HOUSTON -- Stewart & Stevenson Services, Inc. announced that Stewart & Stevenson Tactical Vehicle Systems, LP (TVS) received two contract modifications valued at approximately $264 million. These modifications call up the remaining 1,310 option vehicles for the third program year of the current Family of Medium Tactical Vehicle (FMTV) production contract which begins on October 1, 2005. It also marks the first contract modifications funded by the 2005 Supplemental Spending Bill to the President's budget.

Dennis Dellinger, President of Stewart & Stevenson TVS, said, "This award marks the first stage of a significant increase in FMTV sales as a result of the Supplemental Spending Bill. It also reflects the importance of the FMTV and its operators to every facet of land operations and demonstrates the direct support the FMTV provides in the war on terror."

Max Lukens, Stewart & Stevenson's President and Chief Executive Officer, said, "These awards and the additional orders that may result from the recently approved Supplemental Spending Bill demonstrate the US Army's commitment to the FMTV. Its adaptability and reliability allow the FMTV to meet our customer's needs, and we are proud of the efforts of our employees in delivering this product to the US Army."

Stewart & Stevenson has produced over 27,000 FMTV vehicles since 1991 from their state-of-the-art facility in Sealy, Texas. The FMTV, which includes 2.5-Ton, 5-Ton and 10 Ton trucks in more than 15 active variants, has become the platform of choice for the U.S. Army. In April 2005, Stewart & Stevenson widened their military product range to include the 4x4 and 6x6 Pinzgauer all- terrain vehicle. Stewart & Stevenson continues to deliver its Low Signature Armored Cabs which are protecting the soldier in the field of battle.

Stewart & Stevenso
14.06.2005