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Egyptian Personnel Support Services IV (EPSS IV) Contract Program Management Office Assessment of Political Situation in Egypt 20 April 2011

The EPSS IV Program Management Office understands that the current political situation in Egypt may impact the risk associated with performing EPSS IV contractual requirements. Due to political instability and security concerns, all non-emergency essential personnel supported by the EPSS III contract were evacuated from Egypt in February 2011. It is anticipated that most non-emergency personnel will return by May 2011. It is also anticipated that dependents of emergency essential and non-emergency essential personnel will return shortly thereafter.

There were no reported incidents of damage to EPSS facilities or property during or after the protests and demonstrations that occurred in the first quarter of 2011. However, curfews implemented by the Egyptian Government during this period impacted EPSS III contractor employee work schedules. Demonstrations and protests also resulted in traffic disruptions that impacted EPSS III contractor operations.

The EPSS IV Program Management Office has provided an assessment of the changing political situation in Egypt on the major EPSS IV contract cost elements listed below. This assessment should be considered for informational purposes only and may change if the political situation in Egypt improves or worsens.

American Contractor Employees Due to political instability in Egypt, the cost associated with hiring American contractor employees may increase.

Egyptian Contractor Employees Due to the reforms that may be implemented requiring higher wages or higher inflation rates, the cost associated with hiring Egyptian contractor employees may increase.

Facility Leases The political situation in Egypt has resulted in a reduction in expatriate staff for many foreign national companies. Due to lower demand in areas where facilities are leased by the contractor, the cost associated with leases may remain stable or decrease.

Parts, Supplies and Material Most items purchased by the contractor to support personnel may be purchased from the U.S. and shipped to Egypt via the Egyptian Air Force Freight Forwarder. Due to this, the cost of parts, supplies and material will remain stable.

Services Due to political instability or higher inflation rates, the cost of services purchased by the contractor in Egypt may increase.