DAOU Systems, Inc. Announces Contracts Totaling $1.6 Million To Provide Services To The Department Of Defense.

Business Editors/Health & Medical Writers

SAN DIEGO--(BW HealthWire)--July 12, 2000

DAOU Systems, Inc. (Nasdaq:DAOU) today announced $1.6 million in additional contract awards with the Department of Defense.

The awards consist of a new Military Health Services (MHS) contract, valued at approximately $633,000, for development of a Clinical Data Standardization Toolset for the Department of Defense Health Affairs office, and $1,000,000 in additional funds allocated for continued support services for the Department of Defense's Composite Health Care System (CHCS) II project.

Under the MHS clinical data standardization and quality initiative, DAOU will supply services to create the tools required to assure that health care data currently residing in the complex and dispersed legacy system databases is accurately and comprehensively mapped to a common reference set that will allow the data to be compared, cleansed, and standardized.

Under the contract, DAOU will support the standardization of data elements currently residing in clinical database images across the MHS. The work includes Task Management; Prototype Tool Development; Tool Testing within the Data Standardization Process (data extraction, data preparation and cleansing; data standardization, validation); Tool Testing within the Data Standardization Sustainment Process; and providing recommendations on new policies and procedures.

The CHCS II program is a worldwide-automated medical information system that supports over 100 Medical Treatment Facilities (MTFs) in providing comprehensive, high quality health care to uniformed service personnel, retirees, and dependents. Under the additional $1,000,000 in CHCS II funding, DAOU's Government Integration Group is providing ongoing technical expertise on the design and integration of commercial health care packages for this project.

In winning the MHS and CHCS II contracts, DAOU has teamed with Integic Corporation (formerly Universal Systems, Inc.) in Chantilly, Va., to provide the Department of Defense with an enhanced program that provides new functionality for the military health care system. Larry Albert, Senior Vice President of Integic's Healthcare Practice, stated, "We chose DAOU because of its demonstrated ability to quickly and easily integrate the CHCS program with outside health care applications. The addition of the Clinical Data Standardization Toolset to the CHCS II architecture will improve the DoD's capacity to provide health care to its personnel."

Larry Grandia, Chief Executive Officer and President of DAOU Systems, Inc., added, "DAOU looks forward to its continued support of the CHCS program, both with our proprietary software and through the type of health care consulting service that our company has provided to the Department of Defense on various projects over the past few years. Our teaming with Integic Corporation has combined the best technical IT talent with superior program direction and design. One of the features that DAOU and Integic will be delivering to the Department of Defense is a client server based system that will facilitate the gathering of health care data across all of the Military Treatment Facilities."

About DAOU Systems, Inc.

DAOU Systems, Inc. is a provider of integrated Information Technology (IT) solutions and services to the U.S. health care industry. DAOU's capabilities range from up-front strategic consulting to IT system design, implementation and long-term tactical support. DAOU's IT offerings include data, voice and video networking, applications consulting and implementation, as well as operational and Internet solutions.

DAOU has approximately 650 employees, and has provided services to more than 1,300 health care organizations, including many of the nation's top 100 integrated delivery systems. More information about DAOU Systems can be found at www.daou.com on the World Wide Web.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve numerous risks and uncertainties. DAOU Systems' actual results could differ materially from those projected in such forward-looking statements and will depend upon a number of factors, including those discussed in the Company's filings with the Securities Exchange Commission and other press releases of the Company.