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Insitu Awaits Verdict On Federal Contract

Decision should be in March

The year 2010 should bring clarity to Insitu as the Bingen-based company waits for word on whether it will be awarded a major federal contract to build more -- and improved -- drone aircraft.

In a Dec. 17 interview, Insitu President/CEO Steve Sliwa said a decision on the "Small Tactical Unmanned Air Systems" (STUAS) contract had originally been scheduled for September, but has been delayed.

"The earliest we'll hear now is March. We're on hold for that," Sliwa said.

The contract, in short, would supply at least 200 unmanned aerial systems for use primarily by the U.S. Navy and the Marine Corps. The initial deal is reported to be for roughly $450 million.

Sliwa explained that there are four companies seeking the STUAS contract.

"We're the incumbent, and we like to think we're the front-runner -- and the aerospace press says we are," Sliwa explained. "But Boeing was the front runner on the air tanker deal, so we can't taken anything for granted. We've worked really hard and invested a lot of money and time. This has been going on for three years."

Sliwa said delays on major federal contracts are not unusual.

"The federal government is nervous about protests; nervous that the losing contractor might protest the award, as with the Boeing tanker deal, and throw the process into a mess," Sliwa pointed out.

According to Sliwa, the contract itself covers two years, but it would pave the way for the winning company to pioneer designs for the next generation of UAVs.

"If we win this contract, it ensures our future for about 10-15 years. That's why we've been so focused on this," Sliwa said.

If the contract is awarded to Insitu, it will give a green light to more hiring, as well as clear the way for a planned business campus that is expected to be built somewhere in the mid-Columbia River Gorge area.

Insitu's hiring trajectory in recent months has been phenomenal.

"By the end of last year (2008) we had 400 employees. Now we're at 719," Sliwa pointed out. "About 200 of those employees are not here, but overseas. We've been growing like gangbusters. We had 70 percent growth in revenue in 2009 -- not a bad year for a recession. And if we win STUAS, we'll add 60-100 more people."

Insitu proposes to construct a 300,000 square foot facility -- at minimum -- to allow the consolidation of its widespread operations in one place.

The possible location of an Insitu campus is the subject of much speculation -- and competition among communities. Company officials will say only that the location would be "limited to Oregon and Washington in the Gorge."

As Insitu aims to consolidate, Sliwa explained that the company's interim goal is to decrease the number of buildings it currently occupies in Bingen, White Salmon, Stevenson, and Hood River.

"We're trying to get into fewer, bigger buildings," Sliwa said. "We're in 23 different buildings now."

And if Insitu does not win the contract?

"If we don't get it, we would have to go back to the drawing board," Sliwa said. "We're really pushing hard on STUAS."

Even without the STUAS contract, the year 2009 was a good one for Insitu. Among Insitu's 2009 highlights, as recapped by Insitu spokesperson Jill Vacek, were the following:

Insitu delivered its 1,000th ScanEagle unmanned aircraft;

Launched subsidiary Insitu Pacific to serve the Asia-Pacific region;

ScanEagle assisted with many anti-piracy missions, including the rescue of a ship's captain held hostage by pirates off the coast of Somalia;

Key civilian applications of ScanEagle included using the UAS to track the progression of fires and hot spots in a 440,000-acre complex of fires, and to estimate the abundance and distribution of ice seals at the southern edge of the Bering Sea;

Bringing "daylight quality imaging" to night operations with the introduction of NightEagle;

Insitu's next generation of UAS -- Integrator -- offers "expanded payload integration, an advanced encryption standard-capable video data link, and single-channel ground-to-air radio system communications relay." Integrator is poised for introduction in 2010.

Sliwa also pointed out that Insitu prides itself on being a good "corporate citizen" that gives back to the community.

"We're always trying to find new ideas to help the community, and employees press us in certain areas," Sliwa noted. "There are a number of programs employees get involved in, and those programs are not always visible."

Initiatives that Insitu and Insitu's employees get involved in include an annual food drive. Last year, Insitu employees donated 2,000 pounds of food and $2,000 for the local Food Bank.

"We do the drive in the off-season, in the summer," Sliwa said.

Another program is the "Children's Community Christmas."

Sliwa said that this Christmas, Insitu sponsored close to 90 children, mostly grade school ages, and employees donated money for gifts for them.

"The gifts go to kids identified as likely not to have that good of a Christmas otherwise," Sliwa explained. "We ask kids what they'd ask Santa for."

Other endeavors Insitu supports include recycling programs; arts in the Columbia Gorge area; Big Brothers/Big Sisters; United Way; and the White Salmon Education Foundation.

Sliwa added that the bulk of Insitu's donations for education go to the White Salmon School District.

"Supporting schools is an important part of what we believe in," Sliwa said. "We get requests from all over, but our primary goal is to support the schools where our employees are."

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