REPORT TO CENTRAL FLORIDA CHAPTER

Lawrence P. Farrell, Jr.President

January 28, 2011

NDIA Proprietary/Confidential: For Internal Use Only by Staff, Directors, Chapter and Division Chairs. Not for release to third parties.

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OVERVIEW

• Aggregate NDIA Participation

• Financial Summary

• Business Centers & Affiliates

• NDIA Issues

• Summary

2010 HIGHLIGHTS

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• Excellent year for NDIA - Operating Net at All Time High- Membership at All Time High- Aggregate Participation UP- NDIA Reserves UP $8.2M, 24%- NTSA/WID/AFEI affiliates with Strong Performance

• Web Operations & Marketing- Membership growth & outreach UP--Automated - Event Success using --Tailored Social Networking- Industry – leading efforts Data-Mining- Business Intelligence--Dashboard incorporating financial data

0

10000

20000

30000

40000

50000

60000

70000

80000

GovernmentAttendees

IndustryAttendees

Exhibitors &VEOs

Total

NDIAAggregate Participation

Exhibits: Booth Equivalents

7.8%

3710 4891

‘09 ‘10

31.8% 4

FY 05 FY 06 FY 07 FY 08 FY 09 FY 010 B FY 09 FY 010 FY 011 B

Meetings 12.141 12.34 13.276 15.631 14.163 13.892 14.163 15.542 14.746762

Exhibits 7.32599999999998

8.252 6.924 7.02299999999999

8.243 8.909 8.243 9.497 9.8619

Sponsorships 0.325000000000003

0.622000000000005

1.093 1.26699999999999

1.236 1.03699999999999

1.236 1.22099999999999

1.1473

1.000

3.000

5.000

7.000

9.000

11.000

13.000

15.000

17.000

MeetingsExhibitsSponsorships

$M

MEETINGS, EXHIBITS AND SPONSORSHIP REVENUE TRENDS

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FY 05 FY 06 FY 07 FY 08 FY 09 FY 010 FY 011 B

Meetings/Exhibits/Spsrshp 19.792 21.43 21.023 23.922 23.642 26.26 25.755962

Dues 2.306 2.545 2.489 2.79 2.881 3.101 2.86643

Advertising 1.169 1.294 1.332 1.456 1.30099999999999

1.40399999999998

1.47

2.5

7.5

12.5

17.5

22.5

27.5

Meetings/Exhibits/Spsrshp

Dues

Advertising $M

PRIMARY REVENUE TRENDS

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FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 010 F

FY 011 B

-5000000

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

Baseline

Actual

% Increase

OPERATING REVENUE – BASELINE TO ACTUAL

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Baseline W Potential "Adds"

Revenue $ 30.98M $33.98M

Net to NDIA* $1.23M $1.65M

*After 401K Profit Share Distribution

FY11 OPERATING PROGRAM

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Event Potential Direct Net

Global EOD $140,000CBRN Survivability $55,000DLA $200,000Live Fire & Test $45,000Navy Energy $90,000Special Mission $60,000Unmanned Undersea $80,000SLAAD $15,000Global Maritime Info $250,000Naval S&T $300,000

$1,235,000

Potential Revenue $2.4 - $3.0M

POTENTIAL EVENTS – NOT IN BASELINE

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FY 96

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

FY 10 F

FY 11

0

5

10

15

20

25

30

35

-1

-0.5

0

0.5

1

1.5

2

2.5

3

Operating Revenue

Net to NDIA

Op

era

tin

g R

ev

en

ue

Net to NDIA

FY 010 Preliminary 11/12/010FY 011 Baseline.

FY 08 Adjustmentfor exhibits A/R

OPERATING REVENUE AND NET TO NDIA - $M

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FY 010 EXECUTION

#Events Planned Executed Add’l

Revenue Revenue Revenue

• Planned 162 $23,868,335 $25,063,064 $1,194,729

• Added 29 $1,581,236 $1,581,236

• Total 191 $23,868,335 $26,644,300 $2,775,965

Note : These are all events, large and small, all with a financial sheet.

Of the 162 Planned, 17 with a budgeted revenue of $776K did not execute. In the

Added , there were 3 new, not on the Potential list, that brought in revenue of $740K

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OPERATING & INVESTMENT RESERVES

FY 97 FY 98 FY 99 FY 00 FY 01 FY02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 100

5

10

15

20

25

30

35

40

45

9.53 9.5311.15

13.9712.25 11.63

14.5217.19

20.1322.6

26.824.27 25.2

27.67

0.9400000000000010.8600000000000010.93

1.571.59 2.78

3.51

4.85

4.4

4.5

5.687.54

8.22

13.92

Available Bank Balance

Investment Reserves

$ M

illio

ns

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NATIONAL DEFENSE MAGAZINE

• Positive reader feedback: ND content regarded as ‘timely,’ ‘relevant,’ ‘insightful’

• Increased online content. Growing web traffic. Greater presence on social networks.

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MEMBERSHIPCorporate Members – NDIA and Affiliates

0

200

400

600

800

1000

1200

1400

1600

1800

Members 844 976 1,109 1,119 1,234 1,365 1,382 1,478 1,564 1,751

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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MEMBERSHIPIndividual Members – NDIA and Affiliates

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Members 22,352 24,239 29,267 34,200 38,396 43,162 48,861 61,734 73,598 87,635

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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MEMBERSHIPGovernment Members – NDIA and Affiliates

0

5,000

10,000

15,000

20,000

25,000

30,000

Members 1,457 1,961 4,227 8,673 11,587 12,579 11,869 16,722 21,049 25,734

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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NATIONAL DEFENSE 6 Month Average BPA Qualified Readers

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Qualified Readers 21,499 23,354 24,630 27,117 29,600 31,933 33,423 34,216 35,262 36,840 38,957 43,693 50,246 55,928 58,981 65,150 67,503

Jun 2002

Dec 2002

Jun 2003

Dec 2003

Jun 2004

Dec 2004

Jun 2005

Dec 2005

Jun 2006

Dec 2006

Jun 2007

Dec 2007

Jun 2008

Dec 2008

Jun 2009

Dec 2009

Jun 2010

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NATIONAL DEFENSE Summary of Advertising Performance

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Total Revenue 775,912 1,054,514 1,209,851 1,214,004 1,308,012 1,476,253 1,547,622 1,726,703 1,526,569 1,713,798

FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

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FY00FY01

FY02FY03

FY04FY05

FY06FY07

FY08FY09

FY100

2000

4000

6000

8000

10000

12000

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16000

18000

20000

0

20000

40000

60000

80000

100000

120000

140000

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180000

200000

Exhibit At-tendanceNet Square Feet

ExhibitAttendance

Net Square FeetExhibitAttendance

Net Square Feet

FY11 228,000 Sq. Ft.

FY12 240,000 Sq. Ft.

NTSAI/ITSEC Performance - Exhibits

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ASSOCIATION FOR ENTERPRISE INFORMATION

-100

0

100

200

300

400

FY05 FY06 FY07 FY08 FY09 FY 10

AFEI Net ($K)

FY11 Conferences:• DOD Agile Development – DISA, DoD CIO• Supply Chain Cyber Risk – Industry, DoD• IT for Disaster Response – NDU, FEMA, DHS, NORTHCOM• 5th annual DoD Enterprise Architecture Conference—DoD CIO, JFCOM• Emerging Information Platforms in DoD – DoD CIO, DISA• DoD SOA and Semantic Web - BTA, DCMO

Successes:• SOA Paper for OUSD (I) - DGCS Adv. Group• Report to DCMO:Industry Perspective-IT

Acq.• Cyber Security Roundtable Meetings • Penn State Enterprise Architecture Adv. Bd.

Challenges:• Pace of Emerging Technology • Cloud, Emergent Applications, IT Acquisition • Evolving CIO Role• IT Reorganization in DoD• Executing 3 to 4 Government events• Membership Growth

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PRECISION STRIKE ASSOCIATION

PSA CHALLENGES

• Retaining individual and Corporate memberships

• Attendance Down-Big weather impact

• Sponsorships/exhibition & meeting revenue decline

• Redefining Precision Strike

PSA SUCCESSES• Successful Precision Strike Technology

Symposium (PSTS) focusing on USCENTCOM’s needs in Afghanistan.

• Well attended –(first time event) Small Unmanned Aircraft Systems

Symposium-- joint event with JHU/APL & the PEO for Unmanned Aviation and Strike Weapons

• Presented the 14th Annual William J. Perry Award to THE SNIPER ADVANCED TARGETING POD TEAM.

• Presented the 2nd Annual Richard H. Johnson Technical Achievement Award to RICHARD J. WHALEN, President and CEO, Decision Sciences

FY06 FY07 FY08 FY09 FY10-25

0

25

50

75

100

PSA Net Performance FY06 – FY10 ($K)

Taking aggressive action to stop negative trend and return to profitability

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WOMEN IN DEFENSEMembers

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2000

2500

3000

Members 389 305 603 775 921 1,097 1,405 1,514 1,971 2,913

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

WID Highlights for FY 2010• Big Membership Jump• 2 New Chapters: New England Shoreline, Hampton Roads• HORIZONS Scholarships totaled $25,000 • Donations to HORIZONS—$27,000—exceeded goal• 25th Anniversary Celebrations

OPERATIONSConference Attendance Trend

10121416182022242628303234

000's 29.4 25.5 26 25.4 33

FY06 FY 07 FY 08 FY 09 FY 10

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‘SERIES’ MEETINGS TREND

0

20

40

60

80

100

Mtgs 72 64 74 80 86

FY 07 FY 08 FY 09 FY 10FY 11 PROJ

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AEROSPACE AND DEFENSE TRADE MISSION TO THE UAE

• October 2-7

• 56 Industry Delegates

• Partnership

- NDIA

- US-UAE Bus Council

- UAE Embassy in DC

• Well-Received by All

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SPECIAL OPERATIONS FORCES INDUSTRY CONFERENCE

• New Event • Co-sponsored by

NDIA and USSOCOM • 5600 Total Attendees• 850 Exhibit Booths

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2011 LEGISLATIVE AGENDA

• Repeal/Delay 3% Withholding Tax- Effective 1/1/12- Implementation begins now- NDIA Letters to present Congressional Leadership- NDIA Letters Planned for Incoming Leadership

• Permanent re-authorization of SBIR- Present Authorization expires 1/1/11- Senate Version of Authorization Act extends for 8 Years- No conference Action expected this year- NDIA Letters Planned for Incoming Leadership

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2011 LEGISLATIVE AGENDA (contin.)

• Promote Legislation for SDVOSB Parity

• Review/Monitor House/Senate Export Control reforms

• Track/Review/Comment/ on DoD AT&L Efficiency Initiatives

• Conduct informational briefings/visits with new Congress

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• ISSUE 1: Ensure an Ethical, and Agile Acquisition System Responsive to the DoD’s Needs

• ISSUE 2: The Defense Industrial Base – Now and in the Future

• ISSUE 3: Increase Government Contract Usage of All Small Businesses

• ISSUE 4: Sustaining Military Readiness While Providing For The Future

• ISSUE 5: Support Efficient and Transparent International Access For the US Defense Industrial Base

Full text of 2011 Top Issues available at: http://www.ndia.org/Advocacy/PolicyPublicationsResources/Pages

• Need to add Cyber Security and Energy Security

TOP ISSUES FOR 2011

AD HOCCYBER ENGAGEMENT COMMITTEE

• Integral to Defense No Substitutes• Problem

- Responsibility Highly Distributed- Acquisition Unfocused

• Cyber Elements- Capitalize Existing Investment- Encourage Migration/Reuse- Robust Government-Industry Partnership- Robust Understanding of Requirements- Clear Authorities

• Solution- Supportive FAR Guidance- Clear Legislative Focus- Cohesive Acquisition Strategy

• Legislation- Police up Battlefield- Encourage Partnership- Require End-to-End Requirements- Require Best Value Acquisition

EXPORT CONTROL MODERNIZATION

Convert Existing Momentum into Implementation

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DEFENSE INDUSTRY GOING FORWARD

• 2011 Authorization/Appropriations Bills: - Uncertain outcomes with new Congress

- Anticipate CR until Mar 4 – no new starts

• DoD Acquisition Reforms/Downsizing- Potential impact of doing business with DoD

- Possibility of additional downsizing

- In-sourcing continues in the military departments

• Fewer Platforms & Major Competitions- Increased interest in sustainment and life cycle initiatives- Army, Navy, Air Force, Marines

• Earned Value Management32

DoD View of EVM and Program Management

• Earned Value Management Systems (EVMS) not always working

- OSD feedback – contractor policy, processes, and procedures are generally good, but companies not following their own Policies

- Specific contractors fail to adequately implement EVM

- Lack of progress on “fixing” EVMS deficiencies at some contractors

- Pending DFARS on Business Systems will carry significant penalties for lack of implementation of EVM

• Companies need to focus on improving EVM implementation • Strengthening of Program Management focus/training needed

Issue - Program Management ownership of EVM - EVM is a program management discipline and tool, not a financial report

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Industry Efforts to Improve the State of EVM • Acknowledged some deficiencies on industry’s part • Provided recommendations to DoD:

- Revitalized EVMS training and certification process- More focus on the Integrated Baseline Review - Stakeholder collaboration for common implementation- Recommends reciprocity-all government agencies

• Recommending collaboration in overhauling process• Continue to urge partnership w/government to improve tools/data• Implementation Improvement by some contractors has been noted,

although large problems at several contractors outweighing any positive message

Ombudsman established – However, function was moved to the PARCA organization which is not currently funded

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NDIA-Recommended Improvement Plan• Companies focus resources to:

- Emphasize Program Management Leadership- Follow own internal policies/procedures

• Continue focus on people, processes, and tools• EVMS training and certification needed at major contractors• Best Practice - EVMS process excellence should be tied into annual

performance reviews, compensation structures, and competence/career models

• Promote program management participation in NDIA PMSC• Each company should measure progress against the above

Advocacy for improved EVM implementations must stem from the highest levels of the organization

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