Tier to Provide Electronic Unemployment Insurance Claims Application System to Arkansas Department of Workforce Services; Upgraded IVR System to Increase ADWS Accessibility.

RESTON, Va. -- Tier Technologies, Inc. (Nasdaq: TIERE), a leading provider of transaction processing and packaged software and systems integration solutions for public sector clients, today announced that it has contracted with the Arkansas Department of Workforce Services (ADWS) to upgrade and enhance the existing ADWS interactive voice response (IVR) system with natural language speech recognition, and to develop a telephone unemployment insurance (UI) initial claims application.

The contract value is approximately $1.1 million, with an option for annual maintenance.

"Helping people transition back to the workforce, and providing quality services to those needing assistance are vital roles for ADWS," said ADWS Director Artee Williams. "We believe that providing another avenue of access to our services will help us in meeting these important roles, as well as increase ADWS staff productivity by enabling UI claimants to electronically enter initial claims data."

Under the current initial UI claims process, claimants must report in-person to a local ADWS field office. Claimants file claims by filling out paper forms, and ADWS staff then key in data from the form into a state intranet application. Claimants may also self-file their claims via a personal computer provided at local ADWS offices.

The upgraded Tier IVR system will allow UI claimants to electronically enter initial claim data via telephone, increasing accessibility for individuals in need of ADWS UI services. Callers will be able to speak naturally into the telephone to answer a series of questions to complete their UI claim application.

"Tier is pleased to have been ADWS' IVR vendor for the past six years," said James R. Weaver, Tier's Chairman and Chief Executive Officer. "We look forward to expanding our relationship with ADWS by providing this state-of-the-art, natural language processing IVR system upgrade, which will benefit Arkansas UI claimants through enhanced ADWS access, as well as enabling greater ADWS staff productivity and efficiency."

ADWS provides workforce services that contribute to the economic stability of Arkansas and its citizens. These services are provided to employers, the workforce and the general public and include: linking employers with qualified job applicants; helping the employed and unemployed find work or training; providing unemployment insurance benefits to those eligible; facilitating employer compliance with Arkansas Employment Security Law; collecting unemployment insurance contributions; and producing and communicating labor market information.

With over 3,000 IVR installations worldwide, including live systems in 47 of the 50 United States, Tier provides state-of-the-art communications solutions and superior customer service and support to utility providers, educational institutions, and state and local governments.

About Tier

Tier is a leading provider of transaction processing and packaged software and systems integration services for public sector clients. We combine our understanding of enterprise-wide systems with domain knowledge enabling our clients to rapidly channel emerging technologies into their operations. We focus on sectors that we believe are driven by forces that make demand for our services less discretionary and are likely to provide us with recurring long-term revenue streams. More information about the Company is available at www.Tier.com.

Statements made in this press release that are not historical facts, including statements regarding expectations for future revenues, earnings, and expenses, are forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Tier undertakes no obligation to update any such forward-looking statements.

Each of these statements is made as of the date hereof based only on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; failure to achieve anticipated gross margin levels with respect to individual projects, including due to unanticipated costs incurred in fixed-price or transaction-based projects; the timing, initiation, completion, renewal, extension or early termination of client projects; the Company's ability to realize revenues from its business development opportunities; and unanticipated claims as a result of project performance, including due to the failure of software providers or subcontractors to satisfactorily complete engagements.

For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the Company's annual report on Form 10-K for the year ended Sept. 30, 2004, our most recent quarterly report on Form 10-Q for the quarter ended June 30, 2005, as well as other filings with the SEC.