MAXIMUS Initiates Arbitration on Subcontract with Accenture

MAXIMUS (NYSE: MMS), a leading provider of government services, announced today that it has initiated an arbitration process to resolve certain disputes under its subcontract with Accenture LLP in Texas. The subcontract is in support of Accenture’s prime contract with the Texas Health and Human Services Commission (HHSC) for the Integrated Eligibility and Enrollment Services program.

MAXIMUS’ action follows HHSC’s recent announcement of a new strategy for the program. MAXIMUS was not party to the finalization of that strategy despite the fact that MAXIMUS had been engaged in ongoing negotiations with Accenture to reduce the overall scope of MAXIMUS’ role in the project. MAXIMUS has incurred substantial losses in connection with the project and believes that the revised arrangements are not economically viable for MAXIMUS and are not in the best interests of its shareholders. At the present time, MAXIMUS continues working on the Texas project. However, MAXIMUS expects to reduce its role on the project and anticipates it will transition a portion of its work to Accenture, namely the management of the Children’s Health Insurance Program (CHIP).

The claims to be arbitrated include (i) Accenture’s attempt to misappropriate MAXIMUS’ intellectual property, (ii) Accenture’s failure to deliver required technology under the subcontract, (iii) Accenture’s unilateral negotiation of issues with HHSC having a direct effect on MAXIMUS, (iv) Accenture’s unfounded assertions that MAXIMUS had breached its obligations with respect to the CHIP operations under the subcontract, and (v) Accenture’s imposition of excessive and unsubstantiated cover costs on MAXIMUS arising out of the amendment to the subcontract entered into last spring.

MAXIMUS will aggressively pursue its rights and remedies against Accenture to resolve the current dispute. MAXIMUS cannot predict the outcome of the arbitration proceeding or the impact it may have on its operating results or financial condition. At the present time, the Company cannot provide any outlook on the impact of the Texas project or reiterate its previous guidance related to Texas, which was provided on November 15, 2006.

MAXIMUS is one of America’s leading government services companies devoted to providing program management, consulting and information technology services. The Company has more than 5,200 employees located in more than 220 offices in the United States, Canada and Australia.