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Rebecca Harmon
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January 25, 2001

University of Pennsylvania Health System Awards Contract for Information Technology Management Services

Outsourcing Agreement Expected to Bring Savings and Improved Service

(Philadelphia, PA) -- The University of Pennsylvania Health System (UPHS) announced the signing of a five-year agreement with First Consulting Group, Inc. (NASDAQ:FCGI) and Affiliated Computer Services (NYSE:ACS) for the provision to UPHS of specialized healthcare information technology (IT) management services. This outsourcing agreement is a continuation of the Health System's comprehensive financial-recovery plan, and is expected to save UPHS approximately $19 million in operating costs over the life of the contract.

Under the terms of the agreement, FCG and ACS (operating as a subcontractor to FCG, and providing services through its operating division, ACS Health Solutions) will operate as a team with current UPHS information services leadership to manage the Health System's information systems infrastructure and applications support. The integration of highly specialized technical and managerial skills is crucial to the success of a major academic healthcare information management organization. Outsourcing is proving to be a highly effective strategy for focusing skills, reducing information management costs, and meeting strategic goals.

"The University of Pennsylvania Health System's commitments to the information-intensive areas of patient care, medical education and research require that we constantly improve information management while reducing unit costs," said William I. Ferniany, Ph.D., Senior Vice President of Administrative and Network Services for UPHS. "Our contract with FCG will bring us an extensive range of resources and experience in developing the kind of cost-effective IT solutions that we require. By combining the strengths of FCG and ACS with UPHS, we believe we will be able to increase the value returned to our health system by our information technology investments."

"This innovative agreement marks a milestone in focusing diverse skills on a common goal in academic, not-for-profit healthcare," said Steve Heck, president of FCG. "The University of Pennsylvania Health System has designed an IT management strategy that will allow UPHS to focus on its mission and core goals while gaining improved IT performance and flexibility to meet its changing needs in a fast-evolving healthcare market. We are also pleased about our new systems infrastructure and support teaming agreement with ACS, which enables us to expand our data center and network management capabilities significantly."

Under the terms of the agreement, FCG will assume direct responsibility for managing a variety of UPHS information-technology functions, including its Help Desk, local area networks, applications support and applications upgrades. ACS will manage mainframe and midrange computer operations and wide-area networking, and will join FCG in service-level management. UPHS will retain most of the IT responsibility for its School of Medicine and telecommunications divisions, as well as its Phoenixville Hospital facility. As requested by UPHS, during the term of the contract, FCG will introduce the Carnegie-Mellon Software Engineering Institute's Capability Maturity Modeling (CMM) best practices into the UPHS IT environment. The contract was completed with the assistance of the Everest Group, a consulting firm.

In addition, approximately 179 of UPHS's current information services staff will be hired by FCG or ACS. "An important part of our negotiation has been to ensure the best possible outcome for affected employees," said Ferniany. "Indeed, a major criterion for vendor selection was that they provide our current employees with the opportunity for rehire into the outsourced positions."

"We know the University of Pennsylvania Health System to be a leader in patient care, research and medical education," said Luther Nussbaum, chief executive officer of FCG. "With this agreement, it is joining the ranks of academic health systems that have chosen innovative ways of improving IT value without losing their focus on their core mission." He added, "The basis of this contract is the shared confidence of UPHS, FCG and ACS in UPHS's ability to improve the value UPHS receives from its information technology investments, its ability to control and accurately predict costs and its ability to use service-level agreements to enhance performance."

Together, FCG and ACS bring a clear value proposition supported by more than 20,000 associates, experience in thousands of healthcare engagements, and demonstrated mastery of information technology. FCG provides consulting, integration and management services to healthcare, pharmaceutical and other life-sciences organizations in North America and Europe. The firm's services are designed to increase its clients' operational effectiveness -- resulting in reduced costs, improved customer service, and enhanced quality of patient care. More information about FCG is available at www.fcg.com or 800-345-0957.

ACS, a Fortune 1000 company comprised of nearly 20,000 people in 21 countries, provides technology solutions to commercial and government clients worldwide. The company delivers e-solutions, systems integration services, and a complete range of technology outsourcing and business process outsourcing solutions to world-class clients. More information about ACS is available at www.acs-inc.com.

The University of Pennsylvania Health System was established in 1993 as the nation's first fully-integrated health system. It comprises four wholly-owned hospitals [Hospital of the University of Pennsylvania (HUP), the nation's first teaching hospital; Pennsylvania Hospital, the nation's first hospital; Presbyterian Medical Center; and Phoenixville Hospital]; the University of Pennsylvania School of Medicine, the nation's first medical school; educationally-affiliated hospitals; multispecialty satellite facilities; a primary-care provider network; home health care; and hospice and long-term care. The University of Pennsylvania Health System is committed to continued excellence and innovation in the related areas of patient care, medical education and research. This year, HUP was ranked one of the nation's top ten "Honor Roll" hospitals by U.S. News & World Report in its annual survey of best hospitals in America; and that same publication ranked Penn's School of Medicine as third in the nation. Penn ranked second in the U.S. among all medical schools that receive research funding from the National Institutes of Health (NIH) -- which is perhaps the single most important barometer of research strength.

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