U.S. Department of State Delivers SmartForce e-Learning to all U.S. Embassies

July 31, 2002

REDWOOD CITY, Calif.—July 30, 2002—SmartForce (Nasdaq: SMTF), the world’s largest and most experienced e-Learning company, today announced a multi-million dollar agreement to provide a SmartForce Learning solution, covering information technology topics, to the Foreign Service Institute (FSI), the training division of the U.S. Department of State. The Foreign Service Institute trains personnel in U.S. foreign affairs including diplomats, information management specialists, officers, security and medical practitioners, and support professionals for the demands of working and living abroad. The SmartForce solution was developed and implemented through FSI’s School of Applied Information Technology (SAIT). The SmartForce solution, offered in 10 languages, will be available to all 30,000 State Department personnel in over 250 countries. The program’s goal is to decrease employees’ time to competency on technology-related topics and to accelerate the agency’s IT infrastructure upgrades.

Under mandate by Secretary of State Colin Powell, the U.S. Department of State has made it a top priority to upgrade its existing IT infrastructure and to deploy a system worldwide that provides Internet and e-mail access for all employees. The SmartForce Learning solution will further this initiative by deepening the technical expertise of the organization and by increasing the number of industry-recognized certifications achieved by workers. The solution will include courses on e-mail, Internet, and IT competency so employees become more confident and comfortable using technology to communicate and share information between offices and embassies, in order to increase the effectiveness of the entire organization.

The SmartForce solution features the industry’s largest body of e-Learning content, technologies for the delivery and management of learning, collaboration tools with real-time mentoring and a learning community of more than two million users. The success of the initial roll out to the IT department led the SAIT to expand the single-source solution to 30,000 State Department personnel and to support the department’s workforce incentive program. Recognized by the government’s Chief Information Officer (CIO) website as a best practice, this incentive program rewards employees who achieve industry certifications with commensurate increases in base pay.

Additionally, SAIT is working to make training on security issues available to specialists that work overseas. To this end, the organization plans to expand its e-Learning content covering security topics and to adapt the solution as its needs and processes dictate.

“Providing easily accessible training, anytime and anywhere, increases the effectiveness of our entire organization,” said Janette Corsbie, program director for the School of Applied Information Technology’s Distance Learning Program, U.S. Department of State. “Given the current state of U.S. foreign affairs, it is essential to our national security that all personnel are competent in advanced technologies. SmartForce e-Learning ensures consistency of knowledge across the board, which in turn, enables State Department employees to work more efficiently and use technology to gather and share the most information possible.”

“The State Department has recognized a critical need in its organization to raise its employees’ knowledge and understanding of information technology and we are proud to be a part of their efforts,” said Greg Priest, chairman and CEO of SmartForce. “We are confident that our user-friendly courses will help the State Department achieve improved communication throughout its organization in an efficient and effective manner and we look forward to continuing the strong relationship that has developed thus far.”

About SmartForce

SmartForce, the world’s largest and most experienced e-Learning company, provides integrated e-Learning solutions that enable enterprises to generate concrete, significant business outcomes by more effectively distributing knowledge around the extended enterprise. With more than 2,500 corporate customers, including many of the world’s largest organizations, SmartForce e-Learning solutions bring the power of the Internet to business processes involving learning, skills development and knowledge transfer. SmartForce is quoted on the NASDAQ National Market under the symbol “SMTF.” The company, which has more than 1,500 employees worldwide, has corporate headquarters at 900 Chesapeake Drive, Redwood City, Calif., 94063. Phone: 650.817.5900. Fax: 650.817.5061. Web site: www.smartforce.com

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Anna Yen

SmartForce Investor Relations

(650) 817-5924