Editor's note: This story was updated at 1:10 p.m. Aug. 15, 2006, to correct that a desktop computer, not a laptop, was stolen from one of the department’s contractors, Unisys.

Veterans Affairs Secretary Jim Nicholson announced plans today for an immediate upgrade of all VA computers that will include enhanced data security encryption systems.

The agency expects to have 100 percent of its laptop computers fully encrypted within four weeks.

According to a VA announcement, the encryption upgrade comes through a $3.7 million contract that was awarded Aug. 11 to SMS, a service-disabled veteran-owned small business in Syracuse, N.Y. The encryption solution consists of GuardianEdge and Trust Digital products.

Under the award, VA laptop computers will receive the encryption programs first. Desktop computers will follow. Portable media, such as flash drives and CDs, are also included in the security encryption program, the announcement states.

Final testing of the software is under way, and implementation and training materials are being developed with the actual encryption of laptops scheduled to begin Aug. 18.

Nicholson has also called for looking into advanced enterprise encryption solutions as a follow-on to the laptop and desktop encryption program, including all VA servers and data centers.

“I have promised America’s veterans that I intend to make VA information security a model of data security, and this expedited encryption program is a major step in that direction,” Nicholson said in a statement. “A systemwide encryption program will be a tremendous step forward in improving the safety and security of sensitive veteran information.”

He gave no new information about the theft of a desktop computer from one of the department’s contractors, Unisys. The computer contained insurance claims data on about 20,000 veterans who were treated at the Pittsburgh and Philadelphia VA medical centers or their community clinics in the past four years.

The desktop was stolen Aug. 3 from Unisys’ office in Reston, Va.