CORPORATE HISTORY

Chenega Logistics; a Joint Venture LLC

Chenega Logistics (CL) is an Alaska company to be based in Sioux Falls, South Dakota.  CL is a 51% owned subsidiary of Chenega Federal Systems (CFS), a subsidiary of Chenega Corporation, an Alaska Native Corporation (ANC) formed under the laws of the Alaska Native Claims Settlement Act (ANCSA). Chenega Corporation has four  8(a) businesses with large contract sole-source capability.  Chenega has exceptional financial strength to facilitate project operations, finance large contracts, and lessen client financial risk.  Chenega revenues are around $800M.  CFS was incorporated in March 2005 and currently has revenue around $35MM. Located in northern Virginia, CFS is the newest 8(a) ANC-Owned subsidiary of the Chenega Corporation.  It is a fully cleared, professional services provider which focuses in the Defense and Intelligence business sectors of the Federal Government.  CFS bridges the gap between the operational domains and the Science, Technology and Engineering communities it supports.  It offers a broad array of capabilities ranging from intelligence collection management and analysis; linguistics, information technology and enterprise services; technology and operational test and evaluation; advanced concepts experimentation and operational transition; integrated logistics support and program management; and support to military operations.

The remaining ownership of Chenega Logistics (CL) will be held by Horizon Services Group (HSG) (49%), which is wholly owned by Horizon Lines.  Horizon Lines is the nation's leading Jones Act container shipping and logistics company, accounting for approximately 36% of the total U.S. marine container shipments between the continental U.S. and the three non-contiguous Jones Act markets of Alaska, Hawaii and Puerto Rico, and to Guam.  It is headquartered in Charlotte, North Carolina.  Horizon Lines is a publicly traded company with strong financials and revenues of $1.1B in 2005. 

CL is set up to operate as a business in several states including Alaska, Texas, Virginia and South Dakota.  The business objective of CL is to aggressively expand the CFS, State, and local government business contracts for the economic benefit of  Alaska Native shareholders and to provide professionally and financially rewarding jobs for employees.  It will also pursue commercial and non-government contracts to expand its service offering beyond the government sector.

CL will capitalize on both Parent Corporation’s knowledge and exposure to the various Department of Defense organizations, the various branches of service within the DoD, as well as other federal agencies as a springboard to utilize the contractual vehicles available through the 8(a) process.  Performance efforts will be geared to high levels of customer satisfaction through timely and comprehensive service.  CL will also leverage the long-standing and healthy relationships Horizon Lines has developed to create new business opportunities.

Initial focus will be to recruit key management personnel with proven records of success and significant experience in business areas identified above.  CL will seek and obtain projects within the expertise of management personnel, seeking to develop a mentor-protégé relationship which will complement its business area focus.  It intends to develop work in the advanced technology, operations and logistics areas.  When realized, these relationships offer opportunities to build skills and qualifications more rapidly, while subsequently maturing corporate processes and systems.  CL offers strategic partnerships with colleges and universities in the South Dakota region and beyond providing a strong and sustainable pipeline of resources.

CL’s parent companies have already teamed together on a project with the University of Alaska in Anchorage (UAA) and HSG.  The project is working with RFID technologies to provide the Defense Logistics Agency (DLA) visibility of freight moving from California to air bases in Alaska.  The project is scheduled for three phases.  The first phase had allocation of $5M.  The second phase has an allocation of $12M and should begin in the fall of 2006; it will involve pallet level tracking of the first phase and add container tracking.  The total project is in the $40M range.