Siemens announced that it has been awarded a $217.5 million fixed-price contract to provide key technologies of the Flats Sequencing Systems (FSS) contract from the Northrop Grumman Corporation (NYSE: NOC).

Northrop Grumman was contracted by the U.S. Postal Service to provide 100 FSS to further automate its flats mail stream, which includes large envelopes, catalogs and magazines.

Siemens will provide the optical character recognition and video coding systems (OCR/VCS), the tray staging device (TSD), and the sorter built to Northrop Grumman Corporation's design. Additionally, Siemens will provide extensive logistical services and support.

A pre-production version of the system will be fielded later this year. This version will be used by the U.S. Postal Service to develop system operational procedures. Installation of the first FSS production units at U.S. Postal Service facilities nationwide is expected to begin in 2008 with the remaining FSS installations scheduled for completion by 2010.

"The technical demands of this program require the combined experience of both companies' in the development of postal automation systems as well as our proven records of performance on U.S. Postal Service programs," said Lukas Loeffler, vice president, Siemens Postal Automation in the U.S. "Northrop Grumman and Siemens entered a teaming agreement for the FSS program in 2003 and it has been a successful partnership."