Savi Technology Awarded $90 Million U.S. Military Contract

WASHINGTON, DC — Feb. 10, 2003 — Savi Technology announced today that it has been awarded a three-year procurement contract by the U.S. Department of Defense valued at up to $90 million for Radio Frequency Identification (RFID) hardware, and related logistics software and services. The award enables U.S. military personnel to procure directly through Savi a wide range of proven automatic identification and data collection technologies (AIDC) and related software to track, monitor, locate, secure, process and deploy military supplies worldwide.

This is Savi's third multi-year RFID procurement contract with DoD since 1994, for a combined total contract value of $280 million. During this time, Savi has helped to build and operate and continues to extend the DoD's Total Asset Visibility (TAV) network, already the world's largest active RFID logistics tracking system, which monitors and manages 270,000 cargo containers transporting military supplies throughout 400 locations in more than 40 countries. RFID tags along with a wide variety of AIDC technologies from bar codes to satellite systems are affixed to cargo containers and other conveyances. The real-time data that these systems automatically capture is integrated into a global software network to provide immediate information on the location and status of the containers and their contents.

Savi will be responsible, in conjunction with the Army's Product Manager for Automatic Identification Technology, in responding to military proposals for real-time solutions provided by the company and through strategic alliances with market-leading automatic identification technology providers. The procurement contract calls for five types of RFID technologies: Passive, Active, Beaconing, Portal-based, and Real Time Locating Systems (RTLS). The contract calls for three years of equipment purchases and two years of training and maintenance services.

"Only Savi can integrate active and other RFID technologies providing users with technical engineering services to field a coherent integrated solution," stated the Justification and Approval document for the contract, following an 18-month evaluation of commercial providers. "Savi has developed unique software that facilitates integration and management of all types of RFID technologies. This software is based on the Universal Data Appliance Protocol (UDAP), an interface to which many RFID suppliers are building. Users will be able to manage all Savi supplied and installed products using this integrated software solution."

"Through its continued adoption of proven RFID technologies, the U.S. Department of Defense, as one of the world's largest shippers, has built a sophisticated logistics network that truly synchronizes the flow of information with the flow of goods in real time," said Vikram Verma, Savi's CEO, who has been instrumental in the company's long-time relationship with the DoD. "The Total Asset Visibility network is the physical equivalent of the Internet, and the technologies available now because of its continued expansion also provide unparalleled management and security benefits for the commercial supply chain community."

Verma also emphasized that the DoD's selection of Savi will help to drive common global standards for RFID technologies, helping to open up this market for a wider array of applications and greater marketplace adoption. Savi's RFID tags are the only active tags on the market currently compliant with the ANSI International Committee for Information Technology Standards (INCITS) 256-2001 Standard, a minimum requirement for the DoD. The Savi-developed UDAP interface also enables interoperability between all kinds of automated data collection devices and the Savi SmartChain software platform and suite of asset management and transportation security applications.

Technology that Savi developed for the U.S. DoD now is currently driving a number of commercial projects. Most importantly, both the infrastructure and 6th-generation technology developed for the TAV network are currently being leveraged for the industry-driven Smart and Secure Tradelanes (SST) initiative. Announced in July, SST is deploying RFID technologies and inter-linked software provided by Savi and its partners to improve the security and management of ocean cargo containers shipped into U.S. seaports. Partners in SST include three of the world's largest port operators - Hutchison Port Holdings, P&O Port Holdings, and PSA Corporation.

In its latest RFID procurement contract with Savi, the DoD said the real-time technologies can be used for both in-transit and asset-visibility operations, including inventory and warehouse environments, maintenance, repair and tracking facilities, in-transit and checkpoint transportation, hazardous materials handling, transactions at custody exchange points and controlling military convoys, among other applications.

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