News release

Compaq Awarded Multi-Year, Single-Source U.S. Postal Service Contract

The U.S. Postal Service has competitively awarded Compaq Computer Corporation (NYSE: CPQ) a five-year, single-source contract that requires purchases of all end-to-end industry standard Windows- and Intel-based IT solutions from Compaq. The contract contains options that could result in a total term of 10 years, and Compaq estimates the value of the base five-year contract could be approximately $1 billion.

The contract includes services, as well as Compaq and third-party products across the U.S. Postal Service's distributed computing environment.

"This is a tremendous contract award from the USPS. We believe Compaq's ability to provide a broad range of industry-standard products and services was critical to the decision, and it demonstrates that Compaq's services- and solutions-led strategy matches precisely our customers requirements to meet ever-changing business demands," said Compaq's Peter Blackmore, executive vice president of worldwide sales and services. "A contract of this magnitude validates Compaq's strategy of focusing on integrated solutions that create value for customers, rather than just providing hardware. We appreciate and value the partnership with the U.S. Postal Service."

Known as ADEPT2, the new contract is a "re-compete" of a contract first awarded to Compaq in 1994. Compaq delivered more than $1.2 billion of products and services—including over 32,000 servers, 180,000 desktops, and 50,000 notebook computers—under the ADEPT1 contract. While fulfilling the terms of ADEPT1, Compaq was awarded four USPS Quality Supplier Awards and received the USPS Postmaster General's Business Partnership Award.

Compaq will leverage its 38,000-strong Global Services division to provide best-in-class support to 42,000 USPS locations across the United States, Puerto Rico, and Guam. To support initiatives under the contract, Compaq established a proprietary toll-free telephone number for use by USPS program management. In addition, Compaq entered into a partnership with IBM Corporation to augment the products and services it offers to meet the unique requirements of the ADEPT2 procurement.

"We're honored to have been awarded this contract to ensure USPS continues to deploy open, WinTel architecture into their distributed computing environment," said Lynn Martin, Compaq Federal LLC's US Postal Service account vice president. "We look forward to extending Compaq's successful business partnership with USPS over the next 10 years."

Company Background

Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.