along the US borders with Canada and Mexico.

Kollsman, headquartered in Merrimack, New Hampshire, is a development, manufacturing and support organization providing advanced electro-optical and avionics systems to the commercial aerospace, military and homeland security markets. The company’s expertise includes enhanced vision systems, flight displays, head-up displays, thermal imaging systems, fire control systems, and advanced security and surveillance solutions.

The Secure Border Initiative is the latest attempt by the United States government to use technology to secure its borders, stop smuggling, and prevent illegal immigration. After September 11, illegal immigration is not just seen as a social problem, but also a national security issue. A unique aspect of this initiative was that Homeland Security gave the bidders total freedom to create new ideas of how to apply both new and old technology to secure the US borders.

The DHS awarded the SBI contract for the border security project to prime contractor Boeing over Lockheed Martin and Northrop Grumman. In addition to Boeing and Elbit, the other members of the $2 billion program are telecommunication heavy-weights Lucent, L3 Communications, Perot Systems and Unisys Global Public Sector.
Elbit was selected because of its ability to bring together global resources with decades of technological experience and capabilities securing borders in extreme cold, mountainous regions, as well as hot, desert terrains.

Kollsman’s global parent, Elbit Systems Ltd. has extensive experience with operational border control and management systems combined with command, control and situational awareness for the Israeli government. Elbit’s Long Range Reconnaissance and Observation System (LORROS) and advanced turnkey unmanned aerial vehicle systems (UAV) are some of the products and technology that will be utilized.

President and CEO of Elbit Systems of America, Tim Taylor said he was proud of being part of the winning bid and is “motivated to provide the best border protection available.”

“US citizens and the federal government are very concerned about the vulnerabilities on the porous US northern and southern borders. The strategic and technological strengths that we bring to the project will help restore the safety and security that Americans have known for so long. Detecting threats along 6,000 miles of border in the US is not the place for experimentation. The experience of our family of companies, along with the substantial credentials of Boeing as a successful prime integrator in the homeland security market enables us to make a significant contribution to protecting the United States.”

Wayne Esser, head of the SBInet project for Boeing said: “We are very happy that Elbit is part of the team because there is not one-size-fits-all solution for 6,000 miles of border. Knollsman has the engineering and manufacturing capability to provide at short notice state-of-the-art solutions that will be integrated to support this challenging effort. The result will be a program that safeguards the freedoms that are a cornerstone of our nation.”

Based in Haifa, Elbit is the largest non-governmental defense company in Israel.
“Elbit Systems through its Ortek subsidiary is a major player in homeland security in Israel and throughout the world. The electronic deterrence system is key in providing customers in Israel and around the globe with comprehensive solutions for peripheral defense,” said Joseph Ackerman, president and CEO of Elbit.

Among its projects are defense systems for Israel’s land and sea borders, peripheral security systems of air force bases, major sections of the border security fence, and Jerusalem’s detour route.

Sixty percent of Elbit’s customers are international. The UK’s Ministry of Defense awarded the Watchkeeper program to a consortium that included Elbit Systems. The WK450 air vehicle that was designed, is based on Elbit Systems Hermes 450. The Hermes 450 is a proven system with over 20,000 flying hours. In 2003, the Elbit Hermes 450 system was accepted by the US Naval Air Station Fallon Joint UAV Test and Evaluation Center in Nevada for joint interoperability trials.

Elbit’s Peripheral Coastal Security was recently deployed by a country in Asia. It is based on Elbit’s advanced night vision sensors, daylight surveillance, and laser rangefinders.

Managing director Eli Venezia said: “Our Coastal Security system is unique in its ability to provide the customer with a comprehensive solution to meet the specific needs of defense against terrorist threats.”

For the SBInet project, the Boeing/Elbit consortium proposed the radical idea of 1,800 towers equipped with cameras and motion detectors stretched across the border. The data from the cameras and motion detectors is transmitted to border patrol agents in real time with no delay.

The exact value of this contract is not known yet. The US Congress is still debating the controversial question of whether or not to construct a fence along the Mexican border. Until that decision is made, it is unclear what the total costs for the SBI net will be. If the fence is built, the costs of the fence alone will be as high as $1 billion.

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Jason Harris

Jason Harris

Executive Director