ATC to Participate in $275 Million Dollar Contract with Department of Health and Human Services

ATC Healthcare, Inc., (AMEX:AHN) a leader in medical
staffing, announced today that it was one of the two awardees of a
large Blanket Purchase Agreement (BPA) with the Department of Health
and Human Services. ATC teamed with one of the largest physician
staffing firms in the country, to provide all the required staffing
services. The contract requires nurse, allied health, and physician
staffing in select DHHS facilities. The two-year contract, which has 3
one-year renewals for a total of five years, covers facilities in 11
states and the District of Columbia. The Department of Health and
Human Services announcement "estimates, but does not guarantee, that
the annual volume of purchases under the Blanket Purchase Agreement
will be over $55 million (or $275 million over 5 years)."
   "I'm very pleased that ATC has been given the opportunity to work
with DHHS on this long term contract", said David Savitsky, CEO of ATC
Healthcare Services. "We estimate that ATC could see $10 million
dollars in sales annually. If all options of the BPA are exercised, it
could be worth as much as $18 million dollars per year to ATC over the
life of the five-year contract. We are experiencing a significant
increase in our government sales this year, having previously
announced awards of up to $16 million dollars with facilities in
Michigan, Massachusetts and New Jersey," Mr. Savitsky further said.

   About ATC Healthcare, Inc.

   ATC is a national leader in medical staffing personnel to
hospitals, nursing homes, clinics, and other health care facilities
with 51 locations and conducts business in 31 states. ATC provides
supplemental staffing, outsourcing and human resources solutions to
hospitals, nursing homes, medical and research facilities and
industry. Drawing from a pool of over 15,000 healthcare professionals
spanning more than 50 specialties, the Company supplies both clinical
and non-clinical personnel for short-term, long-term, and "traveling"
contract assignments. To learn more about the company's services,
visit their web site at www.atchealthcare.com.

   This press release contains forward-looking statements. Actual
results could differ materially from those projected in the
forward-looking statements. Additional information concerning factors
that could cause actual results to differ materially from those in the
forward-looking statements is contained in ATC Healthcare, Inc. Annual
Report on Form 10-K/A for the year ended February 28, 2005 as filed
with the Securities and Exchange Commission on July 29, 2005.