General Dynamics Corporation and Subsidiaries - Page 6

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               At the time that the F-16 was being developed, the Air Force           
          was also developing a significant variety of new weapons and                
          avionics systems, including missiles, infrared navigation and               
          targeting equipment, and advanced countermeasures.  During 1978             
          and 1979, GENDYN and the Air Force jointly developed a plan for             
          the systematic, phased integration of new technologies into the             
          F-16.  This plan was known as the Multinational Staged                      
          Improvement Program or “MSIP”.  MSIP was designed to be                     
          implemented in three stages.  The first phase involved the                  
          redesign of the aircraft's structure, wiring, and cooling systems           
          to accommodate new navigation, targeting, and other systems.  In            
          the second phase, GENDYN would introduce entirely new computers,            
          environmental control systems, pilot-vehicle interface systems,             
          and avionics systems, and would make other changes in                       
          anticipation of various new weapons and sensors which were then             
          under development.  In the final phase, GENDYN would introduce              
          the remaining new systems, as they became available.                        
               MSIP was originally authorized under the first F-16                    
          contract, the 0310 contract, and, after April 15, 1982, it was              
          continued under Contract 2038.  MSIP was made part of a separate            
          contract, primarily to delineate it from the production contracts           
          (i.e., Contract 2034) and developmental work.                               
               While the Air Force and GENDYN were planning the                       
          technological evolution of the F-16, they were also exploring               
          ways to lower the future unit costs of the aircraft so as to make           

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