Penumbra Strategies is a boutique strategy and technology firm that provides consulting services to electronics companies seeking to do business with the Department of Defense (DoD). The firm helps clients target opportunities within the DoD's Communications, Electronics, Telecommunications, and Intelligence (CET&I) budget, which accounts for 10-15% of total DoD procurement spending or around $9-14 billion annually. Penumbra Strategies has expertise in defense procurement regulations and processes, and assists clients with business development, capture strategies, and preparing proposals and other materials to win DoD contracts.

1. Company Overview
PENUMBRA STRATEGIES, INC.
UPDATED JULY 2012

2. What We Do @ Penumbra Strategies, Inc.

3. Sample
Communications, Electronics, Telecommunica
tions, and Intelligence (CET&I)
Categories under the CET&I Section of the DoD Procurement Budget…each
category contains numerous, specific programs that funding is directed toward:
Source: National Defense Budget , P-1 Schedules - DoD
The CET&I Budget runs ~10-15% of the DoD Procurement Budget….or ~$9-14B each year
As procurement climbs, so too does CET&I…
…so too does the escalating need for electro-photonic solutions in military systems (actually accelerating)

4. All Services - CET&I Procurement History Sample
- Does Not Include RDT&E (~$12B) or Defense Wide Data -
All Data (Through 2010 YTD) includes Overseas Contingency Operations (OCO) and Supplementals
[Dollars in FY 2010 Millions]
These increases reflect significant OCO and
Supplemental appropriations (Basically, ‘off
budget’, add-on requests). In particular, Army and Projected Avg. = 7.87% of Annual
USMC ballooned the numbers due to dual Procurement Budget
operations in the Iraq and Afghanistan theaters.
FY 2008
FY 2014
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2015
Source Data: National Defense Budget , P-1 Schedules - DoD

5. Army Procurement History Navy Procurement History
Communications, Electronics, Telecommunications, an Sample
Communications, Electronics, Telecommunications and
d Intelligence (CET&I) Intelligence (CET&I)
11,401.7
[Dollars in FY 2010 Millions] [Dollars in FY 2010 Millions]
2,500.0
2,300.0
2,200.0
2,200.0
2,080.9
8,175.8
2,037.2
7,948.7
1,967.4
1,954.4
1,848.0
1,853.7
7,235.4
6,731.9
6,700.0
6,100.0
6,000.0
5,800.0
4,493.1
Projected Avg. = 52% of Projected Avg. = 19% of
CET&I Budget CET&I Budget
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
USMC Procurement History Air Force Procurement History
Communications, Electronics, Telecommunications and Communications, Electronics, Telecommunications and
Intelligence (CET&I) Intelligence (CETI)
[Dollars in FY2010 Millions] [Dollars in FY 2010 Millions]
2,428.8
2,500.0
2,390.5
2,300.0
1,824.2
2,285.5
2,200.0
2,200.0
2,130.2
2,079.6
1,953.1
1,641.6
1,253.6
1,200.0
1,100.0
1,100.0
1,100.0
1,002.5
934.4
719.3
Projected Avg. = 9% of Projected Avg. = 19% of
CET&I Budget CET&I Budget
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
Source Data: National Defense Budget , P-1 Schedules - DoD

6. Sample
= Electronics-rich content areas

7. Defense Electronics Supply Chain Provisos
• What is your CONOPS? (CONcept of OPerationS)
• Do you fully understand the program, application, decision-
making processes, and program gates?
• Do you understand the realistic time frame for
pursuit/capture?
• Proactive Program Managers:
• Are dedicated business strategists; not BOM expeditors
• ‘Prepare the Ground’ for Integrated Relationships
• Control Detailed Progress Interval Reviews
• What was learned? What value can be added in LRIP?
• Are Dead Honest (Academic)
• Get the paperwork in place for continuity

8. FAR / DFARS
There are numerous FAR clauses that could be potentially cited at any given time…
• 1) Primes want to do business with suppliers that make it easy for them to do business with.
• 2) Primes look to contract by best value in competitive buys (not necessarily lowest price, but price
remains very important).
• 3) Prime's bid list(s) for subcontracted items are not easy to get on. Too many times the
procurement cycle is too short for the prime to send out Requests For Information (RFI) to
determine sources so the prime(s) use the same sources over and over.
• 4) Responses to a customer's RFP must show that the bidder understands the requirements and
customer's expectations. The response is stronger when it identifies the risks and then outlines the
way risks will be addressed and eliminated or mitigated through a management plan.
• 5) Give the government or prime customer a reason to select your company. Identify key resources
with strong resumes. Past performance is key to building confidence. Know your competition and
work to become more valuable then they are.

9. Next Generation Defense EMS
• Emphasis on Logistics…beyond assembly
• Mastery of the ‘Icing’
• Building products is simply the ‘cake’
• Covering it with the best ‘icing’ is where the ‘$’ is:
• Baseline Certifications
• CPSR (Contractor Purchasing System Review )
• MMAS (Material Management and Accounting Systems )
• Approved rates /accounting systems to deal with DCAA
• DCMA quality controls
• COMSEC
• Lean 5S Manufacturing / AS 9100 / NADCAP / CMMI
• Readiness & Sustainment
• Technology ‘Flashpoints’
• Photons vs. Electrons
• Microelectronics Assembly (IC Packaging)
• RF, Microwave, Free Space Optical (FSO)
• Integrated Battlespace Arena (IBAR)
• The Exascale

10. Who We Are
• Boutique Strategy & Technology Firm (>10 Yrs)
• National Reach w/Subject Matter Experts
• Cadre of ex-DEF Professionals
• We target the full range of Electronics Players
• …to help them
initiate, infiltrate, pursue, perfect
• …we are in it for the reputation
• We operate affordably, ethically, carefully

11. Primary Value Propositions
• Collapsing Time Curves
• Business Development, Market Research, Strategy
• Market Readiness
• Business Assessments, Client Targeting, Methods
• Pursuit and Capture Strategies
• Target: Where, How, w/What, w/Whom, by When
• Streamlining Complexities
• RFP’s, Proposals, Audit Preps, Market Overviews

12. THANK YOU
www.penstrat.com
949.374.4130
strategy@penumbra.com
www.twitter.com/penstrat