WASHINGTON, DC -- (MARKET WIRE) -- 10/04/2006 -- The U.S. Department of Veterans Affairs (VA) has selected IBM (NYSE: IBM) to help transform its information-technology (IT) organization. The contract will support VA's goal of delivering excellence in veteran's services and customer satisfaction with IT systems that are secure. IBM will help create a more standardized, interoperable and secure IT environment that will enable the prompt and seamless delivery of services to veterans.

The project will encompass all of VA's major business units, including the Veterans Health Administration, Veterans Benefits Administration and National Cemetery Administration. The contract is valued at approximately $16M and extends through 2008.

"The reorganization of our information technology infrastructure will improve the Department's ability to provide the full range of benefits and programs to the nation's veterans," said VA Secretary R. James Nicolson. "IBM is the right partner to help us achieve this goal."

"IBM is pleased to support the Department of Veterans Affairs in fulfilling its vital mission," said John Nyland, Public Sector Managing Partner of IBM Global Business Services. "Our goal is to help the Department align its technology environment with industry IT best practices so that its already high standards of service to veterans can be surpassed."

The work with VA reflects comparable projects IBM has undertaken to help analyze and transform business and technology processes throughout the healthcare industry and within government, both in the United States and abroad. IBM is a leading provider of technology, software, research and services to the federal government. For more information about IBM, visit www.ibm.com/government.

The U.S. Department of Veterans Affairs is the second-largest Cabinet agency and operates worldwide programs for veteran's healthcare, financial benefits and burial honors. About one-quarter of the nation's population, approximately 63 million people, are potentially eligible for VA benefits and services because they are veterans or family members or survivors of veterans. For more information on the VA, visit www.va.gov.