Basis for Qualified Conclusion

The Statement by the CEO DMO indicates that certain base date expenditure figures have not been disclosed in Section 2.2 (Project Expenditure History), and consequently the DMO has not reported Project Expenditure History in base date dollars, as required by the Guidelines, for the following projects:

•  Airborne Early Warning and Control Aircraft

- AIR 5077 Phase 3

•  Bushmaster Protected Mobility Vehicle

- LAND 116 Phase 3

•  Next Generation SATCOM Capability

- JP 2008 Phase 4

These departures from the Guidelines constitute a basis for a qualified conclusion of my review.