IBM Wins Financial Services Contract With U.S. Navy

Agreement Could Create Up to 300 New Virginia Jobs

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FAIRFAX, VA - 03 May 2005: IBM today announced it won a contract with the U.S. Department of the Navy to provide financial and accounting services to help streamline the Navy's financial systems. The contract, valued at $35 million the first year and with a four-year option extending to more than $100 million, was awarded to IBM's Business Consulting Services unit in Fairfax, Va. The IBM group advises the federal government on a variety of ways it can make its computer systems, business processes and personnel more efficient and cost effective.

The Navy anticipates the agreement in support of the Navy Financial Improvement Plan (FIP) will require more than one million hours of labor. IBM expects to create as many as 300 new jobs over the length of the contract. Sixty percent of those jobs will be located in the Washington, D.C. metropolitan area, at IBM's Fairlakes facility, and in Norfolk, Va. The remainder of the work will be performed primarily by IBM financial experts and subcontractors in San Diego, Ca. The first phase of the contract is expected to be finished by March 2006 and, with options, could run until 2010.

Professionals working on the new program will include experts in finance, accounting and business-process transformation. They will help the Navy develop standardized financial reporting processes, identify department deficiencies and help design new processes to assure audit compliance within five years. IBM said approximately 60-70 percent of these will be new hires to the corporation. IBM is involved in similar transformation contracts with other federal agencies, including the Department of Defense.

The announcement continues IBM's expansion in the Washington and Virginia areas. Last October, IBM announced a plan with Virginia Governor Mark Warner to create more than 1200 new jobs at IBM's facilities in Fairlakes, Virginia. The company already has filled more than 700 of those positions.

"This is a great example of government innovation at its best," Governor Warner said. "Government agencies at every level are changing the way they do business to become more efficient and effective, and I am very pleased that the Commonwealth has this opportunity to host IBM's involvement in such an important federal project."

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