The FBI modernization effort involved a massive technological and cultural change, agency wide,” said Duane Andrews, SAIC chief operating officer. “Unfortunately, implementing this change on the Trilogy contract has been difficult to do without impacts to cost and schedule. To add to that complexity, in the time that SAIC has been working on the Trilogy project the FBI has had four different CIOs and fourteen different managers. Establishing and setting system requirements in this environment has been incredibly challenging.”

SAIC and the FBI worked together on the Virtual Case File (VCF) project as a part of the Trilogy program which started on June 5, 2001. The VCF was originally intended to support the FBI's criminal case management. Since 9-11 the mission of the FBI changed significantly from a focus on criminal investigation and prosecution to one that includes terrorism investigation and prevention. This change in focus drove changes in the VCF requirements. Those changes and other factors contributed to increases in cost and schedule on the contract.

Last year, as recommended by the May 2004 National Research Council report, the FBI changed their deployment strategy for VCF from a “flash cutover” (everything at once) delivery to a less risky incremental phase-in for VCF functions. The VCF Initial Operating Capability (IOC) is the first increment of functionality.

The FBI accepted the IOC software in December 2004, delivered by SAIC ahead of schedule and under budget according to re-negotiated terms. The IOC concept, while representing a relatively small portion of the total system functionality, was envisioned to form the basis for future evolutionary development and deployment allowing the system's functionality to grow in conjunction with the Bureau's changing mission requirements. Other features of the full VCF system have been designed and coded, and are available for deployment testing and integration.

It is SAIC's understanding that the government has embarked on a new initiative called Federal Investigative Case Management System (FICMS). FICMS is being described as a framework that will guide development of future case management systems allowing improved inter-agency information sharing. This framework as well as other requirements changes, have lead the FBI to consider a COTS/GOTS-based solution to satisfy their VCF requirements. This is another example of the evolving scope and changing requirements associated with the VCF project.

“All parties involved have made mistakes in the way the Trilogy program was handled in the past,” said Andrews. “SAIC hopes to move beyond this and continue a mutually beneficial relationship with the FBI that has had many successes over a 25-year period and delivering IOC is a positive step in that direction.”

SAIC is the largest employee-owned research and engineering company in the United States, providing information technology, systems integration and eSolutions to commercial and government customers. From science to solutions, SAIC engineers and scientists work to solve complex technical problems in national and homeland security, energy, the environment, space, telecommunications, health care and logistics. More information about SAIC can be found at www.saic.com.

Statements in this announcement other than historical data and information constitute forward-looking statements that involve risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be very different from the results, performance or achievements expressed or implied by such forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in the Company's Annual Report on Form 10-K for the period ended January 31, 2004, and such other filings that the Company makes with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

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