SteelCloud Intervenes to Dismiss M&A Technology Complaint Against United States Postal Service

Rejected Bidder’s Filing Deemed Frivolous; SteelCloud Deliveries and Financial Forecast Remain on Schedule

HERNDON, Va., Jan. 23 — SteelCloud, Inc., a leading engineering and manufacturing integrator of network centric and embedded computing solutions, today announced it has intervened to contest a lawsuit filed by privately-held M&A Technology, Inc. against the United States Postal Service. SteelCloud intervened with the Postal Service for dismissal of the complaint on grounds that it is frivolous.

As previously announced, on November 21, 2006, SteelCloud was awarded a contract to manufacture and deliver special purpose computer servers to the United States Postal Service. Under the terms of the contract, SteelCloud has already delivered the required initial units. No work stoppage order has been issued by the United States Postal Service.

“We are surprised by M&A’s action coming nearly two months subsequent to SteelCloud’s receipt of this contract award, after an open and rigorous competition. We believe their filing is frivolous. Despite M&A’s request, no injunctive relief has been granted. Clearly it is not unusual for losing bidders to lodge complaints. Nevertheless, based upon review of M&A’s filing and the Postal Service opposition to their filing, we believe our contract will continue as awarded. The Company’s financial forecast for fiscal 2007 remains unchanged,” said Clifton W. Sink, SteelCloud President and CEO.

A final hearing for this matter has been set for March 23, 2007