Georgia Firm Awarded Canadian Government Contract

SMITH CONSULTING GROUP TO MARKET & SELL SURPLUS MILITARY EQUIPMENT

May 10, 2006

Public Works and Government Services Canada has awarded a joint venture contract to Smith Consulting Group (SCG) of Marietta, Georgia to market and sell surplus military armoured vehicles including armoured personnel carriers (APCs), on behalf of the Canadian Government. SCG will work directly with the Crown Assets Distribution Directorate (CADD) in Gatineau, Canada, and the Department of National Defence in Ottawa, Canada. The contract is for a period of four (4) years and Canada has an irrevocable option to extend the period of the Contract by up to two (2) additional one (1) year period(s) under the same terms and conditions.

The announcement of the contract award was made by Billy P. Smith, the Managing Partner of Smith Consulting Group. Mr. Smith stated that SCG was awarded the contract over two other Canadian companies that submitted bids. The Smith Consulting bid was the only firm outside of Canada that submitted a bid.

“This project has been in the making for two years. We were up against some heavy players in this business, and to say that we are very pleased to have been selected by Canada to provide this service would be an understatement,” Smith stated.

“We will market and sell highly specialized military vehicles to foreign governments around the world that are acceptable to Canada, much like a real estate agent representing an owner selling a home,” Smith said.

The contract requires SCG to market and sell approximately 500 surplus military armoured vehicles with the majority of them being the popular M113 armoured troop carrier; a tracked vehicle capable of carrying six troops. Other variants of the same vehicle include vehicle recovery units, mobile command post units and missile launchers.

In addition to the M113’s, there are approximately 50 M548 which is the cargo carrier version, 30 Cougar armoured vehicles and about 30 Husky Armored vehicles. These are also personnel carriers but are wheeled vehicles. The inventory also includes gunnery training simulators.

“This inventory of vehicles is highly specialized. The sales are limited to foreign governments acceptable to Canada. United States Department of State (DOS) approval is required because most of the vehicles were manufactured in the US,” Smith commented. “These vehicles are not for sale to the general public” he said.

Smith Consulting Group has entered into a joint venture with four other Georgia-based companies for this contract namely SECO-Augusta, GDC International Company, and J.C. de Colombia—all are privately owned U.S. companies. Not only does each company bring its expertise to the joint venture, the group collectively has more than 175 years of combined experience. Their roots run deep--having partnered several times since 1984 for similar sales of military surplus throughout Europe, Asia, Africa, and South America.

In addition to marketing and sales services, SCG can also provide the services of other members of its group outside the scope of this contract. Smith Transport and Logistics (STL) can provide inland transportation once the vehicles are sold. STL’s logistics division can arrange international shipping with the ship lines and handle all export license requirements including customs and documentation. STL specializes in provided custom dedicated ocean freight services for its clients.

Since the APCs must be sold in AS-IS-WHERE IS condition, SCG may offer total refurbishing either on site in the buying country or in a refurbishing facility in Augusta, Georgia outside the scope of this contract.

SECO of Augusta, known as the world’s largest military surplus dealer and one of the members of SCG, will offer spares and support parts in order to enhance sales opportunities. In addition, SECO is capable of fully refurbishing the vehicles to combat readiness outside the scope of this contract.

Mr. Smith commented that the global marketing and sales of APCs is a multi-layered operation that requires international resources.

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