CPI Aero Comments on the Department of Defense's Quadrennial Defense Review with Respect to Future C-5 Requirements

Business Wire, Feb 7, 2006

EDGEWOOD, N.Y. -- CPI Aerostructures, Inc. ("CPI Aero") (AMEX: CVU) today reported that based upon the recommendations contained in the Department Of Defense's ("DoD") 2006 Quadrennial Defense Review ("QDR") (http://www.defenselink.mil/qdr/), released on February 3, 2006, the Company looks forward to receipt of meaningful orders under its C-5 TOP (wing tips, others and panels) contract. The indefinite delivery, indefinite quantity contract, awarded to CPI Aero by the U. S. Air Force in May 2004, runs for seven years and has a potential maximum value to CPI Aero of $215 million. To date, CPI Aero has received $11.8 million in orders under this contract.

Page 54 of the 2006 QDR states, "The Air Force is upgrading its C-5 aircraft with new engines and modernized avionics to improve fleet reliability and mission capability rates." In the 'QDR Decisions' section, reference is made to the DoD's prior extensive investments in cargo transportability and strategic lift. The 2006 QDR calls for "maintaining and enhancing this capability by recapitalizing and modernizing its mobility platforms," and for the acquisition and modernization of a fleet of 292 inter-theater air lifters encompassing 180 C-17s and 112 modernized and reliability-enhanced C-5s.

Edward J. Fred, CPI Aero's President & CEO stated, "The QDR's affirmation of the government's commitment to a modernized and reliability-enhanced C-5 fleet is excellent news for CPI Aero. With our own C-5 TOP contract, plus our role as a critical subcontractor to Vought Industries, Inc. under which CPI Aero has been selected to produce 31 parts under Vought's C-5 TOP award, we have every reason to believe that we will receive substantive awards over the life of the contract. While the issues of order timing and magnitude still remain, it appears that the DoD has made cargo airlift a high priority. As we noted in a news release last week, the Air Force has the authority to place multiple orders in a single year and we are hopeful that this will be the case."

ABOUT THE QUADRENNIAL DEFENSE REVIEW

Title 10, Section 118 of the United States Code specifies: "The Secretary of Defense shall every four years, during a year following a year evenly divisible by four, conduct a comprehensive examination (to be known as a "quadrennial defense review") of the national defense strategy, force structure, force modernization plans, infrastructure, budget plan, and other elements of the defense program and policies of the United States with a view toward determining and expressing the defense strategy of the United States and establishing a defense program for the next 20 years. Each such quadrennial defense review shall be conducted in consultation with the Chairman of the Joint Chiefs of Staff." QDR legislation was amended by the 2003 National Defense Authorization Act, which stipulated that the due date for the report is "in the year following the year in which the review is conducted, but not later than the date on which the President submits the budget for the next fiscal year to Congress..."

CPI Aero is engaged in the contract production of structural aircraft parts principally for the U.S. Air Force and other branches of the armed forces. In conjunction with its assembly operations, CPI Aero provides engineering, technical and program management services. Among the key programs that CPI Aero supplies are the C-5A Galaxy cargo jet, the T-38 Talon jet trainer, the A-10 Thunderbolt attack jet, the E-3 Sentry AWACS jet and the MH-60S mine countermeasure helicopter.

The above statements include forward looking statements that involve risks and uncertainties, which are described from time to time in CPI Aero's SEC reports, including CPI Aero's Form 10-KSB for the year ended December 31, 2004 and Form 10-Q for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005.