Universal damage laws, improvements in analytical approaches and efficient computational stochastic models are being sought to assess the reliability and residual strength of aerospace structures having randomly distributed defects. The proposed SBIR Phase-1 effort aims at accomplishing many key aspects in the stochastic modeling of randomly distributed damage resulting from multi-site fatigue cracks, intergranular corrosion and fragments propelled from a missile exploding near an aircraft or other aerospace structure. The finite element and lattice models and simulations of a typical damaged panel will be used to gain the insight into the universal damage laws and effective material properties of these structures. During Phase I research a unified computational tool based on stochastic models will be developed for analysis of plates weakened by a large density of defects and perforations. This model will be applicable to different material behavior including brittle, ductile, strain-hardened and elastic-plastic behavior. 'Me computational model will be augmented to account for arbitrary structure geometry and dynamic (high strain) loading in SBIR Phase H effort. Successful completion of the proposed effort will result in substantial savings to the Air Force and other DoD agencies involved in the reliability assessment of load-carrying aged and damaged structural components