Docstoc

NCI, S-1/A Filing

Document Sample
NCI,  S-1/A Filing Powered By Docstoc
					Table of Contents

                                    As filed with the Securities and Exchange Commission on September 2, 2005
                                                                                                                                        Registration No. 333-127006


                           SECURITIES AND EXCHANGE COMMISSION
                                                                   WAS HINGTON, DC 20549




                                                   AMENDMENT NO. 1
                                                         TO
                                                      FORM S-1
                                               REGISTRATION STATEMENT
                                                                          Under the
                                                                     Securities Act of 1933




                                                                     NCI, INC.
                                                           (Exact Name of Registrant as Specified in its Charter)

                     Delaware                                                       7373                                                 20-3211574
             (State or Other Jurisdiction of                            (Primary Standard Industrial                                    (I.R.S. Employer
            Incorporation or Organization)                               Classification Code Number)                                 Identification Number)

                                                                   11730 Plaza America Dri ve
                                                                     Reston, Virginia 20190
                                                                         (703) 707-6900
                           (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant‘s Principal Executive Offices)




                                                               Charles K. Narang
                                                   CHAIRMAN AND CHIEF EX ECUTIV E OFFICER
                                                                    NCI, Inc.
                                                           11730 Plaza America Dri ve
                                                             Reston, Virginia 20190
                                                                 (703) 707-6900
                                  (Name, Address Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)




                                                                               Copies to:

                          Craig E. Chason, Es q.                                                                  R.W. S mith, Jr., Es q.
                        John M. McDonal d, Es q.                                                                 Jason C. Harmon, Es q.
                Pillsbury Winthrop Shaw Pittman LLP                                                      DLA Pi per Rudnick Gray Cary US LLP
                         1650 Tysons Boulevard                                                                     6225 Smith Avenue
                        McLean, Virginia 22102                                                                Balti more, Maryland 21209
                             (703) 770-7900                                                                          (410) 580-3000




     Approxi mate date of commencement of proposed sale to the public:                         As soon as practicable after the effective date of this
registration statement.
    If any of the securities being registered on this form are to be offered o n a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following bo x. 

    If this form is filed to reg ister additional securities for an offering pursuant to Rule 462(b) under the Securit ies Act, che ck the following
box and list the Securit ies Act registration statement number of the earlier effective reg istration statement for the same offering. 

    If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following bo x and list the
Securities Act registration statement number of the earlier effect ive registration statement for the same o ffering. 

    If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securit ies Act, check the fo llowing bo x and list the
Securities Act registration statement number of the earlier effect ive registration statement for the same o ffering. 

    If delivery of the prospectus is expected to be made pursuant to Rule 434, check the fo llo wing bo x.     




                                                  CALCULATION OF REGIS TRATION FEE

                                                                                Proposed Maximum        Proposed Maximum
            Title of Each Class of                         Amount to be          Offering Price Per     Aggregate Offering               Amount of
          Securities to be Registered                      Registered (1)            Share (2)               Price (2)               Registration Fee (3)
Class A Common Stock, par value $0.019 per
  share                                                        5,922,500        $           12.00       $      71,070,000        $                   8,365


(1) Includes a maximu m 772,500 shares that may be purchased by the Underwriters to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the amount of registration fee, pursuant to Rule 457(a) under the Securities Act of 1933.
(3) A fee of $8,828 was previously paid to the Securities and Exchange Co mmission in connection with the initial filing of this Registration
    Statement on July 29, 2005.

     The Registrant hereby amends this Registrati on Statement on such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which specifically states that this Registrati on Statement shall thereafter become
effecti ve in accordance wi th Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effecti ve on such
date as the Commission, acting pursuant to such Section 8(a), may determine.
Table of Contents

The information in this prospectus i s not complete and may be changed. Neither we nor the selling stockholders may
sell these securitie s until the registration statement filed with the Securities and Exchange Commissi on i s effective. Thi s
prospectus i s not an offer to sell these securitie s and it is not soliciting an offer to buy the se securities in any state
where the offer or sale is not permitted.

                                      SUBJ ECT TO COMPLETION, DATED S EPTEMB ER 2, 2005

                                                            5,150,000 Shares




                                                              NCI, INC.
                                                       Class A Common Stock
      This is our init ial public offering. Of the 5,150,000 shares of Class A common stock being offered, 4,800,000 shares are bein g sold by us
and 350,000 shares are being sold by the selling stockholders. We have granted the underwriters an option t o purchase up to 772,500 addit ional
shares of Class A common stock to cover over-allot ments. We will not receive any proceeds from the sale of the shares of Class A common
stock by the selling stockholders.

      Prior to this offering, there has been no public market for our Class A common stock. It is currently estimated that the init ial pu blic
offering price per share will be between $10.00 and $12.00. We have applied to list the Class A common stock on The Nasd aq National Market
under the symbol ―NCIT.‖

       Investing in our Class A common stock involves risks. See ― Risk Factors ‖ beginning on page 9.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representati on to the contrary is a cri minal offense .


                                                                                      Per
                                                                                     share                                Total
 Public o ffering price                                                          $                     $
 Underwrit ing discount and commissions                                          $                     $
 Proceeds to us (before expenses)                                                $                     $
 Proceeds to selling stockholders (before expenses) (1)                          $                     $


(1) We have agreed to reimburse the selling stockholders for their underwriting discount and commissions.

      The underwriters expect to deliver the shares of Class A common stock to purchasers on or about              , 2005.


Legg Mason Wood Walker                                                                                           Raymond James
                    Incorporated




Robert W. Baird & Co.                                                                                                  Stephens Inc.
                                                The date of this prospectus is           , 2005.
Table of Contents

                                                              TAB LE OF CONTENTS

                                                                                                                                                   Page

Prospectus Summary                                                                                                                                    1
Risk Factors                                                                                                                                          9
Forward-Looking Statements                                                                                                                           19
Use of Proceeds                                                                                                                                      20
Div idend Policy                                                                                                                                     20
S Corporation Status                                                                                                                                 21
Capitalization                                                                                                                                       22
Dilution                                                                                                                                             23
Selected Consolidated Financial Data                                                                                                                 24
Management’s Discussion and Analysis of Financial Condit ion and Results of Operations                                                               26
Business                                                                                                                                             41
Management                                                                                                                                           55
Principal and Selling Stockholders                                                                                                                   62
Related Party Transactions                                                                                                                           63
Description of Capital Stock                                                                                                                         64
Shares Elig ible for Future Sale                                                                                                                     68
Underwrit ing                                                                                                                                        70
Legal Matters                                                                                                                                        72
Experts                                                                                                                                              72
Where You Can Find More In formation                                                                                                                 73
Index to Financial Statements                                                                                                                       F-1

       You should rely only on the info rmation contained in this prospectus. We have not authorized anyone to provide you with info r mat ion
that is different fro m that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our Class A common stock
only in ju risdictions where offers and sales are permitted. The in formation in this prospectus is complete and accurate only as of the date on the
front cover regardless of the time of delivery of this prospectus or of any sale of shares. Except where the context requires otherwise, in this
prospectus the ―Company,‖ ―NCI,‖ ―we,‖ ―us‖ and ―our‖ refer to NCI, Inc., a Delaware corporation, and, where appropriate, its subsidiaries.

      We have not undertaken any efforts to qualify this offering for offers to individual investors in any jurisdiction outside the U.S. Individual
investors located outside the U.S. should not expect to be elig ible to participate in this offering.

      Until                , 2005, 25 days after the date of this offering, all dealers that effect transactions in our shares, whether or not
participating in th is offering, may be required to deliver a prospectus. This is in addition to the dealers ’ obligation to deliver a p rospectus when
acting as underwriters and with respect to their unsold allotments or subscriptions.

                                                                           i
Table of Contents

                                                           PROSPECTUS S UMMARY

     This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the informat ion that
you should consider before making your investment decision. We urge you to read this entire prospect us carefully, including the “Risk
Factors” section and our consolidated financial statements and the notes to those statements. See “—Relevant Industry Terms” for a more
complete definition of industry terms used in this prospectus.

                                                                     NCI, Inc.

      We are a lead ing provider of information technology services and solutions to U.S. federal government agencies. We focus on d esigning,
implementing, maintaining and upgrading secure information technology (IT) systems and networks by leveraging our skills across four core
service offerings: network engineering; information assurance; systems development and integration; and enterprise systems ma nagement. A
majority of our revenue is derived fro m the delivery of mission -critical IT services to defense and intelligence agencies. We believe our
diversified and stable client base, strong client relat ionships, broad array of contracts and significant management and oper ational capabilit ies
position us to continue our growth.

       We have a diversified and stable client base with appro ximately t wo-thirds of our revenue derived fro m engagements with defense and
intelligence agencies, including the U.S. Army, U.S. A ir Force, Defense Logistics Agency and key members of the intelligence community.
These agencies, with their focus on network-centric warfare and informat ion superiority, currently have, and are expected to continue to have,
significant funding for t ransformat ion through informat ion technology initiatives. In addition, appro ximately one -third of our revenue is
derived fro m engagements with federal civilian agencies that are also focused on enhancing their mission -critical IT systems. We believe our
broad client base will enable us to expand our business, regardless of shifts in federal government spending priorities.

       Since our founding in 1989, we have focused on building long -term client relat ionships. We have provided IT services and solutions to
clients with in the U.S. Army , U.S. Air Force, Depart ment of Energy (DOE), Nat ional Aeronautics and Space Administ ration (NASA) and
intelligence co mmunity for more than ten years. In addition, over the past three years, we won more than 90% of the competit ively awarded
prime engagements on which we were the incumbent and elig ible for award. We believe our strong relat ionships result from our in -depth
understanding of client missions, the strength of our technical solutions and the co -location of a majo rity of our employees with our clients.

      We have a broad array of contracts that consisted of approximately 80 contracts and 155 task orders as of June 30, 2005. Ou r largest
engagement, representing approximately 8.0% of revenue for the six months ended June 30, 2005, is not scheduled for reco mpetition until
2011. Our contract base includes mult iple govern ment wide acquis ition contracts, or GWA Cs, such as: the U.S. Army Informat ion Technology
Enterprise Solutions (ITES) contract with a ceiling of $500 million over seven years; the U.S. A ir Force Network-Centric So lutions
(NETCENTS) contract with a ceiling of $9 billion over five years; and the Department of Co mmerce Information Technology Solutions —Next
Generation Program (COMMITS NexGen) contract with a ceiling of $8 b illion over ten years. As a prime contractor on each of th ese contract
vehicles, we are co mpeting with a discrete number of other pre-qualified co mpanies for several hundred million dollars of additional business
each year.

      We have made significant investments in our management, emp loyees and infrastructure in support of our growth and profitability
strategies. Our senior managers average more than 25 years of experience with federal govern ment agencies, the U.S. military and fede ral
government contractors. In addition, our President and our Chief Operat ing Officer each has more than 18 years of public co mp any experience
in the federal IT services

                                                                         1
Table of Contents

sector. We have assembled a highly skilled work force of appro ximately 1,450 emp loyees, of who m 68% possess at least one secu rity
clearance. We have also invested in internally developed business management software tools and expanded facilit ies, including mu ltip le
Sensitive Co mpart mented Informat ion Facilities (SCIFs), wh ich are govern ment certified facilities that allow us to pursue hig hly classified
activities.

      For the six months ended June 30, 2005, our revenue was $93.9 million and our net income was $4.7 million, representing organic growth
of 15.6% and 77.6%, respectively, over the same period in 2004. Since 2001, our revenue, including the effect of an acquisition, has grown to
$171.3 million in 2004, representing a compound annual growth rate of 12.9%. Over the same period, our net income decreased 4.0%, fro m
$6.4 million in 2001 to $6.1 million in 2004. As of June 30, 2005, our total estimated contract backlog was $525 million.

                                                               Market Opportuni ty

      The federal govern ment is among the largest consumers of in formation technology services and solutions in the world. According to
INPUT, an independent federal government market research firm, the overall market fo r contracted IT systems and services by t he federal
government is expected to grow fro m $59.2 billion in federal fiscal year 2005 to $78.8 billion in federal fiscal year 2010. In add ition, recent
defense budgets are significantly higher than in prior years, particu larly in areas related to IT, intelligence, surveillance , reconnaissance and
homeland security. We believe that over the next several years there will be significant market opportunities for providers of IT serv ices and
solutions to federal government agencies, particularly those in the defense and intelligence community, primarily due to t he following trends:

      •    Focus on Federal Government Transformation . The federal government, and the Depart ment of Defense (DoD) in particu lar, is in
           the midst of a significant transformation that is primarily driven by the federal govern ment ’s need to address the changing nature of
           global threats. A significant aspect of this transformation is the use of information technology to increase the federal gove rn ment’s
           effectiveness and efficiency.

      •    Increased Reliance on Professional Services Providers . Federal govern ment agencies have increased their reliance on professional
           services providers primarily due to increased demand for mo re innovative technical solutions and a declining federal governme nt IT
           workforce.

      •    Evolving Procurement Practices . Federal govern ment procurement policies continue to evolve and are currently shaped by a focus
           on best value awards and an increased use of mult iple award contracts.

                                                              Competiti ve Strengths

     We believe we are well positioned to meet the rapidly evolving needs of federal government agencies for IT services and solutions
because we possess the following key business strengths:

      •    In-Depth Understanding of Client Missions . Through our long-term client relationships, as well as the co-location of a majo rity of
           our emp loyees at client sites, we have developed an in-depth understanding of our clients ’ missions that enables us to create new
           technical solutions and high-value service offerings in anticipation of clients ’ future critical requirements.

      •    Proven Ability to Win Business . We have a proven ability to win business, as evidenced by our success in 2004 when we were
           awarded task orders and single award contracts with a total value in excess of $300 million.

      •    Diverse Base of Key Prime Contract Vehicles . We are a prime contractor on numerous mult i-year GWACs that provide us the
           opportunity to bid on hundreds of millions of dollars of business against a discrete number of other pre-qualified co mpanies each
           year.

                                                                          2
Table of Contents

      •    Highly Skilled Employees with Security Clearances . As of June 30, 2005, we had approximately 1,450 emp loyees, 71% o f whom
           had formal degrees and 68% of who m held at least one federal government security clearance.

      •    Experienced Management Team . Our senior managers average more than 25 years of experience with federal government
           agencies, the U.S. military and federal government contractors.

                                                                     Strategy

     Our objective is to grow our business as a leading provider of informat ion technology serv ices and solutions to federal government
agencies while improving our profitability. To achieve our objective, we intend to:

      •    Accelerate Internal Growth . We plan to accelerate our internal growth by:

           Capitalizing on our current contract base. We intend to aggressively pursue task orders under our existing prime GWA Cs which
           have an aggregate ceiling in excess of $20 billion. We have developed several internal tools that facilitate our ability to t rack,
           prioritize and win task orders under these vehicles.

           Expanding the services we provide to our existing clients. We believe our understanding of client missions, processes and needs, in
           conjunction with our full lifecycle IT offerings and our strong performance record, positions us to capture new work fro m existing
           clients.

           Expanding our client base. We plan to expand our client base into areas with significant growth potential by leveraging our
           reputation, long-term client relationships with federal government agencies and diverse contract base, including our GWA C vehicles.

           Offering new complementary services. We intend to leverage our strong reputation for providing IT services to offer new
           complementary services to our existing clients. We expect to focus on high value-added services that are closely aligned with our
           current offerings.

      •    Improve Operating Margins . We believe that we have a significant opportunity to improve our profitability by:

           Capitalizing on our corporate infrastructure investments . We have made significant investments in our senior management an d
           corporate infrastructure. As our revenue grows, we expect to leverage this infrastructure base and increase our operating margin s.

           Capitalizing on our internally developed tools . We have developed a variety of web-based business development and project
           management tools. We believe these highly scaleable tools will enable us to increase operating efficiency as our revenue base grows.

           Concentrating on our high value-added prime contracts . We expect to improve our operating marg ins as we continue to increase the
           percentage of revenue we derive fro m our work as a prime contractor and fro m engagements where contracts are awarded on a be st
           value, rather than on a low cost, basis.

      •    Pursue Strategic Acquisitions . We intend to augment our organic growth by identifying, acquiring and integrating strategic
           acquisitions that complement and broaden our existing client base and expand our primary service offerings. Our successful
           acquisition of Scientific & Eng ineering So lutions, Inc. (SES) in December 2003 demonstrated our ability to comp lete and integ rate
           an acquisition that meets our goals.

                                                                         3
Table of Contents

                                                              Challenges We Face

      We face a number of risks associated with our business and industry and must overcome a variety of challenges in order to be successful.
For examp le:

      •    We depend on contracts with the federal government fo r substantially all of our revenue. If our relationships with federal
           government agencies are harmed, our revenue and operating profits would decline.

      •    We face intense competition fro m many co mpetitors that have greater resources than we do, which could result in price reducti ons,
           reduced profitability and loss of market share.

      •    We expect to lose our eligib ility to participate in the federal government’s small business programs which may affect our abilit y to
           win contracts and grow revenue.

      •    We cannot guarantee that our estimated contract backlog will result in actual revenue.

      •    If we fail to attract and retain skilled employees or employees with the necessary security clearances, we might not be able to
           perform under our contracts or win new business.

      •    Our revenue and operating profits could be adversely affected by significant changes in the contracting or fiscal policies of the
           federal govern ment.

      •    Our federal govern ment contracts may be terminated by the federal govern ment at any time, and if we do not replace them, our
           revenue and operating profits may be adversely affected.

     For further d iscussion of these and other risks you should consider before making an investment in our Class A common stock, see ―Risk
Factors‖ beginning on page 9.

                                                           Relevant Industry Terms

       We generally perform our services for federal government agencies pursuant to both contracts and task orders. A contract may include
specific wo rk requirements for a particular job that is to be performed or may instead provide a framework that defines the scope and terms
under which work may be performed in the future, in which case any task orders that may be issued from t ime to time under the contract set
forth the specific work assignments that are to be performed under the contract. In this prospectus, references to any contract includes the task
orders, if any, issued under that contract. Accordingly, informat ion in this prospectus regarding our revenue under governmen t contracts
includes revenue we receive under both contracts and task orders. We perform services as a prime contractor under those contracts and task
orders that are awarded to us directly by the federal government. We also perform services for the federal govern ment as a subcontractor to
other companies that are awarded prime contracts. References in this prospectus regarding our engagements mean specific work that we have
contracted to perform as a prime contractor or subcontractor pursuant to both contracts and task orders for a particular clie nt.

      Some of our contracts are multiple award contracts . Multiple award contracts are vehicles pursuant to which the federal government
may purchase goods or services from several d ifferent pre-qualified contractors. Such contracts include government-wide acquisition contracts
(GWACs), blanket purchase agreements (BPAs) and other Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts. GWACs are task-order or
delivery-order contracts for goods and services established by one agency for government -wide use. BPAs are a simp lified met hod of filling
repetitive needs or services by establishing ―charge accounts‖ with qualified suppliers and eliminating the need for issuing individual purchase,
invoice and payment documents. Finally, ID/IQs are contracts for goods or services which do not specify a fir m quantity and that provide for
issuance of orders for the performance of tasks during the contract period. Multiple award contracts typically have a ceiling , which is the
maximu m amount the government is authorized to spend under the contract over the li fe of the contract. While the government is permitted to
spend up to the ceiling amount, there is no guarantee that it will do so or that any particular pre -qualified contractor will receive awards under
the vehicle.

                                                                         4
Table of Contents

      Federal govern ment contracts for our services include three types of pricing: time -and-materials, cost-plus and fixed-price.
Time-and-material contracts are contracts which are reimbursed for labor at fixed hourly rates and generally reimbursed separately for
allo wable materials, other direct costs and out-of-pocket expenses. Cost-plus contracts are contracts which are reimbursed for costs that are
determined to be allo wable and allocable to the contract and receive a fee, wh ich represents our profit. Cost-plus fixed fee contracts specify the
contract fee in dollars. Cost-plus incentive fee and cost-plus award fee contracts provide for increases or decreases in the contract fee, within
specified limits, based upon actual results as compared to contractual targets for factors such as cost, quality, schedule and performance.
Fixed-price contracts are contracts under which we perform specific tasks for a predetermined price. We have three basic categories
fixed-price contracts: fixed unit price; fixed-p rice level-of-effort; and fixed-p rice co mp letion contracts. Fixed unit price is where we receive a
fixed price per unit of work delivered, and the unit price is not subject to adjustment. Fixed-price level-of-effort requires the contractor to
provide a specified level of effort over a stated period of time, on work that can only be stated in general terms, and the g overnment is to pay a
stated fixed amount. Fixed-price completion provides a set price for specific performance that is not subject to any adjustment on the basis on
the contractor’s actual cost experience in performing the contract. The majority of our work under fixed -price contracts is fixed -price
level-of-effort work.

       We define backlog as our estimate of the remaining future revenue fro m existing signed contracts over the remaining base contract
performance period and fro m the option periods of those contracts, assuming the exercise of all related options. Our backlog does not include
any estimate of future potential delivery orders that might be awarded under our GWA C or other mu ltip le award contract vehicle s. We define
funded backlog as the portion of backlog for which funding currently is appropriated and obligated to us under a contract or other authoriza tion
for pay ment signed by an authorized purchasing agency, less the amount of revenue we have previously recognized. Our funded b acklog does
not represent the full potential value of our contracts, as Congress often appropriates funds for a particular program or age ncy on a quarterly or
yearly basis, even though the contract may provide for the provision of services over a number of years. We define unfunded b acklog as the
total backlog less the funded backlog. Un funded backlog includes values for contract options that have been priced but not ye t funded.




      We were incorporated in Delaware on July 27, 2005, to hold all of the capital stock of NCI Informat ion Systems, Inc., which was
incorporated in Virg inia in 1989. Our principal executive offices are located at 11730 Plaza A merica Drive, Reston, Virg inia 20190. Our
telephone number at that address is (703) 707-6900. Our website address is www.nciinc.com . We do not intend the information on our website
to constitute part of this prospectus.

                                                                          5
Table of Contents



                                                                    The Offering

Class A common stock offered by us                                         4,800,000 shares
Class A common stock offered by the selling stockholders

                                                                               350,000 shares
Co mmon stock to be outstanding immediately after th is
  offering:
          Class A common stock                                             5,628,947 shares
          Class B common stock                                             6,300,000 shares

              Total                                                       11,928,947 shares
Use of proceeds                                                    We expect to use the net proceeds fro m this offering to repay certain
                                                                   indebtedness and for working capital and general corporate purposes, including
                                                                   potential acquisitions. We will not receive any of the proceeds from the sale of
                                                                   shares by the selling stockholders. See ―Use of Proceeds.‖
Over-allot ment option                                             We have granted the underwriters an option to purchase up to an additional
                                                                   772,500 shares of Class A common stock solely to cover over-allot ments.
Proposed Nasdaq symbol                                             NCIT

     The informat ion contained in this prospectus is based on shares outstanding as of September 2, 2005 and unless we specifically state
otherwise:

      •     is based on the assumption that the underwriters will not exercise their over-allot ment option;

      •     assumes that the initial public offering price will be $11.00, the midpoint of the expected price range;

      •     gives effect to certain transactions completed prior to the offering, including a share exchange, merger, 1 -for-1.9 reverse split o f our
            common stock and revocation of our S corporation status;

      •     excludes 1,719,737 shares of common stock subject to issuance upon the exercise of options we have granted under our 2005
            Performance Incentive Plan at a weighted average exercise price of $ 3.40 per share; and

      •     excludes 1,438,158 shares of common stock reserved for issuance under our 2005 Performanc e Incentive Plan, plus annual increases
            in the number o f shares that will be reserved for issuance under our 2005 Performance Incentive Plan.




                                                                           6
Table of Contents

                                                                 Summary Consoli dated Financi al Data

      The tables below set forth our summary consolidated financial data for the years ended December 31, 2002, 2003 and 2004 and f or the
six months ended June 30, 2004 and 2005. Prospective investors should read this summary consolidated financial data in conju nction with
―Selected Consolidated Financial Data,‖ ―Management’s Discussion and Analysis of Financial Condition and Results of Operations ‖ and our
consolidated financial statements and the related notes included elsewhere in this prospectus.

                                                                                  Year ended December 31,                                      Six months ended June 30,

                                                                          2002                2003                 2004                    2004                          2005

                                                                                           (audited)                                                  (unaudited)
                                                                                                        (in thousands, except per share data)
Statement of Operati ons Data:
Revenue                                                              $ 138,165            $ 136,421           $ 171,253             $            81,227           $          93,875
Operating costs and expenses:
    Cost of revenue                                                      115,728              113,521              144,146                       68,229                      79,671
    General and administrative expenses                                   12,166               14,524               16,363                        8,037                       7,239
    Depreciat ion and amort ization                                        1,600                1,576                1,741                          886                         801
    Amort izat ion of intangible assets                                       20                   16                1,252                          616                         539

Total operating costs and expenses                                       129,514              129,637              163,502                       77,768                      88,250

Operating inco me                                                           8,651                6,784                7,751                        3,459                        5,625

Interest income                                                                 21                  15                   26                            6                           26
Interest expense                                                              (826 )              (439 )             (1,373 )                       (721 )                       (768 )

Income before inco me taxes                                                 7,846                6,360                6,404                        2,744                        4,883
Provision for inco me taxes (3)                                               242                  262                  276                          118                          220

Net inco me                                                          $      7,604         $      6,098        $       6,128         $              2,626          $             4,663

Unaudited pro forma net income:
    Income before taxes                                              $      7,846         $      6,360        $       6,404         $              2,744          $             4,883
    Pro forma provision for inco me taxes (3)                               3,044                2,448                2,595                        1,112                        1,939

      Pro forma net inco me                                          $      4,802         $      3,912        $       3,809         $              1,632          $             2,944

Pro forma earn ings per share:
     Basic                                                           $        0.71        $        0.58       $          0.56       $               0.24          $              0.43
     Diluted                                                         $        0.67        $        0.55       $          0.53       $               0.23          $              0.41
Pro forma weighted average shares:
     Basic                                                                  6,779                6,779                6,779                        6,779                        6,779
     Diluted                                                                7,140                7,143                7,158                        7,134                        7,228

                                                                                                                                            As of June 30, 2005

                                                                                                                                                   Pro                   Pro forma
                                                                                                                          Actual                forma(4)               as adjusted(5)

                                                                                                                                                  (unaudited)
                                                                                                                                                (in thousands)
Balance Sheet Data:
    Cash and cash equivalents                                                                                        $         13          $           13                        7,121
    Net working capital                                                                                                     3,303                 (12,267 )                     27,633
    Total assets                                                                                                           66,330                  69,097                       76,205
    Total debt, including current portion                                                                                  22,326                  40,326                          —
    Total stockholders’ equity                                                                                             18,101                   2,868                       50,302

(1)   Cost of revenue includes stock-based compensation expens e of approximately $0, $175,000 and $116,000 for the years ended December 31, 2002, 2003 and 2004, respect ively, and
      approximately $59,000 and $58,000 for the six months ended June 30, 2004 and 2005, respectively.
(2)   General and administrative expenses include stock-bas ed compensation expense of approximately $0, $113,000 and $1,063,000 for the years ended December 31, 2002, 2003 and 2004,
      respectively, and approximately $50,000 and $315,000 for the six months ended June 30, 2004 and 2005, respectively.
(3) For co mparative purposes, we have included a pro forma p rovision for income taxes assuming we had been taxed as a C corporation in all
    periods when our S corporation election was in effect.

                                                                                          7
Table of Contents

(4) Pro forma balance sheet data reflects: (a) additional borrowings of $3 million under our line of credit and $15 million under our six-month
    time loan; (b) the distribution of $18 million to our stockholders for previously undistributed S corporation earnin gs (excludes a potential
    additional distribution for p reviously undistributed S corporation earnings, estimated at $5 million, wh ich is expected to be mad e to the
    existing stockholders); and (c) the establishment of estimated net deferred tax assets totaling approximately $2.8 million record ed in
    connection with our conversion to a C corporation.
(5) Pro forma as adjusted balance sheet data reflects: (a) the pro forma adjustments in (2); (b) the assumed net proceeds from th e offering of
    $47.4 million; and (c) the repayment of appro ximately $40.3 million of short and long -term debt.

                                                        Transacti ons Prior To Offering

   Share Exchange, Merger and Stock Split

      We were incorporated in Delaware on July 27, 2005. On September 1, 2005, we co mp leted a merger and share exchange that resulted in
NCI Informat ion Systems, Inc., a Virginia corporation, becoming our wholly -o wned subsidiary. Pursuant to a share exchange agreement,
Chander (Charles) K. Narang, our founder, Chairman and Ch ief Executive Officer, transferred all of his shares of common stock of NCI
Information Systems, Inc. to our wholly-o wned subsidiary, NCI Acquisition, LLC, a Virgin ia limited liab ility co mpany. Mr. Narang received
one share of our Class B co mmon stock in exchange for each share he transferred. On the effective date of this share exchange, but afte r Mr.
Narang transferred his shares, NCI Info rmation Systems, Inc. merged with our wholly -owned subsidiary, with NCI Information Systems, Inc.
surviving the merger. As a result of this merger, each issued and outstanding share of common stock of NCI Informat ion Systems, Inc., other
than the shares transferred to our wholly-owned subsidiary by Mr. Narang, was converted into one share of our Class A commo n stock. In
connection with this merger, we assumed all of the issued and outstanding options to acquire capital stock of NCI Information Systems, Inc.,
and, after the merger, these options became exercisable for shares of our Class A common stock.

       Prior to this offering, we will effect a 1-fo r-1.9 reverse stock split of our Class A common stock and Class B co mmon stock. Th e Class A
common stock and the Class B co mmon stock have the same rights and preferences, except that each share of the Class A common stock is
entitled to one vote and each share of the Class B co mmon stock is entitled to ten votes and is convertible into one share of Class A common
stock. See ―Description of Cap ital Stock—Co mmon Stock.‖ For purposes of this prospectus, unless stated otherwise, all references to our
common stock refer to shares of the Delaware corporation after giving effect to the share exchange, merger and stock split, o ther than with
respect to historical consolidated financial statements.

Revocation of S Corporation Status

     We intend to revoke our S corporation status prior to or concurrently with the complet ion of the offering. In connection with that
revocation, we expect to make a d istribution to our current stockholders, including Mr. Narang, representing payment of undistributed S
corporation earnings at and through the date of revocation. The actual amount of the distribution of S corporation earn ings w ill depend on the
amount of our income prior to the revocation of our S corporation status. We estimate the final distribution of S corporation earnings will be
approximately $5 million and will occur during the fourth quarter of 2005 or the first quarter of 2006.




     Immediately fo llo wing this offering, M r. Narang, our founder, Chairman and CEO, will o wn or control 92.5% of the co mbined voting
power and 56.8% of the outstanding shares of the common stock. As a result, Mr. Narang will be able to control the vote on all matters
submitted to a vote of the holders of our common stock, including election of our d irectors, amendments to our certificate of in corp oration,
mergers and other business transactions.

                                                                        8
Table of Contents

                                                                 RIS K FACTORS

      Investing in our Class A common stock involves a high degree of risk. Before making an investment in our Class A common stock , you
should carefully consider the following risks, as well as the other information contained in this prospectus, including our consolidated
financial statements and the related notes. Additional risks and uncertainties not currently known to us, or risks that we cu rrently deem
immaterial, may also impair our business operations. Any of the risk factors described below could significantly and adversely affect our
business and results of operations. As a result, the trading price of our Class A common stock could decline and you may lose all or part of
your investment.

Risks Related to Our Business

We depend on contracts with the federal government for substantially all of our revenue. If our relationships with federal go vernment
agencies are harmed, our revenue a nd operating profits would decline.

       For the six months ended June 30, 2005, we derived appro ximately 99.5% of our revenue fro m federal govern ment contracts, eith er as a
prime contractor or a subcontractor, including appro ximately 73.0% of our revenue fro m contracts with the Depart ment of Def ense and
intelligence agencies. We believe that federal government contracts will continue to be the source of substantially all of ou r revenue for the
foreseeable future. For th is reason, any issue that compro mises our relationship with agencies of the fe deral govern ment in general, or with the
Depart ment of Defense in particular, would cause our revenue to decline. Among the key factors in maintain ing our relationships with federal
government agencies are our performance on indiv idual contracts and task o rders, the strength of our professional reputation and the
relationships of our key executives with client personnel. To the extent that our performance does not meet client expectatio ns, or our
reputation or relationships with one or more key clients are impaired, our revenue and operating results could decline materially .

We face intense competition from many competitors that have greater resources than we do, which could result in price red ucti ons, reduced
profitability or loss of market share.

       We operate in highly co mpetitive markets and generally encounter intense competition to win contracts fro m many other firms, inclu ding
mid-t ier federal contractors with specialized capabilit ies and large defense and IT services providers. We expect competit ion in our markets to
increase as a result of a number o f factors, such as the entrance of new or larger co mpetitors, including those formed throug h consolidation.
These competitors may have greater financial, technical, market ing and public relations resources, larger client bases and greater brand or name
recognition than we do. These competitors could, among other things:

      •    divert sales fro m us by winning very large-scale government contracts, a risk that is enhanced by the recent trend in government
           procurement practices to bundle services into larger contracts;

      •    force us to charge lower prices; or

      •    adversely affect our relat ionships with current clients, including our ab ility to continue to win co mpetitively awarded engagements
           in wh ich we are the incu mbent.

      If we lose business to our competitors or are forced to lower our prices, our revenue and our operating profits could decline . In addition,
we may face co mpetition fro m our subcontractors who, fro m t ime-to-t ime, seek to obtain prime contractor status on contracts for which they
currently serve as a subcontractor to us. If one or mo re of our current subcontractors are awarded prime con tractor status on such contracts in
the future, it could divert sales fro m us and could force us to charge lower prices, which could cause our margins to suffer.

We expect to lose our eligibility to participate in the federal government ’s small business programs w hich may affect our ability to win
contracts and grow revenue.

     In prior years, we were able to pursue business under the U.S. Small Business Admin istration ’s (SBA) business development programs,
making us eligib le to receive certain federal contracts set aside for small

                                                                         9
Table of Contents

businesses, or set-aside contracts. Companies may qualify as small businesses if they meet certain size restrictions based on revenue or
emp loyee base. Although we currently meet the requirement standard for certain s mall business contracts, we do not plan to pu rsue future small
business opportunities. We may have difficu lty in teaming with small business companies on set -aside contracts and our revenue mix and
profitability could be negatively impacted due to our role as a subcontractor. We may also face increased competition fro m la rg er co mpanies as
we bid on non-set-aside contracts as a large prime contractor.

Our quarterly operating results may fluctuate significantly as a result of factors outside of our control, which could cause the market price
of our common stock to decline.

     We expect our revenue and operating results to vary fro m quarter to quarter. As a result, our operating results may fall below th e
expectations of securities analysts and investors, which could cause the price of our co mmon stock to decline. Factors that may affect our
operating results include those listed in this ―Risk Factors‖ section of this prospectus and others such as:

      •    fluctuations in revenue recognized on contracts;

      •    variability in demand for our services and solutions;

      •    commencement, co mplet ion or termination of contracts during any particular quarter;

      •    timing of award or perfo rmance incentive fee notices;

      •    timing of significant bid and proposal costs;

      •    variable purchasing patterns under GSA schedule contracts, government wide acquisition contracts (GWACs), b lanket purchase
           agreements and other Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts;

      •    strategic decisions by us or our competitors, such as acquisitions, divestitures, spin -offs and joint ventures;

      •    strategic investments, or changes in business strategy;

      •    changes in the extent to which we use subcontractors;

      •    seasonal fluctuations in our staff utilization rates; and

      •    federal govern ment shutdowns or temporary facility closings.

      Reductions in revenue in a particular quarter could lead to lower profitability in that quarter because a relatively large amount of our
expenses are fixed in the short-term. We may incur significant operating expenses during the start-up and early stages of large contracts and
may not be able to recognize corresponding revenue in that same quarter. We may also incur addit ional expenses when contracts expire, are
terminated or are not renewed.

       In addition, payments due to us fro m federal govern ment agencies may be delayed due to billing cycles or as a result of failures of
government budgets to gain congressional and administration approval in a timely manner. The federal government ’s fiscal year ends
September 30. If a federal budget for the next federal fiscal year has not been approved by that date in each year, our clients may have to
suspend engagements that we are working on until a budget has been approved. Any such suspensions may reduce our revenue in t he fourth
quarter of that year or the first quarter of the subsequent year. The federal government’s fiscal year end can also trigger increased purchase
requests from clients for equipment and materials. Any increased purchase requests we receive as a result of the federal gove rnment’s fiscal
year end would serve to increase our third or fourth quarter revenue, but will generally decrease profit marg ins for that quarter, as these
activities generally are not as profitable as our typical offerings.

                                                                         10
Table of Contents

We cannot guarantee that our estimated contract backlog will result in actual revenue.

     As of June 30, 2005, our estimated contract backlog totaled approximately $525 million, o f which appro ximately $63 million wa s funded.
There can be no assurance that our backlog will result in actual revenue in any particu lar period, or at all, o r that any con tract included in
backlog will be profitable. There is a higher degree of risk in this regard with respect to unfunded backlog . The actual receipt and timing of any
revenue is subject to various contingencies, many of wh ich are beyond our control. The actual receipt of revenue on contracts included in
backlog may never occur or may change because a program schedule could change o r the program could be canceled, or a contract could be
reduced, modified or terminated early. Our estimates are based on our experience under such contracts and similar contracts. However, there
can be no assurances that all, or any, of such estimated contract value will be recognized as revenue. See ―Prospectus Summary—Relevant
Industry Terms‖ for a mo re co mplete definit ion of industry terms used herein.

If we fail to attract and retain skilled employees or employees with the necessary security clearanc es, we might not be able to perform under
our contracts or win new b usiness.

       The growth of our business and revenue depends in large part upon our ability to attract and retain sufficient numbers of highly qualified
individuals who have advanced informat ion technology skills. If we are unable to recruit and retain a sufficient number of th ese employees, our
ability to maintain and grow our business could be limited. In a t ight labor market, our direct labor costs could increase or we may be required
to engage large nu mbers of subcontractor personnel, which could cause our profit margins to suffer. In addit ion, some of our contracts contain
provisions requiring us to staff an engagement with personnel that the client considers key to our successful performance und er the contract. In
the event we are unable to provide these key personnel or acceptable substitutions, the client may termina te the contract and we may lose
revenue.

       In addition, certain federal government contracts require us, and some of our employees, to maintain security clearances. If our
emp loyees lose or are unable to obtain security clearances, or if we are unable to h ire emp loyees with the appropriate security clearances, the
client may terminate the contract or decide not to renew it upon its expiration. As a result, we may not derive the revenue a nticipated from the
contract, which, if not rep laced with revenue fro m other contracts, could seriously harm our operating results.

The loss of any member o f our senior management could impair our relationships with federal government clients and disrupt th e
management of our business.

       We believe that the success of our business and our ability to operate profitably depends on the continued contributions of the members
of our senior management. We rely on our senior management to generate business and execute programs successfully. In addit io n, the
relationships and reputation that many members of our senior management team have established and maintain with federal go vernment
personnel contribute to our ability to maintain strong client relat ionships and to identify new business opportunities. We do not have any
emp loyment agreements providing for a specific term of emp loy ment with any member of our senior management. The loss of any member of
our senior management could impair our ability to identify and secure new contracts, to maintain good client relations and to otherwise manage
our business.

If our subcontractors fail to perform their contractual obligations, our performance and reputation as a prime contractor and our ability to
obtain future business could suffer.

      As a prime contractor, we o ften rely significantly upon other companies as subcontractors to perform work we are obligated to perform
for our clients. We estimate that revenue derived fro m work performed by our subcontractors represented 14% of our revenue for the six
months ended June 30, 2005. As we secure more work under our GWAC vehicles, we expect to require an increasing level of suppo rt from
subcontractors that provide complementary and supplementary services to our offerings. Depending on labor market conditions, we may not be
able to identify, h ire and retain sufficient numbers of qualified emp loyees to perform the task orders we

                                                                        11
Table of Contents

expect to win. In such cases, we will need to rely on subcontracts with unrelated co mpanies. Moreover, even in favorable labor market
conditions, we anticipate entering into more subcontracts in the future as we expand our work under our GWACs. We are respons ible for the
work performed by our subcontractors, even though in some cases we have limited involvement in that work. If one or mo re of our
subcontractors fail to satisfactorily perform the agreed-upon services on a timely basis or violate federal govern ment contracting policies, laws
or regulations, our ability to perform our obligations as a prime contractor or meet our clients ’ expectations may be co mpro mised. In extreme
cases, performance or other deficiencies on the part of our subcontractors could result in a client terminating our contract for default. A
termination for default could expose us to liability, including liability for the agency ’s costs of reprocurement, could damage our reputation and
could hurt our ability to compete for future contracts.

If we experience systems or service failure, our reputation could be harmed and our clients could assert claims against us fo r damages or
refunds.

      We create, imp lement and maintain IT solutions that are often critical to our clients ’ operations. We have experienced, and may in the
future experience, some systems and service failures, schedule or delivery delays and other problems in connection with our work. If we
experience these problems, we may :

      •    lose revenue due to adverse client reaction;

      •    be required to provide additional services to a client at no charge;

      •    receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients; and

      •    suffer claims for substantial damages.

     In addition to any costs resulting fro m product or service warranties, contract performance or required corrective action, th ese failures
may result in increased costs or loss of revenue if clients postpone subsequently scheduled work or cancel, or fail to renew, con tracts.

      While many of our contracts limit our liability for consequential damages that may arise fro m negligence in rendering service s to our
clients, we cannot assure you that these contractual provisions will be legally sufficient to prote ct us if we are sued.

      In addition, our errors and omissions and product liability insurance coverage may not continue to be available on reasonable terms or in
sufficient amounts to cover one or more large claims, or the insurer may disclaim coverage as to some types of future claims. A s we continue to
grow and expand our business into new areas, our insurance coverage may not be adequate. The successful assertion of any larg e claim against
us could seriously harm our business. Even if not successful, these claims could result in significant legal and other costs, may be a distraction
to our management and may harm our reputation.

Security breaches in sensitive federal government systems co uld result in the loss of clients and negative publicity.

      Many of the systems we develop, install and maintain involve managing and protecting information involved in intelligence, nationa l
security and other sensitive or classified federal govern ment functions. A security breach in one of these systems could caus e serious harm to
our business, damage our reputation and prevent us from being eligib le fo r further work on sensitive or classified systems fo r federal
government clients. We could incur losses from such a security breach that could exceed the policy limits u nder our erro rs and omissions and
product liability insurance. Damage to our reputation or limitations on our eligibility for addit ional work resulting fro m a security breach in one
of the systems we develop, install and maintain could materially reduce ou r revenue.

Our employees may engage in misconduct or other improper activities, which could cause us to lose contracts.

       We are exposed to the risk that employee fraud or other misconduct could occur. Misconduct by employees could include intentional
failures to comply with federal government procurement regulations, engaging in unauthorized activit ies or falsifying time rec o rds. Emp loyee
misconduct could also involve the improper use of our clients ’ sensitive or classified information, which could result in regulat ory sanctions
against us and serious

                                                                         12
Table of Contents

harm to our reputation and could result in a loss of contracts and a reduction in revenues. It is not always possible to dete r emp loyee
misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or un managed risks or
losses, which could cause us to lose contracts or cause a reduction in revenues.

We may not be successful in identifying acquisition candidates and if we undertake acquisitions, they could increase our cost s or liabilities
and impair our revenue a nd operating results.

      One of our strategies is to pursue growth through acquisitions. We have limited experience with acquisitions, having completed only one
significant acquisition since our inception. We may not be able to identify suitable acquisition candidates at prices that we consider appropriate.
If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of the acquisition or finance the
acquisition on terms that are satisfactory to us. Negotiations of potential acquisitions and the integration of acquired business operations could
disrupt our business by diverting management attention fro m day -to-day operations. Acquisitions of businesses or other material operations
may require addit ional debt or equity financing, resulting in addit ional leverage or dilution of o wnership .

       If we are unable to successfully integrate companies we may acquire in the future, our revenue and operating results could su ffer. The
integration of such businesses into our operations may result in unforeseen operating difficulties (including incompa tib le accounting and
informat ion management systems), may absorb significant management attention and may require significant financial resources that would
otherwise be available for the ongoing development or expansion of our business. These difficult ies of integration may require us to coordinate
geographically dispersed organizations, integrate personnel with disparate business backgrounds and reconcile different corpo rate cultures. In
certain acquisitions, federal acquisit ion regulations may require us to enter into government novation agreements, a potentially time-consuming
process. In addition, we may not be successful in achieving the anticipated synergies from these acquisitions, including our strategy of offering
our services to clients of acquired companies to increase our revenue. We may experience increased attrition, including, but not limited to, key
emp loyees of the acquired companies, during and following the integration of acquired co mpanies that could reduce our future revenue. In
addition, we may need to record write-downs fro m future impairments of identified intangible assets and goodwill, which could reduce our
future reported earnings. Acquisition candidates may have liab ilities or adverse operating issues that we fail to discover th rough due diligence
prior to the acquisition. In part icular, to the extent that prior owners of any acquired businesses or properties failed to c omp ly with or otherwise
violated applicable laws or regulations, or failed to fulfill their contractual obligatio ns to the federal government or other clients, we, as the
successor owner, may be financially responsible for these violations and failures and may suffer reputational harm or otherwise be adversely
affected. The discovery of any material liab ilities associated with our acquisitions could cause us to incur additional expenses and cause a
reduction in our operating profits.

We may be harmed by intellectual property infringement claims and our failure to protect our intellectual property could enab le
competitors to market products and services with similar features.

      We may beco me subject to claims fro m our emp loyees or third parties who assert that software and other forms of intellectual p roperty
that we use in delivering services and solutions to our clients infringe upon intellectual property rights of such employe es or third parties. Our
emp loyees develop much of the software and other forms of intellectual property that we use to provide our services and solut ions to our
clients, but we also license technology from other vendors. If our employees, vendors, or othe r third parties assert claims that we or our clients
are infringing on their intellectual property rights, we could incur substantial costs to defend those claims. In addition, if any of these
infringement claims are ult imately successful, we could be requ ired to:

      •    cease selling or using products or services that incorporate the challenged software or technology;

      •    obtain a license or additional licenses from our emp loyees, vendors, or other third parties; or

      •    redesign our products and services that rely on the challenged software or technology.


                                                                          13
Table of Contents

      In addition, if we are unable to protect our intellectual property, our competitors could market services or products similar to our services
and products, which could reduce demand for our offerings. We may be unable to prevent unauthorized part ies fro m a ttempting to copy or
otherwise obtain and use our technology. Policing unauthorized use of our technology is difficult, and we may not be able to prevent
misappropriation of our technology, particularly in foreign countries where the laws may not protect o ur intellectual property as fully as those
in the United States. Others, including our employees, may circu mvent the trade secrets and other intellectual property that we own. Lit igation
may be necessary to enforce our intellectual property rights, to prot ect our trade secrets and to determine the valid ity and scope of the
proprietary rights of others. Any litigation could result in substantial costs and diversion of resources, with no assurance of success.

Risks Related to Our Industry

Our revenue and operating profits could be adversely affected by significant changes in the contracting or fiscal policies of the federal
government.

     We depend on continued federal government expenditures on intelligence, defense and other programs that we support. Accordingly,
changes in federal govern ment contracting policies could direct ly affect our financial performance. In addition, a change in presidential
administrations, congressional majorit ies or in other senior federal govern ment officials may negatively affect the rate at which the federal
government purchases IT services. The overall U.S. defense budget declined fro m time -to-time in the late 1980s and the early 1990s. While
spending authorizat ions for intelligence and defense-related programs by the federal government have increased in recent years, future levels of
expenditures and authorizations for those programs may decrease, remain constant or shift to programs in areas where we do no t currently
provide services. Among the factors that could materially adversely affect us are:

      •    budgetary constraints affecting federal government spending generally, or specific depart ments or agencies in particular, and
           changes in fiscal policies or availab le funding;

      •    changes in federal govern ment programs or requirements, including the increased use of small business providers;

      •    curtailment of the federal government’s use of professional services providers;

      •    the adoption of new laws or regulat ions;

      •    federal govern mental shutdowns (such as that which occurred during the federal government ’s 1996 fiscal year) and other potential
           delays in the government appropriations process;

      •    delays in the payment of our invoices by federal govern ment pay ment offices due to problems with, or upgrades to, federal
           government informat ion systems, or for other reasons;

      •    competition and consolidation in the IT industry; and

      •    general economic conditions.

     These or other factors could cause federal governmental agencies, or prime contractors for which we are act ing as a subcontra ctor, to
reduce their purchases under contracts, to exercise their right to terminate contracts or not to exercise options to renew contracts, any of which
could cause our revenue and operating profits to decline.

Our federal government contracts may be terminated by the federal government at any time, and if we do not replace them, our revenue and
operating profits may be adversely affected.

      We derive most of our revenue fro m federal government contracts that typically span one or more base years and one or more o p tion
years. The option periods may cover more than half of a contract’s potential duration. Federal govern ment agencies have the right not to
exercise these option periods. In addition, our contracts also contain provisions permitting a federal govern ment client to t ermin ate the contract
on short notice

                                                                         14
Table of Contents

and for its convenience, as well as for our default. A decision by a federal government agency not to exercise option periods or to terminate
contracts could result in a reduction of our profitability on these contracts and significant revenue shortfalls.

      If the federal govern ment terminates a contract for convenience, we may recover only our incurred or co mmitted costs, settlem ent
expenses and profit on work co mp leted prior to the termination. We cannot recover anticipated profit on terminated work. If the federal
government terminates a contract for default, we may not recover even those amounts, and instead may be liab le for excess cos ts incurred by
the federal government in procuring undelivered items and services from another source.

Federal government contracts contain other provisions that may be unfavorable to us.

      Federal govern ment contracts contain provisions and are subject to laws and regulations that give the federal government righ ts and
remedies not typically found in co mmercial contracts. These allow the federal govern ment to terminate a contract for convenience or decline to
exercise an option to renew. They also permit the federal government to do the following:

      •    reduce or modify contracts or subcontracts;

      •    cancel mult i-year contracts and related orders if funds for contract performance fo r any subsequent year become unavailable;

      •    claim rights in products and systems produced by us; and

      •    suspend or debar us from doing business with the federal govern ment.

      If the federal govern ment exercises its rights under any of these provisions, our revenues and operating profits could declin e.

Many of our federal government clients spend their procurement budgets through multiple award contracts under which we are re quired to
compete for post-award orders or for which we may not be eligible to compete and could limit our ability to win new contr acts and grow
revenue.

      Budgetary pressures and reforms in the procurement process have caused many federal govern ment clients to increasingly purcha se
goods and services through ID/IQ contracts, GSA Schedule contracts and other mu ltip le award and/or GWAC vehicles. These contract vehicles
have resulted in increased competition and pricing pressure, requiring us to make sustained post -award efforts to realize revenue under the
relevant contract vehicle. The federal govern ment’s ability to select mult iple winners under mu ltiple award schedule contracts, GWA Cs,
blanket purchase agreements and other ID/IQ contracts, as well as its right to award subsequent task orders among such mult ip le winners,
means that there is no assurance that these multiple award contracts will result in the actual orders equal to the ceiling value, or result in any
actual orders. We are only eligib le to co mpete for work (task orders and delivery o rders) as a prime contractor pursuant to GWACs already
awarded to us. Our failure to co mpete effectively in this procurement environ ment could reduce our revenue. If the federal government elects
to use a contract vehicle that we do not hold we will not be able to compete as a prime contractor. See ―Prospectus Summary—Relevant
Industry Terms‖ for a mo re co mplete definit ion of industry terms used herein.

Each of our contract types involves the risk that we could underestimate our costs and i ncur losses.

      We enter into three types of federal govern ment contracts for our services: time -and-materials, cost-plus and fixed-price. For th e six
months ended June 30, 2005, we derived approximately 59.4%, 25.7% and 14.9% of our revenue fro m t ime -and-materials, cost-plus and
fixed-price contracts, respectively. If we acquire other businesses, our contract mix may change.

                                                                         15
Table of Contents

       Each of these types of contracts, to differing degrees, involves the risk that we could underestimate our cost of performance , wh ich may
result in a reduced profit o r a loss on the contract for us. Under time-and-materials contracts, we are reimbu rsed for labor at neg otiated hourly
billing rates and for certain expenses. We assume min imal financial risk on time-and-materials contracts because we only assume the risk of
performing those contracts at negotiated hourly rates. Under cost-plus contracts, we are reimbursed for allo wable costs and paid a fee, wh ich
may be fixed or performance-based. To the extent that the actual costs incurred in performing a cost -plus contract are within the contract
ceiling and allowable under the terms of the contract and applicable regulat ions, we are entit led to reimbu rsement of our cos ts, plus a profit.
However, if our costs exceed the ceiling or are not allowable under the terms of th e contract or applicable regulations, we may not be able to
recover those costs. Under fixed-price contracts, we perform specific tasks for a fixed p rice. Co mpared to time -and-materials and cost-plus
contracts, fixed-price contracts generally offer h igher margin opportunities, but involve greater financial risk because we bear t he impact of
cost overruns. Because we assume the most risk for cost overruns and contingent losses on fixed -p rice contracts, an increase in the percentage
of fixed-price contracts in our contract mix would increase our risk of suffering losses.

      Our profits could be adversely affected if our costs under any of these contracts exceed the assumptions we used in bidding f or the
contract.

Our failure to comply with complex procurement laws and regulations could cause us to lose business and subject us to a va rie ty of
penalties.

      We must comply with and are affected by laws and regulations relating to the formation, ad ministration and perfo rmance of fed eral
government contracts, which affect how we do business with our clients and may impose added costs on us. Among the most significant laws
and regulations are:

      •    the Federal Acquisition Regulat ions, and agency regulations supplemental to the Federal Acquisition Regulations, which
           comprehensively regulate the format ion, ad min istration and performance of federal govern ment contracts;

      •    the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with contract
           negotiations;

      •    the Cost Accounting Standards and Cost Princip les, which impose accounting requirements that govern our right to reimb ursement
           under certain cost-based federal government contracts; and

      •    laws, regulations and executive orders restricting the use and dissemination of informat ion classified for national security purposes
           and the export of certain products and technical data.

     Moreover, we are subject to industrial security regulat ions of the Department of Defense and other federal agencies that are designed to
safeguard against foreigners’ access to classified informat ion. If we were to co me under foreign ownership , control or influence, our federal
government clients could terminate or decide not to renew our contracts, and our ability to obtain new contracts could be imp aired.

We derive significant revenue from contracts awarded through a competitive procurement process, which may require significant upfront
bid and proposal costs that could negatively affect our operating results.

     We derive significant revenue fro m federal govern ment contracts that are awarded through a competitive procurement process. We
expect that most of the federal govern ment business we seek in the foreseeable future will be awarded through competitive pro cesses.
Co mpetitive procurements impose substantial costs and present a number of risks, including:

      •    the substantial cost and managerial time and effo rt that we spend to prepare bids and proposals for contracts that may not be
           awarded to us and could reduce our profitability; and

                                                                         16
Table of Contents

      •    the expense and delay that we may face if our co mpetitors protest or challenge contract awards made to us pursuant to competitive
           procedures, and the risk that any such protest or challenge could result in the resubmission of offers, or in terminat ion, re duction or
           modification of the awarded contract, wh ich could result in increased cost and reduced profitability.

      In addition, most federal govern ment contract awards are subject to protest by competitors. If specified legal requirements a re satisfied,
these protests require the federal government agency to suspend the contractor’s performance of the newly awarded contract pending the
outcome of the protest. These protests could also result in a requirement to resubmit bids for the contract or in the termina tion, reduction or
modification of the awarded contract.

Unfavorable federal government audit results could subject us to a variety of penalties and sanctions, and could harm our rep utation and
relationships with our clients and impair our ability to win new contracts.

      The federal govern ment, including the Defense Contract Audit Agency (DCAA), audits and reviews our performance on contracts,
pricing practices, cost structure and compliance with applicable laws, regulations and standards. The DCAA reviews a contractor’s internal
control systems and policies, includ ing the contractor’s purchasing, property, estimating, co mpensation and management info rmat ion systems,
and the contractor’s compliance with such policies. Any costs found to be improperly allocated to a specific contract will not be reimbu rsed,
while such costs already reimbu rsed must be refunded. Adverse findings in a DCAA audit could materially affect our co mpetit ive posit ion and
result in a substantial adjustment to our revenue and profit.

       If a federal government audit uncovers imp roper or illegal activit ies, we may be subject to civil and criminal penalties and administrative
sanctions, including termination of contracts, forfeiture of pro fits, suspension of payments, fines and suspension or debarme nt from doing
business with federal government agencies. In addition, we could suffer serious harm to our reputation and competitive position if allegations
of imp ropriety were made against us, whether or not true. If our reputation or relationship with federal govern ment agencies were impaired, or
if the federal govern ment otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our
revenue and operating profit wou ld decline.

Risks Related to This Offering

There is no prior public market for our Class A commo n stock and our stock price could be volatile and could decline following this
offering, resulting in a substantial loss on your invest ment.

       Prior to this offering, there has not been a public market for our Class A common stock. An active trading market for our Class A
common stock may never develop or be sustained, which could affect your ability to sell your shares and could depress the mar ket price of
your shares. In addition, the init ial public o ffering price has been determined through negotiations between us and the representatives of the
underwriters and may bear no relationship to the price at which the co mmon stock will t rade upon completion of this offering. The stock
market in general has been highly volatile. As a result, the market price of our co mmon stock is likely to be similarly volatile, and investors in
our Class A common stock may experience a decrease in the value of their stock, including decreases unrelated to our operatin g performance or
prospects. The price of our Class A common stock could be subject to wide fluctuations in response to a number of factors, including those
listed in this ―Risk Factors‖ section of this prospectus and others such as:

      •    our operating performance and the performance of other similar co mpanies;

      •    changes in our revenue or earnings estimates;

      •    changes in recommendations by securities analysts;

      •    publication of research reports about us or our industry by securities analysts;

      •    speculation in the press or investment community;

                                                                         17
Table of Contents

      •    terrorist acts; and

      •    general market conditions, including economic factors unrelated to our performance.

       In the past, securities class action litigation has, at times, been instituted against companies following periods of volatil ity in their stock
price. Th is type of litigation against us could result in substantial costs and divert our management ’s attention and resources.

You will experience immediate and substantial dilution.

      The init ial public offering price per share will significantly exceed the current net tangible book value per share of our st ock that was
outstanding prior to this offering. As a result, investors purchasing Class A common stock in this offering will exper ience immediate and
substantial dilut ion. Dilution is the difference between the offering price per share and the pro forma net tangible book value per share of our
Class A common stock. In addition, we have issued options to acquire 1,719,737 shares of co mmon stock at a weighted average price of $3.40
per share. The exercise of these stock options will result in further dilution to new investors.

Mr. Narang, our founder, Chairman and CE O, will continue to control the Company after the offeri ng, and his i nterests ma y not be
aligned with yours.

      Upon complet ion of this offering, Mr. Narang, through his ownership of our Class B co mmon stock, will own or control 92.5% of the
combined voting power and 56.8% o f the outstanding shares of the common stock. Accordingly, Mr. Narang will control the vote on all matters
submitted to a vote of our stockholders. As long as Mr. Narang beneficially o wns the majority of the voting power of our co mmon stock, he
will have the ability, without the consent of our public stockholders, to elect all members of our board of directors and to control our
management and affairs. Mr. Narang’s voting control may have the effect of preventing or discouraging transactions involving a change in
control, includ ing pro xy contests, tender offers, mergers or other purchases of the capital stock of the Co mpany, regardless of whether a
premiu m is offered over then-current market prices.

A substantial number of shares of our common stock will be eligible for sale by Mr. Narang and other stockho lders in the near future,
which could cause our common stock price to decline significantly.

      A substantial number o f shares of our common stock will be eligib le fo r sale by Mr. Narang and other stockholders in the near future.
After this offering, Mr. Narang will beneficially own 6,778,947 shares, or approximately 56.8% of our outstanding shares o f common stock. If
Mr. Narang or other stockholders sell, or the market perceives that they intend to sell, substantial amounts of our common st ock in the public
market following this offering, the market price of our Class A common stock could decline sig nificantly. These sales may also make it mo re
difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. Immediately after
complet ion of this offering and based on the number of our shares outst anding as of September 2, 2005, we will have 11,928,947 outstanding
shares of Class A common stock and Class B co mmon stock, assuming no exercise of outstanding options. Of these shares, 5,150, 000 shares
sold in this offering will be freely tradable. Appro ximately 6,778,947 additional shares of Class A common stock will be available for sale in
the public market 180 days after the date of this prospectus following the expirat ion of lock-up agreements entered into by our executive
officers and directors, subject to applicable volu me restriction and manner of sale requirements imposed on affiliates under Rule 144 of the
Securities Act. Legg Mason Wood Walker, Incorporated, on behalf of the underwriters, may release the executive officers, dire ctors and
stockholders fro m their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sale of shares
in the public market. As restrictions on resale end, the market price of our co mmon stock could drop significantly if the holders of restricted
shares sell them or are perceived by the market as intending to sell them.


                                                                           18
Table of Contents

                                                    FORWARD-LOOKING STATEMENTS

      This prospectus, including the section entitled ―Management’s Discussion and Analysis of Financial Condition and Results of
Operations,‖ contains forward-looking statements. We have attempted to identify forward-looking statements by using such words as
―anticipate,‖ ―believe,‖ ―could,‖ ―estimate,‖ ―expect,‖ ―intend,‖ ―may,‖ ―should,‖ ―will,‖ ―would‖ or other similar expressions. These
forward-looking statements, which are subject to risks and uncertainties, and assumptions about us, ma y include, among other things,
projections of our future financial performance, our anticipated growth strategies, anticipated trends in our industry, our p otential growth
opportunities, the effects of future regulations and the effects of competition. The se statements are only predictions based on our current
expectations and projections about future events. Because these forward -looking statements involve risks and uncertainties, you should be
aware that there are important factors that could cause our actual results, level of activity or performance to differ materially fro m the results,
level of activity or performance exp ressed or implied by these forward -looking statements. Some of these important factors are outlined under
―Risk Factors‖ and elsewhere in this prospectus. Although we believe that the expectations reflected in the forward -looking statements are
reasonable, we cannot guarantee our future results, level of activ ity or perfo rmance. We undertake no obligation to update pu blicly or revise
any forward-looking statements. You should not place undue reliance on the forward -looking statements.

                                                                         19
Table of Contents

                                                               US E OF PROCEEDS

      We estimate our net proceeds of this offering will be appro ximately $47.4 million after deducting the estimated expenses rela ted to this
offering and the underwriting discounts. We intend to use the net proceeds we receive to pay off all of the principal and accrued interest then
outstanding under our credit facility, wh ich includes amounts incurred in connection with our acquisition of SES and for the dis tribution of
previously undistributed S corporation earnings. On June 30, 2005, that amount was $21.8 million, appro ximately $10.1 millio n of which was
under a term note and $11.7 million of which was under a line of cred it. In July 2005, the cred it facility was amended to allow for a new t ime
loan under which we borrowed $15 million and an additional $3 million under our line o f cred it, for distribution of prev iously undistributed
S corporation earnings. Our term note and line of cred it mature on December 31, 2006, and accrue interest based on LIBOR p lus a n applicable
margin. The time loan will be due in January 2006, or upon receipt of proceeds fro m this offering, whichever occurs first. As of June 30, 2005,
interest on our term note and line o f cred it was based on LIBOR p lus 2.7% and 2.2%, respectively. Both marg ins are based on t he ratio of our
funded indebtedness to our adjusted earnings. The weighted average interest rate applicable to all borrowings under our credit facility was
approximately 5.5% on June 30, 2005. The interest rate on the time loan is LIBOR plus 45 basis points. Afte r the repayment of the line of
credit, we may re-incur debt under the revolving note.

      We may use some or all of the remain ing net proceeds fro m this offering for wo rking capital and general corporate purposes, including all
or a portion of the costs of any acquisitions we decide to pursue in the future. We have no present commit ments, agreements or understandings
to acquire any business. Pending final use, we may invest the net proceeds of this offering in short -term, investment grade, interest-bearing
securities or guaranteed obligations of the United States or its agencies.

      We will not receive any of the proceeds from sale of Class A common stock by the selling stockholders.

                                                               DIVIDEND POLICY

      We currently intend to retain all future earnings, if any, for use in the operation, develop ment and expansion of our busines s. As a result,
we do not anticipate paying any cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash
dividends will be at the discretion of our board of d irectors and will depend on then -existing conditions, business prospects and any other
factors our board of directors deems relevant. Our existing credit facility prohibits us from paying a dividend if, after it is paid, we will be in
default under our credit agreement. In addition, the terms of any future credit ag reement may prevent us from paying any divid ends or making
any distributions or payments with res pect to our capital stock.

      All of our assets consist of the stock of our subsidiary. We will need to rely upon dividends and other payments fro m our sub sidiary to
generate the funds necessary to make d ividend payments, if any, on our Class A common stock. However, our subsidiary is leg ally d istinct
fro m us and has no obligation to pay amounts to us. The ability of our subsidiary to make dividend and other payments to us is subject to,
among other things, the availability of funds, the terms of our subsidiary ’s indebtedness and applicable state laws.

                                                                         20
Table of Contents

                                                           S CORPORATION S TATUS

       Since the incorporation of our subsidiary in 1989, we have been treated for federal and certain state income tax purposes as an S
corporation under Subchapter S of the Internal Revenue Code and co mparable state laws. As a result, our earn ings have been taxed for federal
and, in the case of certain states, state income tax purposes directly to our stockholders rather than to us. In connection with this offering, we
will revoke our status as an S corporation and thereafter be taxed as a C corporation. As a result of the revocation of our S corp oration status,
we will record a net deferred tax asset and corresponding income tax benefit effective upon the revocation date. The total amou nt of the net
deferred tax assets would have been approximately $2.8 million if the revocation date had been June 30, 2005. The actual amou nt, which we
estimate to be approximately $5 million, will be determined after giv ing effect to our operating results through the revocation date.

       In connection with the revocation of our S corporation tax status, we will make a distribution to our stockholders representing
undistributed S corporation earnings. The actual amount will be determined after giv ing effect to our operating results throu gh the revocation
date with the filing of the final S corporation tax return. We will also enter into a tax indemn ification agreement with the stockholders.
Although we believe that we have met the requirements for an S corporation, the agreement provides for, among other things, the stockholders
to indemnify us for any additional federal and state income taxes, including interest and penalties, incurred by us if for an y reason we are
deemed to be a C corporation during any period in wh ich we reported our taxable inco me as an S corporation. The tax indemn ification
obligation of our stockholders is limited to the aggregate amount of all distributions made to them by us to pay taxes during any time that we
were reporting our taxable inco me as an S corporation but are deemed to be a C corporation. The agreement also provides for payments by our
stockholders to us and by us to our stockholders to adjust for any increases or decreases in tax liability arising fro m a tax audit t hat affects our
tax liability and results in a corresponding adjustment to the tax liability of our stockholders. The amount of any payment cannot exceed the
amount of refund received by us or our stockholders attributable to the adjustment in tax liability.

                                                                          21
Table of Contents

                                                               CAPITALIZATION

      The following table sets forth our capitalizat ion as of June 30, 2005:

      •    on an actual basis;

      •    on a pro forma basis to reflect the S corporation distributions made in July 2005, the borro wings to fund the distributions a nd the
           estimated net deferred tax assets recorded in connection with our conversion to a C corporation; and

      •    on a pro forma as adjusted basis to reflect the pro forma adjustments noted above, our sale of 4,800,000 shares of Class A co mmon
           stock at an assumed in itial public offering price of $11.00 per share, after deducting underwriting discounts, commissions an d the
           estimated offering expenses payable by us, the exercise of options by the selling stockholders for 350,000 shares of Class A
           common stock and the repayment of appro ximately $40.3 million of short and long -term debt.

      This table excludes:

      •    1,719,737 shares of common stock subject to issuance upon the exercise of options we have granted under our 2005 Performance
           Incentive Plan at a weighted average exercise price of $ 3.40 per share; and

      •    1,438,158 shares of common stock reserved for issuance under our 2005 Performance Incentive Plan, plus annual increases in the
           number of shares that will be reserved for issuance under our 2005 Performance Incentive Plan.

     You should read this table together with ―Selected Consolidated Financial Data,‖ ―Management’s Discussion and Analysis of Financial
Condition and Results of Operations ‖ and our consolidated financial statements and related notes included elsewhere in this prospectus.
                                                                                                                        As of June 30, 2005

                                                                                                                                 Pro                  Pro forma
                                                                                                       Actual                   forma                 as adjusted

                                                                                                                     (in thousands except share
                                                                                                                         and per share data)
                                                                                                                             (unaudited)
Cash and cash equivalents                                                                          $            13          $           13        $        7,121

Short-term debt, including current portion of long-term debt                                       $ 14,792                 $ 32,792              $           —
Long-term debt, net of current portion                                                                7,534                    7,534                          —
Stockholders’ equity:
     Class A common stock, $.019 par value; 37,500,000 shares authorized and 478,947
        shares issued and outstanding, actual and pro forma; 37,500,000 shares authorized
        and 5,628,947 shares issued and outstanding, pro forma as adjusted                                      9                       9                     100
     Class B common stock, $.019 par value; 12,500,000 shares authorized and 6,300,000
        shares issued and outstanding, actual, pro forma and pro forma as adjusted                         120                      120                      120
     Paid in capital                                                                                     5,423                    5,423                   52,766
     Deferred stock-based compensation                                                                  (2,235 )                 (2,235 )                 (1,031 )
     Retained earnings (deficit)                                                                        14,784                     (449 )                 (1,653 )

           Total stockholders’ equity                                                                   18,101                    2,868                   50,302

           Total capitalization                                                                    $ 40,427                 $ 43,194              $       50,302


                                                                         22
Table of Contents

                                                                    DILUTION

      If you invest in our Class A common stock, your interest will be diluted to the extent of the difference between the in itial public offering
price per share of our Class A common stock and the adjusted net tangible book value per share of our co mmon stock immediat ely after this
offering.

      The net tangible book value of our co mmon stock on a pro forma basis as of June 30, 2005 was approximately $(16.4) million, o r
approximately $(2.42) per share. Net tangible book value per share represents the amount of ou r total tangible assets less our total liabilities
divided by the number of shares of common stock outstanding.

      After giving effect to the issuance and sale of the shares of the Class A common stock offered by us and after deducting the underwrit ing
discount and commissions and estimated offering expenses payable by us, the application of the net proceeds and the exercise o f s tock options
by the selling stockholders, our as adjusted net tangible book value after this offering would have been approximately $31.0 million, o r
approximately $2.60 per share. This represents an immediate increase in net tangible book value of appro ximately $5.02 per sh are to existing
stockholders and an immediate dilution of appro ximately $8.40 per share to new investors purchas ing shares in this offering. If the initial
public offering price is higher or lower, the dilution to the new investors will be more or less, respectively. The following table illustrates this
per share dilution:

Assumed initial public offering price per share                                                                                                $11.00
    Pro forma net tangible book value per share at June 30, 2005                                                                  $ (2.42 )
    Increase in net tangible book value per share attributable to new investors                                                      5.02

As adjusted net tangible book value per share after this offering                                                                                   2.60

Dilution per share to new investors                                                                                                               $8.40


       The following table summarizes, as of June 30, 2005, the total number of shares of common stock purchased from us, the value of the
total consideration paid to us, or attributed to the shares purchased, and the average price per share paid to us, or attribu ted to the shares
purchased, by the existing stockholders and by the investors purchasing shares of Class A common stock fro m us in this offerin g. The
calculation below is based on an assumed in itial public offering price of $11.00 per share.

                                                                                                                                          Average price
                                                                       Shares purchased                  Total consideration                per share

                                                                     Number           Percent           Amount             Percent

Existing stockholders                                                6,778,947             56.8 %   $      129,000               0.2 %   $         0.02
Optionholders(a)                                                       350,000              2.9                —                —                   —
New investors                                                        4,800,000             40.3         52,800,000              99.8              11.00

      Total                                                         11,928,947            100.0 %   $   52,929,000             100.0 %   $          4.57


(a)   In connection with this offering, options to purchase 350,000 shares of Class A common stock will be exercised by the selling
      stockholders.

     The discussion and table above assume no other exercise of stock options and therefore excludes 1,369,737 shares of common st ock at a
weighted average exercise price of $3.40 per share that will be subject to issuance upon exercise of the options under our 2005 Performance
Incentive Plan.

      If the underwriters exercise in full their option to purchase additional shares of our Class A common stock fro m us at the in itial public
offering price less the underwriters ’ d iscount, the percentage of shares held by existing stockholders will decrease to 53.4% of the total shares
outstanding, and the number of shares held by new investors will increase to 5,572,500, or 43.6% o f the total shares outstand ing.

                                                                         23
Table of Contents

                                                S ELECTED CONSOLIDATED FINANCIAL DATA

      The tables below set forth the selected consolidated financial data for each of the years in the five -year period ended December 31, 2004
and for the six months ended June 30, 2004 and 2005. We derived the selected consolidated financial data as of June 30, 2004 and 2005 and for
the periods then ended fro m our unaudited consolidated financial statements. We have prepared our unaudited consolidated fina ncial statements
on the same basis as our audited consolidated financial statements. Our results of operations for the six months ended June 30, 2005 are not
necessarily indicat ive of our operating results for 2005 or any other future period. Prospective investors should read this s elected financial data
in conjunction with ―Management’s Discussion and Analysis of Financial Condit ion and Results of Operations ‖ and our consolidated financial
statements and the related notes included elsewhere in this prospectus.

                                                                                                                                                    Six months ended
                                                                                 Year ended December 31,                                                June 30,

                                                               2000            2001             2002             2003           2004               2004            2005

                                                                                           (audited)                                                   (unaudited)
                                                                                           (in thousands, except per share data)
Statements of Operations Data:
Revenue                                                    $ 112,049       $ 119,100        $ 138,165        $ 136,421      $ 171,253          $ 81,227        $     93,875

Operating costs and expenses:
      Cost of revenue (1)                                       95,428         100,017          115,728          113,521           144,146          68,229           79,671
      General and administrative expenses (2)                    9,513           9,632           12,166           14,524            16,363           8,037            7,239
      Depreciation and amortization                              1,115           1,296            1,600            1,576             1,741             886              801
      Amortization of intangible assets                            189             189               20               16             1,252             616              539

Total operating costs and expenses                             106,245         111,134          129,514          129,637           163,502          77,768           88,250

Operating income                                                 5,804           7,966            8,651            6,784             7,751           3,459             5,625

Interest income                                                    130             270               21               15                26               6                26
Interest expens e                                               (1,376 )        (1,551 )           (826 )           (439)           (1,373 )          (721 )            (768 )

Income before income taxes                                       4,558           6,685            7,846            6,360             6,404           2,744             4,883
Provision for income taxes (3)                                     330             302              242              262               276             118               220

Net income                                                 $     4,228     $     6,383      $     7,604      $     6,098    $        6,128     $     2,626     $       4,663

Earnings per share:
      Basic                                                                                 $      1.12      $      0.90    $         0.90     $      0.39     $        0.69
      Diluted                                                                               $      1.03      $      0.83    $         0.82     $      0.36     $        0.62
Weighted average shares:
      Basic                                                                                 $     6,779      $     6,779    $        6,779     $     6,779     $       6,779
      Diluted                                                                               $     7,350      $     7,347    $        7,443     $     7,351     $       7,571

Unaudited pro forma net income:
     Income before taxes                                                                    $     7,846      $     6,360    $        6,404     $     2,744     $       4,883
     Pro forma provision for income taxes (3)                                                     3,044            2,448             2,595           1,112             1,939

       Pro forma net income                                                                 $     4,802      $     3,912    $        3,809     $     1,632     $       2,944

Pro forma earnings per share:
       Basic                                                                                $      0.71      $      0.58    $         0.56     $      0.24     $        0.43
       Diluted                                                                              $      0.67      $      0.55    $         0.53     $      0.23     $        0.41
Pro forma weighted average shares:
       Basic                                                                                      6,779            6,779             6,779           6,779             6,779
       Diluted                                                                                    7,140            7,143             7,158           7,134             7,228

                                                                                      As of December 31,                                           As of June 30, 2005

                                                                                                                                                                  Pro
                                                               2000            2001             2002             2003           2004               Actual      forma(4)

                                                                                           (audited)                                                   (unaudited)
                                                                                                       (in thousands)
Balance Sheet Data:
     Cash and cash equivalents                             $       842     $       744      $       316      $     1,340    $           40     $        13     $          13
     Net working capital                                         2,104           3,189            6,539            2,492             4,653           3,303           (12,267 )
     Total assets                                               39,497          41,834           36,681           61,992            64,170          66,330            69,097
     Total debt, including current portion                      17,824          16,565           12,129           29,343            24,503          22,326            40,326
     Total stockholders’ equity                                  9,122          10,354            9,877           12,216            16,043          18,101             2,868
                                                                                                                                      (footnotes on following page)
24
Table of Contents



(1)   Cost of revenue includes stock-based compensation expens e of approximately $0, $0, $0, $175,000 and $116,000 for the years ended December 31, 2000, 2001, 20 02, 2003 and 2004,
      respectively, and approximately $59,000 and $58,000 for the six months ended June 30, 2004 and 2005, respectively.
(2)   General and administrative expenses include stock-bas ed compensation expense of approximately $171,000, $0, $0, $113,000 and $1,063,000 for the years ended December 31, 2000,
      2001, 2002, 2003 and 2004, respectively, and approximately $50,000 and $315,000 for the six months ended June 30, 2004 and 20 05, respectively.
(3)   For comparative purposes, we have included a pro forma provision for income taxes assuming we had been taxed as a C corporation in all periods when our S corporation election was
      in effect.
(4)   Pro forma balance sheet data reflects: (a) additional borrowings of $3 million under our line of credit and $15 million under our six-month time loan; (b) the distribution of $18 million
      to our stockholders for previously undistributed S corporation earnings; and (c) the establishment of estimated net deferred tax assets totaling approximately $2.8 million recorded in
      connection with our conversion to a C corporation.

                                                                                               25
Table of Contents

                            MANAGEMENT‘S DIS CUSSION AND ANALYS IS OF FINANCIAL CONDITION
                                            AND RES ULTS OF OPERATIONS

      The following discussion and analysis should be read in conjunction with the ―Selected Consolidated Financial Data‖ and the
consolidated financial statements and related notes included elsewhere in this prospectus. This discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions, such as statements of our plans, objectives, expectatio ns and
intentions. The cautionary statements made in this prospectus should be read as applying to all related forward-looking statements wherever
they appear in this prospectus. Our actual results could differ materially fro m those anticipated in the forward -looking statements. Factors that
could cause or contribute to our actual results differing materially fro m those anticipated include, but are not limited to, those discussed in
―Risk Factors‖ and elsewhere in this prospectus. See ―Prospectus Summary—Relevant Industry Terms‖ for a mo re co mp lete defin ition of
industry terms used herein.

Overview

      We are a lead ing provider of information technology services and solutions to federal government agencies. We focus on design ing,
implementing, maintaining and upgrading secure IT systems and networks. Our technology and industry expertise enables us to p rovide a full
spectrum of services and solutions that assist our clients in achieving their program goals. We deliver a wide range of co mplex services and
solutions by leveraging our skills across four core service offerings:

      •    network engineering;

      •    informat ion assurance;

      •    systems development and integration; and

      •    enterprise systems management.

       We generate substantially all of our revenue fro m federal government contracts. We report operating results and financial dat a as one
operating segment. Funding for our contracts and task orders is generally linked to trends in federal government spending by defense,
intelligence and federal civ ilian agencies. For the six months ended June 30, 2005, we received approximately 73.0% of our re v enue from
services and solutions we provided to the Department of Defense and intelligence agencies, 26.5% of our reve nue fro m federal civilian
agencies and less than 1.0% of our revenue fro m co mmercial and state and local entities. For the same six month period ended June 30, 2004,
we received approximately 68.1% of our revenue fro m services and solutions we provided to the Department of Defense and intelligence
agencies, 31.4% of our revenue fro m federal civilian agencies and less than 1.0% of our revenue fro m co mmercial and state and local entit ies.
The following table shows our revenue from the client groups listed as a percentage of total revenue.
                                                                          Year ended December 31,                      Six months ended June 30,

                                                                   2002             2003            2004              2004                   2005

Depart ment of Defense and intelligence agencies                    62.1 %            61.5 %          69.9 %             68.1 %                    73.0 %
Federal civilian agencies                                           36.9              37.8            29.6               31.4                      26.5
Co mmercial and state & local entities                               1.0               0.7             0.5                0.5                       0.5

     Total revenue                                                 100.0 %          100.0 %          100.0 %            100.0 %                100.0 %


      We believe that our contract base is well diversified. As of June 30, 2005, we had appro ximately 80 active contracts and 155 task orders.
Our largest engagement is with the U.S. Transportation Co mmand (USTRANSCOM ), which has been a client of ours since 1992. Th is
engagement generated approximately 8.0% o f our revenue for the six months ended June 30, 2005 and approximately 8.6% of our revenue for
the six months ended June 30, 2004. In June 2004, USTRANSCOM awarded us two new seven -year task orders, with a total value of
approximately $117 million. Each of the USTRANSCOM task orders has a four-month base period and seven option periods. The first six
option periods are one-year each, and the seventh option period is eight months, for a total of seven years. Each option period has been priced
and has a value associated with it.

                                                                          26
Table of Contents

       As of June 30, 2005, our total contract backlog was appro ximately $525 million of wh ich appro ximately $63 million was funded. We
define backlog as our estimate of the remaining future revenue fro m existing signed contracts over the remain ing base contrac t performance
period and fro m the option periods of those contracts, assuming the exercise of all related options. Our backlog does not inc lude any estimate
of future potential delivery orders that might be awarded under our GWAC or other mult iple award cont ract vehicles. We define funded
backlog as the portion of backlog for which funding currently is appropriated and obligated to us under a contract or other a uthorization for
payment signed by an authorized purchasing agency, less the amount of revenue we h ave previously recognized. Our funded backlog does not
represent the full potential value of our contracts, as Congress often appropriates funds for a particu lar program or agency on a quarterly or
yearly basis, even though the contract may provide for the provision of services over a number of years. We define unfunded backlog as the
total backlog less the funded backlog. Un funded backlog includes values for contract options that have been priced but not ye t funded.

      We intend to expand our revenue by pursuing opportunities under our GWAC vehicles. As we secure more work under these vehicles, we
expect to hire additional employees and to require an increasing level of support from subcontractors that provide complement ary and
supplementary services to our offerings. Depending on labor market conditions, we may not be able to identify, hire and retain a sufficient
number of qualified emp loyees to perform the task orders we expect to win. In such cases, we will need to rely on subcontracts with unrelated
companies. Moreover, even in favorable labor market conditions, we anticipate entering into more subcontracts in the future as we expand our
work under our GWACs. The addit ional use of subcontractors may increase our risk o f non -performance under our GWA Cs because we will
not exercise control over such subcontractors ’ day to day operations. A material failure by a subcontractor on a particular engagement could
impact our client relationships, making it more d ifficu lt for us to win additional task orders fro m th at client, as well as other potential clients.
Further, as we gro w our business, we expect the possibility of technical failures and lawsuits against us for intellectual property infringement to
increase.

       We do not expect the effects of these trends to have a material impact on the results of our operations, working capital requ irements or
liquid ity.

      On December 23, 2003, we acquired Scientific & Eng ineering So lutions, Inc. (SES), a provider of informatio n assurance, software
engineering and knowledge and enterprise management solutions to agencies within the intelligence co mmunity. The acquisit ion of SES
strengthened our presence in the intelligence sector, enabling us to bid and win larger contracts with new and existing clients. The total
consideration paid, including closing indebtedness and acquisition costs, was $22.3 million, of wh ich a total of $2.9 million was paid during
2004 and 2005 as a result of certain contract transfers. The transaction was accounted for in accordance with SFA S No. 141, Business
Combinations , whereby the net tangible and identifiable intangible assets acquired and liabilit ies assumed were recognized at their estimated
fair market values at the date of acquisition.

      Our federal govern ment contracts are subject to audits by the Defense Contract Audit Agency (DCAA). Our DCAA audits have been
completed through 2001. The DCAA audits for SES have been completed through 2002. We do not anticipate any material imp act to our
financia l results with respect to periods in which audits have not been completed.

Revenue

      Substantially all of our revenue is derived fro m services and solutions provided to the federal government, primarily by our employees
and, to a lesser extent, our subcontractors. In some cases, our revenue includes third-party hardware and software that we purchase and
integrate as a part of our overall solutions. The level of hard ware and software purchases we make for clients may vary fro m period to period
depending on specific contract and client requirements. Since we earn higher profits fro m labor services that our emp loyees provide compared
with subcontracted efforts and other reimbursable items such as hardware and software purchases for clients, we seek to optim ize our labor
services on all of our engagements.

                                                                          27
Table of Contents

Contract Types

      Our services and solutions are provided under three types of contracts: time -and-materials; cost-plus; and fixed-price. Our contract mix
varies fro m year to year due to numerous factors including our business strategies and federal government procurement o bjectives. The
following table shows our revenue fro m each of these types of contracts as a percentage of our total revenue for the periods shown.

                                                        Year en ded Decemb er 31,                                 Six months ende d June 30,

                                       2002                        2003                2004                    2004                            2005

Time-and-materials                             60.5 %                        59.2 %            58.8 %                  60.5 %                          59.4 %
Cost-plus                                      28.4                          28.5              28.4                    26.9                            25.7
Fixed-price                                    11.1                          12.3              12.8                    12.6                            14.9

     Total revenue                            100.0 %                      100.0 %            100.0 %                 100.0 %                         100.0 %


      Time-and-materials contracts. Under time-and-materials contracts, we are reimbursed for labor at fixed hourly rates and generally
reimbursed separately for allowab le materials, other direct costs and out -of-pocket expenses. Our actual labor costs may vary from the
negotiated hourly rates if in a constricted labor market we need to hire addit ional emp loyees at higher wages or increase the compensation paid
to existing employees. To date, we have not experienced any material variations in the negotiated hourly rates on our time -and-material
contracts and our actual labor costs in connection with those contracts. To the extent that our actual labor costs under a ti me-an d-materials
contract vary significantly fro m the negotiated hourly rates, we can generate more or less than the targeted a mount of profit.

      Cost-plus contracts. Under cost-plus contracts, we are reimbu rsed for costs that are determined to be allowable and allocable to the
contract and receive a fee, which represents our profit. Cost-plus fixed fee contracts specify the contract fee in dollars. Cost-plus incentive fee
and cost-plus award fee contracts provide for increases or decreases in the contract fee, within specified limits, based upon actual results as
compared to contractual targets for factors such as cost, quality, s chedule and performance.

      Fixed-price contracts. Under fixed-p rice contracts, we perform specific tasks for a predetermined price. We have three basic categories of
fixed-price contracts: fixed unit price; fixed-p rice level-of-effort; and fixed-p rice co mp letion contracts. See ―Prospectus Summary—Relevant
Industry Terms‖ for a mo re co mplete definit ion of industry terms used herein. Co mpared to time-and-materials and cost-plus contracts,
fixed-price contracts generally offer higher profit margin opportunities but involve greater financial risk because we bear the impact of
potential cost overruns in return for the full benefit o f any cost savings. The majority of our work under fixed -price contracts is fixed-price
level-of-effort work, which has a lower risk than fixed-p rice co mp letion contracts, such as software development.

Operating Expenses

Cost of Revenue

      Cost of revenue primarily includes direct costs incurred to provide our services and solutions to clients. The most significa nt portion of
these costs is salaries and wages, plus associated fringe benefits including stock-based compensation, of our employees directly serving clients,
in addition to the related management, facilities and infrastructure costs. Cost of revenue also includes the costs of subcon tractors and outside
consultants, third-party materials, such as hardware or software that we purchase and provide to the client as part of an integrated solution, and
any other related direct costs, such as travel expenses. Since we earn higher pro fits on our own labor services, we expect th e rat io of cost of
revenue as a percent of revenue to decline when our labor services mix increases relative to subcontracted labor or third -party material.
Conversely, as subcontracted labor or third-party material purchases for clients increase relative to our own labor services, we expect the rat io
of cost of revenue as a percent of revenue to increase. Changes in the mix of services and equipment provided under our contracts can result in
variability in our contract margins. In addit ion, as we continue to bid and win larger

                                                                               28
Table of Contents

contracts, our own labor services component could decrease. This is because the larger contracts typically are b roader in sco pe and require
more diverse capabilities resulting in mo re subcontracted labor and the potential for mo re third -party hardware and software purchases. While
these factors could lead to a higher ratio of cost of revenue as a percent of revenue, the economics of these larger jobs are nonetheless generally
favorable because they increase income, broaden our revenue base and have a favora ble return on invested capital.

General and Administrative Expenses

      General and administrative expenses include the salaries and wages, plus associated fringe benefits including stock-based compensation,
of our employees not performing work d irectly for clients. Among the functions covered by these costs are facilities, corporate business
development, bid and proposal, contracts admin istration, finance and accounting, legal, corporate governance, and executive a n d senior
management.

Depreciation and Amortization

     Depreciat ion and amort ization includes the depreciation of co mputers, furniture and other equipment, the amort ization of thir d party
software we use internally, and leasehold imp rovements.

Amortization of Intangible Assets

     Amort izat ion of intangible assets includes the amortizat ion of identifiable intangible assets over their estimated useful liv es. Non-compete
agreements are generally amortized straight-line over the term of the agreement, wh ile contracts and related client relationships are amort ized
proportionately against the acquired backlog.

Interest Expense

      Interest expense is primarily related to interest expense incurred or accrued under our outstanding borrowings and notes paya ble and, to a
lesser extent, our interest rate swap agreement, deferred financing charges and interest on capital leases.

Provision for Income Taxes

      Under our S corporation election, all items of inco me and expense were ―passed through‖ and taxed at the stockholder level. As a result,
we were not required to record a provision for federal inco me taxes. However, we have recorded a provision for state income t axes for those
states that do not recognize the S corporation status. For the periods ended on the dates indicated below, after g iv ing effect to the revocation of
our S corporation status, we estimate our effect ive inco me tax rate would have been approximately 38.8%, 38.5% and 40.5% fo r the years
ended 2002, 2003 and 2004, respectively and an estimated 39.7% fo r the six months ended June 30, 2005.

                                                                         29
Table of Contents

Results of Operations

      The following table sets forth certain items fro m our consolidated statements of operations as a percentage of revenue for th e periods
indicated.

                                                                                                                          Six months ended
                                                                      Year ended December 31,                                 June 30,

                                                     2002                        2003             2004                2004                   2005

Revenue                                                     100.0 %                     100.0 %          100.0 %         100.0 %               100.0 %
Operating costs and expenses:
    Cost of revenue                                          83.7                        83.2             84.2            83.9                      84.9
    General and administrative
       expenses                                               8.8                        10.6              9.6               9.9                     7.7
    Depreciat ion and amort ization                           1.2                         1.2              1.0               1.1                     0.8
    Amort izat ion of intangible assets                       0.0                         0.0              0.7               0.8                     0.6

Total operating costs and expenses                           93.7                        95.0             95.5            95.7                      94.0

Operating inco me                                             6.3                         5.0              4.5               4.3                     6.0

Interest income                                               0.0                         0.0              0.0                0.0                    0.0
Interest expense                                             (0.6 )                      (0.3 )           (0.8 )             (0.9 )                 (0.8 )

Income before taxes                                           5.7                         4.7              3.7               3.4                     5.2
Provision for inco me taxes(1)                                0.2                         0.2              0.1               0.2                     0.2

Net inco me                                                   5.5 %                       4.5 %            3.6 %             3.2 %                   5.0 %


(1)   Provision for inco me taxes only reflects taxes paid as an S corporation. See ―S Corporation Status.‖

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

      Revenue: Revenue for the six months ended June 30, 2005 was $93.9 million, co mpared to $81.2 million for the six months ended June
30, 2004, representing an increase of $12.7 million, or 15.6%. The increase is primarily due to appro ximately $11.9 million in n ew contract
awards, including a five-year task order with an estimated value of $63.7 million with the U.S. Army ’s Program Executive Office for
Simu lation, Train ing and Instrumentation (PEO STRI). In addit ion, the increase in rev enue was also due to approximately $6.2 million fro m
growth on existing contracts and approximately $0.5 million fro m higher award fees fro m cost -plus contracts. These increases were part ially
offset by reductions of approximately $4.0 million in work we p erfo rmed for the Depart ment of Energy (DOE) and U.S. Navy on a
subcontracted basis.

      Cost of revenue: Cost of revenue for the six months ended June 30, 2005 was $79.6 million, or 84.9% of revenue, co mpared to $68.2
million, or 83.9%, for the six months ended June 30, 2004. The increase in cost of revenue was primarily due to approximately $7.8 million of
higher subcontractor costs. To a lesser extent, the increase was driven by approximately $2.4 million of d irect contract costs in support of new
and expanded task orders and contracts and the reallocation of appro ximately $0.9 million of expenses associated with the reorganization of our
business development efforts. The increase in cost of revenue as a percent of revenue was primarily due to the increased use of subcontractors
and increased levels of hardware and equip ment acquired on behalf of our clients.

      General and administrative expenses: General and administrative expenses for the six months ended June 30, 2005 were $7.2 million, or
7.7% of revenue, compared to $8.0 million, or 9.9%, for the six months ended June 30, 2004. The decrease in general and administrative
expenses is due to the reallocation of appro ximately $0.9 million of expenses associated with the reorganizat ion of our busin ess development
efforts and approximately $1.3 million reduction in accounting costs after the integration of SES. These decreases were offse t, to some extent,
by approximately $0.4 million increases in audit and consulting fees associated with corporate governance an d approximately $0.8 million for
expenses associated with the hiring of additional executive management.

                                                                            30
Table of Contents

      Depreciation and amortization: Depreciat ion and amort ization for the six months ended June 30, 2005 was appro ximately $0.8 million,
compared to appro ximately $0.9 million for the six months ended June 30, 2004. The decrease in depreciat ion and amort ization was primarily
due to certain computer and equipment assets being fully depreciated during 2005.

      Amortization of intangible assets: Amortizat ion of intangible assets for the six months ended June 30, 2005 was approximately $0.5
million, co mpared to appro ximately $0.6 million for the six months ended June 30, 2004. The decrease was primarily due to decreasing
amort ization on the contracts and client relat ionship intangible asset recorded in connection with the SES acquisition, which is being amort ized
proportionately against the acquired backlog over five years.

      Operating income: For the six months ended June 30, 2005, operating inco me was $ 5.6 million, or 6.0% of revenue, compared to $3.5
million, or 4.3%, for the six months ended June 30, 2004. Operating inco me, as a percent of revenue, increased primarily due to lower general
and admin istrative expenses and the recognition of revenue fro m award fees upon notification of award. Award fees on cost-plus contracts are
in addition to the reimbursement of allo wable costs and, therefore, have no additional expense associated with them.

     Interest expense: For the six months ended June 30, 2005, interest expense was $0.8 million, co mpared to $0.7 million for the six months
ended June 30, 2004. The increase in interest expense was due to a higher average interest rate on borrowings, which was part ially o ffset by
decreased borrowing under our line of credit and term note.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

      Revenue: Revenue for the year ended December 31, 2004 was $171.3 million, co mpared to $136.4 million fo r the year ended December
31, 2003, representing an increase of $34.9 million, or 25.6%. The increase in revenue was primarily due to approximately $22.4 million which
we assumed as a result of the 2003 SES acquisition, $9.8 million in new contract awards and $18.5 million in contract growth under existing
contracts and task orders. New contract awards included the U.S. Army ’s PEO STRI contract, various task orders under the U.S. Army ’s ITES
GWA C and an award for the U.S. Air Force’s Aircraft Maintenance Intuitive Troubleshooting (AMIT) program. The additional re venue on
these and other contracts was partially o ffset by a decrease in revenue of approximately $7.3 million fro m exp ired contracts and $9.7 million
funding reductions under existing contracts.

      Cost of revenue: Cost of revenue for the year ended December 31, 2004 was $144.0 million, or 84.2% of revenue, compared to $113.5
million, or 83.2%, for the year ended December 31, 2003. The increase was due to approximately $19.6 million in additional la bor and related
overhead costs and approximately $11.1 million in addit ional subcontract costs. The increase in cost of revenue as a percent of revenue was
primarily due to the increased use of subcontractors and increased levels of hardware and equip ment acquired on behalf of our clients.

      General and administrative expenses: General and administrative expenses for the year ended December 31, 2004 were $16.4 million, or
9.6% of revenue, compared to $14.5 million, or 10.6%, for the year ended December 31, 2003. The increase in general and ad ministrative
expenses was due to approximately $0.7 million for the addition of senior executives to support corporate growth and approximately $3.0
million for the full-year inclusion of general and admin istrative functions associated with SES. In addit ion, general and ad minist rative expenses
increased due to $0.9 million in stock co mpensation expense resulting from the issuance of non -qualified stock options to senior executives.
These increases were offset, in part, by a reduction and reallocation of appro ximately $2.8 million due to reorganizat ion of our business
development efforts. General and ad ministrative expenses as a percent of revenue declined as we leveraged our corporate infra s tructure
expenses over a larger revenue base.

      Depreciation and amortization: Depreciat ion and amort ization for the year ended December 31, 2004 was $1.7 million, co mpared to $1.6
million for the year ended December 31, 2003. The increase in depreciat ion and amort ization was primarily due to increased amort ization of
leasehold improvements.

                                                                         31
Table of Contents

     Amortization of intangible assets: Amortizat ion of intangible assets for the year ended December 31, 2004 was $1.3 million, co mpared to
$16,000 for the year ended December 31, 2003. The increase was the result of the full-year amo rtization of intangible assets recorded in
connection with the acquisition of SES.

      Operating income: For the year ended December 31, 2004, operating inco me was $7.8 million, or 4.5% of revenue , compared t o $6.8
million, or 5.0%, for the year ended December 31, 2003. Operat ing inco me, as a percent of revenue, decreased primarily due to an increase in
cost of revenue, amo rtization of intangible assets and stock compensation expense, which was partially o ffset by a decrease in general and
administrative expenses as a percent of revenue.

      Interest expense: For the year ended December 31, 2004, interest expense was $1.4 million, co mpared to $0.4 million for the year ended
December 31, 2003. The increase in interest expense was due to increased borrowing under our line of credit , a new term note used to finance
the acquisition of SES and rising interest rates.

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

      Revenue: Revenue for the year ended December 31, 2003 was $136.4 million, co mpared to $138.2 million fo r the year ended December
31, 2002, representing a decrease of $1.8 million, o r 1.3%. The decrease was due to approximately $11.7 million in contract wo rk reductions
and a reduction in revenue of approximately $8.3 million fro m the exp iration of s mall business prime contracts for wh ich we w ere not elig ible
to bid as a prime contractor and were ab le to retain on ly a portion of the work as a subcontractor on some of these contracts. This decrease was
partially offset by approximately $4.9 million additional revenue fro m new contracts awarded, includ ing the National Nuclear Security
Admin istration’s (NNSA) Nevada contract and the Defense Logistics Agency ’s Applications Support Team (DLA AST) contract, and
approximately $11.5 million in revenue growth on existing contracts.

      Cost of revenue: Cost of revenue for the year ended December 31, 2003 was $113.5 million, or 83.2% of revenue, compared to of $115.7
million, or 83.7%, for the year ended December 31, 2002. The decrease in cost of revenue was primarily due to a decrease of approximately
$4.0 million in the use of subcontractor labor which was partially offset by a $1.7 million increase in direct labor. The dec rease in cost of
revenue as a percent of revenue was primarily due to this increased use of our direct labor, which typically generates higher margins, and the
decreased use of subcontractor labor.

     General and administrative expenses: General and administrative expenses for the year ended December 31, 2003 were $14.5 million, or
10.6% of revenue, compared to $12.2 million, or 8.8%, for the year ended December 31, 2002. The increase in general and ad ministrative
expenses was due to investments in corporate infrastructure to support our anticipated future growth, including appro ximately $1.8 million for
an expansion of the business development and market ing staff, and approximately $0.2 million of increased legal expenses.

      Depreciation and amortization: Depreciat ion and amort ization for the years ended December 31, 2003 and 2002 was $1.6 million.

      Amortization of intangible assets: Amortizat ion of intangible assets for the year ended December 31, 2003 was $16,000 due to the
partial-year amort ization of intangible assets recorded in connection with the acquisition of SES. The amortizat ion of intangible assets for the
year ended December 31, 2002 was $20,000 due to the final amo rtization of a copyright.

      Stock compensation expense: Stock compensation expense for the year ended December 31, 2003 was $0.3 million. We recorded no
stock compensation expense for the year ended December 31, 2002. The increase was due to the issuance of non -qualified stock options to
senior executives.

                                                                         32
Table of Contents

      Operating income: For the year ended December 31, 2003, operating inco me was $6.8 million, or 5.0% of revenue, compared t o $8.7
million, or 6.3%, for the year ended December 31, 2002. Operat ing inco me, as a percent of revenue, decreased primarily due to the decrease in
revenue and the increase in general and ad min istrative expenses, which were part ially offset by a decrease in cost of revenue .

      Interest expense: For the year ended December 31, 2003, interest expense was $0.4 million, co mpared to $0.8 million for the year ended
December 31, 2002. The decrease was due to reduced borrowing under our line of credit and declin ing interest rates during 200 3 as compared
to 2002.

Effects of Inflation

      We generally have been able to price our contracts in a manner to acco mmodate the rates of inflat ion experienced in recent years. In
2004, we conducted approximately 58.8% of our business under time -and-materials contracts, where labor rates are usually adjusted annually
by predetermined escalation factors. Also in 2004, we conducted approximately 28.4% o f our business under cost -plus contracts, which
automatically adjust for changes in cost. We conducted the remain ing 12.8% of our business under fixed -price contracts, in which we include a
predetermined escalation factor and for which we generally have not been adversely affected by inflation.

Li qui di ty and Capital Resources

       Our primary liquidity needs are for financing working capital, investing in capital expenditures and making selective strateg ic
acquisitions. Historically, we have relied primarily on our cash flow fro m operations and borrowings under our credit facilit y to provide the
capital for our liquid ity needs. We expect the combination of cash flow fro m operations and the available borro wing capacity on our credit
facility to continue to meet our normal working capital and capital expenditure requirements for at lea st the next t welve months. As part of our
growth strategy, we may pursue acquisitions that could require us to raise additional external capital.

     Cash and net working capital: The follo wing table sets forth our cash and net working capital (current asset s less current liabilities)
balances as of June 30, 2005 and December 31, 2004 and 2003, respectively.

                                                                                                                                  As of June 30,
                                                                                              As of December 31,                      2005

                                                                                           2003                 2004

                                                                                                             (in thousands)
       Cash and cash equivalents                                                         $ 1,340            $         40      $               13
       Net working capital                                                                 2,492                   4,653                   3,303

      We consider cash on deposit and all h ighly liquid investments with original maturities of three months or less to be cash and cash
equivalents. We maintain min imal cash balances and have substantially all available cash credited against our borrowings under our line of
credit. Net working capital decreased by $1.3 million for the six months ended June 30, 2005 and increased by $2.2 million fo r the year ended
December 31, 2004. The decrease for the six months ended June 30, 2005 was primarily due to a $1.1 million increas e in accru ed salaries and
benefits and a $1.1 million increase in accounts payable, primarily offset by a $0.7 million decrease in borro wings under our lin e of credit. The
increase in net working capital fo r the year ended December 31, 2004 was primarily d ue to an increase in operating cash flow which reduced
our line of cred it balance by $2.5 million. Th is reduction was partially offset by a slightly larger increase in accounts pay able and accrued
expenses than in accounts receivable. Accounts receivable d id not grow as much as accounts payable and accrued expenses primarily due to
our improved invoicing and collection efforts that reduced our days sales outstanding.

                                                                         33
Table of Contents

     Cash flow: The following table sets forth our sources and uses of cash for the six months ended June 30, 2005 and 2004, and the years
ended December 31, 2004, 2003 and 2002.

                                                 Year ended December 31,                                                Six months ended June 30,

                              2002                         2003                             2004                     2004                           2005

                                                        (audited)                                                              (unaudited)
                                                                                     (in thousands)
Net cash provided
  by operating
  activities         $                 9,946     $                  12,353      $                     9,232      $          3,326      $                   8,193
Net cash provided
  by (used in)
  investing
  activities                           2,594                        (24,497 )                         (2,212 )                (585 )                       (3,066 )
Net cash (used in)
  provided by
  financing
  activities                         (12,968 )                      13,168                            (8,320 )              (3,133 )                       (5,154 )

Net (decrease)
  increase in cash   $                  (428 )   $                    1,024     $                     (1,300 )   $            (392 )   $                      (27 )


      Our operating cash flow is primarily affected by the overall profitability of our contracts, our ability to invoice and collect fro m our
clients in a t imely manner, and our ability to manage our vendor payments. We bill most of our clients and prime contractors monthly after
services are rendered. Improving our invoicing and collect ion procedures remains a top priority in order to increase cash flow from operat ions.
The increase in cash provided by operating activities for the six months ended June 30, 2005 compared to the six months ende d June 30, 2004
was primarily due to increased profitability and a decrease in accounts receivable due to imp roved collections. The $3.1 million decrease in net
cash provided by operating activities for the year ended December 31, 2004 was caused primarily by a $5.3 million increase in accounts
receivable co mpared to a $3.7 million decrease in accounts receivable for the year ended December 31, 2003. Th is increase was caused by
growth in our business, yet reflects our improved invoicing and collection efforts. The increase in accounts receivable was partially offset by an
increase of $0.9 million in stock compensation expense related to the issuance of non -qualified stock options to senior executiv es in 2004.

      Our cash flo w used in investing activities cons ists primarily of capital expenditures and acquisitions. Our increase in cash used in
investing activities for the six months ended June 30, 2005 co mpared to the six months ended June 30, 2004 was primarily due to capital
expenditures and final SES acquisition pay ments. The $2.2 million in cash used for investing activities for the year ended December 31, 2004
was primarily due to $1.0 million in capital expenditures and $1.2 million in additional payments related to the SES acquisit ion . The $24.5
million in cash used for investing activities for the year ended December 31, 2003 was primarily due to $19.2 million in cash used to acquire
SES in December 2003 and capital expenditures of $5.3 million. The increased capital expenditures in 2003 were primarily du e to the
relocation of our headquarters and the leasehold improvements and other fixed asset additions associated with that relocation .

       Our cash flo w provided by financing activ ities consists primarily of proceeds from and payments on our line of credit and term note, and
distributions to our stockholders. Our increase in cash provided by financing activities for the six months ended June 30, 2005 compared to the
six months ended June 30, 2004 was primarily due to payments on our line of cred it and term loan and stockholder distributions. For the year
ended December 31, 2004, cash flow used in financing activit ies included $2.6 million in scheduled amortization pay ments on the term note,
payments of $2.5 million on the line of credit and distributions to s tockholders of $3.5 million, partially o ffset by a $0.2 million increase in
capital lease obligations. The $13.2 million provided by financing activities for the year ended December 31, 2003 was primar ily due to
increased borrowing under our line of credit and a $14.0 million term note. Borrowings under the line of cred it and the term note were used to
finance the acquisition of SES in December 2003.

      Credit Agreement: On December 23, 2003, we entered into a Loan and Security Agreement that provides for a $30.0 million revolving
note and a $14.0 million term note.

     The revolving note provides a line of credit of up to $30.0 million, limited to a percentage of our elig ible receivables under the Loan and
Security Agreement. The outstanding balance of the line of credit accrues interest

                                                                                34
Table of Contents

based on LIBOR plus an applicable margin . The outstanding borrowings are collateralized by a security interest in substantially all of our
assets. The bank also requires a direct assignment of all of our contracts at the bank’s discretion. The line of credit exp ires on December 31,
2006, but may be renewed by agreement of the part ies. The following table summarizes our line of credit as of June 30, 2005 a nd December
31, 2004 and 2003.

                                                                               As of December 31,                            As of June 30, 2005

                                                                             2003               2004                      Actual            Pro forma

                                                                                                    (dollars in thousands)
       Amount available under line of cred it                            $ 25,266            $ 26,788                $ 27,007              $ 27,007
       Outstanding balance                                                 14,951              12,439                  11,731                14,731

       Unused portion                                                    $ 10,315            $ 14,349                $ 15,276              $ 12,276

       Interest rate on line of cred it                                             3.7 %               4.5 %                    5.3 %             5.3 %

      For the six months ended June 30, 2005 and for the years ended December 31, 2004, 2003 and 2002, the interest expense on the line of
credit was appro ximately $0.4 million, $0.6 million, $0.3 million and $0.5 million, respectively.

      The $14.0 million term note was provided as part of the financing for our acquisition of SES in December 2003. The term note balance is
being amort ized over 60 months commencing February 1, 2004 with the balance of $5.6 million due on December 31, 2006. The term note
accrues interest based on LIBOR plus an applicable margin. In connection with the term note, we entered into an interest rate swap agreement
with an initial notional amount of $14.0 million, wh ich amort izes at the same rate as the term note. The interest rate swap agreement has
effectively fixed our interest rate on the term note at 2.6% plus the applicable margin.

      Our scheduled term note maturities for the years following December 31, 2004 are: $2.8 million in 2005 and $8.4 million in 2006,
including the final pay ment of $5.6 million due on December 31, 2006. For the six months ended June 30, 2005 and for the year ended
December 31, 2004, the interest expense on the term note was appro ximately $0.3 million and $0.6 million, respectively.

      The following table summarizes the outstanding balance and applicable interest rate on our term note as of June 30, 2005 and December
31, 2004 and 2003.

                                                                                                                                              As of
                                                                                                                                             June 30,
                                                                                                     As of December 31,                        2005

                                                                                               2003                       2004

                                                                                                              (dollars in thousands)
       Outstanding balance                                                                  $ 14,000                 $ 11,433              $ 10,033
       Interest rate on term note                                                                 4.1 %                    5.0 %                 5.8 %

      On July 25, 2005, we amended the Loan and Security Agreement to provide for additional borrowings under a six-month time loan of up
to $15.0 million. The t ime loan will be due in January 2006 or upon receipt of proceeds fro m this offering, wh ichever occurs first, and will bear
interest at LIBOR plus 45 basis points. On July 26, 2005, we borrowed $15 million under the time loan.

      The Loan and Security Agreement requires that we meet certain financial covenants, including a min imu m net worth, a funded de bt ratio
and a fixed charge coverage ratio. We have been in co mpliance with these financial covenants.

Off-Bal ance Sheet Arrangements

      We do not have any off-balance sheet arrangements.

                                                                        35
Table of Contents

Contractual Obligati ons

        The following table summarizes our contractual obligations as of December 31, 2004 that require us to make future cash paymen ts.

                                                                                                          Payments due by period

                                                                                                   Less than           1-3              3-5     More than
                                                                                      Total         1 year            years            years     5 years

                                                                                                               (in thousands)
Contractual obligations:
Revolving note(1)                                                                  $ 12,440       $ 12,440        $      —         $      —     $     —
Term note                                                                            11,433          2,800             8,633              —           —
Capital lease obligations                                                               683            274               409              —           —
Operating lease obligations                                                             324            199               121                3         —
Rent on facilities                                                                   26,748          3,490            10,244            6,210       6,803
Other long-term liabilities                                                             188            150                38              —           —

Total                                                                              $ 51,816       $ 19,353        $ 19,445         $ 6,213      $   6,803


(1)     The revolving note exp ires on December 31, 2006, but is classified as a current liab ility.

Critical Accounti ng Policies

Revenue Recognition

      Our revenue recognition policy addresses our three different types of contractual arrangements: time -and-materials contracts; cost-plus
contracts; and fixed-price contracts.

    Time-and-Material Contracts: Revenue on time -and-material contracts is recognized based on negotiated billable rates multip lied by the
number of hours delivered plus allo wable expenses incurred during the period.

     Cost-Plus Contracts: Revenue on cost-plus contracts is recognized based on the allowable costs incurred during the period , plu s any
recognizable earned fee. Revenue associated with fixed fees under cost -plus contracts is considered earned in proportion to the allo wable
expenses incurred in perfo rmance of the contract.

      Fixed-Price Contracts: The Co mpany has three categories of fixed -price contracts: fixed un it price; fixed-price level-o f-effort; and
fixed-price co mplet ion contracts. Revenue on fixed unit price contracts, where specified units are delivered under service arran gements, is
recognized as units are delivered based on the specified price per unit. Revenue for fixed-price level-of-effort contracts is recognized based
upon the number of units of labor actually delivered mu ltip lied by the negotiated rate for each unit of labor. Revenue on fixed-price co mp letion
contracts is recognized on the percentage of completion method using costs incurred in relation to total estimated costs.

     For contracts with performance based incentives or award fees, revenue is recognized as earned. Certain fees are not recognized until
award notification is received, wh ich may result in revenue and profit variability fro m quarter to quarter.

      Contract accounting requires judgment relat ive to assessing risks, estimating contract revenues and costs, and making assumptions for
schedule and technical issues. Less than 2% of our revenue is derived fro m contracts that require the use of estimates or related assumptions.
Due to the size and nature of certain of our contracts that require the use of estimates or related assumptions, the estimat ion of total revenue and
cost at completion is subject to many variables. Contract costs include material, labor and subcon tracting costs, as well as an allocation of
allo wable indirect costs. Assumptions have to be made regard ing the length of time to co mplete the contract because costs als o include
expected increases in wages and prices for materials. We apply judgment in es timating the amounts and assessing the potential for realization.
Further, we utilize a number of

                                                                           36
Table of Contents

management processes to monitor contract performance and revenue estimates, including quarterly management reviews of contrac t estimates.
These amounts are only included in contract value when they can be reliably estimated and realization is considered pr obable. Estimates of
award fees related to performance on certain contracts, which are generally awarded at the discretion of the client, as well as penalties related to
contract performance, are considered in estimating sales and profit rates. Incentives and penalties are recorded when there is sufficient
informat ion for us to assess anticipated performance. Anticipated losses on contracts are recognized at the time they become known.

      Fro m t ime to time, circu mstances develop or actual amounts are determinable that require us to revise our total estimated costs or revenue
expectations. We record the effect of any revisions to our estimated total costs and revenue in the period in which circu msta nces requiring
revision become known. Consequently, operating results could be affected by revisions to prior accounting estimates. Historically, these
changes relate to changes in the contractual scope of our work, and have not significantly impacted the expected profit rate on a contract. We
do not expect that revisions to our estimates and assumptions would have a material effect on the Co mpany ’s consolidated results of operations,
cash flows or financial position.

Stock-Based Compensation

      We account for stock-based compensation in accordance with Accounting Principles Board Op inion No. 25, Accounting for Stock Issued
to Emp loyees (APB No. 25) using the intrinsic-value method. Under this method, we recognized appro ximately $1.2 million and $0.3 million
in co mpensation expense for stock options issued during 2004 and 2003, respectively. We allocate this expense either to cost of revenues or
general and administrative expenses depending on the recipient of the option. We have issued nonqualified stock options to employees at
various times during 2004 and 2003 with vesting periods ranging from zero to seven years. Co mpensation expense for the amount that the fair
value of the stock at the grant date exceeds the exercise price is being amo rtized over the applicable vesting periods. In ad dition to the standard
vesting schedule, some of the option agreements have accelerated vesting upon the occurrence of certain events, including an IPO or t he
achievement of certain revenue and profit goals. We estimate stock co mpensation expense in 2005 will be appro ximately $1.7 mi llion,
including the expense for the accelerated vesting of certain options. We estimate our stock co mpensation expense to be approximately $0.2
million each year for 2006 through 2009, but up to an additional $0.2 million could be expensed in the year the re venue and profit goals are
achieved, which would reduce the expense in subsequent years.

      Due to the lack o f an active public market fo r our co mmon stock, we determined the fair value of our options considering the guidance
provided by the AICPA Pract ice Aid, Valuation of Privately-Held-Co mpany Equity Securities Issued as Co mpensation. We estimated the fair
value of the common stock underlying the options by performing contemporaneous valuations in connection with each grant date. The
valuations were based on the market approach, applying the valuation mu ltip les of public co mpanies in our sector on trailing twelve months for
revenue, EBIT, and EBITDA to our trailing twelve month results, adjusted for outstanding debt, cash, and applying a discount for lack of
marketability. We prepared the valuations in-house because we had reasonable methodologies for estimating the fair value of the common
stock. In the past twelve months all of the options we have granted have been at an exercise price of $10.0, which in all cases exceeded the fair
market value of our co mmon stock on the date of grant. The factors contributing to the increase in the fair market value (as reflected in our
expected offering price) are the anticipated marketability of the stock and our increa sed organic growth in the first six months of 2005.

     In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share -Based
Payment, which is a rev ision of FASB Statement No. 123, Accounting for Stock-Based Co mpensation. (See discussion below under Significant
New Accounting Pronouncement.) Nonpublic entities that did not use the fair-value-based method of accounting are required to apply the
prospective transition method of accounting under FAS 123(R) as of the required effective date, which is, for us, January 1, 2006. Under the
prospective method, a nonpublic entity accounting for its equity -based awards using the intrinsic-value

                                                                         37
Table of Contents

method under APB 25, would continue to apply APB 25 in future periods to awards outstanding at the date they adopt FAS 123(R) . Therefore,
there will be no change to the projected stock compensation expenses for our existing stock options as a result of FAS 123(R).

Goodwill and the Amortization of Intangible Assets

      Our accounting policy regarding acquisitions is in accordance with SFAS No. 141, Business Co mbinations , whereby the net tangible and
identifiable intangible assets acquired and liab ilit ies assumed are recognized at their estimated fair market values at the date of acquisition. The
value of the contracts and related client relationships is based on an independent appraisal. At the time of the acquisition, all int angibles
including the contracts and related client relationships and non-compete agreements are rev iewed to determine the term of amo rtizat ion for
each intangible asset.

      Our accounting policy regarding goodwill and the amort ization of intangible assets requires that goodwill be reviewed periodically for
impairment and no longer be amortized against earnings. Annually, on October 1, we perform a fair value analysis of our r eporting units using
valuation techniques prescribed in Statement of Financial Accounting Standards (SFAS) No. 142.

       Long-lived assets are reviewed for impairment whenever events or circu mstances indicate that the carrying amount of an asset many not
be fully recoverable in accordance with SFAS No. 144, Accounting for the Impairment of Long-Lived Assets . An impairment loss is recognized
if the sum of the long-term undiscounted cash flows is less than the carrying amount of the long -lived asset being evaluated. Any write-downs
are treated as permanent reductions in the carrying amount of the assets.

     Contract rights are amortized proportionately against the acquired backlog. Non -co mpete agreements are amortized over their estimated
useful lives.

Significant New Accounting Pronouncement

       In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share Based
Payment, which is a rev ision of FASB Statement No. 123, Accounting for Stock -Based Compensation . Statement 123(R) supersedes APB
Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows .
Statement 123(R) will be effective for nonpublic companies in the first fiscal year beginning after December 15, 2005. Early adoption will be
permitted in periods in which financial statements have not yet been issued. We plan to adopt FAS 123(R) effective January 1, 2006. FAS
123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the fin ancial
statements based on their fair values (i.e. pro forma d isclosure is no longer an alternative to financial statement recognition). Nonpublic entities
that did not use the fair-value-based method of accounting are required to apply the prospective transition method of accounting under FAS
123(R) as of the required effective date. Under the prospective method, a nonpublic entity accounting for its equity -based awards using the
intrinsic-value method under APB 25, would continue to apply APB 25 in future periods to awards outstanding at the date they adopt FAS
123(R). A ll awards granted, modified or settled after the date of adoption will be accounted for using the measurement, recog nition and
attribution provisions of FAS 123(R). Although the adoption of FAS 123(R) is expected to affect the measurement of share -based equity
awards to employees after adoption, we do not expect the adoption will have a material effect on our consolidated results of operations, cash
flows or financial position.

Qualitati ve and Quantitati ve Disclosures about Market Risk

       Our exposure to market risk relates to changes in interest rates for borrowings under our revolving credit agreement and our term loan.
These borrowings accrue interest at variable rates. Based upon our borrowings under these two facilit ies in 2004, a hypothetical 10% in crease
in interest rates would have increased interest expense by approximately $21,400 and would have decreased our annual cash flow by a
comparable amount.

                                                                          38
Table of Contents

Quarterly Results of Operati ons

       Our results of operations, particularly our revenue, operating inco me and cash flow may vary significantly fro m quarte r to quarter
depending on a number of factors, including the progress of contract performance, the number of b illable days in a quarter, v acation days, the
timing of client orders, timing of award fee notices, changes in the scope of contracts, billing of other d irect and subcontract costs, the
commencement and comp letion of contracts we have been awarded and general economic condit ions. Because a significant portion of our
expenses, such as personnel and facilit ies costs, are fixed in the short term, successful contract performance and variation in the volume of
activity, as well as in the number of contracts or task orders commenced or co mp leted during any quarter, may cause significa nt variations in
operating results from quarter to quarter.

       The federal govern ment’s fiscal year ends September 30. If a federal budget for the next federal fiscal year has not been approved by that
date in each year, our clients may have to suspend engagements that we are working on until a budget has been approve d. Any such
suspensions may reduce our revenue in the fourth quarter of that year or the first quarter of the subsequent year. The federa l government’s
fiscal year end can also trigger increased purchase requests from clients for equipment and materials. A ny increased purchase requests we
receive as a result of the federal government’s fiscal year end would serve to increase our third or fourth quarter revenue, but will generally
decrease profit margins for that quarter, as these activities generally are no t as profitable as our typical offerings.

      As a result of the above factors, period-to-period comparisons of our revenue and operating results may not be meaningful. Pot ential
investors should not rely on these comparisons as indicators of future performance as no assurances can be given that quarterly results will not
fluctuate, causing a material adverse effect on our operating results and financial condition.

                                                                        39
Table of Contents

                                                                                                  For the quarter ended

                                Mar. 31,        June 30,           Sept. 30,           Dec. 31,        Mar. 31,       June 30,           Sept. 30,        Dec. 31,       Mar. 31,       June 30,
                                 2003             2003               2003               2003            2004            2004               2004            2004           2005            2005

                                                                                        (in thousands, except per share data)
Statement of Operations
   Data:
Revenue                        $    35,311      $   34,751     $       34,147      $      32,212      $   40,843      $   40,384     $       44,261      $   45,765      $   46,372     $   47,503
Operating costs and
   expenses:
   Cost of revenue (1 )             29,603          28,872             28,105             26,940          34,289          33,940             37,536          38,380          39,567         40,104
   General and
      administrative
      expenses (1)                   3,729           3,829              3,069              3,898           4,132           3,904              3,939           4,387           3,622          3,617
   Depreciation and
      amortization                     413            385                 376                403             449            437                 435             420            398            403
   Amortization of
      intangible assets                —              —                   —                   16             309            307                 320             316            272            267

Total operating costs and
  expenses                          33,745          33,086             31,550             31,257          39,179          38,588             42,230          43,503          43,859         44,391

Operating income                     1,566           1,665              2,597                955           1,664           1,796              2,031           2,262           2,513          3,112

Interest income                         11               1                  0                  3               2               4                  8              13               8             18
Interest expens e                     (158 )          (100 )              (80 )             (101 )          (401 )          (320 )             (364 )          (288 )          (352 )         (416 )

Income before income taxes           1,419           1,566              2,517                857           1,265           1,480              1,675           1,987           2,169          2,714
Provision for income taxes
   (2)                                  59              65                104                 35              55              64                 72              86            102            118

Net income                     $     1,360      $    1,501     $        2,413      $         822      $    1,210      $    1,416     $        1,603      $    1,901      $    2,067     $    2,596

Pro forma earnings per
   share-diluted (3)           $      0.12      $     0.13     $         0.22      $        0.07      $     0.11      $     0.12     $         0.14      $     0.16      $     0.18     $     0.23

                                                                                                  For the quarter ended

                                Mar. 31,        June 30,           Sept. 30,           Dec. 31,        Mar. 31,       June 30,           Sept. 30,        Dec. 31,       Mar. 31,       June 30,
                                 2003             2003               2003               2003            2004            2004               2004            2004           2005            2005

As a Percentage of
   Revenue:
Revenue                              100.0 %         100.0 %            100.0 %            100.0 %         100.0 %         100.0 %            100.0 %         100.0 %         100.0 %        100.0 %

Operating costs and
  expenses:
  Cost of revenue                     83.8            83.1               82.3               83.6            84.0            84.0               84.8            83.9            85.4           84.5
  General and
      administrative
      expenses                        10.6            11.0                9.0               12.1            10.1             9.7                 8.9            9.6             7.8            7.6
  Depreciation and
      amortization                     1.2             1.1                1.1                1.3             1.1             1.1                 1.0            0.9             0.9            0.8
  Amortization of
      intangible assets                —              —                   —                  0.1             0.8             0.8                 0.7            0.7             0.6            0.6

Total operating costs and
  expenses                            95.6            95.2               92.4               97.1            96.0            95.6               95.4            95.1            94.7           93.5

Operating income                       4.4             4.8                7.6                2.9             4.0             4.4                 4.6            4.9             5.3            6.5

Interest income                         0.0            0.0                 0.0                0.0             0.0            0.0                 0.0             0.0            0.0            0.0
Interest expens e                      (0.4 )         (0.3 )              (0.2 )             (0.3 )          (1.0 )         (0.8 )              (0.8 )          (0.6 )         (0.8 )         (0.9 )

Income before income taxes             4.0             4.5                7.4                2.6             3.0             3.6                 3.8            4.3             4.5            5.6
Provision for income taxes
   (2)                                 0.1             0.2                0.3                0.1             0.1             0.2                 0.2            0.1             0.2            0.2

Net income                             3.9 %           4.3 %              7.1 %              2.5 %           2.9 %           3.4 %               3.6 %          4.2 %           4.3 %          5.4 %


(1)   Cost of revenue and general and administrative expenses include the following stock-based compens ation expense:
                                                                                             For the quarter ended

                                Mar. 31,       June 30,          Sept. 30,        Dec. 31,        Mar. 31,     June 30,         Sept. 30,     Dec. 31,       Mar. 31,       June 30,
                                 2003            2003              2003            2003            2004          2004             2004         2004           2005            2005

                                                                                                (in thousands)
      Cost of revenue          $        22    $        73    $           22   $          58      $       30    $      29    $           28   $        29    $        29    $       29
      General and
        administrative
        expenses                        24             36                36              17              26           23               507          506            148            167

(2)   Provision for income taxes only refl ects taxes paid as an S corporation. See ―S Corporation Status.‖
(3)   Pro forma earnings per share is based on pro forma net income assuming we had been taxed as a C corporation in all periods when our S corporation election was in effect.

                                                                                                40
Table of Contents

                                                                    B US INESS

                                                              Company Overview

      We are a lead ing provider of information technology services and solutions to federal government agencies. We focus on design ing,
implementing, maintaining and upgrading secure information technology (IT) systems and networks by leveraging our skills acro ss four core
service offerings: network engineering; information assurance; systems development and integration; and enterprise systems ma nagement.
Since our founding in 1989, we have derived substantially all of our revenue fro m contracts performed for fed eral government agencies, with
the majority of our revenue currently generated fro m the delivery of mission -crit ical IT services to defense and intelligence agencies. We
believe our diversified and stable client base, strong client relat ionships, broad array of contracts and significant management and operational
capabilit ies position us to continue our growth.

       We have a diversified and stable client base of federal government agencies that are upgrading and modernizing their mission -crit ical IT
systems to enhance their operational effectiveness. Approximately two -thirds of our revenue is derived fro m engagements with defense and
intelligence agencies, including the U.S. Army, U.S. A ir Force, Defense Logistics Agency and key members of the intelligence community.
These agencies, with their focus on network-centric warfare and informat ion superiority, currently have, and are expected to continue to have,
significant funding for t ransformat ion through informat ion technology initiatives. Approximately one -third of our revenue is derived fro m
engagements with federal civilian agencies that are also focused on enhancing their mission -crit ical IT systems, including the Department of
Energy (DOE), the National Aeronautics and Space Administration (NA SA) and the Gen eral Accounting Office (GA O). We believe our broad
client base of federal agencies will enable us to expand our business, regardless of shifts in federal govern ment spending priorit ies.

      We have strong, long-term relat ionships with our clients, as evidenced by our record of retaining business. We have provided IT services
and solutions to clients within the U.S. Army , U.S. Air Fo rce, DOE, NASA and the intelligence co mmunity for more than ten yea rs, In
addition, over the past three years, we won more than 90% of the co mpetitively awarded prime engagements on which we were the incumbent
and eligib le for award. We believe our strong relationships result fro m our in -depth understanding of client missions, the strength of our
technical solutions and the co-location of a majority of our emp loyees with our clients.

      We have a broad array of contracts that enables us to expand business with existing clients a nd develop relationships with new clients. As
of June 30, 2005, we were performing work on appro ximately 80 contracts and 155 task orders. For the six months then ended, o ur largest
engagement represented approximately 8.0% of our revenue, and that work is not scheduled for reco mpetition until 2011. Our contract base
includes mu ltiple large government wide acquisition contracts, or GWACs, such as: the U.S. Army Information Technology En terp rise
Solutions (ITES) contract with a ceiling of $500 million over s even years; the U.S. A ir Force Network-Centric So lutions (NETCENTS)
contract with a ceiling of $9 b illion over five years; the Department of Co mmerce Information Technology Solutions —Next Generation
Program (COMMITS NexGen) contract with a ceiling of $8 billion over ten years. As a prime contractor on each of these contract vehicles, we
compete with a discrete number of other pre-qualified co mpanies for several hundred million dollars of additional business each year. See
―Prospectus Summary—Relevant Industry Terms‖ for a mo re co mplete definit ion of industry terms used herein.

      We have made significant investments in our management, emp loyees and infrastructure in support of our growth and profitability
strategies. Our senior managers average more than 25 years of experience with federal govern ment agencies, the U.S. military and federal
government contractors. In addition, our President and our Chief Operat ing Officer each has more than 18 years of public co mp any experience
in the federal IT services sector. Members of our management team have extensive experience growing businesses organically, as well as
through acquisitions. We deliver our services through a highly skilled work fo rce of appro ximately 1,450 emp loyees, of whom 68% possess at
least one security clearance. In addit ion, we recently expanded our Sensitive Co mpart mented Information Facilit ies (SCIFs), which are
government certified facilit ies that enable us to pursue additional classified wo rk.

                                                                        41
Table of Contents

      For the six months ended June 30, 2005, our revenue was $93.9 million and our net income was $4.7 million, representing organ ic growth
of 15.6% and 77.6%, respectively, over the same period in 2004. Since 2001, our revenue, including the effect of an acquisition, has grown to
$171.3 million in 2004, representing a compound annual growth rate of 12.9%. Over the same period, our net income decreased 4.0%, fro m
$6.4 million in 2001 to $6.1 million in 2004. As of June 30, 2005, our total estimated contract backlog was $525 million. We are focused on
continuing to grow organically while improving margins, and intend to expand our capabilities through strategic acquisitions.

                                                               Market Opportuni ty

      The federal govern ment is among the largest consumers of in formation technology services and solutions in the world. Accordin g to
INPUT, an independent federal government market research firm, the overall market fo r contracted IT systems and services by t he federal
government is expected to grow fro m $59.2 billion in federal fiscal year 2005 to $78.8 billion in federal fiscal year 2010. In add ition, recent
defense budgets are significantly higher than in prior years, particu larly in areas related to IT, int elligence, surveillance, reconnaissance and
homeland security due to increased counter-terroris m activ ities and the U.S. deploy ments overseas. According to INPUT, the Department of
Defense’s spending on information technology services and solutions is expected to increase fro m $27.2 billion in federal fiscal year 2005 to
$35.0 b illion in federal fiscal year 2010. A lthough spending on intelligence related activit ies by the federal government remains highly
classified, INPUT estimates total addressable IT spending for U.S. intelligence agencies in federal fiscal year 2005 at $7.8 billion, growing to
$10.9 b illion in federal fiscal year 2010. We believe there will be significant market opportunities for providers of IT serv ices and solutions to
federal govern ment agencies, particularly those in the defense and intelligence co mmunity, over the next several years because of the trends
outlined below.

Focus on Federal Government Transformation

       The federal govern ment, and the DoD in particu lar, is in the midst o f a significant transformation that is driven by the federal
government’s need to address the changing nature of global threats. A significant aspect of this transformat ion is the use of informatio n
technology to increase the federal government’s effectiveness and efficiency. The result is increased federal government spending on
informat ion technology to upgrade networks and transform the federal government fro m separate, isolated organizat ions into la rger, enterprise
level, network-centric organizat ions capable of sharing information broadly and quickly. While the transformation initiat ive is driven by the
need to prepare for new world threats, adopting these IT transformat ion init iatives will also improve efficiency and reduce infrastructure costs
across all federal government agencies. We believe IT spending in connection with the federal government ’s transformation in itiative will
continue to be driven by:

      Increased Demand for Interoperable and Robust Networks. The federal govern ment is focused on enhancing interoperability across its
disparate networks and systems in order to effectively use information to assess and respond to terrorist threats and to transform the military’s
approach to fulfilling its mission. Such a transformation is necessary to ensure information superiority and foster the development and
deployment of the next generation of in formation technology systems for network centric warfare, including C4I systems (comma nd, control,
communicat ions, computing and intelligence systems). In addit ion, we believe the convergence of voice, video and data onto the desktop will
increase the requirements for more robust networks. We expect these increased requirements to result in greater market opport unities and
demand for our core business services.

       Increased Demand for Secure Networks and Systems. In response to increased concerns over cyber-attacks and threats to the national
informat ion infrastructure, the federal government adopted the Federal Informat ion Security Management Act (FISMA) in 2002. FISMA
requires each federal govern ment agency to develop, document and implement an agency -wide information security program and ensure that
its systems are certified and accredited according to predetermined federal government standards and processes. According to the Office of
Management and Budget, many agencies are still working to achieve co mpliance with FISMA and will likely

                                                                         42
Table of Contents

require the assistance of professional services providers to achieve their informat ion security requirements. INPUT estimates that federal
spending for information security init iatives will increase fro m appro ximately $5.1 billion in federal fiscal year 2005 to appro ximately $7.3
billion in federal fiscal year 2010.

Increased Reliance on Professional Services Providers

      The federal govern ment has increasingly relied on professional services providers, particularly for informat ion technology se rvices, in
connection with its transformation in itiat ives. INPUT projects total federal spending on contracted information technolo gy services to grow
fro m $12.7 billion in federal fiscal year 2005 to $16.5 b illion in federal fiscal year 2010. We believe t wo of the primary re asons for the federal
government’s increased reliance on professional services providers are:

      Demand for More Innovative Solutions and Technology Services. Federal government agencies are seeking more innovative solutions and
technology services in response to the increasing pressure to operate more effectively and efficiently. Because of their skills and experience,
federal govern ment agencies are using professional services providers to support transformational mandates, introduce commerc ial best
practices and leverage commercial technological advances. In addition, professional services providers are able to le verage their recent
experiences across their client base to develop more cost-effective and efficient technology solutions that comply with the latest applicable
standards.

      Declining Federal Government IT Workforce . According to INPUT estimates, appro ximately 45% of federal government IT workers will
be elig ible to ret ire by federal fiscal year 2008. Given the difficulty the federal government has experienced in recru iting and retaining skilled
technology personnel, we believe the declin ing federal government IT wo rkforce will necessitate the continued and increasing use of
professional services providers for the federal govern ment’s IT needs.

Evolving Procurement Practices

      Federal govern ment procurement practices and policies are expected to continue to evolve as federal agencies increasingly rely on
professional services providers for information technology solutions and services. We expect the follo wing trends to continue to shape the
federal govern ment’s procurement practices and policies:

       Focus on Strength of Technical Solution and Best Value. Federal govern ment agencies are shifting emphasis to the procurement of
contracts with the strongest technical solution and overall best value for the federal govern ment. To achieve this goal, fede ral agencies have
adopted procurement criteria that give mo re consideration to companies ’ technical capabilit ies and past performance on similar projects. These
criteria also place more emphasis on a solution’s overall contribution to a federal govern ment agency’s mission than on the proposed cost. We
believe these factors benefit co mpanies with deeper technical capabilities, relevant project experience and existing relation ships with clients.

      Increased Use of GWACs and Multiple Award Contracts. As part of its shift in procurement practices aimed at increasing flexibility and
responsiveness, the federal government is expanding its use of GWACs and other mu ltip le award contracts. Professional service s providers
compete to be pre-selected under these umbrella contracts, which outline the basic terms and conditions for the procurement of services. Once
pre-selected, the companies compete only among themselves to provide services under the vehicle. These contracts provide the fede ral
government contracting agencies with additional flexibility and responsiveness as projects can be awarded quickly to these preferred providers.
See ―Prospectus Summary—Relevant Industry Terms‖ for a more co mplete definition of industry terms used herein.

                                                                          43
Table of Contents

                                                              Competiti ve Strengths

     We believe we are well positioned to meet the rapidly evolving needs of federal government agencies for IT services and solut ions
because we possess the following key business strengths:

In-Depth Understanding of Client Missions

      Since our founding, we have provided mission-crit ical services and solutions to our clients, enabling us to develop an in -depth
understanding of their missions and technical needs. In addition, approximately three quarters of our employees are located at client sites,
giving us valuable strategic insights into clients ’ ongoing and future program requirements. Our in-depth understanding of our client missions,
in conjunction with the strategic location of our emp loyees, enables us to offer technical solutions tailored to our clients ’ specific requirements
and consistent with their evolving mission objectives.

Proven Ability to Win Business

      In 2004, we were awarded task orders and single award contracts with a total value in excess of $300 million. Over the past three years,
we won more than 90% of the co mpetitively awarded prime engagements on which we were the incumbent and eligible for award. Ou r success
in winning business is based, in part, on our ability to anticipate clients’ emerging requirements which enables us to develop stronger technical
proposals. As a result, we are often awarded contracts based on the overall value of our solution rather than its cost.

Diverse Base of Key Prime Contract Vehicles

      As a result of our business development focus on securing key contracts, we are a prime contractor on numerous mu lti-year GWACs that
provide us the opportunity to bid on hundreds of millions of dollars of business against a discrete number of oth er pre-qualified companies each
year. These contracts include: the U.S. Army ITES contract with a ceiling of $500 million over seven years; the U.S. A ir Forc e NETCENTS
contract with a ceiling of $9 b illion over five years; the Department of Veterans Affairs Global IT Support Services (GITSS) co ntract with a
ceiling of $3 billion over eight years; the Department of Co mmerce COMMITS NexGen contract with a ceiling of $8 b illion over ten years;
and the GSA Schedule 70. We believe that holding prime positions on these contract vehicles provides us an advantage as we seek to expand
the level of services we provide to our clients. See ―Prospectus Summary—Relevant Industry Terms‖ for a more co mplete definition of
industry terms used herein.

Highly Skilled Employees with Security Clearances

       As of June 30, 2005, we had approximately 1,450 emp loyees, 71% o f whom had formal degrees and the majo rity of who m hold techn ical
certifications. In addition, appro ximately 68% of our emp loyees as of June 30, 2005 held at least one federal government security clearance,
and approximately 34% possessed clearance levels of Top Secret or h igher. These higher clearance levels generally require sponsorship by a
client, extensive background investigations and lifestyle polygraph testing, a process that can take more than one year to comp lete.

Experienced Management Team

      Our senior management team has the skills, experience and knowledge to imp lement our business and operating strategies. Membe rs of
our senior management team have significant federal govern ment sector experience, as well as considerable experience as senior operating
executives of publicly traded federal govern ment contractors. For example, our President and our Chief Operat ing Officer each has more than
18 years of public co mpany experience in the federal IT services sector. The senior management team’s range of experience includes growing
smaller co mpanies, primarily through internal gro wth, and large co mpanies through internal growth and acqu isitions. Our senior management
team has significant experience successfully identify ing, acquiring and integrating acquisitions, having completed more than 30 transactions
during their careers.

                                                                         44
Table of Contents

                                                                     Strategy

     Our objective is to grow our business as a leading provider of informat ion technology services and solutions to federal gover nment
agencies while improving our profitability. To achieve our objective, we intend to:

Accelerate Internal Growth

      We intend to accelerate our internal growth rate by capitalizing on our current contract base, expanding services provided to our existing
clients, expanding our client base and offering new, co mp lementary services.

       Capitalize on Current Contract Base. Our contract base includes four prime GWA C vehicles with a total co mb ined budgeted ceiling
value in excess of $20 billion. We intend to aggressively pursue task orders under these vehicles to maximize our revenue and strengthen our
client relationships. We have developed several internal tools that facilitate our ability to track, priorit ize and win task orde rs under these
vehicles. Co mb ining these tools with our technical expertise, our strong past performance record and our knowledge o f our clients’ needs,
should position us to win additional task orders under our prime GWA C vehicles.

       Expand Services Provided to Existing Clients. We intend to expand the services we provide to our current clients by leveraging our strong
relationships, technical capabilities and past performance record. We believe our understanding of client missions, processes and needs, in
conjunction with our full lifecycle IT offerings, positions us to capture new work fro m existing clients as the federal govern ment continues to
increase the volume of IT services contracted to professional services providers. Moreover, we believe our strong past perfor mance record
positions us to expand the level of services we provide to our clients as the federal government places greater emphasis on past performance as
a criterion for awarding contracts.

      Expand Client Base. We also plan to expand our client base into areas with significant growth opportunities by leveraging our industry
reputation, long-term client relationships and diverse contract base. We anticipate that this expansion will enable us both to pursue additional
higher value work and to further d iversify our revenue base across the federal government. Ou r long -term relationships with federal
government agencies, together with our GWA C vehicles, give us opportunities to win contracts with new clients within these agencies. For
example, under the $500 million U.S. Army ITES vehicle, since March 2004 we have been awarded 12 task orders with a co mb ined value in
excess of $200 million. Of these task orders, six were awarded by new clients.

      Offer New Complementary Services. We intend to leverage our strong reputation for providing IT services to offer new co mplementary
services to our existing clients. We expect to focus on high value-added services that are closely aligned with our current offerings. When
appropriate, we anticipate selectively identifying and hiring key personnel who possess unique client, mission or technical e xperience to
enhance our knowledge of and expertise in the new service offering. New services in wh ich we are currently focused on buildin g a greater
presence include systems engineering, acquisition management and program management.

Improve Operating Margins

     We believe that we have significant opportunities to increase our operating marg ins and improve profitability by capitalizing on our
corporate infrastructure investments and internally developed tools, and concentrating on high value -added prime contracts.

      Capitalize on Corporate Infrastructure Investments . During the past several years we have made significant investments in our senior
management and corporate infrastructure in anticipation of future revenue growth. These investments included hiring four exec utives with
more than 90 years of co mbined experience with federal IT services companies, strengthening our internal controls and accounting staff in
anticipation of Sarbanes-Oxley co mp liance and public co mpany reporting requirements, expanding our SCIFs and moving our headquarters to
a larger facility. We believe our management experience and corporate infrastructure are more typical of a

                                                                        45
Table of Contents

company with a much larger revenue base than ours. We therefore anticipate that as our revenue grows, we will be able to leve rage this
infrastructure base and increase our operating marg ins.

       Capitalize on Internally Developed Tools . We have invested significant resources in a variety of web-based tools that enable us to
efficiently and effectively manage our business development and project management functions. We created our business develop ment tool to
allo w our managers to track and manage new business opportunities in real time securely over the internet. Our proposal staff and project
managers leverage our proposal development tool to create more effective new business proposals in an online, collaborative e nvironment,
regardless of their locations. In addition, our p roject management tool is highly modular and adaptable, enabling management t o track project
progress virtually instantaneously to better manage contract costs and improve profitability. We believe these highly scaleab le tools will enable
us to increase operating efficiency as our revenue base grows.

      Concentrate on High Value-Added Prime Contracts . We expect to improve our operating margins as we continue to increase the
percentage of revenue we derive fro m our work as a prime contractor and fro m engagements where contracts are awarded on a best value,
rather than on a low cost, basis. As a prime contractor, we better control our staffing levels and maximize emp loyee utilizat ion. During the six
months ended June 30, 2005 as compared to the six months ended June 30, 2004, we increased our percentage of revenue from prime contracts
to approximately 64.3% fro m 55.7%. For the year ended December 31, 2004 as co mpared to year ended December 31, 2003, o ur perc entage of
revenue from prime contracts increased to approximately 59.4% fro m 55.4%. We expect to further increase this percentage given our recent
prime contract awards. The federal government’s move toward performance-based contract awards to realize greater return on its investment
has resulted in a shift to greater utilizat ion of best value awards. We believe this shift will enable us to expand our operating margins as we are
awarded more contracts of this nature. See ―Prospectus Summary—Relevant Industry Terms‖ for a more co mp lete defin ition of industry terms
used herein.

Pursue Strategic Acquisitions

       We intend to supplement our organic growth by identify ing, acquiring and integrating acquisitions that complement and broaden our
existing client base and expand our primary service offe rings. Our senior management team b rings significant acquisition experience, having
completed more than 30 transactions. Our successful acquisition of Scientific & Engineering Solutions, Inc. (SES) in December 2003
demonstrated our ability to comp lete and integrate an acquisition that meets our goals. In addition to strengthening our presence in the
intelligence sector, the acquisition of SES has positioned us to bid on and win larger, technically more sophisticated contra cts with the
intelligence co mmunity.

                                                                         46
Table of Contents

                                                              Services and Solutions

      We provide integrated information technology services and solutions by leveraging our four core service offerings: network en gineering;
informat ion assurance; systems development and integration; and enterprise systems management.

Network Engineering

      We offer a full lifecycle o f network engineering services to our clients from the in itial analysis of the requirements and des ign of the
network through implementation and testing of the solution, including the design of disaster recovery contingency plans. Our network
engineering capabilities include the design, architecture, configuration, imp lementation and operation of Local Area Networks (LAN),
Metropolitan Area Networks (MAN) and Wide Area Net works (WAN). Our extensive experience providing the followin g network engineering
services for federal government clients allows us to rapidly identify potential bottlenecks, security threats and vulnerabilities, and address these
potential issues with cost-effective solutions:

     •    Architecture Design                                                   •   Protocol and Topology Selection
     •    Disaster Response Planning and Recovery                               •    Reliability and Contingency Assessment
     •    Installation, Test and Evaluation                                     •    Requirements Analysis
     •    Net work Configuration                                                •    Routing Design
     •    Net work Security Evaluation                                          •    Vu lnerability Assessment

Information Assurance

      We offer informat ion assurance solutions to secure enterprise systems and networks, with particu lar expertise protecting IT
infrastructures for our clients that operate in classified environ ments. We design, configure and deploy security architectur es based on
assessments of our clients’ current and future information technology needs, mission objectives and regulatory requirements, in addition to
specific threats fro m unauthorized users. In connection with the implementation of these architectures, we help define and imp lement
informat ion assurance policies, procedures and guidelines to ensure effective future IT p lanning. Our highly skilled and accredited employees
provide research and implementation of security policies, technical support and the development of comprehensive security assessment plans.
We also identify potential threats and vulnerabilities and design and implement corrective action plans that employ advanced technologies,
such as encryption, digital signatures and firewalls, using both commercial-o ff-the-shelf (COTS) and custom security and software solutions.
Our informat ion assurance services include:

     •    Certification and Accreditation                                       •   Public Key Infrastructure (PKI) Implementation
     •    Intrusion Detection System (IDS) Development                          •    Risk and Threat Assessment
     •    Policy and Procedures Development                                     •   Security Awareness and Training
     •    Products Evaluation and Integration                                   •   Security Test and Evaluation

Systems Development and Integration

      We provide a full range of systems development and integration services to our clients. Init ially, we leverage our business p rocess
engineering skills to analyze the activities, ro les and objectives of a proposed IT system or solution. Based on this analysis, we integrate
advanced technologies with our clients ’ legacy systems to improve their operational efficiency and increase our clients ’ returns on IT
investments. Our systems development and integration services in clude:

     •    Database Design                                                       •    Legacy System Integration
     •    Enterprise Portal Implementation                                      •   Project Planning and Management
     •    Integration, Test and Evaluation                                      •    Requirements Definit ion

                                                                         47
Table of Contents

Enterprise Systems Management

       We design, install and manage co mplex, mission-crit ical enterprise systems for our clients, increasing the reliability, security and
efficiency of their IT operations while meeting stringent mission requirements. As part of our overall network operation an d management
services, we continually analy ze and monitor enterprise system components and create systems that can adapt to rapidly changing needs. We
emp loy a knowledge-centric service delivery assurance methodology designed to keep client mission -crit ical systems at peak performance.
This methodology utilizes network and traffic simu lations to identify potential changes in performance or possible security issues within a
particular network, allowing our engineers to protect clients ’ systems and data. Our network engineers are certified in the leading commercial
enterprise tools and combine that knowledge with our techniques, experience and processes to deliver solutions to our clients . Our enterprise
systems management services include:

     •       Applications Support                                              •   Net work Performance Evaluation
     •       Infrastructure Operation and Management                           •   Net work Upgrade Assessment
     •       Intrusion Detection and Response                                  •   Teleco mmun ications Support and Help Desk

                                                                     Clients

      Our clients include a diverse base of federal government defense, intelligence and civilian agencies. For the six months ended June 30,
2005, Depart ment of Defense and intelligence commun ity clients generated approximately 73.0% of our revenue and federal civil ian agency
clients generated approximately 26.5%. We believe our risk fro m adverse budgetary changes is reduced by the mission -crit ical nature of the IT
work we perform for our clients. We also believe our diverse client base within the federal govern ment mit igates the impact o f annual
fluctuations in our clients’ budgets.

      The following is a representative list of our clients for the six months ended June 30, 2005. Due to the sensitive nature of our work with
the intelligence commun ity, we are precluded fro m provid ing detailed informat ion regarding specific intelligence agency clients.

   Department of Defense

         •    Air National Guard

         •    Army National Guard—Headquarters

         •    Defense Intelligence Agency

         •    Defense Logistics Agency

         •    U.S. Air Force Warner Robbins, Georgia

         •    U.S. Air Force U.S. Transportation Co mmand/Air Mobility Co mmand (TRANSCOM/AMC)

         •    U.S. Army Co mmunications Electronic Lifecycle Management Co mmand (C -E LCM C)

         •    U.S. Army Ft. Lewis, Washington

         •    U.S. Army Program Executive Office for Enterprise Info rmation Systems (PEO EIS)

         •    U.S. Army Program Executive Office for Simu lation, Train ing and Instrumentation (PEO STRI)

         •    U.S. Army Tank-Automot ive and Armaments Co mmand (TA COM )

         •    U.S. Army White Sands Missile Range, New Mexico

                                                                        48
Table of Contents

   Various Intelligence Agencies

   Federal Civilian

      •    Depart ment of Co mmerce

      •    Depart ment of Energy

      •    Depart ment of State

      •    Depart ment of Veterans Affairs

      •    General Accounting Office

      •    General Serv ices Admin istration

      •    NASA—Goddard Space Flight Center

      •    NASA—Headquarters

      •    NASA—Langley Research Center

      •    National Nuclear Security Administration

                                                         Representati ve Engagements

       The following engagements are representative of both our client base and the types of services we offer. In these description s, the contract
value and period of performance indicated reflect our current expectations about completion of the engagements, inc luding the assumption that
all priced option periods are exercised, if applicable. Contract value represents the stated value of the contract at the time of the award, and as
modified post-award.

                                     U.S. Transportation Command (USTRA NSC OM) C4 Systems a nd Support


                    Contract Value                              Period of Performance                                   NCI Role

                    $75.9 million                               06/2004 – 05/2011                                        Prime
                    $41.0 million                               06/2004 – 05/2011                                        Prime

      Objective: Provide co mprehensive IT support services, under two separate task orders, to USTRA NSCOM, the agency charged with
delivering synchronized transportation, distribution and sustainment for the Depart ment of Defense. Du ring an average week, U STRANSCOM
conducts more than 1,900 air missions, with 25 ships underway and 10,000 ground shipments operating in three -quarters of the world ’s
countries.

      Solution: We have provided network engineering, informat ion assurance, systems development and integration and enterprise systems
management services to USTRANSCOM since 1992. As part of our engagement, we developed and deployed advanced communications
security and intrusion detection technologies and services for wh ich USTRANSCOM won the prestigious Frank B. Rowlett Or ganizational
Excellence Award three t imes. With this award, the Nat ional Security Agency (NSA) annually recognizes one organization in t he federal
government for making the most significant contribution to improving national information systems security, o perational informat ion assurance
readiness, or the defensive information operations posture of the federal govern ment. USTRANSCOM is the only federal governme nt agency
to win this award three times, most recently in 2003.

      In connection with our ongoing maintenance and upgrade of USTRANSCOM’s systems, we designed and implemented an
enterprise-wide web portal that extends to approximately 4,500 users across the world. We also

                                                                         49
Table of Contents

implemented an automated asset management system that tracks over 8,000 pieces of USTRANSCOM C4 equip ment, successfully excee ding
the client’s goal of 95% accuracy in inventory accounting.

                       U.S. Army Program Executive Office for Simulation, Training and Instrumentation (PEO STRI)


                    Contract Value                                                Period of Performance                                   NCI Role

                    $63.7 million                                                 09/2004 - 08/2009                                       Prime

      Objective: Provide co mprehensive information technology services and solutions for the PEO STRI Ch ief Informat ion Officer’s large and
complex informat ion systems. These systems support the PEO and subordinate Program Management Offices in attaining the PEO ST RI
world wide mission to provide lifecycle management of interoperable training, testing and simulat ions solutions for soldier readiness.

       Solution: In September 2004, we were awarded a one-year base task order with four one-year option periods to provide the PEO STRI
CIO co mprehensive IT support services including project management, network engineering, info rmation assurance, asset acquisition and
management, system maintenance, software support, sustainment and other services in support of the IT infrastructure. As part of the overall
execution strategy, we are assisting our client in migrating to a 100% .net IT environment in support of the U.S. Army ’s larger goal of moving
to a more secure and responsive, net-centric IT services environment. We have successfully co mpleted a significant early contract delivery with
the implementation of a p rototype Executive Management Dashboard. The Dashboard provides the foundation to support follow -on .net
activities and was developed and delivered within 120 days of contract award, fulfilling a long -standing desire by the client.

                                      National Nuclear Security Administration (NNSA ) Information Assurance


                     Contract Value                                           Period of Performance                                 NCI Role

               $10.0 million to date*                                         10/2002 – 09/2007                                 Subcontractor
                  $129.7 million                                              06/2000 – 05/2010                                 Subcontractor


* This contract does not specify a total value for the period of performance. The value stated above is based on task orders is sued to date.

       Objective: Provide co mprehensive information assurance services for NNSA Nuclear Weapons Co mplex facilit ies. The NNSA ’s mission
is to maintain and enhance the safety, reliability and performance of the U.S. nuclear weapons stockpile to meet national sec urity require ments.

      Solution : We perform classified and unclassified cyber-security services for NNSA at the following facilities: Las Vegas, Nevada;
Germantown, Maryland; Washington, DC; Albuquerque, New Mexico; A marillo, Texas; and Oak Ridge, Tennessee. We help de fine and
implement information assurance policies, procedures and guidelines to ensure effective information technology planning. Our certified
engineers develop and implement security policies and integrate security technologies into new and existing syst ems, networks and software
applications. We also provide security support for web-enabled systems and electronic messaging and development of compreh ensive
computer security plans. Our engineers are certified in NSA -approved network encryptors and serve as communicat ions security custodians for
keying material and Classified Removable Electronic Media. Applicat ion of our information assurance solutions and expertise h as resulted in a
significantly mo re robust IT security at NNSA.

                                                                        50
Table of Contents

                                         Army National Guard (ARNG), Air National Guard (ANG)


                    Contract Value                                                 Period of Performance                                     NCI Role

                    $99.0 million                                                  10/2003 – 09/2009                                         Prime

     Objective: Provide co mplete IT operations support for the Army National Guard (A RNG) and Air Nat ional Guard (ANG). The ARNG
and ANG, ad ministered by the National Guard Bureau, maintain well-trained, well-equipped units available for pro mpt mob ilization during
war and provide assistance during national emergencies.

      Solution: We have provided the ARNG and ANG with co mprehensive IT infrastructure services, including local area network operations
and maintenance, enterprise support and integrated data and telecommunications support, for over seven years. These services support our
clients’ transformat ion to net-centric systems and adaptive processes that are designed to improve the ARNG’s and ANG’s efficiency in
carrying out their missions. We provide support to these clients at multip le locations including Andrews Air Force Base. At these locations, we
support approximately 6,000 users with a centralized help desk and by providing information assurance, quality assurance, network
engineering, desktop maintenance, training and teleco mmunications services.

                                                         Intelligence Agency Contract


                     Contract Value                                  Period of Performance                                    NCI Role

                    $34.9 million                                   02/2005 – 09/2008                                          Prime

     Objective : Provide system, software and network develop ment and integration, full lifecycle support, informat ion assurance and
technical documentation and training development in support of the organization ’s operational mission.

      Solution : We support our intelligence agency client’s mission by providing systems engineering and full lifecycle IT support services to
a significant nu mber of mission related critical systems. Services include system and software design, development and implem entation, as
well as knowledge management and extract ion on very large databases. We also leverage our informat ion assurance expert ise to provide
overall policy rev iew, evaluation and imp lementation, for the purposes of ensuring the integrity of our clients ’ IT systems. Our enterprise
solutions ensure stable and reliab le arch itectures and operations across complex and diverse computing environ ments. Because of the sensitive
and classified nature of the work performed for this client, we are unable to give detailed information on sp ecific contracts.

                                                                   Contracts

     We have a stable and diversified contract base with approximately 80 act ive contracts and 155 task orders. Our contract terms typically
extend fro m one to seven years, including option years (which may be exercised at the election of the federal government). Our top ten
engagements accounted for approximately 50.2% o f revenue for the six months ended June 30, 2005.

     Many of our services are provided under GWAC vehicles. Our contract base includes the follo wing prime GWAC veh icles that have an
aggregate program ceiling value of $20.5 b illion, excluding GSA Schedule 70.

                                                                                                             Period of                   Ceiling
Vehicle                                                   Owning agency                                    performance                    value

NETCENTS                                               U.S. Air Force                                 09/ 2004 –   09/ 2009            $9.0 billion
ITES                                                     U.S. Army                                    10/ 2003 –   10/ 2010            $0.5 billion
GITSS                                          Depart ment of Veterans Affairs                        10/ 2003 –   10/ 2013            $3.0 billion
COMMITS NexGen                                   Depart ment of Co mmerce                             02/ 2005 –   02/ 2015            $8.0 billion
GSA Schedule 70                                General Serv ices Admin istration                      06/ 2002 –   06/ 2007               N/A

                                                                          51
Table of Contents

      We believe that these contract vehicles are the preferred method of award ing work by many of our clients because they enable federal
government agencies to rapidly obtain services through a streamlined process. Under these GWAC vehicles, task orders can on ly be awarded to
a discrete number of pre-qualified co mpanies. For instance, on the $9.0 billion ceiling NETCENTS contract, there were awards made to eight
contractors in total. Revenue under our GWAC and GSA schedule task orders accounted for approximately 45.5% of our total revenue for the
six months ended June 30, 2005. We anticipate that this percentage will increase in the future as we have the opportunity to bid on additional
tasks under these contract vehicles.

      The federal govern ment’s ability to select mu ltiple winners under mu ltip le award contracts, as well as its right to award subsequent task
orders among such multip le winners, means that there is no assurance that these mult iple award contracts will result in the a ctual orders equal
to the ceiling value, or result in any actual orders. Our failure to compete effectively in this procurement environment could reduce ou r
revenue.

                                                                 Contract B acklog

      As of June 30, 2005, our total contract backlog was appro ximately $525 million of wh ich appro ximate ly $63 million was funded. We
define backlog as our estimate of the remaining future revenue fro m existing signed contracts over the remain ing base contrac t performance
period and fro m the option periods of those contracts, assuming the exercise of all related options. Our backlog does not include any estimate
of future potential delivery orders that might be awarded under our GWAC or other mult iple award contract vehicles. See ―Prospectus
Summary—Relevant Industry Terms‖ for a mo re co mplete definit ion of industry terms used herein.

      We define funded backlog as the portion of backlog for which funding currently is appropriated and obligated to us under a co ntract or
other authorizat ion for pay ment signed by an authorized purchasing agency, less the amount o f revenue we have previously recognized. Our
funded backlog does not represent the full potential value of our contracts, as Congress often appropriates funds for a particular program or
agency on a quarterly or yearly basis, even though the contract may p rovide for the provision of services over a number of years.

     We define unfunded backlog as the total backlog less the funded backlog. Unfunded backlog includes values for contract option s that
have been priced but not yet funded.

        Our estimates of funded, unfunded and total backlog as of June 30, 2005 and 2004 and fo r our three most recent years are as follows:

                                                                                                           Funded           Unfunded           Total
As of                                                                                                      backlog           backlog          backlog

                                                                                                                            (in millions)
June 30, 2005                                                                                             $ 62.7        $           461.8    $ 524.5
June 30, 2004                                                                                               66.8                    471.8      538.6
December 31, 2004                                                                                           61.5                    485.3      546.8
December 31, 2003                                                                                           61.9                    356.1      418.0
December 31, 2002                                                                                           70.7                    298.8      369.5

     There can be no assurance that our backlog will result in actual revenue in any p articu lar period, or at all, o r that any contract included in
backlog will be profitable. There is a higher degree of risk in this regard with respect to unfunded backlog. The actual rece ipt and timing of any
revenue is subject to various contingencies, many of wh ich are beyond our control. The actual receipt of revenue on contracts included in
backlog may never occur or may change because a program schedule could change or the program could be canceled, or a contract could be
reduced, modified or terminated early. Our estimates are based on our experience under such contracts and similar contracts.

                                                                         52
Table of Contents

                                                             Business Devel opment

      Our business development process is closely aligned with our overall business strategy to accelerate our organic growth wh ile improv ing
our operating margins. We are focused on maximizing the work we perform under our GWA C vehicles, expanding our work with existing
clients, expanding our client base and offering new, co mp lementary services. Working closely as a team, our business development and
operations personnel assess market act ivities with the objective of identifying, qualifying and generating capture strategies for contract
opportunities consistent with our overall business development focus. Business opportunities are carefully qualified and prio rit ized based on
potential value and win probability. A senior level executive is assigned responsibility for evaluating and capturing each opportunity.

      We have centralized and dedicated staff resources for proposal development, pricing, contracts admin istration, market researc h and
recruit ing to support these business development activities. We manage our business development activity with an internally developed,
automated sales and opportunity tracking tool. The entire process is defined and quality controlled using our ISO 9001 best p ractices
procedures. All major business development opportunities undergo frequent, disciplined reviews with our senior management. In addition, our
CEO, President and COO conduct monthly rev iews of all opportunities in our pipeline to validate our business development activities and
ensure that resources are allocated to maximize the return on these investments.

                                                                   Competiti on

      We believe that the major co mpetitive factors in our market are strong client relationships, a record of succ essful contract performance, a
reputation for quality, an experienced management team, employees with a wide -range of technical expert ise, security clearances and
competitive pricing. We often compete against or team with div isions of large defense and information technology services contractors,
including Lockheed Martin Corporation, Northrop Gru mman Corporation and Science Applications International Corporation. We also
compete against or team with mid -tier federal contractors with specialized capabilities, such as Anteon International Corporatio n, CA CI
International Inc and SRA International, Inc. So me of our co mpetitors have significantly longer operating histories and more substantial
resources. We expect co mpetition in the federal government IT services sector to increase in the future.

                                                                    Empl oyees

     As of June 30, 2005, we had approximately 1,450 emp loyees, 68% o f whom held at least one federal government security clearanc e and
34% of who m possessed clearance levels of Top Secret or h igher. Our emp loyees are located at mo re than 50 sites within the United States,
Europe and Asia. Over 83% of our staff is located on-site with our clients, allowing us to build long-term relationships. Approximately 71% of
our emp loyees have formal degrees, and the majority of our technical staff is professionally certified in one or more of the follo wing areas:

  •   M icrosoft Certified Professional (M CP)                                   •   CompTIA A+ Certification
  •   M icrosoft Certified Systems Engineer (M CSE)                              •   Sun Certified Systems Administrator
  •   M icrosoft Certified Systems Administrator (MCSA)                          •   Certified Information Security System
  •   Cisco Certified Network Associate (CCNA)                                        Professional (CISSP)
  •   Cisco Certified Network Professional (CCNP)                                •   Certified INFOSEC Professional
  •   Cisco Certified Design Professional (CCDP)                                 •   COM SEC Certification
  •   Cisco Certified Security Professional (CCSP)                               •   Global Information Assurance Certification

      We believe we have a professional environment that encourages advanced training to acquire industry -recognized certifications, rewards
strong job performance with advancement opportunities and fosters ethical and honest conduct. Only five o f our emp loyees are represented by
a labor union or subject to a collect ive bargaining agreement. We believe our salary structures, incentive compensation and b enefit packages
are co mpetitive within our industry.

                                                                        53
Table of Contents

                                                                Legal Proceedings

     Fro m t ime-to-t ime, we are involved in legal proceedings arising in the ordinary course of business. There is no litigat ion pending that is
expected to have a material adverse effect on our financial condition and results of operations.

                                                                     Facilities

       We lease office facilities used in our business. Our executive offices and principal operations are located at 11730 Plaza A merica Drive,
Reston, Virginia, where we occupy space under a lease that exp ires in 2013. We also lease space located in Alabama, Arizona, Colorado,
Florida, Georgia, Illinois, Maryland, Oh io, Tennessee and Virg inia. We have multip le high -level Sensitive Co mpart mented Informat ion
Facilit ies (SCIFs). The majority of our emp loyees are located in facilit ies provided by the federal government. We do not cur rently own any
real estate used in the performance of ongoing contracts and maintain flexibility in facility occupancy through termination and subleasing
options concurrent with contract terms in many of our leases. We currently own one condominiu m, have a long -term rental ag reement on one
apartment and fro m time -to-time may rent other apart ments that are used by our executive officers and proposal teams who are traveling for an
extended period and where we believe it is cost-effective to do so. We believe our facilit ies meet our current needs and that additional facilities
will be available as we expand in the future.

                                                                         54
Table of Contents

                                                                 MANAGEMENT

       The following table identifies our executive officers and directors and indicates their ages and positions as of June 30, 2005.

Name                                                                      Age    Position

Charles K. Narang                                                          63    Chairman, Ch ief Executive Officer and Director
Michael W. Solley                                                          47    President and Director
Judith L. Bjornaas                                                         42    Senior Vice President and Chief Financial Officer
Terry W. Glasgow                                                           61    Chief Operating Officer
Linda J. A llan                                                            57    Executive Vice President
James P. Allen                                                             56    Director
John E. Lawler                                                             56    Director
Paul V. Lo mbardi                                                          63    Director
J. Patrick McMahon                                                         63    Director
Daniel R. Young                                                            71    Director

      Set forth below is biographical information for our executive officers and directors. References to our offices and directors hips mean
offices and directorships of NCI Informat ion Systems, Inc. for the time period prior to imp lementation of our holding co mpany structure and
mean offices and directorships of NCI, Inc. for all time periods thereafter.

       Charles K. Narang founded NCI Information Systems, Inc. in 1989 and has served as our Chairman and Chief Executive Officer since
that time. Mr. Narang has more than 30 years of experience in corporate management and the analysis of large financial and informat ion
management systems for the federal government and Fortune 100 clients. Under Mr. Narang’s direct ion, we have grown fro m one office to
more than 50 work sites worldwide, and have won numerous awards and citations for our work and client service. He holds a Master’s degree
in industrial engineering, a Master of Business Admin istration degree and is a Cert ified Public Accountant licensed in the Co mmonwealth of
Virgin ia.

      Michael W. Solley has served as our President since October 2003 and has served on our board of directors since July 2004. Prior to
joining us, Mr. Solley served as Chief Executive Officer, President and director of MTC Technologies, Inc., a p rovider of tec hnical and
engineering services to the federal government, fro m 2002 to 2003. Fro m 2000 to 2002, M r. Solley served as President of Modern
Technologies Corporation which became MTC Technologies, Inc. in 2002. Mr. Solley served fro m 1998 until 2000 as Executiv e Vic e
President for Nichols Research Corporation, a co mpany that provided engineering services to, among other clients, the Department of Defense
and other federal government agencies. Mr. Solley also served as President of the Govern ment Seg ment for Nichols fro m 1999 until 2000 and
as President of the Govern ment Informat ion Technology Segment fro m 1996 until 1998. Nichols merged with Co mputer Scien ces Cor poration
in November 1999, and Mr. Solley continued to serve as the President of the CSC/ Nichols defense business until March 2000.

       Judith L. Bjornaas has served as our Chief Financial Officer since January 2004. Prior to that, she was our Vice President of Finance
since joining us in 1995. Prior to joining NCI, Ms. Bjornaas was Vice President of Finance and Accountin g for I-NET, Inc., a provider of
network management and outsourcing services to the federal government, fro m 1987 through 1995. Prior to that, Ms. Bjornaas wo rked for
Electronic Data Systems, a publicly traded provider of business and technology solutions, from 1985 to 1987 in various audit and accounting
roles. She holds a Master of Business Admin istration degree and is a Cert ified Management Accountant.

      Terry W. Glasgow jo ined us in 2004 and has served as Chief Operating Officer since May 2004. He serve d as our Executive Vice
President of Federal Programs fro m January 2004 until May 2004. Fro m 1991 through 2003, Mr. Glasgow was the Vice President/Ge neral
Manager of Co mputer Sciences Corporation’s Army Programs business area, managing a business portfolio of over $400 millio n annually.
Under his leadership, in

                                                                         55
Table of Contents

excess of $3 b illion of new business awards were captured. Mr. Glasgow also led several significant acquisitions, includin g the acquisition and
integration of Nichols Research. Prior to 1991, Mr. Glasgow was Vice President of Ford Aerospace and Communications Army Prog rams in
Colorado Sp rings. While at Ford Aerospace, Mr. Glasgow held nu merous executive positions, including Controller of their Satellite Div ision
and Vice President and Controller of their Co mmand, Control and Co mmunicat ions Division.

      Linda J. Allan joined us in 1991 and has served as our Executive Vice President since that time. Fro m 1985 to 1991, Ms. Allan s erved in
numerous roles with Automated Sciences Group, Inc., including Vice President of Corporate Programs fro m 1989 to 1991 and Vice President
and Senior Director of the Energy and Environment Group fro m 1985 to 1989. Prior to jo ining Automated Sciences Group, Ms. Allan served in
several senior management roles with MAXIMA Corporation fro m 1979 to 1985, Litton Bionetics, a subsidiary of Litton Industrie s, Inc., fro m
1972 to 1979 and the Microbiological Associates subsidiary of Whittaker Corporation fro m 1970 to 1972.

      James P. Allen has served on our board of directors since October 2004. Mr. Allen served as the Senior Vice President and Chief
Financial Officer of Veridian Corporation, a publicly traded federal IT services contractor, fro m May 2000 until its sale to Gen eral Dynamics
Corporation in August 2003. Prior to Verid ian, he served as CFO for both GRC International, Inc. and CA CI International Inc, both publicly
traded companies in the federal IT services sector.

       John E. Lawler has served on our board of directors since October 2004. Mr. Lawler has been President of East/West Financial Services,
Inc., a d iversified financial management and business consulting firm, since November 1987. He is also co -founder, Chief Executive Officer
and Chairman of Sterling Wealth Management, Inc., a reg istered investment advisor. Fro m 1975 to 1982, Mr. Lawler served in to p
administrative positions with the U.S. House of Representatives, including serving as Chief of the Office of Finance. Mr. Law ler also currently
serves as a director of Identix Incorporated, a Nasdaq listed company, and chairs its audit committee. Mr. Lawler serves on the Board of
Trustees of two non-profit organizations and is a member of the American Institute of Certified Public Accountants (AICPA).

      Paul V. Lombardi has served on our board of directors since October 2004. Mr. Lo mbard i served as President and Chief Executive
Officer of DynCorp fro m 1997 until its sale to Co mputer Sciences Corporation (CSC) in 2003. Prior to his association with Dy nCorp, Mr.
Lo mbard i was emp loyed at PRC Inc. where he held a variety of executive level positions including Senior Vice President and Ge neral Manager
of PRC’s Applied Management Group, wh ich provided information technology and systems integration in the federal IT services sector.

     J. Patrick McMahon has served on our board of directors since January 2005. M r. McMahon is a Partner in the law firm of Barton, Baker,
McMahon, Hildebrandt & To lle, LLP where he practices corporate law with a primary focus on companies that offer information technology
products and services to the federal government. Prior to this position, Mr. McMahon served as a legislative attorney for the Secretary of
Defense where he worked with the staffs of all of the Uniformed Services and the staffs of the House and Senate Armed Serv ices Committees.
Mr. McMahon’s other government service positions included: legislative attorney for the Secretary of the Navy; Navy Judge Advocate
General’s Office; Ad ministrative Law Division; and U.S. Marine Corps officer.

     Daniel R. Young has served on our board of directors since January 2005. Mr. Young is currently Managing Partner of the Turn berry
Group, an advisory practice to CEOs and other senior executives. He was the Vice Chair man and Ch ief Executive Officer of Federal Data
Corporation (FDC) before retiring after having served the company in various executive capacit ies for 25 years. Before join in g FDC, Mr.
Young was an executive with Data Transmission Co mpany and prior to that, he held various engineering, sales and management positions at
Texas Instruments, Inc. Mr. Young also served as an officer in the U.S. Navy. He is also a director of Analex Corporation, GT SI Corporation
and Halifax Corporation.

                                                                       56
Table of Contents

Commi ttees of the B oard of Directors

      Our board of d irectors has established an Audit Co mmittee, a Co mpensation Committee and a No minating/ Governance Co mmittee. Ou r
board of directors has determined that each of the members of these committees is independent under the applicable SEC and Na sdaq rules and
regulations.

      The Audit Co mmittee, wh ich consists of Messrs. Allen (chairman), Lo mbardi and Lawler, reviews the professional services provided by
our independent registered public accounting firm, the independence of our accountants from our ma nagement, our annual and quarterly
financial statements and our internal accounting controls. The Audit Co mmittee also reviews other matters with respect to our accounting,
auditing and financial reporting practices and procedures as it may find appropriat e or may be brought to its attention. Our board of directors
has determined that Mr. Allen, an independent director, qualifies as an ―audit committee financial expert‖ as defined in the Securities Exchange
Act of 1934, as amended.

      The Co mpensation Committee, which consists of Messrs. Lo mbardi (chairman), Young and Allen, reviews executive salaries,
administers our bonus, incentive compensation and stock plans and approves the salaries and other benefits of our executive o fficers. In
addition, the Co mpensation Committee consults with our management regard ing our benefit plans and compensation policies and practices.

     The No minating/ Governance Co mmittee, which consists of Messrs. Lawler (chairman), McMahon and Young, oversees all aspects of our
corporate governance functions, makes reco mmendations to the board of directors regarding corporate governance issues, identifies, revie ws
and evaluates candidates to serve as directors and makes such other recommendations to the board regarding affairs relating t o our directors.

Director Compensation

      Pursuant to our compensation plan for outside directors, we pay each non -employee director $20,000 per year, paid quarterly, $1,000 for
each board meeting attended and $1,000 for each co mmittee meeting attended. The chairman o f the Audit Co mmittee receives an additional
payment of $3,000 per year, the chairman of the Co mpensation Co mmittee receives an additional pay ment of $1,500 per year and the chairman
of the No minating/ Governance Co mmittee receives an additional payment of $1,000 per year. In addition, each non -employee director was
issued non-qualified stock options to purchase 10,526 shares of Class A common stock which vest in three annual installments beginning one
year fro m the grant date of April 1, 2005.

                                                                      57
Table of Contents

Executi ve Compensati on

      The following table sets forth informat ion concerning the compensation we paid to our Chief Executive Officer and our four mo st
highly-co mpensated executive officers other than the Chief Executive Officer for the 2004 calendar year:

                                                                                                                    Other annual                   All other
                                                                             Annual compensation                    compensation                 compensation

Name and principal position                                                Salary             Bonus

Charles K. Narang                                                        $ 397,917        $ 100,000                             —               $          6,230 (1)
  Chairman and Ch ief Executive Officer
Michael W. Solley                                                        $ 313,613        $    50,000                           —               $           450 (2)
 President
Judith L. Bjornaas                                                       $ 216,834        $    60,000                           —               $          4,398 (1)
  Chief Financial Officer
Terry W. Glasgow                                                         $ 221,645        $    55,000 (3)           $       6,000 (4)           $          3,814 (1)
  Chief Operating Officer
Linda J. A llan                                                          $ 176,840        $           —             $       6,000 (4)           $       359,990 (5)
  Executive Vice President


(1)    Represents matching payments to defined contribution plans and payments for excess life insurance coverage.
(2)    Represents payments for excess life insurance coverage.
(3)    Includes $25,000 signing bonus.
(4)    Represents amount paid as car allowance.
(5)    Includes (i) $242,585 paid in connection with the cancellation of a life insurance policy which was under a key person supple mental life
       program wh ich has been terminated, (ii) $112,500 note payment (see Note 11 of our consolidated financial statements) and (iii) $4,905
       for matching pay ments to defined contribution plans and payments for excess life insurance coverage.

Opti on Grants in 2004

                                                     Individual grants

                                                Percent of
                                               total options
                               Number of        granted to
                                securities      employees
                               underlying         in fiscal                                                             Potential reali zable value at
                                 options            year              Exercise price     Expiration                 assumed annual rates of stock price
                              granted (#)(1)     2004 (2)               per share          date                       appreciation for option term (3)

Name                                                                                                           0%                    5%                    10%

Charles K. Narang                       —               — %       $              —              —         $         —       $             —         $            —
Michael W. Solley                   368,421             60.9                    0.19      06/ 30/ 14          3,982,631             6,531,309             10,441,481
Judith L. Bjornaas                   13,158              2.2                    0.19      06/ 30/ 14            142,227               233,245                372,885
Terry W. Glasgow                     39,473              6.5                   10.00      04/ 21/ 14             39,473               312,541                731,481
                                     26,315              4.4                   10.00      09/ 13/ 14             26,315               208,358                487,648
Linda J. A llan                         —               —                        —              —                   —                     —                      —


(1)    Each option represents the right to purchase one share of Class A common stock.
(2)    During 2004, we granted employees options to purchase an aggregate of 604,717 shares of Class A common stock.
(3)    There was no public market for our co mmon stock on the grant dates of these options. Accordingly, we calcu lated the potential realizable
       value by mu ltiply ing the number of shares of our common stock subject to a given option by the assumed in itial public o ffering price of
       $11.00 per share, assuming that the aggregate stock value derived fro m that calcu lation co mpounds at the annual rates of 0%, 5% and
       10% for the entire term of the option, and subtracting fro m that result the total option exercise price.

                                                                                58
Table of Contents

Aggregate Fiscal Year-End Opti on Values

      The following table provides information regarding stock options held by the named executive officers as of December 31, 2004.

                                                                              Number of securities
                                                                             underlying unexercised                      Value of unexercised
                                                                               options at end of                         in-the-money options
                                                                                   fiscal year                          at end of fiscal year (1)

                                                                      Exercisable            Unexercisable       Exercisable                Unexercisable

Charles K. Narang                                                            —                        —         $        —              $            —
Michael W. Solley                                                            —                    368,421                —                     3,982,631
Judith L. Bjornaas                                                           —                     52,632                —                       313,952
Terry W. Glasgow                                                             —                     65,788                —                        65,788
Linda J. A llan(2)                                                           —                    407,895                —                     4,224,095


(1)   Value is calculated by subtracting the exercise price per share fro m the assumed in itial public offering price of $11.00 per share and
      mu ltip lying the result by the number of shares subject to the option.
(2)   A portion of these options will become exercis able upon the completion of the offering and we expect that some will be sold in the
      offering.

Executi ve Empl oyment Contracts

      We do not have employ ment agreements with any of our executives.

Empl oyee Benefit Plans

401(k) Plan

      We sponsor a defined contribution 401(k) profit sharing plan that covers all eligib le full-time and part-time emp loyees. We provide 50%
matching funds for elig ible part icipating emp loyees, limited to the emp loyee’s participation of up to 5% of earn ings. Currently, for certain
non-highly compensated employees, we provide 100% matching funds limited to the employees ’ participation of up to 6% of th eir earnings.
Our total contributions to the plan totaled $0.8 million for the six months ended June 30, 2005, $1 .8 million for the year ended December 31,
2004, $1.5 million for the year ended December 31, 2003 and $1.1 million for the year ended December 31, 2002.

      We are also required to contribute to a union pension plan under a Collective Bargaining Agreement with the International Ass ociation of
Machinists and Aerospace Workers for eligible employees on one of our contracts. The current agreement exp ires December 31, 2006. For
years ended December 31, 2002, 2003 and 2004, the contribution amounts were approximately $45,000, $24,000 and $19,000, respe ctively.
For the six months ended June 30, 2005 the contribution was approximately $7,500.

      For certain o f our contracts, we are required to adopt a 401(k) ret irement p lan for eligible employees. For the years ended December 31,
2002, 2003 and 2004, the contribution amounts were approximately $75,000, $81,000 and $116,000, respectively. For the six mon ths ended
June 30, 2005, the contribution was approximately $63,000.

2005 Performance Incentive Plan

      Our board of d irectors has adopted our 2005 Performance Incentive Plan wh ich plan has been approved by our stockholders. The 2005
Performance Incentive Plan provides for the grant of incentive stock options and nonqualified stock options, stock appreciation rights, the grant
or sale of restricted shares and other stock-based awards and incentive awards. Prior to comp letion of the offering and in connection with the
merger and share exchange with NCI Informat ion Systems, Inc., we will assume under the plan all issued and outstanding options to acquire
stock of NCI Informat ion Systems, Inc., and after the merger these options will be exercisable under

                                                                        59
Table of Contents

the plan for 1,719,737 shares of a Class A common stock. The co mmittee ad min istering the plan may provide for the payment of dividend
equivalents, on a current, deferred or contingent basis, on awards granted under the plan. Subject to comp liance with appl icable tax law rules,
the committee administering the plan may also authorize participants in the plan to defer receipt or settlement of an award a nd may further
provide that deferred payments include the payment of dividend equivalents or interest on the deferred amounts.

      Options: Under the 2005 Performance Incentive Plan, we may grant options intended to qualify as incentive stock options under Section
422 of the Code and non-qualified stock options not intended to so qualify. The option exercise price of an incentive stock option may not be
less than the fair market value of the Class A common stock on the date the option is granted. The plan prohibits repricing o f an outstanding
option, and therefore, the committee administering the plan may not, witho ut the consent of the stockholders, lower the exercise price of an
outstanding option. This limitation does not, however, prevent adjustments resulting fro m stock div idends, stock splits, reclassifications of
stock or similar events.

       Restricted Shares: Restricted shares may be granted in consideration of the performance of services or pay ments by a participant that may
be less than the market value of our co mmon stock on the date of grant. Each grant or sale will constitute an immediate t rans fer of the
ownership of common stock to the participants. During the restricted period, the restricted shares will be subject to a substan tial risk of
forfeiture and may not be transferred by the participant.

      Stock Appreciation Rights: Stock appreciation rights entitle the recipient to a pay ment in cash, shares of Class A common stock or both,
as we determine, equal to the excess of the fair market value of our Class A common stock on the date of exercise of the stoc k appreciation
right over the fair market value on the date the award is granted.

    Other Stock Based Awards: Other stock based awards are awards other than options, restricted shares or stock appreciation rights that are
denominated in, valued in whole or in part by reference to, or otherwise based on or related to our Class A common stock.

      Incentive Awards: Incentive awards are performance based awards that are denominated in dollars. Both annual and long -term incentive
awards may be granted. Performance goals for incentive awards and other awards under the Plan as established by the committ ee administering
the plan. Perfo rmance goals for awards intended to constitute performance based compensation under Section 162(m) of the Co de include
specified levels of, or increases in, our return on equity, earning s per share, total earnings, earnings growth, return on capital, return on assets,
economic value added, earn ings before interest and taxes, earnings before interest, taxes, depreciat ion and amort ization, sales growth, gross
margin return on investment, increase in the fair market value of the shares, share price (including but no limited to growth measures and total
shareholder return), net operating profit, cash flo w return on investments (which equals net cash flow d ivided by total capit al), internal rate of
return, increase in net present value or expense targets.

      Shares Reserved; Plan Limits : We have reserved a total of 3,157,895 shares of our Class A common stock for issuance under the 2005
Performance Incentive Plan, subject to adjustment in the event of forfeitures, transfers of common stock to us in payment of the exercise price
or withholding amounts or changes in our capital structure. On August 1 of each year the total number of shares of Class A common stock
                                                                              st


reserved for issuance under the Plan will increase by 78,947 shares. The maximu m incentive awards that may be granted to an individual
participant in any one calendar year is $1.0 million for each full or partial year in the performance cycle for the award. No participant may be
granted awards for more than 394,737 shares during any calendar year.

      Eligibility: Officers, employees, non-employee directors and consultants of NCI and related entities may be selected by the the committee
administering the plan to receive benefits under the plan. The committee administering the plan may prov ide for special terms for awards to
participants who are foreign nationals or who are emp loyed by us outside t he United States as the board of directors may deem necessary or
appropriate to accommodate differences in local law, tax policy or custom.

                                                                         60
Table of Contents

      Adjustments : The nu mber o f shares covered by outstanding awards, certain other provisions contained in outstanding awards, the number
of shares reserved for issuance under the plan and the other share limits contained in the plan are subject to adjustment in certain situations as
provided in the plan.

      Administration, Termination and Amendments: The Co mpensation Co mmittee of our board of directors administers and interprets the
plan. The plan terminates ten years after its initial adoption by our board of directors, u nless terminated earlier by our board. Th e plan may be
amended by the board of directors so long as any amendment that increases the aggregate number of shares available, that chan ges the class of
emp loyees eligible for incentive stock options or that must be approved by our stockholders in order to comp ly with applicab le law or the rules
of any securities exchange or market on which shares of common stock are traded or quoted is subject to obtaining such stockholder approval.

      Plan Benefits: As of September 2, 2005, there were options to purchase 1,719,737 shares of Class A common stock outstanding under the
plan with a weighted average exercise price of $3.40 per share. Currently, it is not possible to determine specific awards th at may be granted in
the future under the plan. We are authorized to grant options covering up to an additional 1,438,158 shares of Class A common stock under our
2005 Performance Incentive Plan.
                                                                                 Equity compensation plan information as of December 31, 2004

                                                                          (A)                               (B)                                  (C)
                                                                      Number of                                                         Number of securities
                                                                   securities to be                                                   remaining available for
                                                                     issued upon                     Weighted average                  future issuance under
                                                                      exercise of                     exercise price of                 equity compensation
                                                                     outstanding                        outstanding                       plans (excluding
                                                                  options, warrants                  options, warrants                 securities reflected in
Plan category                                                         and rights                         and rights                         column (A))

Equity co mpensation plans approved by security
  holders                                                                1,696,053               $                  3.25                                    —
Equity co mpensation plans not approved by
  security holders                                                              —                                    —                                      —

Total                                                                    1,696,053               $                  3.25                                    —



                                                                         61
Table of Contents

                                                         PRINCIPAL AND S ELLING STOCKHOLDERS

        The following table sets forth, as of September 2, 2005, information with respect to the beneficial ownership of our co mmon s tock by:

        •     each person known to us to beneficially o wn more than 5% of the outstanding shares of our common stock;

        •     each of the selling stockholders;

        •     each director of NCI and each executive officer; and

        •     all directors and executive officers as a group.

      The selling stockholders will acquire the shares of Class A common stock being offered by exercising options granted by us. T he
percentages shown are based on 478,947 shares of Class A common stock and 6,300,000 shares of Class B co mmon stock outstandin g as of
September 2, 2005 and 5,628,947 shares of Class A common stock and 6,300,000 shares of Class B co mmon stock to be outstanding after the
offering. Beneficial ownership is determined in accordance with the rules of the Securit ies and Exchange Co mmission and includes voting or
investment power with respect to the securities. Co mmon stock subject to options that are currently exercisable or exercisable within 60 days of
September 2, 2005 are deemed to be outstanding and beneficially o wned by the person holding such options or warrants. Such shares, however,
are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Unless otherwise indic ated below, to
our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of common stock, except to
the extent authority is shared by spouses under applicable law, and have the same address as NCI, Inc. Our address is 11730 P laza A merica
Drive, Reston, Virginia 20190.

                                                                                                                                                                Percent of
                                                                                                                                                                  vote of
                                                                                                                                   Class B                     all classes of
                                                                     Class A common stock(1)(2)                                 common stock(1)               common stock

                                                      Shares beneficially          Shares
                                                       owned prior to               being                    Shares beneficially owned
Name                                                    this offering              offered                      after this offering

                                                                                                                                                           Before         After
                                                     Number          Percent       Number       Number          Percent        Number       Percent       offering       offering

Charles K. Narang(3)                                    478,947         100.0 %      —             478,947             8.5 %   6,300,000       100.0 %       100.0 %                92.5 %
Michael W. Solley(4)                                    368,421          43.5 %      —             368,421             6.1 %         —           —           *                  *
Judith L. Bjornaas(4)                                    13,158           2.7 %      —              13,158         *                 —           —           *                  *
Terry W. Glasgow(4)                                         —             —          —                 —               —             —           —             —                    —
Linda J. Allan(4)                                       368,421          43.5 %    130,947         237,474             4.0 %         —           —           *                  *
James P. Allen                                              —             —          —                 —               —             —           —             —                    —
James E. Lawler                                             —             —          —                 —               —             —           —             —                    —
Paul V. Lombardi                                            —             —          —                 —               —             —           —             —                    —
J. Patrick McMahon                                          —             —          —                 —               —             —           —             —                    —
Daniel R. Young                                             —             —          —                 —               —             —           —             —                    —
All executive officers and directors as
    a group (10 persons)(6)                           1,228,947         100.0 %    128,947       1,100,000          16.3 %     6,300,000    100.0%           100.0 %                92.6 %
Estate of Norris B. Carter(5)                           221,053          31.6 %    219,053           2,000         *                 —           —           *                  *


(1)   The holders of each share of Class A common stock are entitled to one vote per share, and the holder of the shares of Class B common stock is entitled to ten votes per share.
(2)   Excludes shares of Class B common stock that are convertible into shares of Class A common stock at the election of the holder.
(3)   Includes 478,947 shares of Class A common stock outstanding which are held of record by the Shashi K. Narang 2004 GRAT, und er Trust Agreement dated December 29, 2004, and the
      Chander K. Narang 2004 GRAT, under Trust Agreement dated December 29, 2004.
(4)   Represents shares issuable upon exercise of outstanding stock options.
(5)   Mr. Carter was a form er employee of NCI Inform ation Systems, Inc. and his estate is a selling stockholder.
(6)   Includes 750,000 shares issuable upon exercise of outstanding stock options.
*     Represents less than 1%.

                                                                                         62
Table of Contents

                                                      RELAT ED PARTY TRANSACTIONS

       In January 2005, we entered into a subcontracting agreement with Net Co mmerce Corporation, a govern ment contractor which prov ides
support in the performance of certain imaging, indexing and retrieval services for the District o f Colu mb ia Depart ment of Motor Veh ic les. Th is
relationship allows us to provide cost effective services in non -core business areas such as electronic imag ing and retrieval services. Net
Co mmerce is wholly -owned by Rajiv Narang, the son of Charles K. Narang, our founder, Chairman and Ch ief Executive Officer. The
agreement provides for pay ments on a time -and-materials basis based on labor utilization for the month. For the six months ended June 30,
2005, we made payments to Net Co mmerce Corporation totaling $312,891. The subcontract provides that the total payment will no t exceed
$409,222 and will, by its terms, expire in August 2005. We are also a party to a fixed -price purchase order with Net Co mmerce Corporation to
provide support on our contract with the Drug Enforcement Agency, which began in January 2005 and exp ires in September 2005. Fo r the six
months ended June 30, 2005, we have made payments to Net Co mmerce Corpo ration on this purchase order totaling $88,125. Additionally, in
June 2005, we terminated a consulting arrangement with Net Co mmerce Corporation pursuant to which we had paid $142,360 during 2004 and
$169,650 during the six months ended June 30, 2005. During 2002, Net Co mmerce Corporation provided support to us on a number of
short-term projects and we paid a total of $177,847 for these services in 2002. Prior to April 1, 2004, Net Co mmerce Corporation wa s owned
by Charles K. Narang. Additionally, we have provided network management services to Net Co mmerce Corporation during the periods 2002
through 2004. We were paid appro ximately $13,000, $107,000 and $34,000 for the services provided in the years ending December 31, 2002,
2003, and 2004, respectively. No services have been provided in the six months ended June 30, 2005. We believe that the terms of these
agreements reflect then current market conditions.

      We have used private aircraft to acco mmodate the travel needs of our executives for our business. These aircraft are o wned directly or
indirectly by M ichael W. Solley, our President and one of our directors. We have paid to Mr. So lley or his affiliate $7,727 in 2003, $164,820 in
2004 and $37,367 during the six months ended June 30, 2005 as reimbursement for fees and expenses associated with the busines s use of these
aircraft. We believe that these reimbursements reflect then current market conditions.

S Corporation Distributions

      Since our init ial incorporation in 1989, we have been treated for federal and state income tax purposes as an S corporation u nder
Subchapter S of the Internal Revenue Code of 1986 and co mparable state tax laws. As a result, our e arnings are taxed, and will be taxed until
the termination of our S corporation status, with certain exceptions, directly to our stockholders rather than to us, leaving our stockholders
responsible for paying inco me taxes on these earnings. We have historically paid d istributions to our stockholders to enable them to pay their
income tax liabilit ies as a result of our status as an S corporation and, fro m t ime to time, to d istribute previously undistributed S corporation
earnings and profits. We made cash S corporation distributions to our stockholders of approximately $8.1 million during 2002, $4.0 million
during 2003, $3.5 million during 2004 and $3.0 million in the six months ended June 30, 2005.

       We will revoke our S corporat ion status in connection with this offering. We intend to distribute substantially all of our S corporation
earnings for tax purposes through the date of revocation of S corporation status to our stockholders. The actual amount of th e distribution of S
corporation earnings to our stockholders will depend on the amount of our income prior to co mpletion of the offering. We estimate the final
distribution of S corporation earn ings will be appro ximately $5 million and will occur during the fourth quarter of 2005 or t he first quarter of
2006.

                                                                          63
Table of Contents

                                                      DESCRIPTION OF CAPITAL STOCK

General

      Our authorized capital stock consists of 37,500,000 shares of Class A common stock, $0.019 par value, and 12,500,000 shares o f Class B
common stock, $0.019 par value, after giving effect to a share exchange, merger and 1-fo r-1.9 reverse reverse stock split. See ―Prospectus
Summary—Transactions Prior to Offering—Share Exchange, Merger and Stock Split.‖ Together, the Class A common stock and the Class B
common stock comp rise all o f the authorized capital stock. Prio r to this offering, there were 6,300,000 sha res of Class B co mmon stock
outstanding, all of which were held of record by Charles K. Narang, our founder, Chairman and CEO, and 478,947 shares of Clas s A common
stock outstanding, all of wh ich were held of record by two stockholders, the Shashi K. Naran g 2004 GRAT, under Trust Agreement dated
December 29, 2004, and the Chander K. Narang 2004 GRAT, under Trust Agreement dated December 29, 2004.

Common Stock

     Upon complet ion of this offering, and assuming the over-allot ment option is not exercised, there will be 5,628,947 shares of Class A
common stock and 6,300,000 shares of Class B common stock outstanding. All of the outstanding shares of Class B common stock will be
beneficially o wned by Charles K. Narang, our founder, Chairman and Chief Executive Officer. In addit ion, an aggregate of 1,719,737 shares of
our Class A common stock will be reserved for issuance under our 2005 Performance Incentive Plan.

       Voting. Holders of Class A common stock are entitled to one vote for each share held of record, and holders of Class B co mmo n stock are
entitled to ten votes for each share held of record, except with respect to any ―going private transaction‖ (generally, a transaction in wh ich Mr.
Narang, his affiliates, his direct or indirect permitted transferees or a group, which includes Mr. Narang, such affiliates and permitted
transferees, seek to buy all outstanding shares), as to which each share of Class A common stock and Class B co mmon stock are entitled to one
vote per share. The Class A common stock and the Class B co mmon stock vote together as a single class on all matters submitted to a vote of
stockholders, including the election of d irectors, except as required by law. Ho lders of our co mmon stock do not have cumulat ive voting rights
in the election of d irectors.

      As a result of this offering, excluding any over-allot ment shares, the percentage of the voting power of the outstanding common stock
owned or controlled by Mr. Narang will decline to appro ximately 92.5% if the over-allot ment option is not exercised and 91.5% if the
over-allot ment option is exercised in fu ll; but he will continue to control all actions to be taken by the stockholders, including the election of all
directors to the board of directors. See ―Principal and Selling Stockholders ‖ and ―Risk Factors—Mr. Narang, our founder, Chairman and CEO,
will continue to control the Co mpany after the offering and his interests may not be aligned with yours.‖

      Dividends; Stock Splits. Holders of common stock are entitled to receive, when and if declared by the b oard of directors fro m
time-to-time, such dividends and other distributions in cash, stock or property fro m our assets or funds legally available for such p urposes.
Each share of Class A common stock and Class B co mmon stock is equal in respect of dividend s and other distributions in cash, stock or
property, except that in the case of stock dividends, only shares of Class A common stock will be d istributed with respect to the Class A
common stock and only shares of Class B co mmon stock will be d istributed with respect to Class B co mmon stock. In no event will either
Class A common stock or Class B co mmon stock be split, divided or comb ined unless the other class is proportionately split, d ivided or
combined. For example, if we effect a 1-for-1.9 reverse stock split with respect to the Class A common stock, we will at the same time effect a
1-for-1.9 reverse stock split with respect to the Class B co mmon stock.

      Conversion. The shares of Class A common stock are not convertible into any other series or class of securities. Each share of Class B
common stock, however, is freely convertible into one share of Class A common stock at the option of the Class B stockholder. Except for
transfers to certain family members or t rusts

                                                                          64
Table of Contents

established for the benefit of such family members, transfers to partnerships, corporations, or similar entit ies whose genera l partners,
stockholders or members are, d irectly o r indirectly, such family me mbers, and transfers to certain charitable organizat ions or to one of our
emp loyee benefit plans (each, a ―Permitted Transferee‖), any transfer of Class B co mmon stock will result in the automatic con version of the
transferred shares into Class A common stock. In addit ion, if M r. Narang transfers shares of Class B co mmon stock to one or more Permitted
Transferees and at any time after such transfer or transfers he does not exercise voting control over the transferred shares, then all of the shares
of Class B co mmon stock which M r. Narang has transferred to these Permitted Transferees and over which Mr. Narang does not exercise
voting control will automatically convert to an equivalent number of shares of Class A common stock. Shares of Class B co mmon stock may be
pledged as collateral fo r indebtedness but, unless the pledgee is a Permitted Transferee, the shares will automatically conve rt to Class A
common stock upon any transfer in foreclosure of the pledged shares. Upon Mr. Narang ’s death or permanent mental incapacity, all
outstanding shares of Class B co mmon stock automatically convert to Class A common stock.

      Mergers, Consolidations and Other Transactions. In the event that we enter into any consolidation, merger, co mb ination or other
transaction in wh ich shares of common stock are exchanged for other capital stock, cash or property, then the shares of each class of common
stock will be exchanged for the same amount of capital stock, cash or property, as the case may be, for wh ich each share of a ny other class of
common stock is exchanged. Holders of each class of common stock may receive different distributions of stock, securities, ca sh or property if:

      •    shares of common stock are exchanged for shares of capital stock, then the shares exchanged ma y differ only to the extent that the
           Class A common stock and the Class B common stock differ;

      •    the holders of Class A common stock receive an amount of stock, securities, cash or property per share having a value greater than
           or equal to the value per share into which or for which each share of Class B co mmon stock is exchanged; or

      •    holders of Class A common stock and holders of Class B co mmon stock receive an amount of stock, securities, cash or property per
           share in accordance with a transaction approved by the holders of a majority of Class A common stock and by the holders of a
           majority of Class B common stock, each voting separately as a class.

      Nasdaq. We have applied to list our Class A common stock on The Nasdaq National Market under the symbol ―NCIT.‖

Corporate Governance Provisions of Our Certificate of Incorporation and Byl aws

      Advance Notice. Our bylaws require that advance written notice of all director no minations or other business matters proposed to be
brought before an annual meet ing of stockholders be delivered to our Secretary at our principal executive office not later th an 60 days nor more
than 120 days prior to the first anniversary of the date on which we first mailed our pro xy materials for the prior year’s annual meet ing of
stockholders. This provision may make it mo re difficult for stockholders to nominate or elect directors or ta ke action opposed by our board.

      Special Meetings. Our certificate of incorporation and bylaws provide that special meet ings of the stockholders may be called by our
Secretary at the direction of:

      •    the affirmative vote of a majority of the board of directors;

      •    the chairman of the board of directors;

      •    the chief executive officer; or

      •    the holders of shares representing a majority of the voting power of the outstanding common stock entitled to vote at such me eting
           of stockholders.

                                                                           65
Table of Contents

     No Stockholder Action by Written Consent. Our cert ificate of incorporation provides that stockholders entitled to take action on any
matter may act solely at a meet ing of stockholders duly called and held in accordance with applicab le law and our cert ifica te of incorporation
and bylaws and may not act by a consent or consents in writ ing. Accordingly, our stockholders will not be able to take action b y written
consent in lieu of a meeting. This provision may have the effect of deterring hostile takeovers or delaying changes in control or management.

       Indemnification of Directors and Officers. Our cert ificate of incorporation and bylaws provide a right to indemnification for expenses,
attorney’s fees, damages, punitive damages, judg ments, penalties, fines and amounts paid in settlement actually and reasonably incurred by any
person whether or not the indemnified liability arises or arose fro m any threatened, pending or completed proceeding by or in o ur right by
reason of the fact that he or she is or was our director or officer o r wh ile our director or officer, is or was serving at our request as a director,
officer, partner, venturer, proprietor, trustee, emp loyee, agent or similar functionary of another foreign or do mestic corpor ation, partnership,
joint venture, sole proprietorship, trust, emp loyee benefit plan or other enterprise, to the fullest extent permitted under the Delaware General
Corporation Law. Our certificate of incorporation and bylaws also provide for the advancement of expenses to an indemnified party.
Additionally, we may indemnify any emp loyee or agent of ours to the fullest extent permitted by law. Our bylaws authorize us to take steps to
ensure that all persons entitled to the indemnification are properly indemn ified, including, if the board of directors so determines, purchasing
and maintaining insurance.

       Anti-Takeover Effects o f Delaware Law and Provisions of our Certificate of Incorporation and Bylaws. We are subject to the provisions
of Section 203 of the Delaware General Corporation Law, an anti-takeover law. Sect ion 203 prohibits a publicly held Delaware corporation
fro m engaging in a business combination with an interested stockholder for a period of three years after the date of the tran saction by which
that person became an interes ted stockholder, unless the business combination is approved in a prescribed manner. For purposes of Section
203, a ―business combination‖ includes a merger, asset sale or other transaction involving NCI and an interested stockholder. An ―interested
stockholder‖ is a person who, together with affiliates and associates, owns, or within three years prior did own, 15.0% o r more of our vot ing
stock.

      Our cert ificate of incorporation and bylaws to be effective upon the completion of this offering provide:

      •    that the number of directors shall be fixed exclusively by the board of directors pursuant to a resolution adopted by a major ity of the
           board of directors;

      •    that directors may be removed at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the
           voting power of the then-outstanding shares of our capital stock entitled to vote generally in the election of d irectors; and

      •    that any vacancy on the board of directors, however occurring, including a vacancy resulting fro m an enlargement of the board , may
           only be filled by vote of a majority of the directors then in office.

      The limitat ions on the number of d irectors on the board of directors and the limitations on the removal of d irectors and filling of
vacancies could have the effect of making it more d ifficu lt for a third party to acquire us, wh ich could have the effect of d iscouraging a third
party fro m attempting to do so.

      Our cert ificate of incorporation and bylaws will also provide that:

      •    any action required or permitted to be taken by the stockholders at an annual meet ing or special meet ing of stockholders may o nly
           be taken if it is properly brought before such meeting and may not be taken by written consent in lieu of a meeting; and

      •    special meetings of the stockholders may only be called by the chairman o f the board of directors, the chief executive office r, th e
           board of directors acting pursuant to a resolution adopted by a majority of the whole board or the holders of shares rep resenting a
           majority of the voting power of the outstanding shares of our capital stock entitled to vote at such a meeting of stockholder s.

                                                                          66
Table of Contents

      These provisions could delay until the next stockholders ’ meeting stockholder actions which are favored by the holders of a majority of
our outstanding voting securities. These provisions may also discourage another person or entity fro m making a tender of fer for our common
stock, because such person or entity, even if it acquired a majority of our outstanding voting securities, would be able to t ake action as a
stockholder (such as electing new directors or approving a merger) only at a duly called stockho lders’ meeting and not by writt en consent.

       Delaware ’s corporation law generally p rovides that the affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation’s certificate of incorporation or bylaws, unless a corporation’s certificate of incorporation or b ylaws, as the
case may be, requires a greater percentage. Following the share exchange and merger, our amended and restated certificate of incorporation
will require the affirmative vote of the holders of at least 75% of the comb ined voting power of the outstanding shares of our capital stock
entitled to vote to amend or repeal any of the fo regoing provisions of our amended and restated certificate of incorporation. Generally, our
amended and restated bylaws may be amended or repealed at any meeting of the board of directors or the stockholders, provided notice of the
proposed change was given in the notice of the meeting and, in the case of a meeting of the board of directors, in a notice g iven at least 24
hours prior to the meeting.

        Limitations on Liability of Officers and Directors. Our certificate of incorporation provides that none of the directors shall be personally
liab le to us or our stockholders for monetary damages for breaches of their fiduciary duty as a director, except liability for:

      •    any breach of the director’s duty of loyalty to us or our stockholders;

      •    acts or omissions not in good faith or wh ich involve intentional misconduct or a knowing vio lation of law;

      •    the payment of unlawfu l div idends and certain other actions prohibited by Delaware General Corporation Law; and

      •    any transaction from wh ich the director derived any improper personal benefits.

      The effect of this provision of our cert ificate of incorporation is to eliminate our rights and the rights of our stockholders to recover
monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting fro m negligent or
grossly negligent behavior, except in the situations described above. This provision does not limit or eliminate our rights o r the rights of any
stockholder to seek non-monetary relief, such as an injunction or rescission in the event of a breach of a director’s duty of care.

Transfer Agent and Registrar

      The transfer agent and registrar for our co mmon stock is A merican Stock Transfer & Trust Co mpany.

                                                                         67
Table of Contents

                                                 SHARES ELIGIB LE FOR FUT URE S ALE

    Sales of substantial amounts of our Class A common stock in the public market could adversely affect the market price of our Class A
common stock and could impair our future ability to raise capital through the sale of our equity securities.

       Upon consummation of this offering, we will have 5,628,947 shares of Class A common stock outstanding, assuming no exercise of the
underwriters’ option to purchase additional shares of our Class A common stock at the initial public o ffering price less the underwriters ’
discount, and no exercise of outstanding options or warrants. Of these shares, the 5,150,000 shares to be sold in this offering will be freely
tradable without restriction or further reg istration under the Securities Act of 1933, as amended, except that any shares pur chased by our
affiliates may generally only be sold in comp liance with the limitat ions of Rule 144 described below. An affiliate is defined under Ru le 144 as
a person that controls, is controlled by or is under common control with NCI, Inc. The remaining shares of Class A common stock, and all of
the shares of Class B co mmon stock, are held by existing stockholders and were issued and sold by us in reliance on exemption s from the
registration requirements of the Securit ies Act. Upon expirat ion of the lock -up agreements, as described below, 6,778,947 shares of Class A
common stock (including shares of Class A common stock into wh ich shares of Class B co mmon stock may be converted) will become elig ible
for sale, subject in most cases to the limitations of either Rule 144 or Rule 701 under the Securit ies Act.

Lock-up Agreements

      All of our officers and directors have entered into lock-up agreements with the underwriters. These lock-up agreements provide that these
individuals will not offer, sell, contract to sell, pledge (other than to us), hedge or otherwise dispose of our Class A common stock, Class B
common stock, or any securities convertible into or exchangeable for our cap ital stock, owned by them for a period of 180 day s after the date of
this prospectus without the prior written consent of Legg Mason Wood Walker, Incorporated, as representative of the underwriters, other than
certain permitted transfers.

      Legg Mason Wood Walker, Incorporated, in its sole discretion, may release any of the securities subje ct to these lock-up agreements at
any time without notice, but they have advised us that they have no present intent or arrangement to release any of the secur ities subject to
lock-up agreements prior to exp iration of the lock-up period. Factors Legg Mason Wood Walker, Incorporated may consider in deciding
whether to release shares may include the length of time before the lock-up exp ires, the number of shares involved, the reason for the requested
release, market conditions, the trading price of our Class A common stock, historical trading volu mes of our Class A common stock and
whether the person seeking the release is our officer, d irector or affiliate.

Rule 144

     In general, under Rule 144, beginning 90 days after the date of this prospectus, a person who has beneficially owned shares of our Class
A common stock or Class B common stock for at least one year would be entitled to sell within any three -month period a nu mb er of shares that
does not exceed the greater of:

      •    1% of the shares of Class A common stock then outstanding, which will equal 56,290 shares immediately after this offering; or

      •    the average weekly trad ing volu me of the Class A common stock on The Nasdaq National Market during the four calendar weeks
           preceding the filing of a notice on Form 144 with respect to the sale.

      Sales under Rule 144 must comp ly with manner of sale provisions an d notice requirements, and informat ion about us must be publicly
available.

                                                                       68
Table of Contents

       Under Rule 144(k), a person who has not been one of our affiliates at any time during the 90 days preceding a sale, and who h as
beneficially o wned the shares proposed to be sold for at least two years, is entitled to sell those shares without complying with the manner of
sale, public informat ion, volu me limitat ion or notice provisions of Rule 144.

Rule 701

      Under Rule 701, persons who purchase shares upon the exercise of options granted prior to the effective date of this offering are entitled,
beginning 90 days after this offering, to sell those shares in reliance on Rule 144, without comply ing with the holding period requirements or,
in the case of sales by non-affiliates, without comply ing with any of the limitat ions and requirements of Ru le 144 except manner of sale
limitat ions. The options granted to our executive officers, covering an aggregate of shares of Class A common stock, were g ra nted under Rule
701.

Stock Opti ons

      Mr. Norris B. Carter and Ms. Linda J. A llan have been issued options to purchase shares of our common stock. In May 2000, Mr. Carter
received options, which after the share exchange, merger and stock split, allo w h im to purchase 221,053 shares of our Class A common stock at
an exercise price of $0.0007 per share. In May 2001, Ms. Allan received options, which after the share exchange, merger and stock split, allow
her to purchase 368,421 shares of our Class A common stock at an exercise price of $0.0007 per share. In addit ion, as of Sept ember 2, 2005,
approximately 1,130,263 shares of our Class A common stock were issuable pursuant to stock options granted under our stock option plans.

      We intend to file a registration statement on Form S -8 under the Securit ies Act follo wing this offering, to reg ister up to 2,807,895 shares
of Class A common stock, including 1,369,737 of the 1,719,737 shares of Class A common stock subject to outstanding options as of
September 2, 2005. The registration statement is expected to become effective upon filing.

                                                                          69
Table of Contents

                                                                  UNDERWRITING

      Subject to the terms and conditions stated in the underwrit ing agreement between us, the selling stockholders and the underwr it ers, each
of the underwriters named below has severally agreed to purchase, and we and the selling stockholders have agreed to sell to each named
underwriter, the number of shares set forth opposite the name of each underwriter.

       Underwriters                                                                                                             Number of shares

       Legg Mason Wood Walker, Incorporated
       Ray mond James & Associates, Inc.
       Robert W. Baird & Co. Incorporated
       Stephens Inc.

                    Total


     The underwrit ing agreement provides that the obligation of the underwriters to purchase the shares included in this offering is subject to
approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the s hares (other than those
covered by the over-allot ment option described below) if they purchase any of the shares.

      The underwriters propose to offer some of the shares directly to the public at the public offering price set forth on the cov er page of this
prospectus, and some of the shares to dealers at the public offering price less a concession not to exceed $             per share. Th e underwriters
may allow, and dealers may reallo w, a concession not to exceed $             per share on sales to other dealers. If all o f the shares are not sold at
the initial public offering price, the rep resentatives of the underwriters may change the public offering price and other selling terms.

      We have granted to the underwriters an option, exercisable for 30 days fro m the date of this prospectus, to purchase up to an aggregate of
772,500 additional shares of Class A common stock at the public offering price less the underwriting discount. The underwrite rs may exercise
the option solely for the purpose of covering over-allot ments, if any, in connection with the offering. To the extent the option is exercised, each
underwriter must purchase a number of addit ional shares approximately proportionate to that underwriter’s in itial purchase commit ment.

      We and each of our officers and directors have agreed that for a period of 180 days from the date of this prospectus, we and they will not,
without the prior written consent of Legg Mason Wood Walker, Incorporated, offer, sell, hedge or otherwise dispose of any shares of our Class
A common stock or any securities convertible into or exchangeable for our Class A common stock held directly by them, subject to certain
exceptions. Legg Mason Wood Walker, Incorporated in its sole discretion may release any of the securities subjec t to these lock-up agreements
at any time without notice.

       At our request, the underwriters have reserved an aggregate of 144,000 shares of Class A common stock for sale at the public offering
price to persons who are directors, officers or employees, or who are otherwise associated with us, through a directed share program. The
number of shares of Class A common stock availab le for sale to the general public will be reduced by the number of directed s hares purchased
by participants in the program. Any directed shares not purchased will be offered by the underwriters to the general public on the same basis as
all other shares of Class A common stock offered.

      Prior to this offering, there has been no public market for our Class A common stock. Consequently , the public offering price for the
shares was determined by negotiations among us, the selling stockholders and the representatives. Among the factors considered in determin ing
the public offering price were our record of operations, our current financial condition, our future prospects, our markets, the economic
conditions in and

                                                                           70
Table of Contents

future prospects for the industry in which we co mpete, our management, and currently prevailing general conditions in the equ ity securities
markets, including current market valuations of publicly traded companies considered comparable to us. We cannot ass ure you, however, that
the prices at which the shares will sell in the public market after this offering will not be lower than the public offering price or that an active
trading market in our Class A common stock will develop and continue after this offe ring.

     We have applied to have our Class A common stock listed on The Nasdaq National Market under the symbol ―NCIT.‖ The underwriters
have undertaken to sell shares of Class A common stock to a minimu m of 2,000 beneficial o wners in lots of 100 o r more sh ares to meet
Nasdaq’s distribution requirements for trading.

      The following table shows the underwriting discounts and commissions that we and the selling stockholders are to pay to the u nderwriters
in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters ’ option to purchase
additional shares of Class A common stock.
                                                                     Per Share                                        Total

                                                           Without                  With                  Without                  With
                                                           Option                  Option                 Option                  Option

       Underwrit ing discount and commission
         paid by us                                  $                        $                    $                          $
       Expenses payable by us
       Underwrit ing discount and commission
         paid by us on behalf of the selling
         stockholders
       Expenses payable by the selling
         stockholders                                        —                       —                      —                      —

      We estimate that the total expenses of this offering will be appro ximately $1,400,000, excluding underwriters ’ discount and commission.
We will pay all expenses associated with this offering and will pay the underwriters ’ discount and commission on all shares sold in the
offering, including $        with respect to the selling stockholders ’ shares.

      In connection with this offering, the underwriters may purchase and sell shares of Class A common stock in the open market. These
transactions may include short sales, syndicate covering transactions and stabilizing transactions. Short sales involve syndicate sales of Class A
common stock in excess of the number of shares to be purchased by the underwriters in th is offering, wh ich creates a syndicat e short position.
―Covered‖ short sales are sales of shares made in an amount up to the number of shares represented by an underwriter’s over-allotment option.
In determin ing the source of shares to close out the covered syndicate short position, an underwriter will consider, among ot her things, the price
of shares available for purchase in the open market as co mpared to the price at which it may purchase shares through the over-allot ment option.
Transactions to close out the covered syndicate short position involve either purchases in the open market after the distribu tion has been
completed or the exercise of the over-allotment option. The underwriters may also make ―naked‖ short sales of shares in excess of the
over-allot ment option. An underwriter must close out any naked short position by purchasing shares of Class A common stock in the open
market. A naked short position is more likely to be created if an underwriter is concerned that there may be down ward pressure on the price of
the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing t ransactions consist of
bids for, or purchases of, shares in the open market wh ile the offering is in p rogress.

       The underwriters also may impose a penalty bid. Penalty bids permit the underwriters to reclaim a selling concession from a s yndicate
member when the underwriters repurchase shares originally sold by that syndicate member in order to cover syndicate short positions or make
stabilizing purchases.

      Any of these activities may have the effect of preventing or retarding a decline in the market price of the Class A common stock. They
may also cause the price of the Class A common stock to be higher than the price that would otherwise exist on the open marke t in the absence
of these transactions. The underwriters may conduct these transactions on The Nasdaq National Market, in the over-the-counter market or
otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

                                                                         71
Table of Contents

      The underwriters do not expect sales to discretionary accounts to exceed 5% of the total number of shares of the Class A comm on stock
offered.

      Some of the underwriters have fro m t ime-to-t ime performed, and may in the future perfo rm, various investment banking, financial
advisory and other services for us for which they have been paid, or will be paid, customary fees. Ray mond James & Associates , Inc. acted as
our financial advisor in connection with our acquisition of SES in December 2003.

      A prospectus in electronic fo rmat may be made availab le on the websites maintained by one or more o f the underwriters. The
representatives may agree to allocate a number of shares to underwriters for sale to their online b rokerage account holders. The representatives
will allocate shares to underwriters that may make Internet distributions on the same basis as other allocations. In addition, shares may be sold
by the underwriters to securities dealers who resell shares to online brokerage account holders.

     We and the selling stockholders have agreed to indemnify the underwriters against certain liabilit ies, includ ing liabilit ies under the
Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

                                                                LEGAL MATTERS

     The validity of the issuance of the shares of our Class A common stock offered by this prospectus will be passed upon for us by Pillsbury
Winthrop Shaw Pittman LLP. The underwriters are being represented in connection with this offering by DLA Piper Rudnick Gray Cary US
LLP.

                                                                     EXPERTS

     The consolidated financial statements of NCI, Inc. at December 31, 2004 and 2003, and for each of the three years in the period ended
December 31, 2004, and the financial statements of Scientific and Engineering Solutions, Inc. at December 23, 2003, and for t h e period fro m
January 1, 2003 through December 23, 2003, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance
upon such reports given on the authority of such firm as experts in accounting and auditing.

                                                                         72
Table of Contents

                                              WHER E YOU CAN FIND MORE INFORMATION

       We have filed with the Securities and Exchange Co mmission a registration statement on Form S -1 under the Securities Act wit h respect
to the Class A common stock to be sold in this offering. Th is prospectus, which constitutes part of the registration statement, does not contain
all of the in formation set forth in the reg istration statement. For further informat ion about us and the Class A common stock, we refer you to
the registration statement and the exhib its and schedules filed as a part of the registration statement. Statements contained in this prospectus as
to the contents of any contract or other document filed as an exh ibit to the registration statement are not necessarily co mplete. If a contract or
document has been filed as an exh ibit to the registration statement, we refer you to the copy of the contract or document that has been filed. The
registration statement may be inspected without charge at the principal office of the Co mmission in Washington, DC and copies of all or any
part of it may be inspected and copied at the public reference facilit ies maintained by the Co mmission at 100 F Street, N.E., Room 1580,
Washington, DC 20549. Copies of this material can also be obtained at prescribed rates by mail fro m:

      Public Reference Section
      Securities and Exchange Co mmission
      100 F Street, N.E.
      Roo m 1580
      Washington, DC 20549
      Attention: Secretary

      Please call the Co mmission at (800) SEC-0330 for further informat ion on the operating rules and procedures for the public reference
room. In addit ion, the Co mmission maintains a website (http://www.sec.gov) that contains reports, proxy and informat ion stat ements and other
informat ion regarding reg istrants that file electronically with the Co mmission. Prio r to this offering, we were not required to file reports with
the Co mmission.

      Upon complet ion of this offering, we will beco me subject to information and periodic reporting requirements of the Exchange Act, and
we will file annual, quarterly and current reports, pro xy statements and other information with the Co mmission. We intend to furnish our
stockholders written annual reports containing financial statements audited by our independent auditors, and make available to our stockholders
quarterly reports for the first three quarters of each year containing unaudited interim financial statements.

      We will make our Co mmission filings available to the public at no cost over the Internet at www.nciinc.com . A mend ments to these
filings will be posted to our website as soon as reasonably practicable after filing with the Co mmission. You may also reques t copies of any
exhibits to the registration statement. Please direct your request to:

      NCI, Inc.
      11730 Plaza A merica Drive
      Reston, Virginia 20190
      Attention: Investor Relations
      (703) 707-6900

                                                                         73
Table of Contents



                                               INDEX TO FINANCIAL STATEMENTS

NCI, INC.
Report of Independent Registered Public Accounting Firm                                   F-2
Consolidated Balance Sheets
    As of December 31, 2003 and 2004, and June 30, 2005 (unaudited) and pro forma as of
       June 30, 2005 (unaudited)                                                          F-3
Consolidated Statements of Income
    For the years ended December 31, 2002, 2003 and 2004, and the six months ended
       June 30, 2004 and 2005 (unaudited)                                                 F-4
Consolidated Statements of Changes in Stockholders’ Equity
    For the years ended December 31, 2002, 2003 and 2004, and the six months ended
       June 30, 2005 (unaudited)                                                          F-5
Consolidated Statements of Cash Flows
    For the years ended December 31, 2002, 2003 and 2004, and the six months ended
       June 30, 2004 and 2005 (unaudited)                                                 F-6
Notes to Consolidated Financial Statements                                                F-7

SCIENTIFIC AND ENGINEERING SOLUTIONS, INC.
Report of Independent Registered Public Accounting Firm                                   F-26
Balance Sheet
     As of December 23, 2003                                                              F-27
Statement of Income
     For the period January 1, 2003 through December 23, 2003                             F-28
Statement of Changes in Stockholder’s Equity
     For the period January 1, 2003 through December 23, 2003                             F-29
Statement of Cash Flo ws
     For the period January 1, 2003 through December 23, 2003                             F-30
Notes to Financial Statements                                                             F-31

                                                                  F-1
Table of Contents

                                          Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
NCI, Inc.

      We have audited the accompanying consolidated balance sheets of NCI, Inc. (the Co mpany) as of December 31, 2003 and 2004, and the
related consolidated statements of income, stockholders ’ equity, and cash flows for each of the three years in the period ended December 31 ,
2004. These financial statements are the responsibility of the Co mpany ’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Co mpany Accounting Oversight Board (United States). Those
standards require that we plan and perfo rm the audit to obtain reasonable assurance about whether the financial statements ar e free of material
misstatement. We were not engaged to perform an audit of the Co mpany’s internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Co mpany’s internal control over financial reporting. Accordingly we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of
NCI, Inc. at December 31, 2003 and 2004, and the consolidated results of its operations and its cash flows for each of the th ree years in the
period ended December 31, 2004, in conformity with accounting principles generally accepted in the Un ited States.

E RNST & Y OUNG LLP
McLean, VA
March 1, 2005, except as to the Reincorporation Transaction described in Note 1, as to which the date is Sept ember          , 2005.

     The foregoing report is in the fo rm that will be signed upon the completion of the Reincorporation Transactions of NCI, Inc. described in
Note 1 to the financial statements.

/s/ E RNST & Y OUNG LLP
McLean, VA
August 31, 2005

                                                                         F-2
Table of Contents

                                                                      NCI, Inc.

                                                             Consolidated B alance Sheets
                                                        (in thousands, except share amounts)

                                                                                            As of December 31,                 As of June 30, 2005

                                                                                           2003              2004            Actual             Pro forma

                                                                                                                                      (unaudited)
                                                                                                                                                    (Note 2)
Assets
Current assets:
     Cash and cash equivalents                                                         $    1,340        $       40      $        13           $         13
     Accounts receivable—net                                                               33,162            38,458           38,932                 38,932
     Deferred tax asset                                                                       —                 —                —                    2,430
     Prepaid expenses and other current assets                                              1,140               381              375                    375

Total current assets                                                                       35,642            38,879           39,320                 41,750
Property and equipment—net                                                                  7,001             6,299            6,632                  6,632
Other assets                                                                                1,362             1,093            1,099                  1,099
Deferred tax asset—net                                                                        —                 —                —                      337
Intangible assets—net                                                                       3,644             2,391            1,852                  1,852
Goodwill                                                                                   14,343            15,508           17,427                 17,427

Total assets                                                                           $ 61,992          $ 64,170        $ 66,330              $ 69,097

Liabilities and stockhol ders‘ equity
Current liab ilit ies:
     Line of credit                                                                    $ 14,951          $ 12,440        $ 11,731              $ 14,731
     Accounts payable                                                                     5,536             7,086           8,230                 8,230
     Accrued salaries and benefits                                                        7,453             8,373           9,501                 9,501
     Other accrued expenses                                                               2,161             3,144           3,385                 3,385
     Current portion of cap ital lease obligation                                           117               242             261                   261
     Current portion of notes payable                                                     2,800             2,800           2,800                17,800
     Due to employee, current portion                                                       132               141             109                   109

Total current liabilities                                                                  33,150            34,226           36,017                 54,017
Capital lease obligation, less current portion                                                275                  388           301                     301
Long-term notes payable, less current portion                                              11,200                8,633         7,233                   7,233
Deferred rent                                                                               4,973                4,843         4,678                   4,678
Due to employee, less current portion                                                         178                   37           —                       —

Total liabilities                                                                          49,776            48,127           48,229                 66,229
Stockholders’ equity:
     Class A common stock, $0.019 par value—37,500,000 shares authorized;
       478,947 shares issued and outstanding ( Note 6 )                                           9                 9                  9                       9
     Class B common stock, $0.019 par value—12,500,000 shares authorized;
       6,300,000 shares issued and outstanding ( Note 6 )                                     120               120              120                     120
     Additional paid-in capital                                                             3,107             5,508            5,423                   5,423
     Deferred co mpensation                                                                (1,471 )          (2,693 )         (2,235 )                (2,235 )
     Retained earnings (deficit)                                                           10,451            13,099           14,784                    (449 )

Total stockholders’ equity                                                                 12,216            16,043           18,101                   2,868

Total liabilities and stockholders ’ equity                                            $ 61,992          $ 64,170        $ 66,330              $ 69,097


                                                    See Notes to Consolidated Financial Statements.

                                                                         F-3
Table of Contents

                                                                   NCI, Inc.

                                                       Consolidated Statements of Income
                                                    (in thousands, except per share amounts)

                                                                                                                                Six months ended
                                                                                 Year ended December 31,                            June 30,

                                                                          2002             2003                2004            2004                 2005

                                                                                                                                      (unaudited)
Revenue                                                               $ 138,165        $ 136,421           $ 171,253       $ 81,227           $ 93,875
Operating costs and expenses:
    Cost of revenue                                                       115,728          113,521             144,146         68,229               79,671
    General and administrative expense                                     12,166           14,524              16,363          8,037                7,239
    Depreciat ion and amort ization                                         1,600            1,576               1,741            886                  801
    Amort izat ion of intangible assets                                        20               16               1,252            616                  539

Total operating costs and expenses                                        129,514          129,637             163,502         77,768               88,250
Operating inco me                                                           8,651             6,784              7,751          3,459                5,625
Interest income                                                                21                15                 26              6                   26
Interest expense                                                             (826 )            (439 )           (1,373 )         (721 )               (768 )

Income before taxes                                                         7,846             6,360              6,404          2,744                4,883
Income taxes                                                                  242               262                276            118                  220

Net inco me                                                           $     7,604      $      6,098        $     6,128     $    2,626         $      4,663

Earnings per common and co mmon equivalent share:
  Basic:
  Weighted average shares outstanding                                       6,779             6,779              6,779          6,779                6,779
  Net inco me per share                                               $      1.12      $       0.90        $      0.90     $     0.39         $       0.69
  Diluted:
  Weighted average shares and equivalent shares outstanding                 7,350             7,347              7,443          7,351                7,571
  Net inco me per share                                               $      1.03      $       0.83        $      0.82     $     0.36         $       0.62
Unaudited pro forma inco me tax information:
  Income before taxes                                                 $     7,846      $      6,360        $     6,404     $    2,744         $      4,883
  Pro forma provision for inco me taxes                                     3,044             2,448              2,595          1,112                1,939

  Pro forma net inco me                                               $     4,802      $      3,912        $     3,809     $    1,632         $      2,944

  Unaudited pro forma earn ings per common and co mmon
    equivalent share:
  Basic:
  Weighted average shares outstanding                                       6,779             6,779              6,779          6,779                6,779
  Pro forma net inco me per share                                     $      0.71      $       0.58        $      0.56     $     0.24         $       0.43
  Diluted:
  Weighted average shares and equivalent shares outstanding                 7,140             7,143              7,158          7,134                7,228
  Pro forma net inco me per share                                     $      0.67      $       0.55        $      0.53     $     0.23         $       0.41
Unaudited pro forma earn ings per common and co mmon
  equivalent share, as adjusted for distribution ( Note 2 ):
  Basic:
  Weighted average shares outstanding, as adjusted                                                               8,870                               8,870
  Pro forma net inco me per share, as adjusted                                                             $      0.43                        $       0.33
  Diluted:
  Weighted average shares and equivalent shares
    outstanding, as adjusted                                                                                     9,249                               9,319
  Pro forma net inco me per share, as adjusted                                                             $      0.41                        $       0.32
See Notes to Consolidated Financial Statements.

                     F-4
Table of Contents

                                                                        NCI, Inc.

                                           Consolidated Statements of Changes in Stockhol ders ‘ Equity
                                                                (in thousands)

                                                                                          Additional                                               Total
                                                    Class A              Class B           paid-in        Deferred           Retained         stockholders‘
                                                 common stock         common stock         capital      compensation         earnings             equity

                                                         Amoun                  Amoun
                                                Shares     t         Shares       t

Balance at December 31, 2001                      479    $       9   6,300      $ 120 $       1,348     $        —       $      8,877     $         10,354
Net inco me                                       —          —         —          —             —                —              7,604                7,604
Distributions to stockholders                     —          —         —          —             —                —             (8,081 )             (8,081 )
Issuance of stock options                         —          —         —          —             —                —                —                    —
Amort izat ion of deferred co mpensation          —          —         —          —             —                —                —                    —

Balance at December 31, 2002                      479            9   6,300          120       1,348              —              8,400                 9,877
Net inco me                                       —          —         —            —           —                —              6,098                 6,098
Distributions to stockholders                     —          —         —            —           —                —             (4,047 )              (4,047 )
Issuance of stock options                         —          —         —            —         1,759           (1,759 )            —                     —
Amort izat ion of deferred co mpensation          —          —         —            —           —                288              —                     288

Balance at December 31, 2003                      479            9   6,300          120       3,107           (1,471 )         10,451               12,216
Net inco me                                       —          —         —            —           —                —              6,128                6,128
Distributions to stockholders                     —          —         —            —           —                —             (3,480 )             (3,480 )
Issuance of stock options                         —          —         —            —         2,401           (2,401 )            —                    —
Amort izat ion of deferred co mpensation          —          —         —            —           —              1,179              —                  1,179

Balance at December 31, 2004                      479            9   6,300          120       5,508           (2,693 )         13,099               16,043
Net inco me (unaudited)                           —          —         —            —           —                —              4,663                4,663
Distributions to stockholders (unaudited)         —          —         —            —           —                —             (2,978 )             (2,978 )
Issuance of stock options (unaudited)             —          —         —            —           (85 )             85              —                    —
Amort izat ion of deferred co mpensation
   (unaudited)                                    —          —         —            —           —                373              —                     373

Balance at June 30, 2005 (unaudited)              479    $       9   6,300      $ 120 $       5,423     $     (2,235 )   $ 14,784         $         18,101


                                                  See Notes to Consolidated Financial Statements.

                                                                              F-5
Table of Contents

                                                                       NCI, Inc.

                                                      Consolidated Statements of Cash Fl ows
                                                                  (in thousands)

                                                                                                                                   Six months ended
                                                                                   Year ended December 31,                             June 30,

                                                                        2002                  2003               2004            2004                 2005

                                                                                                                                        (unaudited)
Cash flows from operating acti vities
Net inco me                                                        $       7,604          $     6,098        $    6,128      $    2,626          $     4,663
Adjustments to reconcile net inco me to net cash provided by
  operating activities:
     Depreciat ion and amort ization                                       1,620                1,592             2,993           1,502                1,340
     Cash surrender value of life insurance                                  (98 )                (70 )             (70 )           (68 )               (334 )
     Loss (gain) on sale and disposal of property and
       equipment                                                                   4                  (1 )            8               8                    1
     Non-cash stock compensation expense                                       —                     288          1,179             109                  373
     Changes in operating assets and liabilities, net of effect
       of business combination:
          Accounts receivable, net                                           838                 3,712           (5,297 )        (2,967 )               (474 )
          Prepaid expenses and other assets                                  218                  (875 )          1,099             138                  345
          Accounts payable                                                  (704 )                 514            1,550             911                1,144
          Accrued expenses/other current liabilit ies                        551                (3,746 )          1,848           1,041                1,369
          Deferred rent                                                      —                   4,964              (74 )            91                 (165 )
          Due to employee                                                    (87 )                (123 )           (132 )           (65 )                (69 )

Net cash provided by operating activities                                  9,946               12,353             9,232           3,326                8,193

Cash flows from investing acti vi ties
Purchase of property and equipment                                        (1,095 )             (5,319 )          (1,055 )          (442 )             (1,151 )
Proceeds from sale of property and equipment                                  67                    3               —               —                      4
Cash paid for purchase of SES                                                —                (19,181 )          (1,157 )          (143 )             (1,919 )
Note receivable fro m stockholder                                          3,622                  —                 —               —                    —

Net cash provided by (used in) investing activities                        2,594              (24,497 )          (2,212 )          (585 )             (3,066 )

Cash flows from financing acti vities
(Pay ments on) proceeds from line of credit, net                          (4,808 )              3,227            (2,511 )           559                 (708 )
Proceeds from (pay ments on) term loan                                       —                 14,000            (2,567 )        (1,400 )             (1,400 )
(Principal pay ments under) additions to capital lease
  obligation                                                                 (79 )                 (12 )            238              51                  (68 )
Distributions to stockholders                                             (8,081 )              (4,047 )         (3,480 )        (2,343 )             (2,978 )

Net cash (used in) provided by financing activities                      (12,968 )             13,168            (8,320 )        (3,133 )             (5,154 )

Net change in cash and cash equivalents                                     (428 )              1,024            (1,300 )          (392 )                    (27 )
Cash and cash equivalents, beginning of year                                   744                   316          1,340           1,340                       40

Cash and cash equivalents, end of year                             $           316        $     1,340        $          40   $      948          $            13

Supplemental disclosure of cash flow informati on
Cash paid during the period for:
    Interest                                                       $           954        $          598     $    1,367      $      781          $       769

     Income taxes                                                  $           242        $          262     $      276      $      161          $       191


                                                 See Notes to Consolidated Financial Statements.
F-6
Table of Contents

                                                                    NCI, Inc.

                                                 Notes to Consoli dated Financi al Statements
                                                             December 31, 2004

1. Organizati on and Business Overview

Reincorporati on Transaction

      NCI, Inc. (the Co mpany or NCI) was incorporated in Delaware in July 2005.

      In September 2005, we co mpleted a merger and share exchange as a result of which NCI Informat ion Systems, Inc., a Virginia
corporation, became our wholly-owned subsidiary. Pursuant to a share exchange agreement, the majority stockholder of NCI Information
Systems, Inc. transferred all of his shares of common stock of NCI Informat ion Systems, Inc. to our wholly -owned subsidiary, NCI
Acquisition, LLC, a Virgin ia limited liab ility co mpany. The majo rity stockholder received one share of Class B co mmon stock in exchange for
each share he transferred. NCI Info rmation Systems, Inc. then merged with our wholly -owned subsidiary, with NCI Info rmatio n Systems, Inc.
surviving the merger. As a result of this merger, each issued and outstanding share of common stock of NCI Informat ion Systems, Inc., other
than the shares transferred to our wholly-owned subsidiary by the majo rity stockholder, was converted into one share of our Class A common
stock. In connection with this merger, NCI assumed all o f the issued and outstanding options to acquire capital stock of NCI Informat ion
Systems, Inc., and these options became exercisable shares of our Class A common stock. As this transaction represented a mer ger of entities
under common control, the transaction was accounted for similar to a pooling-of-interests whereby all financial informat ion prior to the
transactions has been restated as if the combined entity existed for the periods presented. Refer to Note 6 for additional de scription of the
capital stock transactions associated with this transaction. The above transactions are collect ively referred to herein as the ―Reincorporation
Transaction.‖

Business Overview

       NCI is a provider of in formation technology services and solutions to federal govern ment agencies. The Co mpany ’s focus is on
designing, implementing, maintain ing and upgrading secure information technology (IT) systems and networks by leveraging the Co mpany’s
skills across four core service offerings: network engineering; information assurance; systems development an d integration; and enterprise
systems management. The Co mpany provides these services to defense, intelligence and federal civ ilian agencies. Substantially all of the
Co mpany’s revenue was derived fro m contracts with the federal government, directly as a p rime contractor or as a subcontractor. The
Co mpany conducts business domestically in 22 states and the District of Co lu mbia. In addit ion, the Co mpany conducts business internationally
in support of federal government contracts.

      The Co mpany’s operations are subject to certain risks and uncertainties including, among others, dependence on contracts with federal
government agencies, dependence on significant clients, existence of contracts with fixed p ricing, dependence on subcontracto rs to fulfill
contractual obligations, current and potential competitors with greater resources, dependence on key management personnel, ability to recru it
and retain qualified emp loyees, and uncertainty of future profitability and possible fluctuations in financial results.

2. Summary of Significant Accounting Policies

Interi m Results

      The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2004 and 2005,
have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Co mmission. As a result, certain
informat ion and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally acc epted accounting
principles have been condensed or omitted. In the opinion of management, the accompanying unaudited interim consolidated

                                                                      F-7
Table of Contents

                                                                      NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Interi m Results (continued)

financial statements reflect all necessary adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for
fair presentation for the periods presented. The information disclosed in the notes to the financial statements for these periods is unaudited. It is
suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements
included herein. The current period’s results of operations are not necessarily indicat ive of results that may be achieved for any future period.

Unaudi ted Pro Forma Fi nancial Information

      The pro forma consolidated balance sheet data as of June 30, 2005 g ives effect to expected deferred tax assets created as a result of the
planned termination of the Co mpany’s S corporation status (see Note 13) and the stockholder distributions and the borrowing under the new
time loan (see Note 15) as though they had occurred on June 30, 2005.

Major Clients

     The Co mpany earned approximately 99% of its revenue fro m the federal government for the years ended December 31, 2002, 2003 a nd
2004, respectively. Revenue by client sector for each of the three years ended December 31 was as follows:

                                                                                                    Year ended December 31,

                                                                                  2002        %           2003           %         2004          %

                                                                                                      (dollars in thousands)
Depart ment of Defense and intelligence agencies                               $ 85,812      62.1 % $ 83,871            61.5 % $ 119,755        69.9 %
Federal civilian agencies                                                      $ 50,976      36.9 % $ 51,567            37.8 % $ 50,596         29.6 %
Co mmercial and state & local entities                                         $ 1,377        1.0 % $    983             0.7 % $     902         0.5 %

Basis of Consoli dation

      The consolidated financial statements include the accounts of wholly -owned subsidiaries. A ll significant interco mpany balances and
transactions have been eliminated in consolidation.

Reclassifications

      Certain amounts for prior years have been reclassified to conform with the current presentation.

Revenue Recogni tion

      The Co mpany generates its revenue from three different types of contractual arrangements: time -and-materials contracts; cost-plus
contracts; and fixed-price contracts.

      Revenue on time -and-material contracts is recognized based on negotiated billable rates multip lied by the number of hours delivered plus
allo wable expenses incurred. The Co mpany considers fixed fees under cost -plus contracts to be earned in proportion to the allowable costs
incurred in performance of the contract. Revenue for performance based fee incentives is recognized as earned.

      The Co mpany has three basic categories of fixed-price contracts: fixed unit price; fixed-p rice level-of-effort; and fixed-p rice co mp letion
contracts. Revenue on fixed unit price contracts, where specified units are delivered

                                                                         F-8
Table of Contents

                                                                     NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Revenue Recogni tion (continued)

under service arrangements, is recognized as units are delivered based on the specified price per unit. Revenue for fixed -price level-of-effort
contracts is recognized based upon the number of units of labor actually delivered mult iplied by the negotiated rate for each unit of labor.
Revenue on fixed -price comp letion contracts is recognized on the percentage of completion method using costs incurred in relation to total
estimated costs.

      Contract accounting requires judgment relat ive to assessing risks, es timating contract revenue and costs, and making assumptions for
schedule and technical issues. Due to the size and nature of many of the Co mpany ’s contracts, the estimation of total revenue and cost at
complet ion is co mplicated and subject to many variab les. Contract costs included material, labor and subcontracting costs, as well as an
allocation of allowable indirect costs. Assumptions have to be made regarding the length of time to comp lete the contract bec ause costs also
include expected increases in wages and prices for materials. For contract change orders, claims or similar items, the Co mpany applies
judgment in estimat ing the amounts and assessing the potential for realizat ion. These amounts are only included in contract v alue when they
can be reliably estimated and realization is considered probable. Estimates of award fees for certain contracts are also a significant fac tor in
estimating revenue and profit rates based on actual and anticipated awards. Anticipated losses on contracts are recognized a t the time they
become known.

Cash and Cash Equi valents

      The Co mpany considers cash on deposit and all highly liquid investments with original maturities of three months or less to b e cash and
cash equivalents.

Cash Surrender Value of Life Insurance

      The Co mpany had a life insurance policy on its majority stockholder with a total face amount of appro ximately $1.0 million as of
December 31, 2004, o f which the Co mpany was the beneficiary. Subsequent to year-end, the policy was transferred to the majority stockholder.
As of December 31, 2003, the Co mpany had life insurance policies on its majority stockholder and other officers with a total face value of
approximately $2.4 million. During 2004, policies with face values of appro ximately $1.4 million were either cancelled or transferred to the
covered individuals. During 2003, policies with face values of approximately $2.5 million were either cancelled or transferre d t o the covered
individuals. As of December 31, 2003 and 2004, the policies were recorded at their cash surrender value, which appro ximates fair value.

                                                                        F-9
Table of Contents

                                                                    NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)

Property and Equi pment

      Property, equip ment and leasehold improvements are recorded at cost and are depreciated on a straight -line basis over their estimated
useful lives, wh ich range fro m two to seven years for property and equipment, over the shorter of the lease term or the useful lives of the
leasehold or leasehold improvements and over 30 years for real property. The following table details the net property and equ ipment at the end
of each period:

                                                                                                                             As of
                                                                                                  As of                     June 30,
                                                                                              December 31,                    2005

                                                                                       2003                  2004

                                                                                                                        (unaudited)
                                                                                                       (in thousands)
                Property and equipment
                    Furniture and equip ment                                       $    8,554           $     9,488     $       9,964
                    Leasehold improvements                                              3,907                 3,950             4,579
                    Real property                                                         558                   549               549

                                                                                       13,019                13,987            15,092
                Less: Accumulated depreciat ion and amort ization                       6,018                 7,688             8,460

                Net property and equipment                                         $    7,001           $     6,299     $       6,632


Goodwill

      Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets (SFAS No. 142) , requires that
goodwill no longer be amort ized against earnings, but instead reviewed periodically for impairment. Annually, on October 1, t he Co mpany
performs a fair value analysis of its two reporting units using valuation techniques prescribed in SFAS No. 142. The Co mpany had two
reporting units in 2004, NCI and Scientific and Engineering So lutions, Inc. (SES), a wholly -owned subsidiary. For 2005, the Company has one
reporting unit as SES was fully integrated into NCI. Based on the analysis performed, the Co mpany determined that no impairment existed as
of October 1, 2003 or 2004.

Long-Li ved Assets (Excludi ng Goodwill)

       In accordance with SFAS No. 144, Accounting for the Impairment of Long-Lived Assets , a rev iew of long-lived assets for impairment is
performed when events or changes in circu mstances indicate the carrying value of such assets may not be recoverable. If an in dication of
impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to its carrying amount.
If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the
excess of the asset’s carrying amount over its fair value. Any write-downs are treated as permanent reductions in the carrying amount of the
assets. The Co mpany believes there were no indications of impairment of such assets during 2003 or 2004.

                                                                      F-10
Table of Contents

                                                                     NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)

Intangi ble Assets

      Intangible assets consisted of the following :

                                                                                                                                         As of
                                                                                                         As of                          June 30,
                                                                                                     December 31,                         2005

                                                                                              2003                  2004

                                                                                                                                      (unaudited)
                                                                                                              (in thousands)
                Copyrights                                                                $      100           $      100           $         100
                Less: Accumulated amort ization                                                  100                  100                     100

                                                                                                 —                    —                       —

                Contract and client relationships                                              2,260                2,260                   2,260
                Less: Accumulated amort ization                                                    6                  792                   1,098

                                                                                               2,254                1,468                   1,162

                Non-compete agreements                                                         1,400                1,400                   1,400
                Less: Accumulated amort ization                                                   10                  477                     710

                                                                                               1,390                  923                     690

                Total                                                                     $ 3,644              $ 2,391              $       1,852


      Contract and client relationships are being amort ized over five years based on projected cash flows, which are p roportionate to acquired
backlog. Non-compete agreements are being amortized over 36 months based on their estimated useful lives. A mortizat ion exp ense for the yea r
ended December 31, 2004 was approximately $1.3 million. Fu ture amort ization expense related to intangible assets is expected to be as
follows:

                                                                                                                                   (in thousands)
                For the year ending December 31,
                2005                                                                                                           $            1,053
                2006                                                                                                                          957
                2007                                                                                                                          354
                2008                                                                                                                           27

Income Taxes

      The Co mpany is treated, for inco me tax purposes, as an S corporation under Subchapter S of the Internal Revenue Code (the Cod e) and
under relevant sections of the tax law of the various states that conform to the Code. As an S corporation, the net inco me or loss of the entity is
reportable on the personal tax return of the majority stockholder. Consequently, no provision for federal inco me taxes has be en reflected in the
accompanying financial statements.

      A current provision for state income taxes of appro ximately $242,000, $262,000 and $276,000 for the years ended December 31, 2002,
2003 and 2004, respectively, and $118,000 and $220,000 fo r the six months ended June 30, 2004 and 2005, respectively, was rec orded for
states that do not recognize the S corporation status.

      The unaudited pro forma provision fo r income tax informat ion on the accompanying statements of income for the years ended Dec ember
31, 2002, 2003 and 2004 and the six months ended June 30, 2004 and 2005 show the appro ximat e federal and state income taxes (by applying
statutory rates) that would have been incurred had

                                                                        F-11
Table of Contents

                                                                      NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Income Taxes (continued)

the Co mpany been taxed as a C corporation in those periods, and thus subject to federal and certain state income taxes. The u naudited pro
forma provision for income tax informat ion included in the statements of income and Note 13 is presented in accordance with SFAS No. 109,
Accounting for Income Taxes (SFAS No. 109) .

Use of Esti mates

        The preparation of financial statements in conformity with accounting principles gene rally accepted in the Un ited States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of con tingent assets and
liab ilit ies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results
could differ fro m those estimates.

Fair Value of Financi al Instruments

      Estimated fair values of our financial instruments were determined by management using available market informat ion and appro priate
valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Acco rdingly, the
estimates presented herein are not necessarily indicat ive of the amounts the Company could realize on disposition of the fina ncial instruments.
The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair valu e amounts.

     The carrying values of the Co mpany’s financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued
expenses and bank loans approximate their fair values.

      Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2004.
Although the Company is not aware of any factors that would significantly affect the reasonable fair value amounts, such amou nts have not
been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may dif fer
significantly fro m the amounts presented herein.

Deri vati ve Financial Instruments

      The Co mpany uses derivative financial ins truments to manage its exposure to fluctuations in interest rates on its line of cred it. None of
the derivatives held by the Company are accounted for as hedges and all are recorded as either assets or liab ilit ies in the c onsolidated balance
sheet, and periodically adjusted to fair value. Adjustments to reflect the changes in the fair values of the derivatives are reflected in e arnings.
The Co mpany does not hold or issue derivative financial instruments for trad ing purposes.

Earnings Per Share

       SFAS No. 128, Earnings Per Share, requires presentation of basic and diluted earnings per share. Basic earn ings per share exclude
dilution and are co mputed by dividing net income by the weighted average number of co mmon shares outstanding for the perio d. The
computation of earnings per share presented is for both Class A and Class B co mmon stock.

      Diluted earnings per share reflect potential d ilution that could occur if securities or other contracts to issue common stock were exercised
or converted into common stock. Diluted earnings per share include the incremental effect of stock options calculat ed using the treasury stock
method.

                                                                        F-12
Table of Contents

                                                                      NCI, Inc.

                                          Notes to Consoli dated Financi al Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Earnings Per Share (continued)

      The following details the historical and pro forma co mputation of basic and diluted earnings per common share (Class A and Class B) for
the years ended December 31, 2002, 2003 and 2004, respectively, and for the six months ended June 30, 2004 and 2005, respectively:

                                                                                                                                     Six months ended June
                                                                     Year ended December 31,                                                  30,

                                                      2002                      2003                   2004                        2004                   2005

                                                                                                                                            (unaudited)
                                                                                 (in thousands, except share and per share data)
Historical net inco me                           $           7,604       $         6,098         $            6,128       $               2,626      $           4,663

Weighted average number of basic shares
  outstanding during the period                       6,778,947               6,778,947                6,778,947                   6,778,947              6,778,947
Dilutive effect of stock options after
  application of treasury stock method                 571,235                   568,043                 663,826                    571,555                  791,937

Weighted average number of diluted shares
 outstanding during the period                        7,350,182               7,346,990                7,442,773                   7,350,502              7,570,884

Basic earn ings per share                        $            1.12       $             0.90      $             0.90       $                0.39      $            0.69
Diluted earnings per share                       $            1.03       $             0.83      $             0.82       $                0.36      $            0.62


Pro forma net inco me                            $           4,802       $         3,912         $            3,809       $               1,632      $           2,944

Weighted average number of basic shares
  outstanding during the period                       6,778,947               6,778,947                6,778,947                   6,778,947              6,778,947
Dilutive effect of stock options after
  application of treasury stock method                 360,765                   364,347                 379,477                    355,231                  449,033

Weighted average number of diluted shares
 outstanding during the period                        7,139,712               7,143,294                7,158,424                   7,134,178              7,227,980

Pro forma basic earnings per share               $            0.71       $             0.58      $             0.56       $                0.24      $            0.43
Pro forma diluted earnings per share             $            0.67       $             0.55      $             0.53       $                0.23      $            0.41

      As discussed in Note 15, in connection with the Co mpany’s proposed initial public offering, a distribution will be made to the
stockholders of the Co mpany. The following details pro forma net inco me per share for the year ended December 31, 2004 and the six months
ended June 30, 2005 as adjusted for the estimated number of shares (2,090,909) that the Co mpany would need to issue (at an as sumed init ial
public offering price of $11.00 per share, wh ich is the midpoint of the proposed initial public offering price range) to fund distributions of
approximately $23 million to the Co mpany’s existing stockholders, $18 million of which was distributed in July 2005 and $5 million of which
represents an estimate of additional funds which may be distributed sometime during the fourth quarter of 2005 or the first quarter of 2006.

                                                                         F-13
Table of Contents

                                                                    NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Earnings Per Share (continued)

                                                                                                               December 31,                        June 30,
                                                                                                                   2004                              2005

                                                                                                                                  (unaudited)
                                                                                                                        (in thousands, except share and
                                                                                                                                per share data)
Pro forma net inco me                                                                                     $                3,809               $            2,944

Weighted average number of basic shares outstanding during the period                                              8,869,856                           8,869,856
Dilutive effect of stock options after application of treasury stock method                                          379,477                             449,033

Weighted average number of diluted shares outstanding during the period                                            9,249,333                           9,318,889

Pro forma as adjusted, basic earnings per share                                                           $                 0.43               $                 0.33
Pro forma as adjusted, diluted earnings per share                                                         $                 0.41               $                 0.32

Stock-Based Compensati on

      The Co mpany accounts for stock-based compensation in accordance with Accounting Princip les Board Opin ion No. 25, Accou nting for
Stock Issued to Employees (APB No. 25) using the intrinsic-value method. Under this method, the Co mpany recognized appro ximately
$373,000 and $109,000 as of June 30, 2004 and 2005, respectively, and $288,000 and $1.2 million in co mpensation expense for s tock options
issued during 2003 and 2004, respectively. There was no stock-based compensation expense incurred for the year ended December 31, 2002.
The Co mpany issued non-qualified stock options to employees at various times during 2003 and 2004 with vesting periods ranging fro m zero
to seven years and any related expense is being amortized over the applicable vesting periods.

      SFAS No. 123, Accounting for Stock -Based Compensation (SFAS No. 123), as amended, requires the disclosure of pro forma effects on
net income co mputed as if the Co mpany accounted for the stock options under the fair value method. For the options issued dur ing 2003 and
2004, the fair value of the options was estimated using the min imu m value method assuming a weighted average risk free intere st rate of 3.4%
and 3.7%, respectively, with no dividends expected to be paid over the expected life of five to seven years. The pro forma effect on net income
is shown in the follo wing table:

                                                                                                  December 31,                              June 30,

                                                                                           2003                  2004                2004                 2005

                                                                                                                   (in thousands)
Net inco me as reported                                                                 $ 6,098            $      6,128            $ 2,626             $ 4,663
Add: Stock-based employee co mpensation expense as reported under APB No. 25
  for all awards, net of related tax effects                                                  288                 1,179                  109                 373
Deduct: Stock-based compensation expense determined under SFAS No. 123 for all
  awards, net of related tax effects                                                         (382 )              (1,283 )               (155 )              (418 )

Pro forma net inco me                                                                   $ 6,004            $      6,024            $ 2,580             $ 4,618


New Accounting Pronouncements to be Adopted

      In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment
(SFAS No. 123(R) , which is a rev ision of SFA S No. 123, Accounting for Stock-Based Compensation . SFAS No. 123(R) supersedes APB No.
25, and amends SFAS No. 95 , Statement of Cash Flows.

                                                                       F-14
Table of Contents

                                                                     NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
2. Summary of Significant Accounting Policies (continued)
New Accounting Pronouncements to be Adopted (continued)

SFAS No. 123(R) will be effective for non-public co mpanies in the first fiscal year beginning after December 15, 2005. Early adoption will be
permitted in periods in which financial statements have not yet been issued. The Co mpany plans to adopt SFAS No. 123(R) effective January
1, 2006. SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the
financial statements based on their fair values (i.e., p ro forma disclosure is no longer an alternative to financial statement recognition).
Non-public entit ies that did not use the fair-value-based method of accounting are required to apply the prospective transition method of
accounting under SFAS 123(R) as of the required effective date. Under the prospective method, a non -public entity accounting for its
equity-based awards using the intrinsic-value method under APB No. 25, would continue to apply APB No. 25 in future period s to awards
outstanding at the date they adopt SFAS 123(R). All awards granted, modified or settled after the date of adoption would be acc ounted for
using the measurement, recognition and attribution provisions of SFAS 123(R). A lthough the adoption of SFAS 123(R) is expected to affect
the measurement of share-based equity awards to employees after adoption, management does not expect the adoption would have a material
effect of the Co mpany’s consolidated results of operations, cash flows or financial position. Informat ion about the fair value of stock options
and the proforma impact on the Co mpany’s net earnings for the years ended December 31, 2003 and 2004, and fo r the six months ended June
30, 2004 and 2005 can be found in the Stock-Based Co mpensation section of Note 2.

3. Accounts Recei vable

      Accounts receivable consist of billed and unbilled amounts at December 31, 2003 and 2004 and June 30, 2005 as follows:

                                                                                                                                                As of
                                                                                                                     As of                     June 30,
                                                                                                                 December 31,                    2005

                                                                                                          2003                  2004

                                                                                                                                           (unaudited)
                                                                                                                          (in thousands)
Billed receivables:
     Billed receivables                                                                                $ 20,367            $ 20,045        $      22,437
     Billable receivables at end of period                                                               10,758              17,824               16,036

Total billed receivables                                                                                  31,125                37,869            38,473
Total unbilled receivables                                                                                 2,237                 1,064             1,059

Total accounts receivable                                                                                 33,362                38,933            39,532
Less: Allowance for doubtful accounts                                                                        200                   475               600

Total accounts receivable, net                                                                         $ 33,162            $ 38,458        $      38,932


      Unbilled rece ivables primarily consist of fees withheld by the client in accordance with the contract terms and conditions that will be
billed upon contract completion and approval of indirect rates.

4. Loan and Security Agreement

     On December 23, 2003, the Co mpany entered into a Loan and Security Agreement that provides for a $30.0 million revolving n ote and a
$14.0 million term note.

      The revolving note provides a line of credit of up to $30.0 million limited to a percentage of th e Co mpany’s elig ible receivables as
defined in the line of credit agreement. As such, as of December 31, 2002, 2003 and 2004

                                                                       F-15
Table of Contents

                                                                   NCI, Inc.

                                      Notes to Consoli dated Financi al Statements (continued)
4. Loan and Security Agreement (continued)

and June 30, 2005 appro ximately $24.6 million, $25.3 million, $26.8 million and $27.0 million, respectively, was availab le on the line of
credit. The unpaid principal balance of the line of credit bears interest based on the LIBOR plus applicable margins.

      As of December 31, 2002, 2003 and 2004 and June 30, 2005, the interest rate was 2.9%, 3.7%, 4.5% and 5.3%, respectively. The
outstanding borrowings are collateralized by a security interest in substantially all assets of the Company. The bank also requires a direct
assignment of all the Co mpany’s contracts at the bank’s discretion. The line of cred it is renewable on December 31, 2006. For t he years ended
December 31, 2002, 2003 and 2004 and for the six months ended June 30, 2004 and 2005, the interest expense was approximat ely $5 01,000,
$303,000, $584,000, $320,000 and $390,000, respectively.

      As of December 31, 2003 and 2004 and June 30, 2005, the term note had an outstanding balance of $14.0 million, $11.4 million and
$10.0 million, respectively. The term note balance will be amort ized over 60 months commencing February 1, 2004 in consecutiv e equal
monthly installments of $233,000 p lus applicable interest with the balance of $5.6 million due on December 31, 2006. The note bears interest
based on LIBOR plus applicable marg ins. The interest rate at December 31, 2003 and 2004 and June 30, 2005 was 4.1%, 5.0% and 5.8%,
respectively. The Co mpany’s scheduled term note maturities for the years following December 31, 2004 are $2.8 million in 2005 and $8.4
million in 2006, including a final payment of $5.6 million due on December 31, 2006.

      The Loan and Security Agreement requires that the Company meet certain finan cial covenants including a minimu m net worth, a funded
debt ratio and a fixed charge coverage ratio. The Co mpany was in co mp liance with the financial covenants of the line of credit at December 31,
2004. Substantially all assets of the Company have been pledged as collateral under this Loan and Security Agreement.

      As described in Note 15, in Ju ly 2005 the Loan and Security Agreement was amended.

5. Deri vati ves

      On March 13, 2001, the Co mpany entered into a Master Swap Agreement. In 2001, under this agreement, the Co mpany entered into an
interest rate swap and a collar to swap LIBOR-based variable rates on the Company’s line of credit for fixed interest rates. The interest rate
swap exp ired March 15, 2004, and the collar expired March 15, 2003. The Co mpany did not designate the swap or collar as a hedge, therefore,
at December 31, 2002, 2003 and 2004, and June 30, 2004 and 2005, an increase in fair value of appro ximately $64,000, $214,000 , $48,600, $0
and $0, respectively, was recorded as interest expense.

      On December 23, 2003, the Co mpany entered into an interest rate swap under this agreement, with an in itial notional amount of $14.0
million and a monthly amortizat ion of $233,333, to swap a LIBOR-based variable rate on the Co mpany’s term note for fixed in terest rates. The
interest rate swap exp ires January 3, 2006, with an optional termination period beginning July 1, 2004 through and including December 1, 2005
at the Co mpany’s discretion. The Co mpany did not designate the swap as a hedge. Therefore, at December 31, 2003, the change in fair value of
approximately $55,000 was recorded as additional interest expense and at December 31, 2004, $91,000 was recorded as a reduction in interest
expense. At June 30, 2004 and 2005, $60,000 and $17,000, respectively, was recorded as a reduction in interest expense.

                                                                      F-16
Table of Contents

                                                                    NCI, Inc.

                                           Notes to Consoli dated Financi al Statements (continued)

6. Stockhol ders‘ Equity and Related Items

Common Stock

       As described in Note 1, the Co mpany co mpleted the reincorporation of its business in September, 2005. As a result, the Co mpan y
maintains two classes of common stock. In connection with the proposed initial public offering, the Co mpany effected a 1 -for-1.9 reverse stock
split of both its Class A and Class B co mmon stock. The effect of this reincorporation, including the reverse stock split, has been reflected
retroactively in the acco mpanying consolidated financial statements.

      Holders of Class A common stock are entitled to one vote for each share held of record, and holders of Class B co mmon stock are entitled
to ten votes for each share held of record, except with respect to any ―going private transaction,‖ as to which each share of Class A common
stock and Class B co mmon stock are both entitled to one vote per share. The Class A common stock and the Class B common s tock vot e
together as a single class on all matters submitted to a vote of stockholders, including the election of d irectors, except as required by law.
Holders of our co mmon stock do not have cumulative voting rights in the election of d irectors.

      Holders of co mmon stock are entit led to receive, when and if declared by the board of directors fro m time -to-time, such dividends and
other distributions in cash, stock or property fro m our assets or funds legally available for such purposes. Each share of Class A common stock
and Class B co mmon stock is equal in respect of dividends and other distributions in cash, stock or property, except that in the case of stock
dividends, only shares of Class A common stock will be distributed with respect to the Class A common stock and only shares o f Class B
common stock will be distributed with respect to Class B co mmo n stock.

     Each share of Class B common stock is convertible into one share of Class A common stock at any time at the option of the Cla ss B
stockholder, and in certain other circu mstances.

Stock Opti ons

      The Board of Directors of the Co mpany duly adopted and approved the 2003 Performance Incentive Plan (the Plan) on January 31, 2003.
The Plan was designed to enable the Company to attract and retain key personnel. The Plan will exp ire on January 31, 2013, su bject to earlier
termination by the Board of Directors but such exp iration shall not affect the valid ity of outstanding options. Stock options granted in 2003 and
2004 under the Plan will fully vest over a period of zero to seven years from the date of grant in accordance with the indiv idual stock option
agreement. The occurrence of an in itial public offering of the Co mpany ’s stock, the achievement of certain performance criteria, or a change in
control as defined by the Plan may accelerate the vesting period. Upon the complet ion of the in itial public o ffering, addit ional stock
compensation expense of approximately $1,204,000 will be recorded. The Board of Directors of the Co mpany administers the Plan .

      During 2003 and 2004 and the first six months of 2005, the Co mpany granted options to purchase 693,94 9, 604,717 and 78,945 shares of
common stock, respectively, to certain emp loyees and directors under the Plan. No options were granted during 2002. Stock-based
compensation cost related to stock option grants has been reflected in the net income for the ye ars ended December 31, 2002, 2003 and 2004
and the six months ended June 30, 2004 and 2005 as certain options granted had an exercise price less than the fair market va lue of the
underlying common stock at the date of the grant. Stock co mpensation expense and pro forma information regarding net inco me as if the
Co mpany had accounted for its emp loyee stock options under the fair value method is included in Note 2.

                                                                       F-17
Table of Contents

                                                                    NCI, Inc.

                                        Notes to Consoli dated Financi al Statements (continued)
6. Stockhol ders‘ Equity and Related Items (continued)
Stock Opti ons (continued)

      The Board of Directors of the Co mpany has adopted the 2005 Performance Incentive Plan wh ich has been a pproved by the Company’s
stockholders, and under which 3,157,895 shares of Class A common stock were reserved for issuance under this plan. Stock options granted
under the 2003 Performance Incentive Plan, as described above, together with certain non -qualified stock options granted to two executives in
2000 and 2001, were assumed under the 2005 Performance Incentive Plan and, thereafter, became exercisable for shares of Class A common
stock. The 2005 Performance Incentive Plan p rovides for the grant of incentive stock options and non-qualified stock options, and the grant or
sale of restricted shares of common stock to the Company’s directors, employees and consultants.

      Stock option activity is as follows:

                                                                                                                               Weighted
                                                                                                                                average
                                                                                                                               exercise
                                                                                                                               price per
                                                                                                       Options                   share

                                                                                                               (in thousands, except per
                                                                                                                      share data)
       Outstanding at December 31, 2001                                                                    589                less than $0.01
           Granted                                                                                         —                              —
           Forfeited/cancelled                                                                             —                              —

       Outstanding at December 31, 2002                                                                    589                less than $0.01
           Granted                                                                                         694                           6.58
           Forfeited/cancelled                                                                             145                           6.65

       Outstanding at December 31, 2003                                                                  1,138                             $3.16
           Granted                                                                                         605                              3.81
           Forfeited/cancelled                                                                              47                              8.14

       Outstanding at December 31, 2004                                                                  1,696                             $3.25
           Granted (unaudited)                                                                              79                              10.0
           Forfeited/cancelled (unaudited)                                                                  55                              8.40

       Outstanding at June 30, 2005 (unaudited)                                                          1,720                             $3.40


      Information regard ing options outstanding at December 31, 2004 is summarized below:

                                                                                   Weighted              Weighted
                                                                                   average               average
                                                              Number of            exercise             remaining                    Options
       Range of exercise prices                                options              price             contractual life             exercisable

                                                             (in thousands)                              (in years)
       Less than $1.00                                                  971       $    0.08                           19.5             —
       $1.00 – $2.00                                                     11            1.90                            8.2             —
       $5.00 – $6.00                                                    512            6.65                            8.2             —
       $9.00 – $10.00                                                   202           10.00                            9.6             —

                                                                       F-18
Table of Contents

                                                                    NCI, Inc.

                                        Notes to Consoli dated Financi al Statements (continued)
6. Stockhol ders‘ Equity and Related Items (continued)
Stock Opti ons (continued)

      The following table lists the options granted during the twelve month period ended June 30, 2005:
                                                                                     Number of Options              Exercise          Intrinsic
       Month of Grant                                                                   Granted (1)                  Price            Value (1)

       September 2004                                                                          49,999           $ 10.00                    —
       November 2004                                                                           14,472             10.00                    —
       December 2004                                                                           29,205             10.00                    —
       April 2005                                                                              52,630             10.00                    —
       June 2005                                                                               26,315             10.00                    —


(1)   Intrinsic value is the amount by which the fair value of the shares on the grant date exceeds the exercise price and is the a mount to be
      recorded as stock compensation expense over the applicable vesting period.

      The weighted average fair value of each option granted during 2004 was $6.78.

7. Leases

     The Co mpany leases office space, equipment, and automobiles under operating leases that expire on various dates through December 31,
2013. Several of the leases contain escalation clauses ranging from 2.5% to 5.0% per year, which are reflected in the amounts below. The
Co mpany is also responsible for certain operating expenses.

     The Co mpany has entered into certain capital lease obligations with various exp irat ion dates through January 2008. In October 2003, the
Co mpany entered into a lease line of cred it to finance various PC and networking equip ment.

      The following amounts have been capitalized and are included in property and equipment:

                                                                                                                                As of
                                                                                                         As of                 June 30,
                                                                                                     December 31,                2005

                                                                                                  2003          2004

                                                                                                            (in thousands)
                Telephone equipment                                                              $ 477         $ 477           $    477
                PC and networking equipment                                                         50           452                519
                Office furniture and other equip ment                                               39            56                 39

                                                                                                    566             985            1,035
                Less: Principal amort ization                                                       174             355              474

                                                                                                 $ 392         $ 630           $    561


                                                                       F-19
Table of Contents

                                                                    NCI, Inc.

                                           Notes to Consoli dated Financi al Statements (continued)
7. Leases (continued)

      Minimu m lease payments under the noncancelable operating leases and the capital leases are as follows:
                                                                                                          Capital          Operating
                                                                                                           leases           leases

                                                                                                                (in thousands)
                For the year ending December 31,
                     2005                                                                                $   274          $      3,689
                     2006                                                                                    267                 3,551
                     2007                                                                                    132                 3,512
                     2008                                                                                     11                 3,303
                     2009                                                                                    —                   3,361
                     Thereafter                                                                              —                   9,655

                    Total minimu m lease payments                                                            684          $ 27,071

                    Amounts representing interest                                                              54

                    Present value of net minimu m lease payments                                         $   630


      The Co mpany incurred rent expense under operating leases of $2.3 million, $2.7 million and $2.9 million for the years ended D ecember
31, 2002, 2003 and 2004, respectively, and $1.4 million and $1.5 million for the six months ended June 30, 2004 and 2005, r espectively.

8. Profit Sharing and Pension Pl ans

      The Co mpany has a 401(k) profit sharing plan that covers substantially all emp loyees meeting certain criteria. The p lan is a ―defined
contribution plan‖ whereby participants have the option of contributing to the plan. The plan provides for the Co mpany to match 50% of the
participant’s contribution not to exceed 2.5% of the participant’s total compensation. Participants are 100% vested in their emp loyee
contributions immediately. The part icipants become fully vested in the employer contributions over five years of service.

      The Co mpany’s contributions for each of the years ended December 31, 2002, 2003 and 2004 were appro ximately $1.1 million. The
trustee of this 401(k) plan is New Yo rk Life Trust Co mpany.

     The Co mpany is also required to contribute to a union pension plan under a Colle ctive Bargaining Agreement with the International
Association of Machinists and Aerospace Workers for elig ible emp loyees on one of its contracts. The current agreement expires December 31,
2006. For years ended December 31, 2002, 2003 and 2004, the contrib ution amounts were approximately $45,000, $24,000 and $19,000,
respectively.

    For certain o f its contracts, the Company is required to adopt a 401(k) retirement plan for eligib le emp loyees. For the years ended
December 31, 2002, 2003 and 2004, the contribution amounts were approximately $75,000, $81,000 and $116,000, respectively.

      The Co mpany maintains a separate 401(k) plan that covers substantially all emp loyees meeting certain criteria of SES. The pla n is a
―defined contribution plan‖ whereby participants have the option of contributing to the plan. The plan provides for the Co mpan y to match
100% o f the participant’s contribution not to exceed 6% of the participant’s total compensation. Participants are 100% vested in their emp loyee
contributions immediately. The part icipants become fully vested in the employer contributions over five years of service. The Company
contributions for the year ended December 31, 2004 were appro ximately $650,000. The trustee of this 401(k) p lan is Transamerica Retirement
Services. Subsequent to December 31, 2004, the SES plan was merged into the Co mpany ’s plan.

                                                                      F-20
Table of Contents

                                                                    NCI, Inc.

                                             Notes to Consoli dated Financi al Statements (continued)

9. Acquisition of Scientific and Engineering Solutions, Inc.

       The Co mpany entered into a Stock Purchase Agreement (the Agreement) on December 17, 2003, effective December 23, 2003, to acq uire
all the issued and outstanding shares of SES stock. The total consideration at closing was cash of $20.5 million, per the Agreement, less closing
indebtedness. The Agreement allows for ad justment of the purchase price for the net asset adjustments as determined in the clo sing statements
due ninety days after closing, a contingent payment of up to $3.0 million, and an earnout payment of up to $5.5 million based on reaching
certain revenue and gross margin goals determined as of December 31, 2004. During 2004, the Co mpany paid approximately $1.0 m illion in
contingent payments to former SES stockholders. No earnout payments have been earned and no payments are anticipated. In March 2005, the
Co mpany paid an additional $1.9 million in contingent payments which was not included in goodwill as of December 31, 2004 as the
triggering events for such payments had not occurred at that time. The $1.9 million represents the final contingent payment relat ed to the SES
acquisition.

      The transaction was accounted for in accordance with SFAS No. 141, Business Combinations , whereby the net tangible and identifiable
intangible assets acquired and liab ilit ies assumed were recognized at their estimated fair market values at the date of acquisition. The
identifiable intangible assets consisted of $2.3 million of contracts and client relatio nships and $1.4 million for the value of a non-compete
agreement. At the time of the acquisition, the contracts and related customer relat ionships had an expected useful life of ap pro ximately five
years. The non-compete agreement is being amort ized on a straight-line basis over the three-year term of the agreement. In accordance with
SFAS No. 142, goodwill arising fro m the transaction is not being amortized.

      The total purchase price paid through December 31, 2004, includ ing closing indebtedness and acquis ition costs, of $20.3 millio n was
allocated to the assets acquired and liabilit ies assumed as follo ws:
                                                                                                                        (in thousands)

                Accounts receivable and other current assets                                                        $            5,162
                Property and equipment, net                                                                                        260
                Other assets                                                                                                        74
                Accounts payable and other current liab ilit ies                                                                (4,149 )
                Contracts and client relationships                                                                               2,260
                Non-compete agreement                                                                                            1,400
                Goodwill                                                                                                       15,340

                Total consideration                                                                                 $          20,347


     The following unaudited pro forma comb ined condensed statement of income sets forth the consolidated results of operations of the
Co mpany for the year ended December 31, 2003 as if the above described acquisition had occurred at January 1, 2003 and if th e Co mpany had
been subject to income taxes (see Note 13). The unaudited pro forma information excludes transaction bonuses and option payme nts made by
SES and does not purport to be indicative of the actual results that would have occurred if the comb ination had occurred at this earlier date:

                                                                                                               December 31, 2003

                                                                                                            (in thousands, except per
                                                                                                                 share amounts)
                Revenue                                                                                 $                       156,562
                Net inco me                                                                                                       4,386
                Net inco me per share                                                                                              0.65

                                                                      F-21
Table of Contents

                                                                    NCI, Inc.

                                           Notes to Consoli dated Financi al Statements (continued)

10. Related Party Transacti on

       The Co mpany provided support services on an as -needed basis under a blanket purchase order with Net Co mmerce Corporation , a
government contractor originally owned by the majority stockholder of the Co mpany. On April 1, 2004, Net Co mmerce Corporation was sold
to a family member of the majority stockholder. For the years ended December 31, 2002, 2003 and 2004, the revenue for service s and expenses
incurred under this purchase order were appro ximately $13,000, $107,000 and $34,000, respectively, of wh ich $2,00 0, $104,000 and $34,000,
respectively, is included in accounts receivable at December 31, 2002, 2003 and 2004.

     The Co mpany also purchased services fro m Net Co mmerce Co rporation of appro ximately $177,800, $0 and $124,000 for the y ears en ded
December 31, 2002, 2003 and 2004, respectively, of which $0, $0, and $19,000, respectively, were included in accounts payable in those
respective years. For the six months ended June 30, 2005, the Co mpany purchased services from Net Co mmerce Corporation of app roximately
$571,000 (unaudited), of which $72,500 (unaudited) was included in accounts payable.

      The Co mpany has used private aircraft to acco mmodate the travel needs of our executives for Co mpany business. These aircraft are
owned directly or indirectly by Michael W. So lley, the President and a director of the Co mpany. The Co mpany has paid approximately $8,000
and $165,000 fo r the years ended December 31, 2003 and 2004, respectively, and approximately $37,000 (unaudited) for the six months ended
June 30, 2005 to Mr. Solley or h is affiliates as reimbursement for fees and expenses associated with the business use of these aircraft.

      All t ransactions with related parties have been conducted based on then current market conditions.

11. Contingencies

Government Audi ts

      Payments to the Company on federal government contracts are subject to adjustment upon audit by various agencies of the feder al
government. Audits of costs and the related payments have been performed by the various agencies through 2001 fo r the Co mp a ny and through
2002 fo r SES. In the opinion of management, the final determination of costs and related payments for unaudited years will no t have a material
effect on the Co mpany’s financial position, results of operations or liquidity.

Litigation

       The Co mpany is party to various legal actions, claims, government inquires, and audits resulting fro m the normal course of bu siness. The
Co mpany believes that any resulting liability will not have a material effect on the Co mpany ’s financial position, results of operations or
liquid ity.

Empl oyee -Rel ated Matter

      On May 9, 2001, the Co mpany signed a final settlement agreement with an emp loyee in resolution of an outstanding offer letter
commit ment. The agreement calls for a cash payout of $750,000, without interest, paid quarterly over a five-year period. A mounts are recorded
net of imputed interest. Amounts due to the employee were appro ximately $310,000 and $178,000 as of December 31, 2003 an d 200 4,
respectively.

                                                                      F-22
Table of Contents

                                                                     NCI, Inc.

                                           Notes to Consoli dated Financi al Statements (continued)

12. Business Segment Informati on

      The Co mpany reports operating results and financial data in one operating segment. This segment provides informat ion technology
solutions through its four core service offerings: network engineering; information assurance; systems development and integr ation; and
enterprise systems management. The accounting policies of the segment are the same as those described in the summary of significant
accounting policies in Note 2 to the financial statements. The Co mpany evaluates the performance of its operating segment bas ed on income
before inco me taxes. Financial informat ion concerning the Co mpany’s reportable segment is shown in the consolidated financial statements.

      Although for purposes of promoting an understanding of the Co mpany ’s complex business, the four core service offerings are discussed,
the Co mpany does not manage its business or allocate capital resources based upon those service offerings. In addition, the underlying
accounting and forecasting systems are not designed to capture key financial information such as revenue, costs and capital e xpenditures by
such service offerings because these offerings cut across all operating div isions of the Company. Therefore, it is not practical fo r the Co mpany
to report revenue by service offerings.

13. Pro Forma Provision for Income Taxes (unaudi ted)

       In connection with the Co mpany’s proposed initial public offering, the Co mpany’s S corporation status will terminate and the Co mpany
will therefore be subject to federal and state income taxes as a C corporation. Because the Co mpany is an S corporation, defe rred taxes have not
been reflected in the financial statements, and the Company is not responsible for these income taxes until the termination o f its S corporation
status. For informat ional purposes, the statements of income include a pro forma p rovision for income taxes tha t would have been recorded if
the Co mpany was a C corporat ion, calculated in accordance with SFAS No. 109.

      The differences between the pro forma prov ision for income taxes at the statutory U.S. federal inco me tax rate of 34%, and th ose reported
in the pro forma provision for inco me tax information relate to the impact of state and local income taxes and other differences. Oth er
differences include, among other items, the nondeductible portion of meals and entertainment, nondeductible penalties and fin es, nondeductible
dues, and nondeductible officers ’ life insurance premiu ms, as well as any tax-exempt items of inco me.

      In connection with the revocation of its S corporation status, the Company will record net deferred tax assets and a related benefit for
income taxes effective upon the revocation date. The amount of the net deferred tax assets would have been approximately $2.8 million if the
revocation date had been June 30, 2005 and is reflected in the Co mpany ’s pro forma balance sheet and retained earnings. The actual amount
will be determined after giv ing effect to the Co mpany’s operating results through the revocation date. The significant items comprising the pro
forma net deferred tax asset as of June 30, 2005 are accrued co mpensation expense from st ock options, deferred rent and accrued vacation.

                                                                       F-23
Table of Contents

                                                                   NCI, Inc.

                                     Notes to Consoli dated Financi al Statements (continued)
13. Pro Forma Provision for Income Taxes (unaudi ted) (continued)

      Significant co mponents of the pro forma provision for inco me taxes fo r the years ended December 31, 2002, 2003 and 2004 are a s
follows:
                                                                                          2002                   2003               2004

                                                                                                        (in thousands)
                Current:
                     Federal                                                           $ 2,548              $ 2,265               $ 2,720
                     State and local                                                       585                  470                   674

                Total current                                                              3,133                  2,735               3,394
                Deferred:
                    Federal                                                                  (57 )                 (227 )              (667 )
                    State and local                                                          (32 )                  (60 )              (132 )

                Total deferred benefit                                                       (89 )                 (287 )              (799 )

                Total inco me tax provision                                            $ 3,044              $ 2,448               $ 2,595


      The reconciliation between statutory U.S. federal income tax rate and those reported in the unaudited pro forma income tax in fo rmation
in the consolidated statements of inco me for the years ended December 31, 2002, 2003 and 2004 is as follo ws:

                                                                                                 2002               2003              2004

                Statutory federal inco me tax rate                                               34.0 %             34.0 %             34.0 %
                State and local taxes, net of federal taxes                                       4.7                4.3                5.6
                Other                                                                             0.1                0.2                0.9

                                                                                                 38.8 %             38.5 %             40.5 %


14. Supplemental Financi al Information

                                              SCHED ULE II—Valuation and Qualifying Accounts

                                                                                                                 For the year ended
                                                                                                                   December 31,


                                                                                                          2002             2003         2004

                                                                                                                   (in thousands)
                Balance at beginning of period                                                          $ —             $ —            $ 200
                    Additions at cost                                                                     —               200            275
                    Deductions                                                                            —               —              —
                    Other charges                                                                         —               —              —

                Balance at end of period                                                                $ —             $ 200          $ 475


                                                                     F-24
Table of Contents

                                                                    NCI, Inc.

                                           Notes to Consoli dated Financi al Statements (continued)

15. Subsequent Events (unaudited)

      In July 2005, the Loan and Security Agreement was amended to recognize the pending agreements related to the Reincorporation
Transaction, the initial public o ffering of Class A common stock, and to provide a time loan of up to $15 million to finance the payment of a
portion of a distribution to the stockholders of the Co mpany.

       Under the terms of this amendment the Co mpany is permitted to make d istributions out of its accumulated adjustments account, of wh ich
up to $15 million would co me fro m the time loan and the remainder fro m the line of cred it. In July 2005, the Co mpany made an $18 mill ion
distribution to the existing stockholders of the Co mpany. Of this amount, $15 million was financed by the time loan, and the balance fro m the
existing line of credit. The Co mpany estimates that the final d istribution of S corporat ion earnings will be appro ximately $5 million and will
occur during the fourth quarter of 2005 or the first quarter of 2006. The t ime loan will be due in January 2006 or upon receipt of proceeds from
the offering, whichever occurs first, and will bear interest at LIBOR p lus 45 basis points. As a result of this amendment, ce rtain financial
covenants were amended within the Loan and Security Agreement to accommodate these transactions.

                                                                      F-25
Table of Contents

                                           Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
NCI, Inc.

      We have audited the balance sheet of Scientific and Engineering Solutions, Inc. (the Co mpany) as of December 23, 2003, and t h e related
statement of income, changes in stockholder’s equity, and cash flows for the period fro m January 1, 2003 through December 23, 2003. These
financial statements are the responsibility of the Co mpany’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.

      We conducted our audit in accordance with the standards of the Public Co mpany Accounting Oversight Board (United States). Those
standards require that we plan and perfo rm the audit to obtain reasonable assurance about whether the financial statements ar e free of material
misstatement. We were not engaged to perform an audit of the Co mpany ’s internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Co mpany ’s internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence support ing the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the 2003 financial statements referred to above present fairly, in all material respects, the financial posit ion of Scientific
and Engineering Solutions, Inc. as of December 23, 2003, and the results of its operations and its cash flows for the period fro m January 1,
2003 through December 23, 2003, in conformity with accounting principles generally accepted in the Un ited States.

/s/ Ernst & Young LLP
McLean, VA

March 1, 2005

                                                                         F-26
Table of Contents

                                                    Scientific and Engi neering Soluti ons, Inc.

                                                                 Balance Sheet
                                                               December 23, 2003

Assets
Current assets:
     Cash                                                                                                   $   2,300,595
     Accounts receivable—contracts, net                                                                         4,995,225
     Prepaid expenses and other current assets                                                                    143,281

Total current assets                                                                                            7,439,101
Property and equipment:
    Co mputer and telephone equipment                                                                            220,986
    Furniture and office equip ment                                                                               56,207
    Software                                                                                                      72,177
    Leasehold improvements                                                                                       225,776

                                                                                                                 575,146
Less: Accumulated depreciat ion and amort ization                                                               (315,073 )

                                                                                                                 260,073
Other assets                                                                                                       73,998

Total assets                                                                                                $   7,773,172

Liabilities and stockhol der‘s equity
Current liab ilit ies:
     Accounts payable                                                                                       $     721,777
     Accrued expenses                                                                                             438,738
     Accrued payroll, payroll taxes and benefits                                                                2,956,859
     Income taxes payable                                                                                           8,478

Total current liabilities                                                                                       4,125,852
Stockholder’s equity:
     Co mmon stock—$.001 par value, 11,000,000 shares authorized, 5,250,000 shares issued and outstanding           5,250
     Additional paid-in capital                                                                                 4,129,150
     Accumulated deficit                                                                                         (487,080 )

Total stockholder’s equity                                                                                      3,647,320

Total liabilities and stockholder’s equity                                                                  $   7,773,172


                                                        See Notes to Financial Statements.

                                                                       F-27
Table of Contents

                                             Scientific and Engi neering Soluti ons, Inc.

                                                      Statement of Income
                                           Period January 1 through December 23, 2003

Contract revenue                                                                            $   20,140,231
Direct contract costs:
     Direct labor                                                                                8,534,143
     Subcontractors and consultants                                                              1,814,620
     Other direct costs                                                                            919,950

Total direct contract costs                                                                     11,268,713
Gross profit                                                                                     8,871,518
Indirect costs:
     Overhead expenses                                                                           5,469,859
     General and administrative expenses                                                         4,816,286

Total indirect costs                                                                            10,286,145
Loss from operations                                                                            (1,414,627 )
Other inco me (expense):
    Other inco me                                                                                   12,526
    Interest expense                                                                               (49,005 )

Total other (expense)                                                                              (36,479 )
Loss before provision for inco me taxes                                                         (1,451,106 )
Provision for inco me taxes                                                                        (19,478 )

Net loss                                                                                    $   (1,470,584 )


                                                 See Notes to Financial Statements.

                                                                F-28
Table of Contents

                                             Scientific and Engi neering Soluti ons, Inc.

                                           Statement of Changes in Stockhol der ‘s Equity

                                                                                      Additional
                                                                                       paid-in          Retained
                                                          Common stock                 capital          earnings           Total

                                                        Shares          Amount

Balance, December 31, 2002                             5,250,000        $ 5,250   $        45,502   $    1,826,510     $    1,877,262
    Distributions                                            —              —                 —           (843,006 )         (843,006 )
    Additional investment by stockholder                     —              —           4,083,648              —            4,083,648
    Net loss                                                 —              —                 —         (1,470,584 )       (1,470,584 )

Balance, December 23, 2003                             5,250,000        $ 5,250   $     4,129,150   $     (487,080 )   $   3,647,320


                                                 See Notes to Financial Statements.

                                                                 F-29
Table of Contents

                                                  Scientific and Engi neering Soluti ons, Inc.

                                                          Statement of Cash Flows
                                                Period January 1 through December 23, 2003

Cash flows from operating acti vities
Net loss                                                                                         $   (1,470,584 )
Adjustments to reconcile net inco me to net cash provided by operating activities:
     Depreciat ion and amort ization                                                                   105,761
     Changes in operating assets and liabilities:
         Accounts receivable                                                                         (1,316,114 )
         Prepaid expenses and other current assets                                                      (61,870 )
         Other assets                                                                                   (58,905 )
         Accounts payable                                                                               426,819
         Accrued expenses                                                                                58,785
         Accrued payroll, payroll taxes, and benefits                                                 2,366,222

Net cash provided by operating activities                                                               50,114

Cash flows from investing acti vi ties
Purchase of property and equipment                                                                    (205,568 )

Net cash used by investing activities                                                                 (205,568 )

Cash flows from financing acti vities
Net payments on line of credit                                                                        (850,349 )
Payments on notes payable                                                                              (34,608 )
Distributions paid                                                                                    (843,006 )
Additional paid-in capital fro m stockholder                                                         4,083,648

Net cash provided by financing activities                                                            2,355,685

Net increase in cash                                                                                 2,200,231
Cash, beginning of year                                                                                100,364

Cash, end of year                                                                                $   2,300,595

Supplemental disclosure of cash flow informati on
Cash paid during the period for:
    Interest                                                                                     $      49,005

     Income taxes                                                                                $      19,478


                                                       See Notes to Financial Statements.

                                                                      F-30
Table of Contents

                                                   Scientific and Engi neering Soluti ons, Inc.

                                                         Notes to Financial Statements
                                                              December 23, 2003

1. Summary of Significant Accounting Policies

Nature of Business

      Scientific and Engineering Solutions, Inc. (the Co mpany) was organized under the laws of the State of Maryland in 1996. The Co mpany
is a small, disadvantaged business concern as defined by the Small Business Administration ’s regulations and has been participating in the
Section 8(a) M inority Business Development Program. The Co mpany is a provider of informat ion assurance, software engineering and
knowledge and enterprise management solutions to agencies within the intelligence community. The Co mpany has elected to be tr eated as an S
corporation under the provisions of the Internal Revenue Code.

Revenue Recogni tion

      Revenue fro m t ime-and-materials contracts is recognized as costs are incurred at amounts represented by the agreed -upon billin g rates.

      Revenue fro m cost-type contacts is recognized as costs are incurred on the basis of direct costs plus allowable indirect costs and an
allocable port ion of the fixed fee.

      Revenue fro m fixed-price type contacts is recognized under the percentage-of-completion method of accounting, with costs and estimated
profits included in contract revenue as work is performed. If actual and estimated costs to complete a contract indicate a lo ss, provision is made
currently for the loss anticipated on the contract.

Basis of Accounting

     The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting princip les
generally accepted in the United States.

Use of Accounting Es timates

        The preparation of financial statements in conformity with accounting principles generally accepted in the Un ited States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of con tingent assets and
liab ilit ies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual re sults
could differ fro m those estimates.

Property and Equi pment

      Property and equipment are recorded at the original cost to th e Co mpany. Assets are depreciated using the straight-line method over the
estimated useful lives of five to seven years. Software is amortized using the straight -line method over the estimated useful lives of three years.

Income Taxes

     The Co mpany files its inco me tax returns using the accrual basis of accounting. The Co mpany has elected to be treated as an S
corporation, and, therefore, does not pay federal taxes on its net income since the tax attributes of the Co mpany are reporte d on the
stockholder’s inco me tax returns. Certain states in which the Co mpany conducts business do not recognize the S corporation filing status.
Accordingly, a provision for current inco me taxes is included in the accompanying financial statements for such state taxes.

                                                                       F-31
Table of Contents

                                                    Scientific and Engineering Soluti ons, Inc.

                                             Notes to Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)

Cash and Cash Equi valents

      For financial statement purposes, all investments with original maturities of three months or less are classified as cash equ ivalents. The
Co mpany maintains cash balances that may exceed federally insured limits. The Co mpany does not believe that this resu lts in any significant
risk.

Stock-Based Compensati on

      The Co mpany follows Accounting Principles Board Op inion No. 25, Accounting for Stock Issued to Employees , in accounting for its
stock-based compensation using the intrinsic method. Had co mpensation cost for the options been recognized in accordance wit h State ment of
Financial Accounting Standards Board No. 123, Accounting for Stock -Based Compensation , the net income for the period fro m January 1,
2003 through December 23, 2003 would not have been materially different.

2. Accounts Recei vable

     The accounts receivable consists mainly of billed and unbilled amounts under contracts in progress that are primar ily with federal
government agencies, principally the Depart ment of Defense.

      At December 23, 2003, the co mponents of accounts receivable are:
                                                                                                                           As of
                                                                                                                      December 23, 2003

                Billed receivables:
                     Billed receivables                                                                           $          2,127,210
                     Billable receivables at end of period                                                                   2,109,376

                Total billed receivables                                                                                     4,236,586
                Total unbilled receivables                                                                                     758,639

                Total                                                                                             $          4,995,225


      All b illed and unbilled amounts are expected to be collected during the next fiscal year. At December 23, 2003, 86% of the to tal accounts
receivable were due fro m t wo agencies of the federal govern ment. During the period fro m January 1, 2003 through Decemb er 23, 2003, 83% o f
the Co mpany’s annual revenues were for sales and services to the same two clients. The billed accounts receivable were pledged to a bank as
collateral on a line of credit arrangement described in Note 3.

3. Line of Credit

      The Co mpany maintained a line of cred it arrangement that was terminated on December 23, 2003. The line was secured by the accounts
receivable of the Co mpany and was guaranteed by the Company ’s stockholder. Under the terms of the agreement, the Co mpany could borrow
up to the lesser of $4.0 million or 90% of eligible billed government accounts receivable, plus 80% of elig ible b illed co mmerc ial accounts
receivable, p lus elig ible unbilled accounts receivable at the billed receivable advance rates (capped at $750,000). In terest was payable monthly
at the Co mpany’s choice of the prime rate plus an amount ranging fro m 0% to 0.5% or LIBOR p lus an amount ranging fro m approximately
2.8% to 3.5%. Changes between the prime rate and LIBOR could be made quarterly at the Co mpany ’s option. The arrangement required that
the Co mpany maintain certain financial ratios. The Co mpany was in co mpliance with all covenants at December 23, 2003. The outstanding
balance at December 23, 2003 was $0 upon the termination of the line of credit arrang ement.

                                                                       F-32
Table of Contents

                                                   Scientific and Engineering Soluti ons, Inc.

                                                   Notes to Financial Statements (continued)

4. Leases

       The Co mpany is obligated, as lessee, under noncancelable operating leases for its office space in Annapolis Junction, Maryland. These
leases expire in December 2009. The leases require the Co mpany to pay a pro rata share of annual increases above a stated bas e amount of the
real estate taxes and operating expenses, and provide for fixed annual increases in rent during the lease term. The Co mpany h as two options,
each for two years, to renew the leases. In December 2003, the Co mpany entered into a three -year operating lease for furniture and equipment.

      Minimu m lease payments under the noncancelable operating leases are as follows:

                For the year ending December 31,                                                                          Amount

                2004                                                                                                  $    398,273
                2005                                                                                                       409,002
                2006                                                                                                       411,019
                2007                                                                                                       337,495
                2008                                                                                                       347,632
                2009                                                                                                       358,061

     Total rental expense under the operating leases for the period fro m January 1, 2003 through December 23, 2003 was $208,583. Rent
expense for 2003 is net of sublease income of $42,591.

5. Retirement Pl an

      The Co mpany maintains a qualified 401(k) p rofit-sharing plan to provide retirement benefits for all eligib le employees. The plan is a
―defined contribution plan‖ whereby the participants have the option of contributing to the plan. Under the plan, emp loyees become eligible to
participate after attain ing the age of 21 and co mpleting three months of service. The Co mpany may make d iscretionary matching contributions
not to exceed 15% of each participant’s compensation per pay period. During 2003, the Co mpany matched 100% of the particip ant ’s
contribution, not to exceed 6% o f the participant’s total compensation. Participants immediately vest 100% in their contributions. Participants
vest in the Co mpany’s matching contributions as follows: 25% after one year and 25% per year thereafter until fu lly vested at th e end of four
years. During the period fro m January 1, 2003 through December 23, 2003, the Co mpany made discretionary matching contrib ution s of
$326,865. The trustee of this 401(k) plan is Transamerica Retirement Serv ices.

                                                                      F-33
Table of Contents

                                                   Scientific and Engineering Soluti ons, Inc.

                                                   Notes to Financial Statements (continued)

6. Stock Options and Stock Incenti ve Pl an

       On July 15, 1999, the Co mpany adopted a stock incentive plan. All emp lo yees, officers, directors, and consultants to the Co mpany were
elig ible to participate in the plan. The plan allo wed for various incentives including: stock options (both qualified and non -qualified); stock
appreciation rights; stock awards; phantom stock; and performance awards. During 2002, the plan was amended by the Board of Directors to
increase the amount of shares available in p lan fro m 750,000 to 1,750,000. Additionally, the Co mpany had approximately 420,00 0 outstanding
stock options issued under separate option agreements outside of the plan. Total stock option transactions for the Co mpany are as follows:

                                                                                                 Number of                Weighted-
                                                                                                  options                  average
                                                                                                   shares               exercise price

                Outstanding at January 1, 2003                                                    1,400,142         $              1.39
                    Granted during 2003                                                             412,095                        2.33
                    Forfeited options                                                              (579,797 )                      1.83
                    Repurchased options                                                          (1,232,440 )                      1.51

                Outstanding at December 23, 2003                                                        —           $               —


      Pursuant to the Stock Purchase Agreement (see Note 9), all stock options were repurchased by the Company. There were no optio ns
outstanding as of December 23, 2003. During 2003, stock co mpensation expense of $2,088,074 was recorded, primarily related to the
repurchase of stock options by the Company.

      Stock co mpensation expense and pro forma information regarding net loss as if the Co mpany had accounted for its employee stoc k
options under the fair value method is included in Note 1.

7. Related Party Transactions

      The Co mpany donated approximately $110,000 to a not-for-profit organization established by the sole stockholder.

8. Contingencies

Government Audi ts

     Payments to the Company on federal government contracts are subject to adjustment upon audit by various federal government agencies.
Audits of costs and the related payments have been performed by the various agencies through 1998. In the opinion of manageme nt, the final
determination of costs and related payments for unaudited years will not have a material effect on the Co mpany’s financial position, results of
operations, or liquid ity.

9. Subsequent Events

       The Co mpany and the sole stockholder entered into a Stock Purchase Agreement on December 17, 2003, effective December 23, 2003,
with NCI Informat ion Systems, Inc. (NCI) to sell all the issued and outstanding shares of stock of the Co mpany, upon which th e Co mpany
ceased to exist as a separate operating entity. The total consideration at closing was cash of $20.5 millio n per the Stock Purchase Agreement
less closing indebtedness. The purchase price can be modified for the net asset adjustments as determined in the closing stat ements due 90 days
after closing, a contingent payment of up to $3.0 million, and an earn out pa yment of up to $5.5 million based on reaching certain revenue and
gross marg in goals determined as of December 31, 2004. Any additional payments will be d istributed by NCI in accordance wit h the Stock
Purchase Agreement.

                                                                      F-34
Table of Contents




                                     5,150,000 Shares
                                   Class A Common Stock




                                        PROSPECTUS

                                                 , 2005




Legg Mason Wood Walker                                    Raymond James
                    Incorporated




Robert W. Baird & Co.                                       Stephens Inc.
Table of Contents

                                                                       PART II

                                            INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses o f Issuance and Distribution

      The following table itemizes the expenses, other than the underwriting discount, incurred, or to be incurred, by the Registra nt in
connection with the registration and issuance of the securities being registered hereunder. All amounts shown below are estimat es except for
the SEC registration fee and the NASD filing fee.

                SEC reg istration fee                                                                                    $        8,365
                NASD filing fee                                                                                          $        7,607
                Printing and engraving expenses                                                                          $      225,000
                Accounting fees and expenses                                                                             $      565,000
                Legal fees and expenses                                                                                  $      450,000
                Transfer Agent and Registrar fees and expenses                                                           $        3,500
                Miscellaneous (including listing fees)                                                                   $      140,528

                    Total                                                                                                $    1,400,000



      The Registrant will bear all expenses shown above.

Item 14. Indemnification of Directors and Officers

     The Registrant’s charter includes provisions that eliminate the personal liability of the Reg istrant ’s directors for monetary damages for
breach of fiduciary duty as a director, except for liability:

      •    for any breach of the director’s duty of loyalty to the Registrant or its stockholders;

      •    for acts or omissions not in good faith or that involved intentional misconduct or a knowing vio lation of law;

      •    under Section 174 o f the Delaware General Corporat ion law; or

      •    for any transaction from wh ich the director derives an improper personal benefit.

      The Registrant’s charter requires, as a condition to advancing expenses, the delivery to the corporation of an undertaking by or on behalf
of such director or officer to repay all amounts so advanced if it shall ult imately be determined that such director or offic er is not entitled to be
indemn ified.

      The Registrant’s charter further provides for the indemnification of the Reg istrant’s directors and officers to the fullest extent permitted
by Section 145 of the Delaware General Corporat ion Law. Indemnification for liab ilit ies arising under th e Securities Act may be permitted to
directors, officers and controlling persons of the Registrant under the foregoing provisions, or otherwise. The Registrant ha s been advised that
in the opinion of the Securities and Exchange Co mmission indemnification for liabilities arising under the Securities Act may b e against public
policy as expressed in the Securities Act and in such an event would be unenforceable.

Item 15. Recent Sales of Unregistered Securities

      None.

                                                                          II-1
Table of Contents

Item 16. Exhibits

      The following Exhib its are filed herewith and made a part hereof:

Number              Description

    1.1             Form of Underwriting Agreement(2)
    2.1             Agreement and Plan of Merger by and between NCI Information Systems, Inc. and NCI Acquisition, LLC, dated as of
                    September 1, 2005(2)
    2.2             Share Exchange Agreement by and between NCI, Inc. and Charles Narang, dated as of September 1, 2005(2)
    3.1             Amended and Restated Certificate of Incorporation of the Registrant(1)
    3.2             Bylaws of the Reg istrant(3)
    4.1             Specimen Class A Common Stock Cert ificate(2)
   4.2*             NCI, Inc. 2005 Performance Incentive Plan
   4.3*             Form of 2005 Performance Incentive Plan Agreement(2)
    5.1             Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding the valid ity of the securities being registered(2)
 10.1*              Non-Statutory Stock Option Agreement by and between NCI Information Systems, Inc. and Linda J. Allan dated May 4,
                    2001(3)
   10.2             Non-Statutory Stock Option Agreement by and between NCI Information Systems, Inc. and Norris B. Carter dated May 5,
                    2000(3)
   10.3             Tax Indemn ification Agreement between NCI, Inc. and stockholders of NCI, Inc., dated as of September 1, 2005(2)
   10.4             401(k) Profit Sharing Plan(3)
   10.5             Loan and Security Agreement between SunTrust Bank and NCI Informat ion Systems, Inc. dated as of December 23, 2003(3)
   10.6             Amend ment to Loan and Security Agreement between SunTrust Bank and NCI Informat ion Systems, Inc. dated as of May 6,
                    2004(3)
   10.7             Second Amendment to Loan and Security Agreement between SunTrust Bank and NCI Information Systems, Inc. dated as of
                    March 15, 2005(3)
   10.8             Third A mend ment to Loan and Security Agreement between SunTrust Bank and NCI Information Systems, Inc dated as of
                    July 25, 2005(3)
   10.9             Lease Agreement between NCI Information Systems, Inc. and Winthrop Resources Corporation, dated October 22, 2003( 3)
 10.10              Lease by and between NCI Information Systems, Inc. and Plaza A merica Office Develop ment II, LLC dated as of January 13,
                    2003(3)
 10.11              Lease by and between NCI Information Systems, Inc. and Corporate Center II, LLC dated as of March 8, 2001(3)
 10.12              Office Lease Agreement by and between JFB Joint Venture Limited Partnership and Scientific Engineering Solutions, Inc.
                    dated as of April 13, 1998(3)
 10.13              Option Assumption Agreement dated July 29, 2005 between NCI, Inc. and Linda Allan(2)
 10.15              Option Assumption Agreement dated September 2, 2005 between NCI, Inc. and the personal representatives of Norris B.
                    Carter(1)
   14.1             Code of Ethics of NCI, Inc.(1)
   21.1             Subsidiaries of Registrant(3)
   23.1             Consent of Ernst & Young LLP(2)

                                                                         II-2
Table of Contents

Numbe
r                   Description

  23.2              Consent of Pillsbury Winthrop Shaw Pittman LLP (included as part of Exhib it 5.1)(2)
  23.3              Consent of INPUT(2)
  24.1              Powers of Attorney (included in signature page to Registration Statement)(3)


(1)     To be filed by amendment.
(2)     Included with this filing.
(3)     Previously filed on Form S-1 dated July 29, 2005.
*       Management Contract or Co mpensatory Plan or Arrangement

Item 17. Undertakings

      (a) The undersigned registrant hereby undertakes:

            (1) To file, during any period in which offers or sales are being made, a post -effective amendment to this registration statement:

                    (i) To include any prospectus required by Section 10(a)(3) o f the Securities Act of 1933;

                   (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
            recent post-effective amend ment thereof) wh ich, individually or in the aggregate, represent a fundamental change in the information
            set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume o f securities offe red (if the
            total dollar value of securities offered would not exceed that which was registered) and any deviation fro m the low or high end of
            the estimated maximu m offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if , in
            the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximu m aggregate offering
            price set forth in ―Calculation of Reg istration Fee‖ table in the effective reg istration statement; and

                  (iii) To include any material in formation with respect to the plan of distribution not previously disclosed in the registration
            statement or any material change to such informat ion in the reg istration statement.

          (2) That, fo r the purpose of determin ing any liab ility under the Securit ies Act of 1933, each such post-effective amend ment shall be
      deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
      deemed to be the init ial bona fide offering thereof.

            (3) To remove fro m registration by means of a post-effective amend ment any of the securities being registered which remain un sold
      at the termination of the offering.

       (b) The undersigned registrant hereby undertakes that, for purposes of determin ing any liability under the Securit ies Act of 1933, each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securit ies Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registrat ion statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the init ial bona fide offering thereof.

      (c) Insofar as indemnification for liabilities arising under the Securit ies Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised tha t in the opinion of the
Securities and Exchange Co mmission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilit ies (other than the payment by the registrant of expenses inc urred or paid by a
director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate ju risdiction the question whether such indemnific atio n by it is against
public policy as exp ressed in the Act and will be governed by the final ad judication of such issue.

                                                                          II-3
Table of Contents

                                                                 SIGNATURES

       Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Reston, Common wealth of Virg inia, on September 2, 2005.

                                                                                         NCI, INC.

                                                                                         By:              /s/ J UDIT H L. B JORNAAS
                                                                                                                    Judith L. Bjornaas
                                                                                                     Senior Vice President and Chief Financial Officer

     Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

                               Signature                                              Title                                           Date



                                   *                         Chief Executive Officer, Director and Chairman                  September 2, 2005
                                                               of the Board (Principal Executive Officer)
                           Charles K. Narang


                                   *                         President and Director                                          September 2, 2005

                           Michael W. Solley


             / S/    J UDIT H L. B JORNAAS                   Senior Vice President and Chief Financial Officer               September 2, 2005
                                                               (Principal Financial and Accounting Officer)
                           Judith L. Bjornaas


                                   *                         Director                                                        September 2, 2005

                            James P. Allen


                                   *                         Director                                                        September 2, 2005

                            John E. Lawler


                                   *                         Director                                                        September 2, 2005

                           Paul V. Lombardi


                                   *                         Director                                                        September 2, 2005

                       J. Patrick McMahon


                                   *                         Director                                                        September 2, 2005

                            Daniel R. Young



*By:                / S/      J UDIT H L. B JORNAAS
                                 Judith L. Bjornaas
                                  Attorney -in-Fact

                                                                        II-4
Table of Contents

                                                               INDEX TO EXHIB ITS

Number              Description

    1.1             Form of Underwriting Agreement(2)
    2.1             Agreement and Plan of Merger by and between NCI Information Systems, Inc. and NCI Acquisition, LLC, dated as of
                    September 1, 2005(2)
    2.2             Share Exchange Agreement by and between NCI, Inc. and Charles Narang, dated as of September 1, 2005(2)
    3.1             Amended and Restated Certificate of Incorporation of the Registrant(1)
    3.2             Bylaws of the Reg istrant(3)
    4.1             Specimen Class A Common Stock Cert ificate(2)
   4.2*             NCI, Inc. 2005 Performance Incentive Plan(2)
   4.3*             Form of 2005 Performance Incentive Plan Agreement(2)
    5.1             Opinion of Pillsbury Winthrop Shaw Pittman LLP regarding the valid ity of the securities being registered(2)
 10.1*              Non-Statutory Stock Option Agreement by and between NCI Information Systems, Inc. and Linda J. Allan dated May 4,
                    2001(3)
   10.2             Non-Statutory Stock Option Agreement by and between NCI Information Systems, Inc. and Norris B. Carter dated May 5,
                    2000(3)
   10.3             Tax Indemn ification Agreement between NCI, Inc. and stockholders of NCI, Inc., dated as of September 1, 2005(2)
   10.4             401(k) Profit Sharing Plan(3)
   10.5             Loan and Security Agreement between SunTrust Bank and NCI Informat ion Systems, Inc. dated as of December 23, 2003(3)
   10.6             Amend ment to Loan and Security Agreement between SunTrust Bank and NCI Informat ion Systems, Inc. dated as of May 6,
                    2004(3)
   10.7             Second Amendment to Loan and Security Agreement between SunTrust Bank and NCI Information Systems, Inc. dated as of
                    March 15, 2005(3)
   10.8             Third A mend ment to Loan and Security Agreement between SunTrust Bank and NCI Information Systems, Inc dated as of
                    July 25, 2005(3)
   10.9             Lease Agreement between NCI Information Systems, Inc. and Winthrop Resources Corporation, dated October 22, 2003(3)
 10.10              Lease by and between NCI Information Systems, Inc. and Plaza A merica Office Develop ment II, LLC dated as of January 13,
                    2003(3)
 10.11              Lease by and between NCI Information Systems, Inc. and Corporate Center II, LLC dated as of March 8, 2001(3)
 10.12              Office Lease Agreement by and between JFB Joint Venture Limited Partnership and Scientific Engineering Solutions, Inc.
                    dated as of April 13, 1998(3)
 10.13              Option Assumption Agreement dated July 29, 2005 between NCI, Inc. and Linda Allan(2)
 10.15              Option Assumption Agreement dated September 2, 2005 between NCI, Inc. and the personal representatives of Norris B.
                    Carter(1)
   14.1             Code of Ethics of NCI, Inc.(1)
   21.1             Subsidiaries of Registrant(3)
   23.1             Consent of Ernst & Young LLP(2)

                                                                         II-5
Table of Contents

Numbe
r                   Description

  23.2              Consent of Pillsbury Winthrop Shaw Pittman LLP (included as part of Exhib it 5.1)(2)
  23.3              Consent of INPUT(2)
  24.1              Powers of Attorney (included in signature page to Registration Statement)(2)


(1)     To be filed by amendment.
(2)     Included with this filing.
(3)     Previously filed on Form S-1 dated July 29, 2005.
*       Management Contract or Co mpensatory Plan or Arrangement

                                                                        II-6
                                                                                                                                          Exhi bit 1.1

                                                                              Shares

                                                                     NCI, INC.

                                                             Class A Common Stock

                                                       UNDERWRITING AGREEMENT

                                                                                                                                               , 2005

L E GG M ASON W OOD W ALKER , I NCORPORATED
R AYMOND J AMES & A SSOCIATES , I NC .
R OBERT W. B AIRD & C O . I NCORPORATED
S T EPHENS I NC .
     As representatives of the several Underwriters
        named in Schedule I hereto
        c/o Legg Mason Wood Walker, Incorporated
        100 Light Street
         Balt imore, Maryland 21202

Ladies and Gentlemen :

      NCI, Inc., a Delaware corporat ion (―NCI Delaware‖ or the ―Co mpany‖) wh ich is the parent of NCI In formation Systems, Inc., a Virgin ia
corporation (―NCI Virg inia‖), proposes to issue and sell to the several underwriters named in Schedule I hereto (the ―Underwriters‖) for whom
you are acting as representatives (the ―Representatives‖), and the stockholders listed on Schedule II hereto (the ―Selling Stockholders‖)
propose to sell to the several Underwriters, an aggregate of           (           ) shares (the ―Firm Shares‖) of the Class A common stock, par
value $0.019 per share, of the Co mpany (the ―Class A Co mmon Stock‖), of wh ich                  (         ) shares are to be issued and sold by the
Co mpany (the ―Co mpany Firm Shares‖) and               (          ) shares are to be sold by the Selling Stockholders (the ―Selling Stockholder
Firm Shares‖). The Co mpany also proposes to sell up to an additional              (           ) shares of Class A Common Stock (t he ―Option
Shares‖) to the several Underwriters, for the sole purpose of covering over-allotments in connection with the sale of the Firm Shares, at the
option of the Underwriters. The Firm Shares and the Option Shares are hereinafter referred to collect ively as the ―Shares.‖

      The Co mpany and the Underwriters agree that up to               (        ) of the Firm Shares (the ―Reserved Shares‖) shall be reserved
for sale by the Underwriters to certain eligible employees of the Co mpany and its subsidiaries and certain persons having bus iness relationships
with the Co mpany (―Reserved Shares Partic ipants‖), as part of the distribution of the Shares by the Underwriters, subject to the terms of th is
Agreement, the applicable ru les, regulations and interpretations of the National Association of Securit ies Dealers, Inc. (the ―NASD‖) and all
other applicable laws, ru les and regulations. To the extent that such Reserved Shares are not orally confirmed for purchase, and subject to an
agreement to purchase, by such eligible emp loyees and persons having business relationships with the Co mpany by the end of th e first business
day after the date of this Agreement, such Reserved Shares may be offered to the public as part of the public offering contemplated hereby.

      Each of the Selling Stockholders has executed and delivered a Custody Agreement and Power of Atto rney in the form attached hereto as
Exh ib it C (co llect ively, the ―Custody Agreement and Power of Attorney‖) pursuant to which the Selling Stockholders have placed their Firm
Shares in custody and
appointed the person(s) designated therein with authority to execute and deliver this Agreement on behalf of the Selling Stockholders and to
take certain other actions with respect thereto and hereto.

     The Co mpany and the Selling Stockholders confirm as follows their respective agreements wit h the Representatives and the several other
Underwriters:

     1(a). The Co mpany represents and warrants to, and agrees with, each of the Underwriters that, as of the date hereof and as of the
Closing Date and each Option Closing Date, if any:

             (i) A reg istration statement on Form S-1 (File No. 333-127006) in respect of the Shares and one or more pre -effect ive amend ments
thereto (together, the ―Initial Registration Statement‖) have been filed with the Securit ies and Exchange Co mmission (the ―Co mmission‖); the
Co mpany has satisfied the conditions for use of Form S-1 under the Securities Act of 1933, as amended (the ―Securities Act‖), as set forth in
the general instructions thereto; the Initial Registration Statement and any post -effective amend ment thereto that has been filed, each in the
form heretofore delivered to the Representatives, have been declared effective by the Co mmission in such form; other than a r egistration
statement, if any, increasing the size of the offering (a ―Rule 462(b) Reg istration Statement‖), filed pursuant to Rule 462(b) under the Securit ies
Act, which became effective upon filing, no other document with respect to the Initial Reg istration Statement has heretofore been filed with the
Co mmission; no stop order suspending the effectiveness of the Initial Reg istration Statement, any post-effective amendment thereto or any
Rule 462(b) Reg istration Statement has been issued, no proceeding for that purpose has been initiated or threatened by the Co mmission and any
request on the part of the Commission for additional info rmation fro m the Co mpany has been satisfied in all material respects; any preliminary
prospectus included in the Initial Registration Statement, as originally filed or as part of any amend ment thereto, or filed with the Co mmission
pursuant to Rule 424(a) of the ru les and regulations of the Commission under the Securities Act is hereinafter called a ―Preliminary
Prospectus‖; the various parts of the Initial Reg istration Statement and the Rule 462(b) Reg istration Statemen t, if any, including all schedules
and exh ibits thereto and including the information contained in the form of final prospectus filed with the Co mmission pursua nt to Rule 424(b)
under the Securities Act and deemed by virtue of Rule 430A under the Securities Act to be part of the Initial Registration Statement at the time
it was declared effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter beco mes effective, each as
amended at the time such part of the Initial Registration Statement became effect ive, are hereinafter collectively called the ―Registration
Statement‖; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Securities Act, is hereinafter called t he ―Prospectus‖;
and all references to the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Co mmission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (―EDGA R‖).

            (ii) (1) at the respective times the Init ial Reg istration Statement, any Rule 462(b) Registration Statement and any post -effective
amend ments thereto became effective and at the Closing Date (as defined herein) (and, if any Option Shares are purchased, at each Option
Closing Date (as defined herein)), the Initial Registration Statement, any Ru le 462(b ) Registration Statement and any amendment s and
supplements thereto complied and will co mply in all material respects with the requirements of the Securities Act and the rules and regulations
of the Co mmission thereunder (the ―Ru les and Regulations‖) and did not and will not contain an untrue statement of a material fact or o mit to
state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (2) at the time the Prospectus
or any amend ments or supplements thereto were issued and at the Closing Date (and, if any Option Shares are purchased, at eac h Option
Closing Date), neither the Prospectus nor any amendment or supplement thereto included or will include an untrue statement of a material fact
or omitted or will o mit to state a material fact necessary in order to make the statements therein, in the light of the circu mstances under which
they were made, not misleading; provided that the

                                                                         2
representations and warranties in clauses (1) and (2) above shall not apply to statements in or omissions fro m the Registration Statement or the
Prospectus made in reliance upon and in strict conformity with info rmatio n furn ished to the Company in writing by any Underwriter or Legg
Mason Wood Walker, Incorporated (―Legg Mason‖) expressly for use in the Registration Statement or the Prospectus, it being understood and
agreed that the only such information provided by any Underwriter is that described as such in Section 9(b). No o rder preventing or suspending
the use of any Preliminary Prospectus has been issued by the Commission. No document has been prepared or delivered in relian ce on Rule
434 under the Securities Act. Each Preliminary Prospectus and the Prospectus filed as part of the In itial Registration Statement as originally
filed or as part of any amend ment thereto, or filed pursuant to Rule 424 under the Securities Act, comp lied when so filed in all material respects
with the requirements of the Securities Act and the Rules and Regulations, and each Preliminary Prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Co mmission
pursuant to EDGA R, except to the extent permitted by Regulation S -T.

            (iii) The Co mpany has filed a reg istration statement pursuant to the Securities Exchange Act of 1934, as amended (the ―Exchange
Act‖), to register the Co mmon Stock, and such registration statement has been declared effective.

            (iv) The Co mpany has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State
of Delaware, with all requisite power and authority (corporate and other) to own, lease, manage and operate its properties and conduct its
business as described in the Prospectus and to enter into and perform its obligations under this Agreement, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns, leases or
manages properties or conducts any business so as to require such qualification, except where the failure so to qualify or be in g ood standing
would not, indiv idually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), busine ss, properties, assets,
rights, operations, management, shareholders ’ equity or results of operations of the Company and its subsidiaries, considered as one enterprise,
whether or not in the ordinary course of business (a ―Material Adverse Effect‖).

             (v) The only subsidiaries (as defined in Ru le 405 under the Securities Act) of the Co mpany are the subsidiaries listed on Schedule
III to this Agreement (individually, a ―Subsidiary‖ and collect ively, the ―Subsidiaries‖). Each Subsidiary has been duly incorporated (or
organized) and is valid ly existing as a corporation (or other organizat ion) in good standing under the laws of the jurisdiction of its incorporation
(or organization), with power and authority to own, lease and operate its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation (or other organizat ion) fo r the transaction of business and is in good standing under the laws of
each other jurisdiction in which its owns, leases or manages properties or conducts any business so as to require such qualif ication, except
where the failure so to qualify or be in good standing would not have a Material Adverse Effect; all of the issued and outstanding capital stock
(or other equity interests) of each Subsidiary has been duly and validly authorized and issued, is fully paid and non -assessable and is owned by
the Co mpany, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
there are no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any s hares of capital stock
or other equity interests in any Subsidiary.

             (vi) All of the Co mpany’s issued and outstanding capital stock has been duly authorized, validly issued and is fully paid and
non-assessable, and the Company’s outstanding classes of capital stock, including, without limitation, the Class A Co mmon Stock, and the
capitalizat ion (authorized and outstanding) of the Co mpany conform in all material respects to the descriptions thereof and t he statements made
with respect thereto in the Registration Statement and the Prospectus as of the date set

                                                                          3
forth therein under ―Capitalizat ion‖ and ―Description of Capital Stock.‖ None of the issued and outstanding shares of the Co mpany’s capital
stock includ ing, without limitation, the Class A Co mmon Stock, have been issued in violat ion of any preemptive or other rights to subscribe for
or purchase shares of capital stock of the Co mpany. Other than as described in the Reg istration Statement, there are no outstanding securities
convertible into or exchangeable for, and no outstanding options, warrants or other rights to purchase, any shares of the cap ital stock of the
Co mpany, nor any agreements or commit ments to issue any of the same, and there are no preempt ive or other rights to subscribe for or to
purchase, and no restrictions upon the voting or transfer of, any capital stock of the Co mpany pursuant to the Company ’s certificate of
incorporation or bylaws or any agreement or other instrument to which the Co mpany is a party. A ll offers and sales of the Company ’s capital
stock prior to the date hereof were at all relevant times duly registered or exempt fro m the registration requirements of the Securit ies Act, and
were duly registered or the subject of an available exemption fro m the reg istration requirements of the applicable state securities or Blue Sky
laws. The form o f cert ificates for the Shares comp lies with the corporate laws of the State of Delaware.

             (vii) The Shares (A) to be issued and sold by the Company have been duly and validly authorized for issuance by the Company and
the Co mpany has the corporate power and authority to issue, sell and deliver the Co mpany Firm Shares and the Option Shares to the
Underwriters and (B) to be sold by the Selling Stockho lders to the Underwriters have been duly authorized and are validly issued, fully paid
and non-assessable; and when the Shares are delivered against payment therefor as provided by this Agreement, the Shares will be valid ly
issued, fully paid and non-assessable, and will not be subject to any preemptive or similar rights. All corporate action required t o be taken by
the stockholders or the Board of Directors of the Co mpany for the authorizat ion, issuance and sale of the Co mpany Firm Shares and the Option
Shares has been duly and validly taken. The Shares conform in all material respects to the description of the Class A Co mmon Stock set forth
in the Reg istration Statement and the Prospectus under the caption ―Description of Capital Stock.‖

            (viii) The Co mpany has all corporate power, authority, authorizat ions, approvals, orders, licenses, certificates and permits necessa ry
to (A) enter into this Agreement and to carry out the provisions and conditions hereof, including, but not limit ed to, the issuance and delivery of
the Shares to the Underwriters as provided herein and (B) perform the transactions contemplated by the Registration Statement and the
Prospectus under ―Prospectus Summary—Transactions Prior To Offering.‖ Th is Agreement has been duly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding agreement of the Co mpany, except insofar as indemnificat ion and con tribution
provisions may be limited by applicable law or equitable princip les and s ubject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganizat ion or similar laws affecting the rights of creditors generally and subject to general principles of equity. The t ransactions
contemplated by the Registration Statement and the Prospectus under ―Prospectus Summary—Transactions Prior To Offering‖ have been duly
and validly authorized by each of NCI Virginia and NCI Delaware.

            (ix) The offer, issue, sale or delivery of the Shares, the execution, delivery or performance of this Agreement by the Co mpany and
the compliance by the Co mpany with all of the provisions of this Agreement and the consummat ion of the transactions herein co ntemplated
and in the Registration Statement and Prospectus, including, without limitation, the transactions described under ―Prospectus
Summary—Transactions Prior To Offering,‖ (A) will not conflict with or result in a breach or violat ion of any of the terms or p rovisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to wh ich the Co mpany or
any of the Subsidiaries is a party or by wh ich the Co mpany or any of the Subsidiaries is bound or to which any of the propert y or assets of the
Co mpany or any of the Subsidiaries is subject, except where such a conflict, breach, v iolation or default would not have a Material Adverse
Effect, (B) will not result in the creation or imposition of any lien, charge or encu mbrance upon any property or assets of the Company o r any
of the

                                                                         4
Subsidiaries or an acceleration of indebtedness pursuant to the terms of any agreement or instrument to which any of them is a party or by
which any of them may be bound or to which any of the property or assets of any of them is subject, except where such a lien, charge,
encumbrance or acceleration would not have a Material Adverse Effect, and (C) will not result in any violat ion of the provisions of the
certificate or art icles of incorporation or by-laws (or other organizat ion documents) of the Co mpany or any of the Subsidiaries or, except as
would not have a Material Adverse Effect, in any violat ion of any statute or any order, rule or regulat ion of any court or go vernmental agency
or body having jurisdiction over the Co mpany or any of the Subsidiaries or any of their properties; and no consent, approval, authorization,
order, reg istration or qualification of or with any such court or governmental agency or body is required for the issue and s ale of the Shares or
the consummation by the Co mpany of the trans actions contemplated by this Agreement, except the registration under the Securities Act of the
Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securitie s or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters or such as may be required by the NASD (including in
connection with the listing requirements of NASDAQ (as defined below) and NASD Ru les of Fair Pract ice) and such other approva ls as have
been obtained.

            (x) Ernst & Young LLP, who have certified certain financial statements of the Co mpany and the Subsidiaries are an independent
registered public accounting firm as required by the Securit ies Act and the Rules and Regulations. The financial statements, together with
related schedules and notes, included in the Registration Statement and the Prospectus comply in all material respects with t he requirements of
the Securities Act and present fairly the consolidated financial position, results of operations and changes in financial position of the Co mpany
and the Subsidiaries on the basis stated in the Registration Statement at the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; and the selected financial data and the summary financial data included in
the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the financial statements
included in the Registration Statement. The pro forma financial statements of the Company and the Subsidiaries and the relate d notes thereto
included in the Registration Statement and the Prospectus present fairly the informat ion shown therein, have been prepared in accordance with
the Co mmission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the
transactions and circu mstances referred to therein. The backlog data included in the Registration Statement and the Prospectus are co mplete
and accurate in all material respects and present fairly, in all material respects, the information shown therein; the assump tions used in the
preparation of the backlog data included in the Registration Statement and Prospectus are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circu mstances referred to therein. No other financial statements, schedules or data of the
Co mpany and its Subsidiaries are required by the Securities Act or the Rules and Regulations to be included or incorporated by reference in the
Registration Statement or Prospectus.

            (xi) Neither the Co mpany nor any Subsidiary has sustained since the date of the latest audited fin ancial statements included in the
Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance,
or fro m any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration Statement and the Prospectus, (1) there has not been any change
in the capital stock (or other equity interests) or long-term debt of the Co mpany or any of the Subsidiaries, (2) there has not been any Material
Adverse Effect, (3) there have been no transactions entered into by, and no obligations or liabilities, contingent or otherwise, in curred by the
Co mpany or any of the Subsidiaries, whether or not in

                                                                        5
the ordinary course of business, which are material to the Co mpany and the Subsidiaries, considered as one enterprise, (4) there has been no
dividend or distribution of any kind declared, paid or made by the Co mpany or any of the Subsidiaries on any class of their capital stock (or
other equity interests), in each case, otherwise than as set forth or contemplated in the Reg istration Statement and the Pros pectus, (5) there have
been no issuances or grants by the Co mpany or any Subsidiary of any securities or interests or rights to acquire its capital stock (or other equity
interests) other than in connection with the exercise of any outstanding options or warrants which are reflected in t he Reg istration Statement
and the Prospectus, and (6) there have been no transactions between the Company or any Subsidiary with an affiliate of the Company (as the
term ―affiliate‖ is defined in Rule 405 pro mulgated by the Co mmission pursuant to the Securities Act), which would otherwise be required to
be disclosed in the Registration Statement and the Prospectus.

              (xii) Neither the Co mpany nor any of the Subsidiaries is or with the giving of notice or lapse of time or both, will be, (1) in v iolation
of its certificate or articles of incorporation or bylaws (or other organizat ion documents), or (2) in v iolation of any law, ordinan ce,
administrative or govern mental ru le or regulation applicab le to the Co mpany or any of the Subsidiaries, including without li mitation, the
Federal Acquisition Regulations (the ―FAR‖) and supplements and the Truth in Negotiations Act, or (3) in violat ion of any decree of any court
or governmental agency or body having jurisdiction over the Co mpany or any of the Subsidiaries, or ( 4) in defau lt in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agr eement,
indenture, lease or other instrument to which the Co mpany or any of the Subsidiarie s is a party or by which any of them or any of their
respective properties may be bound, except, in the case of clauses (2), (3) and (4), where any such violation or default, individually or in the
aggregate, would not have a Material Adverse Effect.

            (xiii) The Co mpany and each Subsidiary has good and marketable t itle to all real and personal property owned by it, in each case
free and clear of all liens, encumb rances and defects except such as are described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made of such property by the Co mpany or any Subsid iary; and any
real property and build ings held under lease by the Co mpany or any Subsidiary are held under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and build ings by the
Co mpany or any Subsidiary. No event has occurred which, with the passage of time or the giving of notice or both, would cause a material
breach of, or default under, any such lease. Each of the leases to which the Co mpany or any Subsidiary is a party is substant ially of the same
character and has terms no more materially burdensome or disadvantageous to the Company or such Subsidiary than those contained in the
leases made availab le to the Representatives in connection with their legal due diligence review of the Co mpany and its Subsidiaries.

            (xiv) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Co mpany or
any of the Subsidiaries is a party or of which any property, officers or personnel of the Co mpany or any of the Subsidiaries is the subject which,
if determined adversely to the Co mpany or the Subsidiary, indiv idually o r in the aggregate, would have or may reasonably be e xpected to have
a Material Adverse Effect, or would prevent or impair the consummat ion of the transactions contemplate d by this Agreement, o r wh ich are
required to be described in the Registration Statement or the Prospectus; and, to the best of the Company ’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.

           (xv) The Co mpany and the Subsidiaries possess all permits, licenses, approvals, consents and other authorizations (including
without limitation security clearances issued to the Co mpany, each Subsidiary and any relevant emp loyees thereof) (collect ive ly, ―Permits‖)
issued by the

                                                                           6
appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the businesses now operated b y them; the
Co mpany and the Subsidiaries are in co mp liance with the terms and condition s of all such Permits and all of the Permits are valid and in fu ll
force and effect, except, in each case, where the failure so to comply or where the invalid ity of such Permits or the failure of such Permits to be
in fu ll force and effect, individually or in the aggregate, would not have a Material Adverse Effect; and neither the Co mpany nor any
Subsidiary has received any notice of proceedings relating to the revocation or material mod ification of any such Permits.

              (xvi) The Co mpany and the Subsidiaries own or possess, or can acquire on reasonable terms, all licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or pro cedures),
trademarks, service marks and trade names, patents and patent rights (collectively, ―Intellectual Property‖) material to carry ing on their
businesses as described in the Prospectus, and neither the Company nor any Subsidiary has received any correspondence relatin g to any
Intellectual Property or notice of infringement of or conflict with asserted rights of others with respect to any Intellectual Proper ty which would
render any Intellectual Property invalid or inadequate to protect the interest of the Company and the Subsidiaries a nd wh ich infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually o r in the aggregate, would have
or may reasonably be expected to have a Material Adverse Effect.

             (xvii) There is no material unfair labor pract ice co mplaint pending against the Co mpany or, to the Co mpany ’s knowledge,
threatened against it before the National Labor Relations Board or any state or local labor relat ions board, and no material grievance or
arbitration proceeding arising out of or under any collective bargain ing agreement is so pending against the Co mpany or, to its knowledge,
threatened against it. No material labor dispute with the emp loyees of the Company or the Subsidiaries exists, or, to the kno wledge of the
Co mpany, is imminent. The Co mpany is not aware of any existing or imminent labor disturbance by the employees of any of its o r any
Subsidiary’s principal suppliers, manufacturers, customers or contractors, which, indiv idually o r in the aggregate, ma y reasonably be expected
to result in a Material Adverse Effect. The Co mpany has not received written notice that (i) any executive, key employee or sig nificant group
of employees of the Co mpany plans to terminate emp loyment with the Co mpany or (ii) any such executive or key emp loyee is subject to any
noncompete, nondisclosure, confidentiality, emp loyment, consulting or similar agreement that would be vio lated by the present or proposed
business activities of the Co mpany.

            (xviii) The Co mpany and each Subs idiary (A) is in comp liance, in all material respects, with any and all applicab le foreign, fed eral,
state and local laws, ru les, regulations, treaties, statutes and codes promulgated by any and all govern mental authorities (including pursuant to
the Occupational Health and Safety Act) relating to the protection of human health and safety in the workp lace (―Occupational Laws‖); (B) has
received all material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business as currently
conducted; and (C) is in comp liance, in all material respects, with all terms and conditions of such permit, license or approval, and the
Co mpany does not have knowledge of any facts, circu mstances or developments relating to its ope rations or cost accounting practices that
could reasonably be expected to form the basis for or give rise to such actions, suits, investigations or proceedings. No act ion, proceeding,
revocation proceeding, writ, in junction or claim is pending or, to the Co mpany’s knowledge, threatened against the Company or any Subsidiary
relating to Occupational Laws.

            (xix) The Co mpany and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they are engaged, including, but not limited to, policies covering
real and personal property owned or leased by the Company and the Subsidiaries against theft, damage,

                                                                          7
destruction, acts of vandalism and earthquakes; all such insurance is outstanding and duly in force on the date hereof; neither the Co mpany nor
any Subsidiary has been refused any insurance coverage sought or applied for; and the Co mpany has no reason to believe that either it or any
Subsidiary will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage fro m
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

            (xx) The Co mpany and each Subsidiary maintains a system of internal accounting cont rols sufficient to provide reasonable
assurance that (1) t ransactions are executed in accordance with management’s general or specific authorizations; (2) t ransactions are recorded
as necessary to permit p reparation of financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; (4) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences; and (5) costs are recorded and allocated in co mp liance with the FA R and the state and local equivalents of the FAR, if any,
including, but not limited to, applicable cost accounting standards specified thereunder.

           (xxi) A ll Un ited States federal income tax returns of the Company (including all predecessors of the Company) and the Subsidiaries
required by law to be filed have been filed and all taxes s hown by such returns or otherwise assessed, which are due and payable, have been
paid, except assessments against which appeals have been or will be pro mptly taken and as to which adequate reserves have bee n provided. The
Co mpany (including all predecessors of the Co mpany) and the Subsidiaries have filed all other tax returns that are required to have been filed
by them pursuant to applicable foreign, state, local or other law, except insofar as the failure to file such returns, individually or in the
aggregate, would not result in a Material Adverse Effect, and have paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Co mpany or any Subsidiary except for such taxes, if any, as are being contested in good faith and as to which adequate reserves
have been provided. The charges, accruals and reserves on the books of the Co mpany and the Subsidiaries in respect of any inc ome and
corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional inco me tax
for any years not finally determined.

            (xxii) There are no statutes, regulations, contracts, agreements or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exh ibit to the Reg istration Statement wh ich are not described or filed as required.
The contracts so described or otherwise described in the Prospectus or filed as exhib its to the Registration Statement are in fu ll force and effect
on the date hereof (assuming due execution and delivery of this Agreement by the Underwriters), and neither the Co mpany or any S ubsidiary
nor, to the Co mpany’s knowledge, any other party is in material breach of or default under any of such contracts. The Co mpany has not
received any written notice of such default or breach. The descriptions of such contracts in the Prospectus and the Registrat ion Statement are
true summaries thereof and fairly present, in all material respects, the informat ion purported to b e summarized. All such agreements to which
the Co mpany or any of its Subsidiaries is a party have been duly authorized, executed and delivered by the Co mpany or a Subsidiary, constitute
valid and binding agreements of the Co mpany or a Subsidiary (assuming due execution and delivery of this Agreement by the Underwriters),
and are enforceable against the Company or a Subsidiary in accordance with the terms thereof, except as the enforcement there of may be
limited by applicab le bankruptcy, insolvency, reorganizat ion, moratoriu m or other similar laws relating to or affecting creditors ’ rights
generally, or by general equitable princip les.

           (xxiii) Except as would not, individually or in the aggregate, result in a Material Adverse Effect : (A) neither the Co mpany nor any
of the Subsidiaries is in violat ion of any federal, state, local o r foreign law or regulat ion relat ing to pollution or protec tion of human health or
the environment

                                                                            8
(including, without limitation, amb ient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without
limitat ion, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleu m products (collectively, ―Materials of Environmental Concern‖), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environment
Concern (collectively, ―Environ mental Laws‖), which v iolation includes, but is not limited to, noncompliance with any permits or other
governmental authorizat ions required for the operation of the business of the Compa ny or its subsidiaries under applicable Environmental
Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of the Subsidiaries received any written
communicat ion, whether fro m a govern mental authority, citizens group, emp loyee or otherwise, that alleges that the Co mpany or any of the
Subsidiaries is in v iolat ion of any Environ mental Law; (B) there is no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Co mpany has received written notice, and no written notice by any person or entity
alleg ing potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages,
personal in juries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now o r in the past
(collect ively, ―Environ mental Claims‖), pending or, to the Co mpany’s knowledge, threatened against the Co mpany or any of the Subsidiaries
or any person or entity whose liability for any Environ mental Claim the Co mpany or any of the Subsidiaries has retained or assumed either
contractually or by operation of law; and (C) to the Co mpany’s knowledge, there are no past or present actions, activities, circu mstances,
conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that would reasonably be expected to result in a vio lation of any Environ mental Law or form the basis of a potential
Environmental Claim against the Company or any of the Subsidiaries or agains t any person or entity whose liab ility for any En viron mental
Claim the Co mpany or any of the Subsidiaries has retained or assumed either contractually or by operation of law.

            (xxiv ) Each emp loyee benefit plan, with in the meaning of Sect ion 3(3) of the Emp loyee Ret irement Inco me Security Act of 1974,
as amended (―ERISA‖), that is maintained, ad ministered or contributed to by the Company or any Subsidiary for employees or former
emp loyees of the Company and its affiliates has been maintained in co mpliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the ―Co de‖), except to
the extent that failure to so comply, indiv idually o r in the aggregate, would not have a Material Adverse Effect. No prohibited t ransaction,
within the mean ing of Section 406 o f ERISA or Section 4975 of the Code has occurred with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exempt ion.

           (xxv ) Except as described in Initial Reg istration Statement, there are no persons with registration rights or other similar rights to
have securities registered pursuant to the Registration Statement or otherwise registered by the Co mpany under the Securities Act.

             (xxv i) Neither the Co mpany nor any of the Subsidiaries is and, after g iving effect to the offering and sale of the Shares as
contemplated herein and the application of the net proceeds therefro m as described in t he Prospectus, the Company will not be required to
register as an ―investment company,‖ as such term is defined in the Investment Co mpany Act of 1940, as amended (the ―Investment Co mpany
Act‖).

           (xxv ii) The Co mpany has not distributed any offering materials in connection with the offering and sale of the Shares, other than the
Registration Statement, any Preliminary Prospectus, the Prospectus or any other offering materials permitted by the Securitie s Act and
approved by the

                                                                          9
Representatives; and the Co mpany has not taken and will not take, direct ly or indirect ly, any action designed to cause or res ult in, or wh ich
constitutes or might reasonably be expected to constitute, the stabilizat ion or man ipulation of the price of any s ecurity of the Co mpany to
facilitate the sale of the Shares.

            (xxv iii) None of the Co mpany or any Subsidiary nor, to the Co mpany ’s knowledge, any officer, director, emp loyee or agent of the
Co mpany or any Subsidiary has made any payment of funds of the Co mpany or any Subsidiary, or received or retained any funds, in violation
of any law, ru le or regulation, or wh ich payment, receipt or retention of funds is of a character required to be disclosed in the Registration
Statement or the Prospectus.

            (xxix) Except for the shares of capital stock or other equity interests of each of the Subsidiaries, neither the Co mpany nor any of th e
Subsidiaries owns any share of stock or any other securities of any corporation or has any equity interest in any firm, partn ership, association,
limited liability co mpany, jo int venture or other entity other than as reflected in the consolidated financial statements inc luded in the
Registration Statement and the Prospectus.

           (xxx) As of the date of the Prospectus, neither the Co mpany nor any of the Subsidiaries currently has any probable acquisitions for
which disclosure of pro forma financial informat ion would be required by the Securit ies Act or the Rules and Regulations.

          (xxxi) The Co mmon Stock to be sold by the Company has been approved for quotation by the National Association of Securit ies
Dealers Automated Quotations National Market (the ―NASDAQ‖) upon official notice of issuance.

          (xxxii) To the Co mpany’s knowledge, no officer, d irector or beneficial owner of five percent (5%) or more of the Co mmon Stock of
the Co mpany has any affiliat ion or association with the NASD or any member thereof.

            (xxxiii) No relationship, direct or ind irect, exists between or among the Co mpany or any Subsidiary on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Co mpany or any Subsidiary (o r any partner, affiliate or asso ciate of any of the
foregoing persons or entities) on the other hand, which is required to be described in the Prospectus which is not so described.

            (xxxiv) There are no claims, payments, issuances, arrangements or understandings, whether oral or written, fo r services in the
nature of a finder’s, consulting or origination fee with respect to the sale of the Shares hereunder or any other arrangements, agreements,
understandings, payments or issuances with respect to the Co mpany or any Subsidiary, or any of their respective officers, dir ect ors,
stockholders, partners, employees or affiliates on behalf of the Co mpany or any Subsidiary that may affect the Underwriter’s compensation, as
determined by the NASD, other than as described in the Prospectus.

           (xxxv ) The Co mpany has obtained written agreements and delivered such agreements to the Representatives as of the date hereof
(―Lock-Up Agreements‖) to the effect and in substantially the form attached hereto as Exhibit B fro m each of its directors, director nominees,
executive officers and stockholders named on Schedule IV .

          (xxxv i) The increased level of general and administrative expenses that the Company will incur as a function of the transactions
contemplated by this Agreement and the Registration Statemen t and Prospectus and the Company’s being subject to the periodic reporting
requirements of the

                                                                          10
Exchange Act will not materially adversely affect the Co mpany ’s ability to obtain and enter into contracts with U.S. federal go vernmen t
customers or otherwise result in a Material Adverse Effect.

          (xxxv ii) Any certificate signed by any officer of the Co mpany delivered to the Underwriters or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

          (xxxv iii) The Co mpany has taken reasonable steps to be in comp liance in all material respects with applicable provisions of the
Sarbanes-Oxley Act of 2002 (the ―Sarbanes-Oxley Act‖) that are effective and is actively taking reasonable steps to ensure that it will be in
compliance in all material respects with other applicable p rovisions of the Sarbanes -Oxley Act upon the effectiveness of such provisions.

            (xxv ii) The Co mpany has imp lemented the ―disclosure controls and procedures ‖ (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) required in o rder for the Ch ief Executive Officer and Ch ief Financial Officer of the Co mpany to en gage in the
review and evaluation process mandated by the Exchange Act. The Co mpany’s ―disclosure controls and procedures‖ are reasonably designed
to ensure that all informat ion (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Rules and Regulations, and
that all such information is accumu lated and communicated to the Co mpany ’s management as appropriate to allow t imely decisions regarding
required disclosure and to make the certifications of the Ch ief Executive Officer and Ch ief Financial Officer of the Co mpany require d under
the Exchange Act with respect to such reports.

       (b) Each Selling Stockholder represents and warrants to, and agrees with, each of the Underwriters that, as of the date hereof an d as of
the Closing Date.

           (i) All consents, approvals, authorizations and orders necessary for the execution and delivery by such Selling Stockholder of this
Agreement and the Custody Agreement and Power of Attorney and for the sale and delivery of the Shares to be sold by such Sell ing
Stockholder hereunder, have been obtained; and such Selling Stockholder has full right, power and authority to enter into this Agreement and
the Custody Agreement and Power of Attorney and to sell, assign, transfer and deliver the Shares to be sold by such Selling S tockholder
hereunder.

            (ii) This Agreement and the Custody Agreement and Power of Attorney have each been duly authorized, executed and delivered by
such Selling Stockholder; and the Custody Agreement and Power of Attorney constitutes the legal, valid and binding obligation of such Selling
Stockholder, enforceable against such Selling Stockholder in accordance with its terms, assuming, in the case of the Custody Agreement, the
due execution and delivery by each other party thereto and except as the enforcement thereof may be limited by applicab le ban kruptcy,
insolvency, reorganization, mo ratoriu m o r other similar laws relating to or affecting creditors ’ rights generally, or by general eq uitable
principles.

            (iii) The sale o f the Shares to be sold by such Selling Stockholder hereunder, the execution of this Agreement and the Custody
Agreement and Power of Attorney by such Selling Stockholder and the comp liance by such Selling Stockholder with all of the provisions o f
this Agreement and the Custody Agreement and Power of Attorney and the consummation of the transactions herein and therein co ntemplated
will not conflict with or result in a breach or v iolation of any of the terms or provisions of, or constitute a default under , any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which such Selling Stockholder is a party or by wh ich such Selling
Stockholder is bound or to which any of the property or assets of such Selling Stockholder is subject or

                                                                        11
any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over such Selling Stockholder or
any of its properties; and no consent, approval, authorization, o rder, registration or qualification of or with any such court or governmental
agency or body is required for the sale of the Shares to be sold by such Selling Stockholder hereunder or the consummat ion by such Selling
Stockholder of the transactions contemplated by this Agreement and the Custody Agreement and Power of Attorney, except the re gistration
under the Securities Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as (A) may b e required under
state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters, (B) may be required by the
NASD (including in connection with NASDAQ listing requirements and NASD Ru les of Fair Practice) or (C) have been obtained.

            (iv) Such Selling Stockholder has, and immediately prio r to the Closing Date will have, good and valid title to the Shares to be sold
by such Selling Stockholder hereunder on such date free and clear of all liens, encumbrances, equities or claims; and, upon d elivery of such
Shares and payment therefor pursuant hereto, good and valid title to such Shares, free and clear of all lie ns, encumb rances, equities or claims,
will pass to the several Underwriters.

             (v) Such Selling Stockholder has not taken and will not take, direct ly or indirectly, any action designed to cause or result in, or
which constitutes or might reasonably be expected to constitute, the stabilizat ion or man ipulation of the price of any security of the Co mpany to
facilitate the sale or resale of the Shares.

            (vi) There are no legal or governmental proceedings pending to which such Selling Stockholder is a party or of which any property
of such Selling Stockholder is the subject which, if determined adversely to such Selling Stockholder, indiv idually or in the aggregate, would
prevent or impair the consummat ion of the transactions contemplated by this Agreement.

          (vii) Any certificate signed by, or on behalf of, such Selling Stockholder delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by such Selling Stockholder to the Underwriters as to the matters covered thereby.

       2(a). Subject to the terms and conditions set forth herein, (i) each of the Co mpany and each Selling Stockholder agrees, severally and
not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Co mpany
and the Selling Stockholders, at a purchas e price per share of $          (the ―Purchase Price‖), the nu mber of Firm Shares (to be adjusted by
the Representatives so as to eliminate fractional shares) determined by multip lying the aggregate number of Firm Shares to be sold by the
Co mpany or the Selling Stockholders as set forth opposite the name of the Co mpany or the Selling Stockholders in Schedule II hereto by a
fraction, the numerator of which is the aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the aggregate number of Firm Shares to be purchased by all of the
Underwriters fro m the Co mpany and the Selling Stockholders hereunder and (ii) in the event and to the extent that the Underwriters shall
exercise the election to purchase Option Shares as provided below, the Co mpany agrees to sell to each of the Underwriters, an d each of the
Underwriters agrees, severally and not jointly, to purchase fro m the Co mpany, at the Purch ase Price, the nu mber of Option Shares (to be
adjusted by the Representatives so as to eliminate fractional shares) determined by mu ltiply ing (x) the nu mber of Option Shares as to which
such election shall have been exercised and (y) the fraction set forth in clause (i) above.

       (b) The Co mpany hereby grants to the Underwriters the right to purchase at their elect ion up to            (          ) Option Shares, at
the Purchase Price, for the sole purpose of

                                                                        12
covering over-allot ments in connection with the sale of the Firm Shares. The Underwriters may exercise their option to acquire Option Share s
in whole or in part fro m t ime to time only by written notice fro m the Representatives to the Co mpany, given within a period of thirty
(30) calendar days after the date of this Agreement and setting forth the aggregate number of Option Shares to be purchased and th e date on
which such Option Shares are to be delivered, as determined by the Representatives but in no even t earlier than the Closing Dat e or, unless the
Representatives and the Company otherwise agree in writ ing, earlier than two (2) o r later than ten (10) business days after the date of such
notice.

       (c) Certificates in negotiable form for the Shares to be sold by the Selling Stockholders hereunder have been placed in custody, for
delivery under this Agreement, under the Custody Agreement and Power of Attorneys made with the Co mpany, as custodian ( ―Custodian‖).
Each Selling Stockholder agrees that the shares represented by the certificates held in custody for such Selling Stockholder under such Custody
Agreement and Power of Attorney are subject to the interests of the Underwriters hereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable and that the obligations of the Selling Stockholder hereunder shall not be terminated
by operation of law, whether by the death of the Selling Stockholder or the occurrence of any other event, or in the case of a trust, by the death
of any trustee or trustees or the termination of such trust. If such Selling Stockholder or any such trustee or trustees shou ld die, or if any other
such event should occur, or if any of such trusts should terminate, before the delivery of the Shares hereunder, certificates for such Shares shall
be delivered by the Custodian in accordance with the terms and conditions of this Agreement as if such death or other event o r termination had
not occurred, regardless of whether or not the Custodian shall have received notice of such death or other event or termination.

       3. It is understood that the several Underwriters propose to offer the Firm Shares for sale to the public upon the terms and conditions set
forth in the Prospectus.

      4(a). The Co mpany will deliver the Firm Shares to the Representatives for the accounts of the Underwriters, against payment of the
Purchase Price therefor in Federal (same day) funds by official bank check or checks or wire transfer drawn to the order of t he Co mpany, in the
case of Firm Shares sold by the Co mpany, and to or on behalf of the Selling Stockholders, under instructions from the Co mpany as the
Custodian, in the case of Firm Shares sold by the Selling Stockholders, at the office o f Legg Mason, 100 Light Street, Balt imore, Maryland
21202, at 10:00 A.M., Baltimore t ime, on                 , 2005, or at such other place and time not later than seven (7) fu ll business days
thereafter as Legg Mason and the Company determine, such time being herein referred to as the ―Closing Date.‖ Fo r purposes of Rule 15c6-1
under the Exchange Act, the Closing Date (if later than the otherwise applicable settlement date) shall be the settlement dat e for payment of
funds and delivery of securities for all the Firm Shares. The certificates for the Firm Shares so to be delivered will be in defin itive form, in such
denominations and registered in such names as the Representatives request and will be made available for checking and packaging at the above
office o f Legg Mason, or such other place as Legg Mason and the Company shall determine, at least twenty -four (24) hours prior to the Closing
Date.

       (b) Each time for the delivery of and payment for the Option Shares, being herein referred to as an ―Option Closing Date,‖ which may
be the Closing Date, shall be determined by the Representatives as provided above. The Co mpany will deliver the Option Shares being
purchased on each Option Closing Date to the Representatives for the accounts of the Underwriters, against payment o f the Purchase Price
therefor in Federal (same day) funds by official bank check or checks or wire transfer drawn to the order of the Co mpany, at the above office of
Legg Mason, or such other place as Legg Mason and the Company shall determine, at 10:00 A.M., Baltimo re t ime on the applicable Option
Closing Date. The certificates for the Option Shares so to be delivered will be in definitive form, in such denominations and registered in such
names as the Representatives request and will be made available for

                                                                         13
checking and packaging at the above office of Legg Mason, or such other place as Legg Mason and the Company shall determine, at least
twenty-four (24) hours prior to such Option Closing Date.

      5. The Co mpany covenants and agrees with each of the Underwriters as follows:

        (a) The Co mpany, subject to Section 5(b), will co mply with the requirements of Rule 430A under the Securities Act, and will notify
the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amend ment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended prospectus shall have been filed, (ii) of the receipt of any comments
fro m the Co mmission, (iii) of any request by the Co mmission for any amend ment to the Registration Statement or any amend ment or
supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus, or of the
suspension of the qualification of the Shares for offering or sale in any ju risdiction, or of the in itiation or threatening o f any proceedings for any
of such purposes. The Company will pro mptly effect the filings necessary pursuant to Rule 424(b) under the Securities Act and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will pro mptly file such prospectus. The Company will make ever y reasonable
effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lift ing thereof at the earliest possible mo ment.

       (b) The Co mpany will give the Representatives notice of its intention to file or prepare any amend ment to the Registration Statement
(including any filing under Rule 462(b) under the Securities Act), or any amend ment, supplement or rev ision to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of time prio r to such proposed filing or use, as the ca se may be, and
will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

        (c) The Co mpany will use its reasonable best efforts to qualify the Shares for offering and sale under the securities laws of suc h
jurisdictions as the Representatives may reasonably request and to comply with such laws so as to permit the continuance of sales and d ealings
therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that not hing in this
Section 5(c) shall require the Co mpany to qualify as a foreign corporation in any jurisdiction in which it is not already so qualifie d, or to file a
general consent to service of process in any jurisdiction.

       (d) The Co mpany has furnished or will deliver to the Representatives, without charge, five (5) signed copies of the Initial Registration
Statement as originally filed, any Rule 462(b) Reg istration Statement and of each amendment to each (including exh ibits filed t herewith) and
signed copies of all consents and certificates of experts, and will also, upon the Representatives ’ request, deliver to the Representatives, without
charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exh ibits) fo r each of the
Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be ident ical to the
electronically transmitted copies thereof filed with the Co mmission pursuant to EDGA R, excep t to the extent permitted by Reg ulation S-T.

      (e) The Co mpany has delivered to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such
Underwriter reasonably requested, and the Co mpany hereby consents to the use of suc h copies for purposes permitted by the Securities Act.
The Co mpany will furnish to each Underwriter, without charge, prior to 5:00 P.M. on the business day next succeeding the date of this
Agreement and fro m t ime to time thereafter during the period when t he Prospectus is required to be

                                                                           14
delivered in connection with sales of the Shares under the Securities Act or the Exchange Act, such number of copies of the P ro spectus (as
amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amend ments or supplements thereto furnished
to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Co mmission pursuant to EDGA R, except to
the extent permitted by Regulation S-T.

        (f) The Co mpany will co mply with the Securities Act and the Rules and Regulations so as to permit the co mplet ion of the distribution
of the Shares as contemplated in this Agreement and in the Prospectus. If at any time when, in the opinion of counsel for the Underwriters, a
prospectus is required to be delivered in connection with sales of the Shares under the Securities Act or t he Exchange Act, any event shall
occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for th e Co mp any, to amend
the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of a
material fact or o mit to state a material fact necessary in order to make the statements therein not misleading in the light of the circu mstances
existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to comp ly with the requirements of the Securities Act o r the Ru les and
Regulations, the Co mpany will pro mpt ly prepare and file with the Co mmission, subject to Section 5(b), such amendment or supplement as may
be necessary to correct such statement or o mission or to make the Reg istration Statement or the Prospectus comply with such r equirements, and
the Co mpany will furn ish to the Underwriters such number of copies of such amend ment or supplement as the Underwriters may re asonably
request. The Company will provide the Representatives with notice of the occurrence of any event during the period specified above that may
give rise to the need to amend or supplement the Registration Statement or the Prospectus as provided in the preceding senten ce promptly after
the occurrence of such event.

       (g) The Co mpany will make generally available (within the mean ing of Section 11(a) of the Securities Act) to its security holders and
to the Representatives as soon as practicable, but not later than forty -five (45) days after the end of its fiscal quarter in which the first
anniversary date of the effective date of the Registration Statement occurs, an earning statement (in form co mplying with the provisions of Ru le
158 under the Securities Act) covering a period of at least twelve consecutive months beginning after the effective date of the Registration
Statement.

       (h) The Co mpany will use the net proceeds received by it fro m the sale of the Shares in the manner specified in the Prospectus under
the heading ―Use of Proceeds.‖

       (i) The Co mpany will use its reasonable best efforts to effect and maintain the listing for quotation of the Common Stock (in cluding
the Shares) on the NASDAQ or such other national securities exchange.

        (j) During a period of one hundred eighty (180) days fro m the date of the Prospectus, the Co mpany will not, without the prior written
consent of Legg Mason, offer, sell, contract to sell (including any short sale), pledge, hypothecate, grant any option, right or warrant for the sale
of, purchase any option or contract to sell, sell any option or contract to purchase, or otherwise encumber, dispose of or transfer, direct ly or
indirectly, any shares of Class A Co mmon Stock o r securities convertible into or exchangeable or exercisable for any shares of Class A
Co mmon Stock, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in
whole or in part, any of the economic consequences of ownership of the Class A Co mmon Stock, whether any such aforementioned transaction
is to be settled by delivery of the Class A Co mmon Stock or such other securities, in cash or otherwise, or publicly disclose the intention to
make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, other than (1) the

                                                                         15
Shares to be sold hereunder, (2) the issuance of options to acquire shares of Class A Co mmon Stock granted pursuant to the Company’s benefit
plans existing on the date hereof that are referred to in the Prospectus, as such plans may be amended, (3) the issuance of shares of Class A
Co mmon Stock upon the exercise of any such options or (4) the issuance of shares of Class A Common Stock as consideration for an
acquisition of another person by the Company, directly o r indirectly, by consolidation, merger, purchase of all or substantially all of the assets,
or other reorganization in which the Co mpany acquires, in a single transaction or series of related transactions, all o r subs tantially all of the
assets of the other person or 51%, more o f the voting power of the other person or 51% or mo re of the equity ownership of the other person;
provided that no such acquisition, consolidation, merger, purchase or reorganizat ion, indiv idually o r together with any other transaction or
transactions, would result in the issuance of more than            shares of Class A Common Stock.

       (k) The Co mpany, during the period when the Prospectus is required to be delivered in connection with sales of the Shares under t he
Securities Act or the Exchange Act, will file all docu ments required to be filed with the Co mmission pursuant to the Exchange Act within the
time periods required by the Exchange Act and the rules and regulations of the Commission thereunder.

      (l) The Co mpany will file with the Co mmission such information on Form 10-Q or Form 10-K as may be required pursuant to Rule
463 under the Securities Act.

       (m) During a period of five years fro m the effective date of the Reg istration Statement, the Co mpany will furnish to the
Representatives copies of all reports or other communicat ions (financial or other) furnished to stockholders generally, and to deliver to the
Representatives (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Co mmission or
any national securities exchange on which any class of securities of the Co mpany is listed; and (ii) such additional informat ion concerning the
business and financial condition of the Co mpany as the Representatives may fro m time to time reasonably request (such financi al statements to
be on a consolidated basis to the extent the accounts of the Co mpany and the Subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Co mmission).

        (n) If the Co mpany elects to rely upon Rule 462(b) under the Securities Act, the Co mpany will file a Rule 462(b) Reg istration
Statement with the Co mmission in co mpliance with Rule 462(b) by 10:00 P.M ., Washington, D.C. time, on the date of this Agreement, and at
the time of filing either to pay to the Co mmission the filing fee fo r the Ru le 462(b ) Registration Statement or to give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Securit ies Act.

        (o) The Co mpany will use its best efforts to ensure that the Reserved Shares will be restricted as required by the NASD or th e NA SD
rules fro m sale, transfer, assignment, pledge or hypothecation for a period of 30 days follo wing the date of this Agreement. The Underwriters
will notify the Co mpany as to which persons, if any, will need to be so restricted. At the request of the Underwriters, the Co mpany will direct
the transfer agent to place a stop transfer restriction upon such securities for such period of time. Should the Co mpany rele ase, or seek to
release, fro m such restrictions any of the Reserved Shares, the Company agrees to reimbu rse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection with, or as a result of, such release.

      (p) The Co mpany shall not invest, or otherwise use the proceeds received by the Company fro m its sale of Shares in such a manner as
would require the Co mpany to register as an ―investment company‖ under the Investment Co mpany Act.

      6.   Each Selling Stockholder covenants and agrees with each of the Underwriters as follows:

                                                                         16
       (a) Such Selling Stockholder will deliver to the Representatives, prior to or at the Closing Date, a properly co mp leted and execu ted
United States Treasury Department Form W-9 (or other applicab le form or statement specified by the Treasury Department reg ulations in lieu
thereof) in order to facilitate the Underwriters ’ docu mentation of their co mpliance with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibilit ies Act of 1982 with respect to the transactions contemplated by this Ag reement.

       (b) Such Selling Stockholder will advise the Underwriters pro mptly of the happening of any event known to the Selling Stockholder
during any period in which a prospectus relating to the Shares is required to be delivered under the Securitie s Act which, in the judgment of the
Selling Stockholder, would require the making of any change in the Prospectus then being used so that the Prospectus would not include an
untrue statement of material fact or o mit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.

      7. Whether or not the transactions contemplated by this Agreement are consummated, (a) the Co mpany covenants and agrees to pay or
cause to be paid all expenses incident to the performance of its obligations under this Agreement, including (i) the fees, disbursements and
expenses of the Co mpany’s counsel, accountants and other advisors; (ii) filing fees and all other expenses in connection with the preparation,
printing and filing of the Reg istration Statement, each Preliminary Prospectus and the Prospectus and amendments and suppleme nts thereto and
the mailing and delivering of copies thereof to the Underwriters and dealers; (iii) the cost of printing or producing this Agreement, closing
documents (including any compilations thereof) and such other documents as may be required in connection with the offering, p urchase, sale
and delivery of the Shares; (iv ) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws
as provided in Section 5(c), including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey (not to exceed $10,000); (v) all fees and expenses in connection with listing the
Class A Common Stock (including the Shares) for quotation on the NASDAQ; (vi) the filing fees incident to any required review by the NASD
of the terms of the sale of the Shares; (vii) all fees and expenses in connection with the preparation, issuance and delivery of the certificates
representing the Shares to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters; (viii) the cost and charges of any transfer agent or registrar; and (ix) the t ransportation
and other expenses incurred by the Co mpany in connection with presentations to prospective purchasers of Shares; and (b) each Selling
Stockholder covenants and agrees to pay or cause to be paid all expenses incident to the performance of the Selling Stockhold er’s obligations
under this Agreement which are not otherwise specifically provided for in this Section 7, including (i) all expenses and taxes incident to the
sale and delivery of the Shares to be sold by the Selling Stockholder to the Underwriters hereunder and (ii) the fees, disbursements and
expenses of the Selling Stockholder’s counsel and other advisors, if any.

      8. The several obligations of the Underwriters hereunder to purchase the Shares on the Closing Date or each Option Closing Date, as
the case may be, are subject to the performance by the Co mpany and the Selling Stockholders of their respective obligations hereunder and to
the following additional conditions:

       (a) The Prospectus shall have been filed with the Co mmission pursuant to Rule 424(b) under the Securities Act with in the applicab le
time period prescribed for such filing by the Rules and Regulations and in accordance with Section 5(a); if the Co mpany has elected to rely
upon Rule 462(b) under the Securities Act, the Ru le 462(b) Registration Statement shall have beco me effective by 10:00 P.M., Baltimore time,
on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose

                                                                        17
shall have been initiated or threatened by the Commission or any state securities commission; and all requests for additional informat ion on the
part of the Co mmission shall have been complied with to the Representatives ’ reasonable satisfaction.

       (b) The respective representations and warranties of the Co mpany and the Selling Stockholders contained herein are true and corre ct
on and as of the Closing Date or the Option Closing Date, as the case may be, as if made on and as of the Closing Date or the Option Closing
Date, as the case may be, except representations and warranties that exp ressly speak as of an earlier date, which are true an d correct only on
and as of the date indicated, and each of the Co mpany and the Selling Stockholders shall have comp lied, in all material respects, with all
agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Opt io n Closing Date, as
the case may be.

        (c) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date or the Option Closing Date, as the c ase
may be, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any downgrading or (ii) any intended or
potential downgrading in the rating accorded any securities of or guaranteed by the Company or any Subsidiary by any ―nationally recognized
statistical rating organizat ion,‖ as such term is defined fo r purposes of Rule 436(g)(2) under the Secur ities Act.

       (d) (i) Neither the Co mpany nor any Subsidiary shall have sustained since the date of the latest audited financial statements inc luded in
the Prospectus any material loss or interference with its business from fire, exp losion, flood or other calamity, whether or not covered by
insurance, or fro m any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemp lated in the
Prospectus, and (ii) since the respective dates as of which informat ion is given in the Registration Statement and the Prospectus, (1) there shall
not have been any change in the capital stock (or other equity interests) or long -term debt of the Co mpany or any Subsidiary or (2) there shall
not have been any Material Adverse Effect, the effect of which, in any such case described in clause (i) or (ii), is in the judg ment of the
Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Closing Date or Option Closing Date, as the case may be, on the terms and in the manner contemp lated in the
Prospectus.

        (e) the Representatives shall have received on and as of the Closing Date or the Option Closing Date, as the case may be, (i) a
certificate of two (2) executive officers of the Co mpany, at least one of who m has specific knowledge about the Company ’s fin ancial matters,
satisfactory to the Representatives, to the effect (1) set forth in Sections 8(b) (with respect to the respective representations, warranties,
agreements and conditions of the Co mpany) and 8(c), (2) that none of the situations set forth in clause (i) or (ii) of Section 8(d) shall have
occurred and (3) that no stop order suspending the effectiveness of the Registration Statement has been issued and to the knowledge of the
Co mpany, no proceedings for that purpose have been instituted or are pending or contemplated by the Co mmission, and (ii) a certificate of the
Selling Stockholders, satisfactory to the Representatives, to the effect set forth in Section 8(b) (with respect to the respective representations,
warranties, agreements and conditions of the Selling Stockholders).

       (f) A ll corporate proceedings and other legal matters incident to the authorization , form and validity of th is Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby and
by the Registration Statement and Prospectus including, without limitation, the transactions contemplated by and described under ―Prospectus
Summary — Transactions Prior To Offering,‖ shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the
Co mpany and the Selling

                                                                        18
Stockholders shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.

       (g) On the Closing Date or Option Closing Date, as the case may be, Pillsbury Winthrop Shaw Pitt man LLP, counsel for the Co mpany,
shall have furnished to the Representatives their favorable written opinion on behalf of the Co mpany, dated the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to counsel for the Underwriters, to the effect set forth in Exh ibit C hereto
and to such further effect as counsel for the Underwriters may reasonably request.

       (h) On the effective date of the Reg istration Statement and, if applicable, the effective date of the most recently filed post -effective
amend ment to the Registration Statement, Ernst & Young LLP shall have furnished to the Representatives a letter, dated the date of delivery
thereof, in form and substance satisfactory to the Representatives, containing statements and information of the type customa rily included in
accountants’ ―comfort letters‖ to underwriters with respect to the financial statements and certain financial informat ion contained in the
Registration Statement and the Prospectus.

        (i) On the Closing Date or Option Closing Date, as the case may be, the Representatives shall have received fro m Ernst & Young LLP
a letter, dated the Closing Date or such Option Closing Date, as the case may be, to the effect that they reaffirm the statements made in the
letter or letters furnished pursuant to Section 8(h), except that the specified date referred to shall be a date not mo re than three business days
prior to the Closing Date or such Option Closing Date, as the case may be.

       (j) On the Closing Date or Option Closing Date, as the case may be, DLA Piper Rudnick Gray Cary US LLP, counsel for the
Underwriters, shall have furnished to the Representatives their favorable opin ion dated the Closing Date or the Opt ion Closing Date, as the case
may be, with respect to the due authorizat ion and valid issuance of the Shares, the Registration Statement, the Prospectus an d other related
matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters.

       (k) The Shares to be delivered on the Closing Date or Option Closing Date, as the case may be, shall have been approved for listing
for quotation on the NASDAQ, subject to official notice of issuance.

      (l) The NASD shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the
underwrit ing terms and conditions.

          (m) The Representatives shall have received the Lock-Up Agreements referenced in Sect ion 1(a)(xxxv), and such agreements shall be
in fu ll force and effect on the Closing Date or Option Closing Date, as the case may be.

       (n) On or prio r to the Closing Date or Option Closing Date, as the case may be, the Co mpany and each Selling Stockholder shall ha ve
furnished to the Representatives such further informat ion, cert ificates and documents as the Representatives shall reason ably request.

      If any condition specified in this Section 8 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be
terminated, subject to the provisions of Section 12, by the Representatives by notice to the Company at any time at or prior to t he Closing Date
or Option Closing Date, as the case may be, and such termination shall be without liability of any party to any other party, except as provided
in Section 12.

                                                                        19
       The opinions and certificates mentioned in this Agreement shall be deemed to be in co mpliance with the provisions hereof only if they
are in all material respects satisfactory to the Representatives and to DLA Piper Rudnick Gray Cary US LLP, counsel for th e Underwriters.

        9(a). The Co mpany agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter
within the mean ing of Section 15 of the Securities Act or Sect ion 20(a) of the Exchange Act against any and all losses, liab ilities, claims,
damages and expenses whatsoever as incurred (including without limitation, reasonable attorneys ’ fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against any litigation, co mmenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or lit igation), joint or several, to wh ich they or any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilit ies, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Init ial Reg istration
Statement, as orig inally filed or any amendment thereof, the Registration Statement, or any post -effective amendment thereof, any Preliminary
Prospectus or the Prospectus, or in any supplement thereto or amend ment thereof, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading, o r (iii) any act or failure o r alleged act or
failure to act by any Underwriter in connection with, o r relating in any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or act ion arising out of or based upon matters covered by clause (i) or
(ii) above (provided, that the Company shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or action resulted directly fro m any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful misconduct); provided, however, that the Comp any will not be
liab le in any such case (A) to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged o mission made in the In itial Registration Statement, as originally filed or any
amend ment thereof, the Registration Statement, or any post-effective amend ment thereof, any Preliminary Prospectus or the Prospectus, or in
any supplement thereto or amendment thereof, in reliance upon and in strict conformity with written info rmation furn ished to the Co mpany by
or on behalf of any Underwriter or Legg Mason expressly for use therein, it being understood and agreed that the only such information
furnished by any Underwriter is the information described as such in Section 9(b) belo w or (B) if the untrue statement, alleged untrue
statement, o mission or alleged o mission is corrected so as to comply with all applicab le securities laws in an amend ment or supplement to the
applicable document and the Underwriter seeking indemn ification has previously been furnished with sufficient copies of the a pplicable
document as so amended or supplemented, and thereafter fails to deliver the amended or supplemented document as required b y the Securities
Act.

        (b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless the Co mpany, the Selling Stockholders, eac h of
the directors of the Co mpany, each of the officers of the Co mpany who shall have signed the Registration Statement, and each other person, if
any, who controls the Company or any Selling Stockholder within the meaning of Section 15 of the Securit ies Act or Section 20(a) of the
Exchange Act, against any losses, liabilit ies, claims, damages and expenses whatsoever as incurred (including without limitatio n, reason able
attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), jo int or several, to
which they or any of them may beco me subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilit ies,
claims, damages or expenses (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Init ial Registration Statement, as orig inally filed or

                                                                          20
any amend ment thereof, the Registration Statement, or any post-effective amendment thereof, or any Preliminary Prospectus or the Prospectus,
or in any supplement thereto or amendment thereof, o r (ii) the o mission or alleged o mission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or o mission or alleged omission
made therein in reliance upon and in strict conformity with written informat ion furnished to the Company by or on behalf of s uch Underwriter
through the Representatives expressly for use therein, it being understood and agreed that the only such information furn ished by any
Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the fifth paragr aph on the cover
page concerning the terms of the offering by the Underwriters, the concession and reallo wance figures appearing in the third paragraph, and the
informat ion set forth in the ninth, tenth, twelfth and thirteenth paragraphs, under the caption ―Underwriting.‖

        (c) Each Selling Stockholder agrees to indemn ify and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securit ies Act or Section 20(a) of the Exchange Act against any and all losses, liab ilit ies,
claims, damages and expenses whatsoever as incurred (including without limitation, reasonable attorneys ’ fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing or defending against any litigation, co mmenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or lit igation), joint or several, to wh ich they or any of them may beco me
subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Initial
Registration Statement, as originally filed or any amend ment thereof, the Registration Statement, or any post -effective amend ment thereof, or
any Preliminary Prospectus or the Prospectus, or in any supplement thereto or amend ment thereof or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in ea ch case to the extent,
but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon an untrue statement or alleged untrue
statement or o mission or alleged o mission made therein in reliance upon and in strict conformity with written informat ion fur nished by the
Selling Stockholder to the Co mpany.

        (d) Pro mpt ly after receipt by an indemnified party under Section 9(a), 9(b ) or 9(c) of notice of the co mmencement of any action, such
indemn ified party shall, if a claim in respect thereof is to be made against the indemn ifying party under such Section, notif y each party against
whom indemnification is to be sought in writing of the co mmencement thereof (but the failure so to notify an indemnifying par ty shall not
relieve it fro m any liability which it may have under this Section 9 unless such party has been materially p rejudiced). In case any such action is
brought against any indemnified party, and it notifies an indemn ify ing party of the commencement thereof, the indemn ifying pa rty will be
entitled to participate therein, and jointly with any other indemnifying party similarly notified, to the extent it may elect by written notice
delivered to the indemnified party pro mptly after receiving the aforesaid notice fro m such indemnified party, to assume the d efense thereof
with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to
the indemnified party). Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the
emp loyment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the de fense of such
action, (ii) the indemnifying parties shall not have emp loyed counsel to have charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) the defendants in any action include both the indemnified party and the indemnifying party and
there is a conflict of interest that would prevent counsel for the indemnifying party fro m also representing the

                                                                         21
indemn ified party (in wh ich case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the
indemn ified party or parties), in any of which events such fees and expenses shall be borne by the indemn ifying part ies. In n o event shall the
indemn ify ing parties be liab le fo r fees and expenses of more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circu mstances, which counsel, in the event of indemn ified parties under Section 9(a), shall be selected by
Legg Mason. The indemn ifying party shall not be liable for any settlement of any proceeding effected without its written cons ent but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnify ing party agrees to indemnify the indemnified p arty fro m and
against any loss or liability by reason of such settlement or judg ment. In addit ion, no indemnify ing party shall, without the written consent of
the indemnified party, effect the settlement or co mp ro mise of, o r consent to the entry of any judgment with respect to, any p ending or
threatened action or claim in respect of which indemnificat ion or contribution may be sought hereunder (whether or not the indemn ified party
is an actual or potential party to such action or claim) unless such settlement, co mpro mise or judg ment (i) includes an unconditional release of
the indemnified party fro m all liability arising out of such action or claim and (ii) does not include a statement as to or an admis sion of fault,
culpability or a failure to act, by or on behalf of any indemnified party.

       (e) (i) If the indemn ification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a), 9(b) or 9(c) in respect of any losses, liabilities, claims, damages or expenses (or actions in respect thereof) referre d to therein, then
each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilit ies, claims,
damages or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits rec eived by the Company
and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Shares. If, however, th e alloca tion
provided by the immed iately preceding sentence is not permitted by applicable law, then each indemn ify ing party shall contrib ute to such
amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benef its but also the
relative fault of the Co mpany and the Selling Stockholders on the one hand and the Underwriters on the other in connection wit h the statements
or omissions which resulted in such losses, liabilities, claims, damages or expenses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Co mp any and the Selling Stockholders on the one hand and the Underwriters on
the other from the offering of the Shares shall be deemed to be in the same proportion as the total net proceeds fro m the offerin g (before
deducting expenses) received by the Co mpany and the Selling Stockholders bear to the total underwriting d iscounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to informat ion supplied by the Company or the Selling Stockholders on the one hand or the Underwriters on the other and
the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or o mission.

            (ii) The Co mpany, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if c ontributions
pursuant to this Section 9(e) were determined by pro rata allocation (even if the Underwriters were t reated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable considerations referred to above in this Section 9(e). The amount
paid or payable by an indemnified party as a result of the losses, liab ilit ies, claims, damages or expenses (or actions in re spect thereof) referred
to above in this Section 9(e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9(e), no Un derwriter shall
be required to contribute any amount in e xcess of the amount by which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public

                                                                          22
exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleg ed untrue
statement or o mission or alleged o mission.

            (iii) No person guilty of fraudulent misrepresentation (within the meaning o f Section 11(f) of the Securities Act) shall be entit led to
contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters ’ obligations in this Section 9(e) to
contribute are several in proportion to their respective underwriting obligations and not joint.

      (f) The obligations of the parties to this Agreements contained in this Section 9 are not exclusive and shall not limit any righ ts or
remedies which may otherwise be available to any indemnified party at law or in equity.

      10. If any Underwriter or Underwriters default in its or their obligations to purchase Shares hereunder on the Closing Date or an y
Option Closing Date and the aggregate number of Shares that such defaulting Underwriter or Underwriters a greed but failed to purchase does
not exceed ten percent (10%) of the total number of Shares that the Underwriters are ob ligated to purchase on such Closing Date or Option
Closing Date, as the case may be, the Representatives may make arrangements satisfac tory to the Company and the Selling Stockholders for
the purchase of such Shares by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date or
Option Closing Date, as the case may be, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective
commit ments hereunder, to purchase the Shares that such defaulting Underwriters agreed but failed to purchase on such Closing Date or Option
Closing Date, as the case may be. If any Underwriter or Underwriters so default and the aggregate number of Shares with respect to which such
default or defaults occur exceeds ten percent (10%) of the total nu mber of Shares that the Underwriters are obligated to purchase on such
Closing Date or Opt ion Closing Date, as the case may be, and arrangements satisfactory to the Representatives, the Company and the Selling
Stockholders for the purchase of such Shares by other persons are not made with in thirty -six (36) hours after such default, this Agreement will
terminate, subject to the provisions of Section 12, without liability on the part of any non-defaulting Underwriter, the Co mpany or the Selling
Stockholders, except as provided in Section 12. Nothing herein will relieve a defau lting Underwriter fro m liability for its default.

      In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Co mpany shall
have the right to postpone the Closing Date or the relevant Option Closing Date, a s the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. A s used in this
Agreement, the term ―Underwriter‖ includes any person substituted for an Underwriter under this Section 10.

      11. Notwithstanding anything herein contained, this Agreement (or the obligations of the several Underwriters with respect to any
Option Shares which have yet to be purchased) may be terminated, subject to the provisions of Section 12, in the absolute discretion of the
Representatives, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or the
Option Closing Date, as the case may be, (a) trad ing generally on the A merican Stock Exchange or the New York Stock Exchange or in the
NASDA Q shall have been suspended or materially limited, or min imu m or maximu m prices for trad ing have been fixed, or maximu m ranges
for prices have been required, by any of said exchanges or by such system or by order of the Co mmission, the NASD or any other
governmental authority, (b) t rading of any securities of or guaranteed by the Company or any Subsidiary shall have been suspended on any
exchange or in any over-the-counter market, (c) a general mo ratoriu m on commercial banking activ ities in New York o r Maryland shall have
been declared by Federal, New Yo rk State or Mary land State authorities or a new restriction materially adversely affect ing th e distribution of
the Firm Shares or the Option Shares, as the case may be, shall have become effective,

                                                                         23
(d) there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judg ment of the
Representatives, impract icable to market the Shares to be delivered on the Closing Date or Option Closing Date, as the case may be, or to
enforce contracts for the sale of the Shares, (e) in the judgment of the Representatives there shall have occurred any Material A dverse Effect, o r
(f) there shall have been sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and operations of the Company regardless of whether or not such loss
shall have been insured.

     If this Agreement is terminated pursuant to this Section 11, such termination will be without liability of any party to any other party
except as provided in Section 12 hereof.

      12. The respective indemnit ies, agreements, representations, warranties and other statements of the Company or its officers, o f the
Selling Stockholders and of the several Underwriters set forth in or made pursuant to this Agreement will remain in fu ll forc e and effect,
regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Co mpany, t he Selling
Stockholders, or any of their respective representatives, officers or d irectors or any controlling person, and will survive d elivery of and
payment for the Shares. If this Agreement is terminated pursuant to Section 8, 10 o r 11 or if for any reason the purchase of any of the Shares by
the Underwriters is not consummated, the Co mpany and the Selling Stockholders shall remain responsible for the expenses to be paid or
reimbursed by them pursuant to Section 7, the respective obligations of the Company, the Selling Stockholders and the Underwriters pursuant
to Section 9 and the provisions of Sections 12, 13 and 16 shall remain in effect and, if any Shares have been purchased hereunder the
representations and warranties in Section 1 and all obligations under Section 5 and Section 6 shall also remain in effect. If this Agreement shall
be terminated by the Underwriters, or any of them, under Section 8 or otherwise because of any failure or refusal on the part of the Co mpany or
the Selling Stockholders to comp ly with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Co mpany or the
Selling Stockholders shall be unable to perform its obligatio ns under this Agreement or any condition of the Underwriters ’ obligations cannot
be fulfilled, the Co mpany agrees to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriter in
connection with this Agreement or the offering contemplated hereunder.

      13. Th is Agreement shall inure to the benefit of and be binding upon the Company, the Selling Stockholders and the Underwriters, the
officers and directors of the Co mpany referred to herein, any controlling persons referred to herein and their respective suc cessors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm o r corporatio n any legal or
equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Sha res from any
Underwriter shall be deemed to be a successor or assign by reason merely o f such purchase.

      14. The Co mpany acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement, including the
determination of the public offering price o f the Shares and any related discounts and commissions, is an arm’s-length commercial transaction
between the Company, on the one hand, and the several Underwriters, on the other hand, (ii) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary
of the Co mpany, or its stockholders, creditors, employees or any other party, (iii) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Co mpany with respect to the offering contemplated hereby or the process

                                                                         24
leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Co mpany on other matters) and no
Underwriter has any obligation to the Company with respect to the offering contemp lated hereby except the obligations expres sly set forth in
this Agreement, (iv) the Underwriters and their respective Affiliates may be engaged in a broad range of transactions that involve interests that
differ fro m those of the Co mpany, and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to
the offering contemp lated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

       15. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given upon receipt
thereof by the recipient if mailed or transmitted by any standard form o f teleco mmunicat ion. Notices to the Underwriters shall be given to the
Representatives, c/o Legg Mason Wood Walker, Incorporated, 100 Light Street, Baltimo re, Mary land 21202 (fax no.: 410-454-4607);
Attention: Michael A. Gilbert. Notices to the Co mpany shall be given to it at NCI, Inc., 11730 Plaza A merica Drive, Reston, Virginia 20190
(fax no.:         ); Attention:                                 . Notices to the Selling Stockholders shall be g iven to the Custodian at NCI,
Inc., 11730 Plaza A merica Drive, Reston, Virgin ia 20190, (fax no.:            ); Attention:                                 .

      16. Th is Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute o ne and
the same instrument.

    17. THIS A GREEM ENT SHALL BE GOVERNED BY AND CONSTRUED I N ACCORDA NCE WITH THE LAWS OF THE
STATE OF MA RYLA ND, WITHOUT REGA RD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAWS.

      18. The part ies hereby submit to the jurisdiction of and venue in the state and federal courts located in the City of Balt imore, Maryland
in connection with any dispute related to this Agreement, any transaction contemplated hereby, or any other matter contemplat ed hereby.

                                                                        25
     If the foregoing is in accordance with your understanding of our agreement, please sign a nd return to the Company a counterpart hereof,
whereupon this instrument will become a binding agreement among the Co mpany, the Selling Stockholders and the Underwriters.

                                                                                     Very tru ly yours,


                                                                                     NCI, INC.

                                                                                     By:
                                                                                     Name:
                                                                                     Title:




                                                                                     SELLING STOCKHOLDERS

                                                                                     By:
                                                                                                    Attorney-in-Fact


Accepted as of the date hereof:

L E GG M ASON W OOD W ALKER , I NCORPORATED
R AYMOND J AMES & A SSOCIATES , I NC .
R OBERT W. B AIRD & C O . I NCORPORATED
S T EPHENS I NC .

By: LEGG MASON WOOD WALKER,
  INCORPORATED


For themselves and as Representatives of the
other Underwriters named in Schedule I hereto


                                                                      26
                                                 SCHED ULE I

                                                                        Number of
                                                                      Firm Shares to
Underwriter                                                            be Purchased


L E GG M ASON W OOD W ALKER , I NCORPORATED
R AYMOND J AMES & A SSOCIATES , I NC .
R OBERT W. B AIRD & C O . I NCORPORATED
S T EPHENS I NC .

Total:

                                                SCHED ULE II

                                              Selling Stockhol ders

Name                                                                        Number of Shares

Linda J. A llen
Estate of Norris B. Carter

       Total

                                                SCHED ULE III

                                                  Subsi diaries
                     SCHED ULE IV

       List of Persons Signing the Lock-Up Agreement
Name                                                   Position(s)




                           C-1
                                                                                                                                    Exhi bit 2.1

                                                 AGREEMENT AND PLAN OF MERGER

     This AGREEM ENT AND PLA N OF M ERGER (the ―Merger Agreement‖), entered into as of the 1 day of September 2005, is by and
                                                                                                          st


among NCI INFORMATION SYSTEM S, INCORPORATED, a Virgin ia corporation (―NCI‖), NCI, INC., a Delaware corporation (the
―Parent‖), and NCI ACQUISITION, LLC, a Virg inia limited liability company whose sole member is Parent (―Acquisition LLC‖).

                                                                  RECITALS

     WHEREAS, NCI is a corporation organized and existing under the laws of the Co mmonwealth of Virgin ia;

     WHEREAS, Acquisition LLC is a limited liab ility co mpany organized and existing under the laws of the Co mmon wealth of Vi rginia ;

       WHEREAS, the sole Member of Acquisition LLC has determined that the merger of Acquisition LLC with and into NCI (the ―Merger‖)
is in the best interests of Acquisition LLC and its Member, and has approved the Merger upon the terms and subject to the con ditions set forth
herein in accordance with the applicable provisions of the Virg inia Limited Liability Co mpany Act (the ―LLC Act‖); and

      WHEREAS, the Board of Directors of NCI has determined that the Merger is in the best interests of NCI and its shareholders an d has
approved the Merger upon the terms and subject to the conditions set forth herein, and the shareholders of NCI have a pproved the Merger, in
each case in accordance with the applicable provisions of the Virginia Stock Corporat ion Act (the ―VSCA‖); and

     WHEREAS, the Board of Directors of Parent has determined that the Merger is in the best interests of Parent and has approved the
Merger upon the terms and subject to the conditions set forth herein in accordance with the applicable provisions of the Dela ware General
Corporation Law.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties, intending to be lega lly
bound hereby, hereto agree as follows:

                                                                ARTICLE I
                                                               THE MERGER

     1.1 The Merger.

          (a) Subject to the terms and conditions of this Merger Agreement, at the Effective Time (as defined in Section 1.1(b)), Acquisition
LLC shall be merged with and into NCI in accordance with the LLC Act and the VSCA, the separate corporate existence of Acquis ition LLC
shall cease, and NCI shall continue as the surviving corporation under the laws of the Co mmonwealth of Virg inia under the name NCI
Information Systems, Incorporated (which is sometimes hereinafter referred to as the ―Surviving Entity‖).
           (b) Upon the execution of this Agreement by each party, the officers of NCI are authorized to, and shall, file a duly executed original
of the Articles of Merger with the State Corporation Co mmission of the Co mmonwealth of Virgin ia. The Merger shall beco me effe ctive (the
―Effective Time‖) upon the acceptance for filing of such Articles of Merger with, and the issuance of a Certificate of Merger by, the State
Corporation Co mmission of the Co mmonwealth of Virg inia.

           (c) At the Effect ive Time, NCI shall thereupon and thereafter possess all the rights, privileges, powers and franchises, both of a
public and private nature, of Acquisition LLC, and be subject to all the restrictions, disabilit ies and duties of Acquisition LLC. All the rights,
privileges, powers and franchises of Acquisition LLC, and all property, real, personal and mixed, and all debts due to Acquis ition LLC on
whatever account, as well as for stock subscriptions and all other things in action or belonging to Acquisition LLC, shall be vested in NCI. All
property, rights, privileges, powers and franchises and all and every other interest shall be thereafter as effectually the p roperty of NCI as they
were of Acquisition LLC; but all rights of creditors and all liens upon any property of Acquisition LLC shall be preserved unimpaired, and all
debts, liab ilities and duties of Acquisition LLC shall thenceforth attach to NCI and may be enforced against NCI to the same extent as if such
debts, liab ilities and duties had been incurred or contracted by NCI.

      1.2 Conversion of Stock.

           (a) At the Effect ive Time, each share of co mmon stock, par value $0.01 per share, of NCI issued and outstanding immed iately p rior
to the Effect ive Time (each, an ―NCI Share‖) shall, by virtue of the Merger and without any action on the part of the holder thereof, be
converted into a right to receive, upon surrender of the certificate representing such NCI Share, one share of Class A Common Stock, par value
$0.01 per share, of Parent (each, a ―Parent Share‖); provided, however, that any NCI Shares owned by Acquisition LLC or NCI as treasury
stock immediately prior to the Effective Time shall, by virtue of the Merger, no longer be outstanding, and automatically sha ll be cancelled and
retired without payment of any consideration therefor. When so converted, all of such NCI Shares no longer shall be outstanding and
automatically shall be cancelled and retired.

         (b) At the Effective Time, the Membership Interest of Acquisition LLC held by Paren t shall be converted into and shall become one
hundred (100) fully paid and nonassessable shares of common stock, par value $0.01 per share, of the Su rviving Entity.

       1.3 Articles of Incorporati on of the Survi ving Entity. At the Effective Time, the Articles of Incorporation of NCI as in effect
immed iately prior to the Effective Time shall be the Articles of Incorporation of the Surviv ing Entity and shall continue in full force and effect
until altered, amended or changed in accordance with the provisions thereof and the VSCA.

      1.4 Bylaws of the Survi vi ng Enti ty. At the Effective Time, the Bylaws of NCI as in effect immed iately prior to the Effect ive Time shall
be the Bylaws of the Su rviving Entity and shall continue in fu ll force and effect until altered, amended or changed in accordance with the
provisions thereof, the provisions of the Articles of Incorporation of the Surviving Entity and the VSCA.

                                                                          2
      1.5 Directors and Officers of the Survi ving Entity. The directors and officers of NCI in office at the Effective Time shall be t he
directors and officers of the Surv iving Entity, retaining their respective positions and terms of office until their successo rs are duly elected and
qualified or until their earlier removal or resignation in accordance with the Bylaws of the Surviv ing Entity.

                                                            ARTICLE II
                                                  EXCHANGE OF S TOCK CERTIFICATES

      2.1 Exchange of NCI Shares. At or after the Effective Time, the holders of NCI Shares, other than Acquisition LLC, shall surre nder the
existing stock certificates for cancellation and shall receive the Parent Shares, as provided in Article I.

      2.2 Exchange of Membershi p Interest in Acquisition. At or after the Effective Time, the holder of the Membership Interest in
Acquisition LLC shall surrender its existing membership interest and shall receive a stock certificate for one hundred (100) shares of common
stock, par value $0.01 per share, of the Su rviving Entity.

                                                                  ARTICLE III
                                                                MIS CELLANEOUS

        3.1 Further Assurances. Each party shall, either prior to or after the Effective Time, execute such further documents and take such
further actions as may reasonably be requested by one or more o f the other parties to consummate the Merger, to vest the Surviving Entity with
full tit le to the assets, properties, privileges and rights of NCI and Acquisition LLC, or to effect the other purposes of th is Merger Agreement.

      3.2 Abandonment. At any time before the Effective Date of the Merger, this Merger Agreement may be terminated and the Merger may
be abandoned for any reason whatsoever by the Sole Member of Acquisition LLC or by the Board of Directors of NCI, o r both,
notwithstanding the approval of this Agreement by the Sole Member o f Acquisition LLC or by the Board of Directors and shareholders of NCI,
or both.

      3.3 Governing Law. Th is Agreement shall in all respects be construed, interpreted and enforced in accordance wit h and governed by the
laws of the Co mmonwealth of Virginia, without regard to the conflicts -of-laws rules thereof.

      3.4 Counterparts . In order to facilitate the filing and recording of this Merger Agreement, this Merger Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same
instrument.

                                                              [Signature Page Follows]

                                                                           3
IN WITNESS WHEREOF, the parties executed this Agreement and Plan of Merger as of the date first above written.

                                                                           PARENT:

                                                                           NCI, INC.,
                                                                           a Delaware corporation

                                                                           By: /s/ Charles K. Narang
                                                                               Name: Charles K. Narang
                                                                               Title: Chairman and Chief Executive Officer


                                                                           ACQUIS ITION LLC:

                                                                           NCI A CQUISITION, LLC,
                                                                           a Virgin ia limited liability co mpany

                                                                           By:    /s/ Charles K. Narang
                                                                                  Name: Charles K. Narang
                                                                                  Title: Chairman and Chief Executive Officer of
                                                                                  NCI, Inc., its sole members


                                                                           NCI:

                                                                           NCI INFORMATION SYSTEMS, INCORPORATED,
                                                                           a Virgin ia corporation

                                                                           By:     /s/ Charles K. Narang
                                                                                   Name: Charles K. Narang
                                                                                   Title: Chairman and Chief Executive Officer
                                                                                                                                    Exhi bit 2.2

                                                   SHARE EXCHANGE AGREEMENT

      THIS S HARE EXCHANGE AGREEMENT (this ―Agreement‖) is dated as of September 1, 2005, by and among Charles K. Narang
(the ― Shareholder ‖) and NCI, Inc., a Delaware corporation (― NCI ‖).

                                                                 RECITALS

     WHEREAS , NCI is the sole member of NCI Acquisition, LLC, a Virg inia limited liability company (― Acquisition LLC ‖);

     WHEREAS , the Shareholder o wns 11,970,000 shares (the ― Shares ‖) of co mmon stock, par value $0.01 per share (― NCI-VA Co mmon
Stock ‖), of NCI Informat ion Systems, Incorporated, a Virginia corporation (― NCI-VA ‖);

      WHEREAS , the Shareholder desires to transfer the Shares, which represent ninety -two and 935/ 1000 percent (92.935%) of the issued
and outstanding shares of NCI-VA Co mmon Stock, to Acquisition LLC in exchange for 11,970,000 shares of Class B Co mmon Stock, par
value $0.01 per share, of NCI (the ― NCI B Shares ‖);

      WHEREAS , the Shareholder intends for federal inco me tax purposes to cause NCI to beco me a successor to NCI -VA as of the Closing
Date, pursuant to a reorganization described in Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the ― Code ‖), by
causing NCI to make elections (a) to be an S corporation pursuant to Section 1362(a) of the Code, and (b ) to treat NCI-VA as a ―qualified
subchapter S subsidiary‖ under Section 1361(b)(3) of the Code; and

     WHEREAS , NCI wishes to issue the NCI B Shares to the Shareholder in exchange for his transfer of the Shares to Acquisition LLC.

      NOW, THER EFORE, in consideration of the foregoing and the mutual covenants contained herein, the parties hereto here by agree as
follows:

                                                             ARTICLE I.
                                                         EXCHANGE OF S HARES

     1.1. Transfer of Shares; Issuance and Delivery of NCI B Shares . Subject to the terms and conditions set forth in this Agreemen t:

        (a) The Shareholder hereby agrees to transfer, assign and deliver to Acquisition LLC the Shares, wh ich represent ninety -two and
935/1000 percent (92.935%) of the issued and outstanding shares of NCI-VA Co mmon Stock, in exchange for 11,970,000 NCI B Shares fro m
NCI, wh ich transfer and exchange shall be made effect ive on the Closing Date by execution and delivery to NCI of the Assignment Agreement
substantially in the form attached hereto as Exhib it A .
        (b) At the Closing, NCI shall issue certificates registered in the name of the Shareholder ev idencing the NCI B Shares acquired by
such Shareholder pursuant to subparagraph 1.1(a).

     1.2. Closing . The closing (the ― Closing ‖) of the transactions contemplated by this Agreement shall take place on September 1, 2005 (the
―Closing Date‖).

                                                               ARTICLE II.
                                                        ADDITIONAL AGREEMENTS

      2.1. Merger . Each of NCI and the Shareholder agree to take all actions, and cause their affiliates to take such actions, necessary to effect
the merger (the ―Merger‖) of Acquisition LLC into NCI-VA pursuant to the Agreement and Plan of Merger, attached hereto as Exh ib it B ,
whereby NCI-VA shall be the surviving entity and shall thereupon become a wholly -owned subsidiary of NCI. The Merger shall be effect ive
on the Closing Date but after the transfer of the Shares described in Section 1.1(a).

                                                                ARTICLE III.
                                                               TAX EL ECTIONS

     3.1. S Election . NCI agrees that it shall make, and the Shareholder agrees that he shall cause NCI to make and shall consent to the
making of, an election by NCI to be treated as a S corporation pursuant to Section 1362(a) of the Code, effective as of the date of incorporation
of NCI.

      3.2. Qualified Subchapter S Subsidiary Elect ion . NCI and the Shareholder agree that they shall cause NCI-VA to make and shall consent
to the making of, an election by NCI to treat NCI-VA as a qualified subchapter S subsidiary under Section 1361(b)(3) of the Co de, effective as
of the Closing Date.

     3.3. Plan o f Reorganization . The part ies hereto hereby adopt this Agreement as their ―plan of reorganization‖ within the mean ing of
Treasury Regulations Sections 1.368-2(g) and 1.368-3(a).

                                                                ARTICLE IV.
                                                              MIS CELLANEOUS

      4.1. Ent ire Agreement; Assignment . This Agreement constitutes the entire agreement of the parties with respect to the subject matter o f
this Agreement and may not be amended or modified, nor may any provisions of this Agreement be waived, except in a writing signed by the
parties to this Agreement. This Agreement may not be assigned by any party without the prior written consent of the other par ties.

      4.2. Headings . Head ings of articles, sections and paragraphs of this Agreement are inserted for convenience of reference only and shall
not affect the interpretation or be deemed to constitute a part of this Agreement.
     4.3. Counterparts . This Agreement may be executed in any number of counterparts and by facsimile, and each such counterpart shall be
deemed to be an orig inal instrument, but all such counterparts together shall constitute but one agreement.

     4.4. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the Co mmonwealth o f Virginia,
without regard to its princip les relating to conflicts of law or choice of law.
IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed as of the date set forth above.

                                                                           NCI, INC.,
                                                                           a Delaware corporation

                                                                           By: /s/ Charles K. Narang
                                                                               Name: Charles K. Narang
                                                                               Title: Ch ief Executive Officer


                                                                           SHAREHOLDER:

                                                                           /s/ Charles K. Narang
                                                                           Charles K. Narang
                      EXHIB IT A

                ASSIGNMENT AGREEMENT


See attached.
                          EXHIB IT B

                AGREEMENT AND PLAN OF MERGER


See attached.
Exhi bit 4.1
    NOTICE: THE SIGN ATURE TO THIS ASSIGNMENT MUST CORRESPON D WITH THE NAME AS WRITTEN UPON THE FACE OF
THE CERTIFICATE IN EVERY PARTIC ULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY C HAN GE WHATEVER.

      The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written
out in full according to applicable laws or regulations:

          TEN COM        - as tenants in common                                 UNIF GIFT MIN AC T
                                                                                -         Custodian
                                                                                                            (Cust)                (Min
                                                                                or)
          TEN ENT        - as tenants by the entireties                         under Uniform Gifts to Minors Act
                                                                                                                        (State)
          JT TEN         - as joint tenants with right of survivorship and not
                         as tenants in common
                         Additional abbreviations may also be used though not in the above list

For value received          hereby sell, assign and transfer unto

PLEASE INSERT SOC IAL SECURITY OR OTHER
IDEN TIFYIN G NUMBER OF ASSIGNEE




                 (PLEASE PRIN T OR TYPEWRITE NAME AN D ADDRESS INCLUDIN G POSTAL ZIP C ODE OF ASSIGNEE)




                                                                                                                                           Shares
represented by the within Certificate, and do hereby irrevocably constitute and appoint
                                                                                                                                         Attorney
to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises.

     Dated
                   In presence of
                                                 ___________________________________
______________________________

THE S ECURITIES REPRES ENT ED B Y THIS CERTIFICATE HAVE NOT B EEN REGIS TERED UNDER THE S ECURITIES
ACT OF 1933, AS AMENDED (THE ‗ACT‘), AND MAY NOT B E SOLD OR TRANS FERRED IN THE ABS ENCE OF AN
EFFECTIVE REGIS TRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGIS TRATION THER EUND ER.

THE CORPORATION WILL FURNIS H TO ANY S TOCKHOLDER, UPON REQUES T AND WITHOUT CHARGE, A
STATEMENT OF THE POWERS , DES IGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR S ERIES T HER EOF AUTHORIZED TO B E ISSUED AND THE
QUALIFICATIONS, LIMITATIONS OR RES TRICTIONS OF S UCH PREFER ENCES AND/OR RIGHTS.
                    Exhi bit 4.2

    NCI, Inc.

2005 Performance
  Incenti ve Plan

     1 of 17
                                                                    NCI, INC.

                                                 2005 PERFORMANCE INCENTIVE PLAN

SECTION 1 – PURPOS E; DEFINITIONS

     The name of the Plan is the NCI, Inc. 2005 Performance Incentive Plan (the ―Plan‖). The Plan is intended to provide an additional means
for NCI, Inc. and its Related Entities (the ―Co mpany‖) to attract and retain key personnel, including senior executives, directors, managers and
technical staff upon whose judgment, init iative and efforts the Co mpany depends for the successful conduct of its business and to encourage
and enable such persons to acquire a proprietary interest in the Co mpany.

           For purposes of the Plan, the fo llo wing terms are defined as set forth below:

           a.      “Annual Incentive Award” means an Incentive Award made pursuant to Section 5(a)(v) with a Performance Cycle of one
                   year or less.

           b.      “Awards” mean grants under this Plan of Incentive Awards, Stock Options, Stock Appreciat ion Rights, Restricted Stock or
                   Other Stock-Based Awards.

           c.      “Board” means the Board of Directors of the Co mpany.

           d.      “Cause” shall, with respect to any Participant, have the equivalent meaning (or the same meaning as ―cause‖ or ―for
                   cause‖) set forth in any emp loyment agreement between the Part icipant and the Co mpany or a Related Entity or, in the
                   absence of any such agreement, such term shall mean (i) the failure by the Participant to perform his or her duties as
                   assigned by the Co mpany (or a Related Entity) in a reasonable manner, (ii) any violat ion or breach by the Participant of his
                   or her employ ment agreement with the Co mpany (or a Related Entity), if any, (iii) any vio lation or breach by the Participant
                   of his or her non-co mpetition and/or non-disclosure agreement with the Co mpany (or a Related Entity), if any, (iv) any act
                   by the Participant of dishonesty or bad faith with respect to the Co mpany (or a Related Entity), (v) chronic addiction to
                   alcohol, drugs or other similar substances affecting the Participant’s work performance, or (vi) the commission by the
                   Participant of any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Co mpany. The good faith
                   determination by the Co mmittee of whether the Participant’s Continuous Service was terminated by the Company for
                   ―Cause‖ shall be final and binding for all purposes hereunder.

           e.      “Code” means the Internal Revenue Code of 1986, as amended fro m time to time, and any successor thereto.

                                                                      2 of 17
f.   “Commission” means the Securit ies and Exchange Co mmission or any successor agency.

g.   “Committee” means the Co mpensation Committee of the Board or such other committee as may be designated the by the
     Board to ad min ister the Plan.

h.   “Common Stock ” or “Stock” means the Class A Common Stock, par value $.01 per share, of the Co mpany.

i.   “Company” means NCI, Inc., a corporation organized under the laws of the State of Delaware, or any successor thereto.

j.   “Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such
     person’s capacity as a director) who is engaged by the Company or any Related Entity to render consulting or advisory
     services to the Co mpany or such Related Entity.

k.   “Continuous Service” means uninterrupted provision of services to the Co mpany or any Related Entity in any capacity of
     Emp loyee, Director, or Consultant. Continuous Service shall not be considered to be interrupted in the case of (i) any
     approved leave of absence, (ii) t ransfers among the Co mpany, any Related Entit ies, in any capacity of Emp loyee Director,
     or Consultant, or (iii) any change in status as long as the individual remains in the service of the Co mpany or a Related
     Entity in any capacity of Employee, Director, or Consultant (except as otherwise provided in the Award agreement). At
     such time as an entity ceases to be a Related Ent ity, an interruption of Continuous Service shall occur with respect to
     Participants whose Continuous Service is attributable solely to service with such entity. An approved leave of absence shall
     include sick leave, military leave, or any other authorized personal leave.

l.   “Director” means a member of the Board or the board of directors of any Related Entity.

m.   “Eligible Persons” means each Executive Officer o f the Co mpany (as defined under the Exchange Act) and other officers,
     Directors and Employees of the Co mpany or of any Related Entity, and Consultants with the Co mpany or any Related
     Entity. An Emp loyee on leave of absence may be considered as still in the emp loy of the Co mpany or a Related Entity for
     purposes of eligibility for part icipation in the Plan.

n.   “Employee” means any person, including an officer, who is an employee of the Co mpany or any Related Entity. Service as
     a director to the Co mpany or a Related Entity shall not be sufficient to constitute ―employ ment‖ by the Co mpany or any
     Related Entity.

                                                      3 of 17
o.   “Exchange Act” means the Securities Exchange Act of 1934, as amended fro m t ime to t ime, and any successor thereto.

p.   “Fair Market Value” of a share of the Stock on any given date means the fair market value of a share of Stock determined
     in good faith by the Co mmittee by application of a reasonable valuation method; provided, however, that unless otherwise
     determined by the Co mmittee (i) if the Stock is admitted to quotation on the NASDAQ, the Fair Market Value on any given
     date shall be the average of the highest bid and lowest asked prices of the Stock reported for such date or, if no b id and
     asked prices were reported for such date, for the last day preceding such date for wh ich such prices were reported, or (ii) if
     the Stock is ad mitted to trading on a national securities exchange or the NASDA Q National Market, the Fair Market Value
     on any date shall be the closing price reported for the Stock on such exchange or system for such date or, if no sales were
     reported for such date, for the last date preceding the date for which such a sale was reported.

q.   “Incentive Award” means any Award that is either an Annual Incentive Award or a Lo ng-Term Incentive Award.

r.   “Incentive Stock Option” means any Stock Option that complies with Section 422 of the Code and is not intended by the
     Co mmittee to be a Non-Qualified Stock Option.

s.   “Long-Term Incentive Award” means an Incentive Award made pursuant to Section 5(a)(v) with a Performance Cycle o f
     more than one year.

t.   “Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

u.   “Other Stock -Based Award” means an Award made pursuant to Section 5(a)(iv).

v.   “Parent” shall mean any corporation (other than the Co mpany), whether now or hereafter existing, in an unbroken chain of
     corporations ending with the Co mpany, if each of the corporations in the chain (other than the Company) owns stock
     possessing 50% or more of the comb ined voting power of all classes of stock in one of the other corporations in the chain.

w.   “Participant” means a person who has been granted an Award under the Plan wh ich remains outstanding, including a
     person who is no longer an Eligib le Person.

x.   “Performance Cycle” means the period selected by the Co mmittee during which the perfo rmance of the Co mpany or any
     subsidiary, affiliate or unit thereof or any individual is measured for the purpose of determin ing the extent to which an
     Award subject to Performance Goals has been earned.

                                                       4 of 17
y.    “Performance Goals” mean the objectives for the Co mpany or any subsidiary or affiliate or any unit thereof or any
      individual that may be established by the Committee for a Performance Cycle with respect to any performance -based
      Awards contingently awarded under the Plan. The Performance Goals for Awards that are intended to constitute
      ―performance-based‖ compensation within the meaning of Section 162(m) of the Code shall be based on one or more of the
      following criteria: specified levels of o r increases in the Company ’s or a business unit’s return on equity, earnings per share,
      total earnings, earnings growth, return on capital, return on assets, economic value added, earnings before interest and taxe s,
      earnings before interest, taxes, depreciat ion and amort ization, sales growth, gross margin return on investment, increase in
      the Fair Market Value of the shares, share price (including but not limited to growth measures and total shareholder return),
      net operating profit, cash flow return on investments (which equals net cash flow divided by total capital), internal rate of
      return, increase in net present value or expense targets.

z.    “Plan” means this NCI, Inc. 2005 Performance Incentive Plan, as amended fro m time to time.

aa.   “Publicly Held Corporation” shall mean a publicly held corporation as that term is used under Section 162(m)(2) of the
      Code.

bb.   “Related Entity” means shall mean any Parent or Subsidiary, and any business, corporation, partnership, limited liability
      company or other entity in wh ich the Co mpany, a Parent or a Subsidiary holds a substantial ownership interest, direct ly or
      indirectly.

cc.   “Restricted Period” means the period during wh ich an Award may not be sold, assigned, transferred, pledged or otherwise
      encumbered.

dd.   “Restricted Stock ” means an Award of shares of Co mmon Stock pursuant to Section 5(a)(iii).

ee.   “Spread Value” means, with respect to a share of Co mmon Stock subject to an Award, an amount equal to the excess of the
      Fair Market value, on the date such value is determined, over the Award ’s exercise or grant price, if any.

ff.   “Stock Appreciation Right” or “SAR” means a right granted pursuant to Section 5(a)(ii).

gg.   “Stock Option” means an option granted pursuant to Section 5(a)(i).

hh.   “Subsidiary” means mean any corporation (other than the Company), whether now or hereafter existing, in an unbroken
      chain of corporations beginning with the Co mpany, if each of the corporations other that the last

                                                         5 of 17
                   corporation in the unbroken chain owns stock possessing 50% or more o f the total co mbined voting power of all classes of
                   stock in one of the other corporations in such chain.

            ii.    “Ten Percent Stockholder” means a person owning more than ten percent (10%) of the total co mbined voting power of all
                   classes of stock of the Co mpany or a Parent or Subsidiary. A person shall, in accordance with Section 424(d) of the Code,
                   be considered to own any voting stock owned (directly or indirectly) by or for h is brothers, sisters, spouse, ancestors and
                   lineal descendants and any voting stock owned (directly or indirectly) by or for a corporation, partnership, estate, trust or
                   other entity shall be considered as being owned proportionately by or for its stockholders, partners or beneficiaries.

SECTION 2 – ADMINIS TRATION

       (a) Authority of the Committee. The Plan shall be ad ministered by the Co mmittee. At any time that the Co mpany is a Publicly Held
Corporation, (i) the me mbership of the Co mmittee shall be constituted so as to comply with the then applicable requirements for
―non-employee directors‖ under Rule 16b-3 of the Exchange Act, (ii) to the extent required by the rules of the exchange or market on which the
Co mpany’s Stock is listed or traded, ―independent‖ within the mean ing of such rules; and (iii) at such times as an Award under the Plan by the
Co mpany is subject to Section 162(m) of the Code (to the extent relief fro m the limitation of Section 162(m) o f the Code is sought with respect
to Awards and administration of the Awards by a committee of ―outside directors‖ is required to receive such relief) ―outside directors‖ within
the meaning of Section 162(m) of the Code. The Co mmittee shall have the authority, in eac h case subject to and consistent with the provisions
of the Plan, to select Elig ible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of, and
all other matters relating to Awards, prescribe Award agree ments (which need not be identical for each Participant) and rules and regulations
for the admin istration of the Plan, construe and interpret the Plan and Award agreements and correct defects, supply omission s or reconcile
inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. In exercising any discretion granted to the Co mmittee under the Plan or pursuant to any Award, th e Co mmittee shall
not be required to follo w past practices, act in a manner consistent with past practices, or treat any Elig ible Person in a manner consist ent with
the treatment of other Eligib le Persons.

      (b) Manner of Exercise o f Committee Authority. Unless otherwise determined by the Board, any action of the Co mmittee shall be final,
conclusive and binding on all persons, including the Co mpany, its Related Entities, Participants, Beneficiaries, transferees under Section 9
hereof, or other persons claiming rights fro m or through a Part icipant, and stockholders. Except as otherwise provided in this Plan, the exp ress
grant of any specific power to the Co mmittee, and the taking of any action by the

                                                                       6 of 17
Co mmittee, shall not be construed as limiting any power or authority of the Co mmittee. The Co mmittee may delegate to officers or managers
of the Co mpany or any Related Entity, or co mmittees thereof, the authority, subject to such terms as the Committee sha ll determine, (i) to
perform ad ministrative functions, (ii) with respect to Participants not subject to Section 16 of the Exchange Act, to perform such other
functions as the Committee may determine, and (iii) with respect to Participants subject to Sectio n 16, to perfo rm such other functions of the
Co mmittee as the Co mmittee may determine to the extent performance of such functions will not result in the loss of an exempt ion under Rule
16b-3 otherwise available for transactions by such persons, in each cas e to the extent permitted under applicable law. The Co mmittee may
appoint agents to assist it in ad ministering the Plan.

     (c) Board’s Authority. Except as otherwise provided in this Plan, the Board may exercise any power or authority granted to the
Co mmittee under this Plan. During the period that the Company is a Publicly Held Corporation, the Board shall not exercise any powe r or
authority of the Co mmittee if and to the extent the Board deems it necessary or advisable to comply with Rule 16b -3 of the Exc hange Act or
Code Section 162(m).

      (d) Binding Decisions. Any and all determinations by the Committee, including, without limitation, any findings of fact or interpretation
or construction of any provision of the Plan or any Award agreement, shall be fina l and binding on all persons, unless determined otherwise by
the Board. Any and all determinations of the Board, including, without limitation, any findings of fact or any interpretation s or construction of
any provision of the Plan or any Award agreement shall be final and binding on all persons, including the Co mmittee.

SECTION 3 – ELIGIB ILITY

      Participants in the Plan will be such officers, Directors, Emp loyees, and Consultants of the Company or a Related Entity who are
responsible for or contribute to the management, growth, p rofitability or success of the Company and/or any Related Entity as are selected fro m
time to time by the Co mmittee, in its sole discretion. Directors who are not Emp loyees of the Co mpany are eligib le to participate in the Plan.

      (a) Incentive Stock Options. Incentive Stock Options may only be issued to Employees of the Co mpany or any Parent or Subsidiary of the
Co mpany. Incentive Stock Options may be granted to officers or Directors provided they are also Emp loyees of the Co mpan y. Payment of a
Director’s fee shall not be sufficient to constitute employ ment by the Corporation.

      (b) Non-Qualified Options. The provisions of Section 3(a) shall not apply to any option designated as a ―Non-Qualified Stock Option
Agreement‖ or which sets forth the intention of the parties that the option be a Non -Qualified Option, or wh ich otherwise does not satisfy the
requirements of an Incentive Stock Option under Section 422 of the Code.

                                                                     7 of 17
SECTION 4 – COMMON STOCK S UBJ ECT TO PLAN, PER PERSON LIMITATIONS

      (a) Shares Available and Limitations on Awards. Subject to adjustment as provided in Section 4(c) hereof, the maximu m aggregate
number of shares of Co mmon Stock that may be issued pursuant to Awards under th e Plan is Six M illion (6,000,000) shares which shall
increase by an additional one hundred fifty thousand shares (150,000) shares of Co mmon Stock as of August 1 of each year foll owing the
effective date of the Plan. If any Award shall terminate, exp ire, beco me unexercisable, or be cancelled as to any shares of Co mmon Stock, the
unissued or unpurchased shares of Common Stock (o r shares subject to an unexercised Stock Appreciation Right) wh ich were subject thereto
shall become availab le for future grant under the Plan. Shares of Co mmon Stock that have been actually issued under the Plan shall not be
returned to the share reserve for future grants under the Plan; except that shares of Co mmon Stock issued pursuant to an Awar d which are
repurchased or reacquired by the Co mpany at the original purchase price of such shares (including, in the case shares forfeited back to the
Co mpany, no purchase price), shall be returned to the share reserve for future grant under the Plan. Any shares of Co mmon Sto ck that are
withheld by the Co mpany as full or part ial payment of withholding taxes shall, to the extent permitted under the rules of the exch ange or
market on which the Co mmon Stock is listed or traded, be available for future grants under the Plan.

      (b) Li mitation on Awards. Subject to adjustment as provided in Section 4(c), no Participant shall be granted Awards representing more
than 750,000 shares in any one calendar year. In addit ion, the maximu m Incentive Awards which may be granted to a Participant in any one
calendar year is $1,000,000 for each fu ll or part ial year in the Performance Cycle applicable to such Award.

      (c) Ad justments to Awards. In the event of any changes in the outstanding shares of Common Stock after the effect ive date of the Plan by
reason of any share dividend or split, reorganization, recapitalization, merger, consolidation, spin -off co mbination or exchange of shares,
repurchase, liquidation, dissolution, or other corporate exchange, any large, special and non -recurring dividend or distribution to stockholders
or other similar corporate transaction, the Committee, in its ’ sole discretion, may make such substitution or adjustment, if any, as it deems to be
equitable and in order to preserve, without enlarging, the rights of Part icipants, as to (i) the nu mber and kind of shares which may be delivered
in connection with Awards granted thereafter, (ii) the nu mber and kind of shares by which annual per-person Award limitations are measured
under Section 4(b) or Sect ion 5 hereof; (iii) the number and kind of shares subject to or deliverable in respect of outstanding Awards, and (iv)
the exercise price, grant price or purchase price relating to any Award and/or make provision for pay ment of cash, other Awar ds or other
property in respect of any outstanding Award. In addition, the Co mmittee is authorized to make adjustments in the terms and conditions of, and
the criteria included in, Awards (including Incentive Awards, Annual Incentive Award, and Performance Goals relat ing thereto) in

                                                                      8 of 17
recognition of unusual or nonrecurring events (including, without limitat ion, events described in the preceding sentence, as well as acquisitions
and dispositions of businesses and assets) affecting the Co mpany, any Related Entity, or any business unit of the Co mpany or a Related Entity,
or the financial statements of the Co mpany or any Related Entity, o r in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of the Co mmittee’s assessment of the business strategy of the Co mpany,
any Related Entity, or business unit of the Co mpany or Related Entity thereof, performance of co mparab le organizations, economic and
business conditions, personal performance of a Participant, and any other circu mstances deemed relevant provided that no such a djustment
shall be authorized or made if and to the extent that such authority or the making of such adjustment would cause awards intended to qualify as
―performance-based compensation‖ under Code Section 162(m) and regulations thereunder to otherwise fail to so qualify.

       (d) Adjust ments in the Event of Certain Corporate Transactions. In the event of a proposed sale of all or substantially all of the
Co mpany’s assets or any reorganization, merger, consolidation, or other form o f corporate transaction in which the Co mpany does not s urvive,
or in which the shares of Co mmon Stock are exchanged for or converted into securities issued by another entity, then the successor or acquiring
entity or an affiliate thereof may, with the consent of the Committee or the Board, assume each outstanding Award or substitu te an equivalent
option or right. If the successor or acquiring entity or an affiliate thereof, does not cause such an assumption or substitution, then each Award
shall terminate upon the consummation of sale, merger, consolidation, or other corporate transaction.

SECTION 5 – AWARDS

       (a) General. The types of Awards that may be granted under the Plan are set forth below. Awards may be granted singly, in co mb ination
or in tandem with other Awards. To the extent provided by the Committee an Award shall be subject to attainment of one or mor e Performance
Goals.

           (i) STOCK OPTIONS. A Stock Option represents the right to purchase a share of Stock at a predetermined grant price. Stock
     Options granted under this Plan may be in the form of Incentive Stock Options or Non -Qualified Stock Options, as specified in the Award
     agreement. The term of each Stock Option shall be set forth in the Award agreement, but no Incentive Stock Option shall be exercisable
     more than ten years after the grant date. The exercise price per share of Co mmon Stock purchasable under an Incentive Stock O ption
     shall be not less than 100% of the Fair Market Value on the date of grant. The Co mmittee may not without the approval of the
     stockholders of the Co mpany lower the exercise price o f an outstanding Option, whether by amending the exercise price of the
     outstanding Option or through cancellation of the outstanding Option and reissuance of a replacement or substitute Option; provided that
     stockholder approval shall not be

                                                                     9 of 17
required for adjustments made in connection with the event, described in Sect ion 4(c) and (d). Subject to the applicable Award
agreement, Stock Options may be exercised, in whole o r in part, by giving written notice of exercise to the Co mpany specifyin g the
number of shares to be purchased. Such notice shall be acco mpanied by payment in full of the purchase price by certified or bank chec k
or such other instrument as the Company may accept (including a copy of instructions to a broker or bank acceptable to the Co mpany to
deliver pro mpt ly to the Co mpany an amount of sale or loan proceeds sufficient to pay the purchase price). As determined by the
Co mmittee, pay ment in fu ll or in part may also be made in the form of Co mmon Stock already owned by the optionee valued at t he Fair
Market Value on the date the Stock Option is exercised; provided, however, that such Common Stock shall not have been acquire d within
the preceding six (6) months upon the exercise of a Stock Option or stock unit or similar A ward granted under the Plan or any other plan
maintained at any time by the Co mpany or any Related Entity, unless otherwise determined by the Co mmittee. The Co mmittee shall
otherwise determine the time or times at which and the circu mstances under which a Stock Opt ion may be exe rcised in whole or in part
and the methods by which such exercise price may be paid or deemed to be paid, and the methods by or forms in which Stock wil l be
delivered or deemed to be delivered to Part icipants.

      (ii) STOCK APPRECIATION RIGHTS. An SA R represents the right to receive a payment, in cash, shares of Common Stock o r
both (as determined by the Co mmittee), equal to the Spread Value on the date the SAR is exercised. The grant price per share subject to
an SAR shall be set forth in the applicable Award agreement and shall be not less than 100% of the Fair Market Value on the date of
grant. Subject to the terms of the applicab le Award agreement, an SA R shall be exercisable, in who le or in part, at such time an d in
accordance with such rules as are provided in the Award agreement.

      (iii) RESTRICTED STOCK. Shares of Restricted Stock are shares of Co mmon Stock that are awarded to a Participant and that
during the Restricted Period may be forfeitable to the Co mpany upon such conditions as may be set forth in the applicable A ward
agreement. Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restricted Per iod, The
Restricted Period shall be no less than one year, unless otherwise determined by the Co mmittee. Except as provided in this subsection (iii)
and in the applicable Award agreement, a part icipant holding Restricted Stock shall have all the rights of a holder of Co mmon Stock,
including the rights to receive dividends and to vote during the Restricted Perio d. Div idends with respect to Restricted Stock that are
payable in Co mmon Stock shall be paid in the form of Restricted Stock.

     (iv) OTHER STOCK-BA SED AWARDS. Other Stock-Based Awards are Awards, other than Stock Options, SARs or Restricted
Stock, that are denominated in, valued in whole or in part by reference to, or otherwise based on or related to, Co mmon Stock , including,
without limitation, restricted share units and deferred shares, shares awarded as a bonus or in lieu of other rights to compensation,
convertible or exchangeable debt securities, other rights convertible or

                                                              10 of 17
     exchangeable into shares, purchase rights for shares, and Awards valued by reference to the book value of shares or the value of securities
     of or the performance of specified subsidiaries. The vesting, forfeiture, purchase, exercise, exchange or conversion of Other Sto ck-Based
     Awards granted under this subsection (iv) shall be on such terms and conditions and by such methods as shall be specified by the
     Co mmittee. Where the value of an Other Stock-Based Award is based on the Spread Value, the grant price for such an Award will be not
     less than 100% of the Fair Market Value on the date of grant.

         (v) INCENTIVE AWARDS. Incentive Awards are performance-based Awards that are denominated in U.S. currency. Incentiv e
     Awards shall either be Annual Incentive Awards or Long Term Incentive Awards.

      (b) Incentive Stock Option Restrictions. To the extent the aggregate Fair Market Value (determined as of the time of grant) o f the shares
of Stock with respect to which Incentive Stock Options granted under the Plan and any other plan of the Co mpany (and any Pare nt or
Subsidiary) become exercisable fo r the first time by an optionee during any calendar year exceed $100,000, the Options are not Incentive Stock
Options. If an Incentive Stock Option is granted to a person who is deemed to be a Ten Percent Stockholder, the exercise pric e per share shall
not be less than 110% o f the Fair Market Value of a share on the date of grant and the term of the Option shall not exceed five (5) years fro m
the grant date. Incentive Stock Options may be granted only to emp loyees of the Company or a Parent or Subsidiary. To the ext ent that any
Stock Option exceeds these restrictions, it shall constitute a Nonqualified Stock Option.

      (c) Awards granted under the Plan may, in the discretion of the Co mmittee, be granted either alone or in addition to, in tand em with, by
assumption of, or in substitution or exchange for, any other Award or any award granted under another plan of the Co mpany, any Related
Entity, or any business entity to be acquired by the Co mpany or a Related Entity or any other right of a Participant to receive payment fro m the
Co mpany or any Related Ent ity. Such additional, tandem, assumed, substitute or exchange Awards may be granted at any time. If an Aw ard is
granted in substitution or exchange for another Award or award, the Co mmittee shall require the surrender of such other Awar d or award in
consideration for the grant of the new Award, and notwithstanding any provision of the Plan (other than the maximu m nu mber of shares of
Co mmon Stock that may be issued under the Plan) the terms of such assumed, substitute or exchange awards s hall be as the Committee deems
appropriate. The Co mmittee may require payment of other consideration for Awards, including such amounts as may be required t o comply
with requirements under the applicable state Corporation Law upon the issuance of Restricte d Stock.

      (d) Cancellation of Options and SARs . Unless otherwise provided in the Award agreement, the Board, in its sole discretion, may at any
time, by giv ing written notice to the Participant, cancel any outstanding Option or SAR and instead pay to the Participant to whom the Option
or SAR was granted, or his estate if the Part icipant is deceased, an amount equal to the excess, if any, of (1) the Fair Market Value, determined
by the Board as of any date determined by the Board that is not more than

                                                                     11 of 17
one year prior to the date of the cancellation, of the shares with respect to which the Option or SAR otherwise would have be en exercisable as
of the effective date of the cancellat ion, over (2) the option price or grant price fo r such shares. Any determination of Fair Market Value by the
Board shall be b inding and conclusive on all parties unless shown to have been made in an arbitrary and capricious manner. Th e purchase price
shall, at the option of the Board, be payable in cash or in the form of the Co mpany’s promissory note payable in up to three (3) equal annual
installments commencing twelve (12) months after the cancellation date, together with interest on the unpaid balance thereof at the rate equal to
the prime rate of interest as quoted in the Wall Street Journal for the cancellat ion date. Notwithstanding the foregoing, no cancellat ion of an
outstanding Option or SAR shall be permitted if such cancellation would result in the applicat ion of Section 409A of the Code to such Option
or SAR.

      (e) Repurchase Rights. The Co mmittee shall have the discretion to grant Options that are exercisable for unvested shares of Common
Stock. Should the Opt ionee’s Continuous Service cease while holding such unvested shares, the Company shall have the right to repurchase, at
the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be e xercisable
(including the period and procedure for exercise and the appropriate vesting for the purchased shares) shall be established by the Co mmittee
and set forth in the Award agreement evidencing the Option.

SECTION 6 – PLAN AMENDMENT AND TERMINATION

       The Board may amend, alter, suspend, discontinue or terminate the Plan or an outstanding Award without stockholder approval at any
time, prov ided, however, that with respect to any amendment that (i) increases the aggregate number of shares of Co mmon Stock that may be
issued under the Plan, (ii) changes the class of employees elig ible to receive Incentive Stock Options or (iii) stockholder approval is required by
the terms of any applicab le law, regulation, o r ru le, including, without limitation, any rule of exchange or market in which the Co mpany’s stock
is listed or traded, each such amendment shall be subject to the approval of the stockholders of the Co mpany with in twelve (12) months of the
date such amendment is adopted by the Board. Except as set forth in any Award agreement, no amendment or terminat ion o f the Plan or an
outstanding Award may materially and adversely affect an outstanding Award under the Plan without the Award recipient ’s consent, provided,
however, that an amend ment that may cause an Incentive Stock Option to become a Non -Qualified Stock Option, and any amendment that is
required to comp ly with the rules applicab le to Incentive Stock Options or to comply with applicable tax law requirements to provide a
Participant or the Co mpany with the intended tax consequences of an Award, shall not be treated as adversely affecting the rights of the
Participant.

                                                                     12 of 17
SECTION 7 – PAYMENTS AND PAYMENT DEFERRALS

      Payment of A wards may be in the form of cash, Stock, other Awards or co mbinations thereof as the Committee shall de termine, and with
such restrictions as it may impose. The Co mmittee, either at the time o f grant or by subsequent amendment, may require or per mit deferral of
the payment of Awards under such rules and procedures as it may establish. It also may provide th at deferred settlements include the payment
or credit ing of interest or other earnings on the deferred amounts, or the payment or credit ing of div idend equivalents where the deferred
amounts are denominated in Co mmon Stock equivalents. Notwithstanding the foregoing, no deferral of payment of an A ward shall be
permitted if such deferral would cause Section 409A of the Code to apply to the Award.

SECTION 8 – DIVIDENDS AND DIVIDEND EQUIVALENTS

      The Co mmittee, in its’ sole discretion, may provide that any Awards under the Plan earn div idends or dividend equivalents. Such
dividends or dividend equivalents may be paid currently or may be credited to an account for deferred payment to the Part icip ant. Any
crediting of d ividends or dividend equivalents may be subject to such restrictions and conditions as the Committee may establish, including
reinvestment in additional shares of Co mmon Stock o r Co mmon Stock equivalents.

SECTION 9 – TRANS FERAB ILITY

       Unless otherwise required by law, Awards shall not be transferable or assignable other than by will or the laws of descent and
distribution, and Options may be exercised during the lifetime of the Participant only by the Participant (or the Participant ’s guardian or legal
representative). The foregoing notwithstanding, the Committee, in its ’ sole discretion, may provide that any Award or right under an Award,
other than an Incentive Stock Option and any Award in tandem therewith, shall be transferable, including fo r purposes of estate-planning
transfers to a Participant’s immed iate family members (i.e., spouse, children, grandchildren, or siblings, and including the Participant), to trusts
for the benefit of such immediate family members, and to partnerships in which such family members and family trusts are the partners, or for
any other purpose deemed by the Co mmittee to be not inconsistent with the purposes of the Plan, and subject to such terms and conditions as
may be specified by the Co mmittee.

SECTION 10 – AWARD AGREEMENTS

      Each Award under the Plan shall be evidenced by a written agreement (which need not be signed by the recipient unless otherwise
specified by the Co mmittee) that sets forth the term conditions and limitations for each Award. Such terms may include, but are not limited to,
the term o f the Award, vesting and forfeiture provisions, dividend rights, transferability and the provisions applicable in t he event the
recipient’s employ ment terminates. The Co mmittee may amend an Award agreement, pro vided

                                                                      13 of 17
that no such amend ment may materially and adversely affect an Award without the Award recipient ’s consent, except as permit ted under
Section 6 hereof. Award agreements need not be identical.

SECTION 11 – UNFUNDED S TATUS OF PLAN

      It is presently intended that the Plan constitute an ―unfunded‖ plan for incentive and deferred co mpensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Co mmon Stock o r make
payments; provided, however, that, unless the Committee otherwise determines, the existence of such trusts or other arrangeme nts is consistent
with the ―unfunded‖ status of the Plan.

SECTION 12 – GEN ERAL PROVIS IONS

      (a) The Co mmittee may require each person acquiring shares of Co mmon Stock pursuant to an Award to represent to and agree with th e
Co mpany in writing that such person is acquiring the shares without a view to the distribution thereof. The certificates for such shares may
include any legend that the Committee deems appropriate to reflect any restrict ions on transfer. All cert ificates for shares of Common Stock or
other securities delivered under the Plan shall be subject to such stop -transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Co mmission, any stock exchange or quotation system upon which the
Co mmon Stock is then listed or quoted, as the case may be, and any applicable Federa l, state or foreign securities law, and the Co mmittee may
cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

      (b) Nothing contained in this Plan shall prevent the Co mpany or any Related Ent ity fro m adopting other or, additional co mpensation
arrangements for its Emp loyees, Directors or other persons eligible for A wards hereunder it.

       (c) The adoption of the Plan shall not confer upon any Employee any right to continued employ ment nor shall inter fere in any way with
the right of the Co mpany or any Related Entity to terminate the employ ment of any Emp loyee at any time.

      (d) No Employee, Participant or other person shall have any right to be granted an Award. The grant of an Award to a d irector shall not
confer any right on such Director to continue as a Director of the Co mpany, and the grant of an Award to a Consultant shall n ot confer any
right on such Consultant or a business entity of which such Consultant is a principal to continue as a Consult ant.

      (e) To the extent required by federal, state, local or foreign law, a Participant shall make arrangements satisfactory to the Comp any for the
satisfaction of any

                                                                     14 of 17
minimu m required statutory federal, state and/or local withholding obligations that arise by reason of the granting or exercise of an Award or
any sale of shares of Co mmon Stock acquired pursuant to Awards, which obligations may consist of any consideratio n and method of payment
acceptable to the Committee. In addit ion, tax withholding obligations that arise by reason of an Option exercise may be satis fied by the
Co mpany’s withholding of Shares subject to the Option but only in the amount up to the minimu m prescribed statutory withholding amount.
The ability to use shares as payment for any tax liab ility will be subject to any limitations or restrictions imposed under t he Sarbanes-Oxley Act
of 2002.

      (f) Neither the adoption of the Plan by the Board, its submission to the Stockholders of the Company for approval, nor the making of any
Award hereunder shall be construed as creating any limitations on the power of the Board or a co mmittee thereof to adopt such other incentive
arrangements as it may deem desirable, including incentive arrangements and awards which do not qualify under Code Sect ion 162(m).

       (g) The Co mpany shall not be required to issue fractional shares pursuant to the Plan. The Co mmittee may provide for eliminat ion of
fractional shares or the settlement of such fraction shares in cash.

      (h) Headings are given to the Sections of the Plan solely as a convenience to facilitate reference, and shall not be used in interpreting,
construing or enforcing any provision hereof. The reference to any stat ute, regulation, or other provision of law shall be construed to refer to
any amend ment to or successor of such provision of law. To the extent that any provision of the Plan would prevent any Option that was
intended to qualify under particu lar provisions of the Code fro m so qualify ing, such provision of the Plan shall be null and void with respect to
such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any
provision of the Plan.

      (i) In order to facilitate the making of any Award or co mbination of Awards under the Plan, the Co mmittee may provide for suc h special
terms fo r Awards to Part icipants who are foreign nationals, or who are employed by the Co mpany or any Related Ent ity outside of the United
States, as the Co mmittee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the
Co mmittee may approve such supplements to, or amendments, restatements or alternative vers ions of, the Plan as it may consider necessary or
appropriate for such purposes without thereby affecting the terms of the Plan, as then in effect, unless the Plan could have been amended to
eliminate such inconsistency without further approval by the Stockholders of the Co mpany.

SECTION 13 – INDEMNIFICATION OF THE B OARD

      In addition to such other rights or indemn ifications as they may have as Directors or otherwise, and to the extent allowed by ap plicable
law, the members of the

                                                                      15 of 17
Board and the Co mmittee shall be indemnified by the Co mpany against the reasonable expenses, including attorney fees, actually and
necessarily incurred in connection with the defense of any claim, action, suit or proceeding, or in connection with any appea l thereof, to wh ich
they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Award granted
under the Plan, and against all amounts paid by them in settlement thereof (provided the settlement is approved by independen t legal counsel
selected by the Co mpany or paid by them in satisfaction of a judg ment in any such claim, action, suit or proceeding, except in any case in
relation to the matters as to which it shall be ad judged in such claim, act ion, suit or proceeding that hew Board of Co mmittee member is liab le
for negligence or misconduct in the performance of his or her duties, provided that within thirty (30) days after institution of any such action,
suit or Board proceeding the member involved shall offer the Co mpany, in writing, the opportunity at its own expense to handle and defend the
same.

SECTION 14 – GOVERNING LAW

      The Plan and all determinations made and action taken pursuant to it, to the extent not otherwise governed by the Code or the securities
laws of the Un ited States, shall be governed by the laws of the State of Delaware and construed accordingly.

                                                                     16 of 17
SECTION 15 – EFFECTIVE DATE

     Subject to the approval of the Plan by the shareholders of the Company prior to twelve (12) months following the date of gran t of the first
Award hereunder, this Plan shall be deemed effect ive as of the date it is adopted by the Board. The Plan shall expire on the tenth (10 )
                                                                                                                                      th


anniversary of such effective date, subject to earlier termination by the Board but such expiration shall not affect the validity of outstanding
Options.

      The foregoing 2005 Performance Incentive Plan was duly adopted and approved by the Board of Directors on July 27, 2005 an d approved
by the shareholders of the Corporation effective September 1, 2005.

                                                                                                               /s/ Michele R. Cappello

                                                                                                     Michele R. Cappello
                                                                                                     Secretary of the Corporation

                                                                    17 of 17
                                                                                                                                        Exhi bit 4.3

                                                                    NCI, INC.

                                                INCENTIV E STOCK OPTION AGREEMENT

     This Incentive Stock Option Agreement (―Agreement‖) is made and entered into by and between NCI, INC., a Virg inia corporation (the
―Co mpany‖), and the emp loyee of the Co mpany named in Section 1 (b) (―Optionee‖).

      In consideration of the covenants set forth in this Agreement, the parties agree as follows:

1.    Opti on Informati on

      (a)   Date of Grant:
      (b)   Optionee:
      (c)   Nu mber of Shares:
      (d)   Exercise Price:

2.    Acknowledg ments

      (a)   Optionee is an employee of the Co mpany.

      (b) The Board of Directors (the ―Board‖ which term shall include an authorized co mmittee of the Board of Directors) and shareholders of
the Co mpany have heretofore adopted the NCI, Inc. 2005 Performance Incentive Plan (the ―Plan‖), pursuant to which this Option is being
granted.

      (c) The Board has authorized the granting to Optionee of a stock option which is intended to be an Incentive Stock Option (―Op tion‖) as
defined in Sect ion 422 of the Internal Revenue Code of 1986, as amended, (the ―Code‖) to purchase shares of common stock of the Co mpany
(―Stock‖) upon the terms and conditions hereinafter stated and pursuant to an exempt ion fro m registration under the Securities Act of 1933, as
amended (the ―Securities Act‖), provided by Rule 701 thereunder.

      (d) Except as otherwise provided herein, defined terms shall have those meanings as are provided for in the Plan.

3.    Shares, Price

      The Co mpany hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number o f
shares of Stock set forth in Sect ion 1(c) above (the ―Shares‖) for cash (or other consideration as is authorized under the Plan an d acceptable to
the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d) above (the ―Exercise Price‖).

4.    Term of Option; Continuati on of Empl oyment

       This Option shall exp ire, and all rights hereunder to purchase the Shares shall terminate, ten years fro m the Date of Grant. Th is Option
shall earlier terminate subject to Sections 5 ,7 and 8 of this Agreement upon, and as of the date of, the termination of Optionee’s Continuous
Service if such termination occurs prior to the end of the ten year period. Nothing contained in this Agreement shall confer upon Optionee the
right to the continuation of his or her emp loyment by the Co mpany or any Related Entity or to interfere with the right of the Company or any
Related Entity to terminate such
emp loyment or to increase or decrease the compensation of Optionee fro m the rate in existence at the date hereof.

5.    Vesting of Option

     Subject to the provisions of Sections 7 and 8 of this Agreement, this Opt ion shall become 100% vested as of the date this Agr eement
becomes fully executed, with the following restrictions:

      (a) Vol untary termi nation if Optionee should voluntarily terminate his emp loyment with the Co mpany, or a Related Entity, within 12
months fro m the date of this Option Agreement, th is Option shall terminate automatically and without notice as to all shares covered by this
Option. Should Opt ionee voluntarily terminate his employ ment with the Co mpany, or a Related Entity within months 12-24 fro m the date of
this Option Agreement, this Option shall auto matically and without notice terminate as to one -half of the shares covered by this Option.

     (b) Involuntary Termination if Optionee should be terminated ―for cause‖ as that term is defined by the Plan or by any emplo yment
agreement between the Optionee and the Co mpany or a Related Entity, or the Optionee terminates Continuous Service at any time following an
event which would be grounds for termination ―for cause,‖ this Option, shall automatically and without notice terminate as to all Shares
covered by this Option not previously exercised.

6.    Exercise

      The shares covered by this Option shall only become exercisable twe lve months after date of grant for 50% o f the shares and twenty -four
months after the date of grant for the remaining 50% o f the shares and upon the occurrence of one of the following events (ea ch individually an
―exercise event‖) whichever occurs first: (a) the Co mpany undergoes a Change in Control as that term is defined in the Plan, (b) the company
completes an underwritten public offering of the Stock (―IPO‖), (c) nine years elapse fro m the Date of Grant, or (d) the Board o f Directors of
the Co mpany approves the Optionee’s exercise of the Option. This Option shall be exercised by delivery to the Co mpany of (a) written notice
of exercise stating the number of Shares being purchased (in whole shares only) and such other informat ion set forth on the f orm of Notice of
Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such
other consideration as has been approved by the Board of Directors consistent with the Plan) and (c) if so required, a written in vestment
representation as provided for in Section 13 of this Agreement. This Option shall not be assignable or transferable, except by will o r by the
laws of descent and distribution, and shall be exercisable only by Optionee during his or her lifet ime.

7.    Death or Disability of Opti onee

      If the Opt ionee shall terminate fro m Continuous Service by reason of death or disability (defined for this purpose as a disab ility
qualifying the Opt ionee for benefits under the Co mpany’s employer-funded long-term disability plan or if no such plan applies,
Section 22(e)(3) of the Code), the vested Options shall terminate on the date which 12 months after the later of (i) the date of Optionee’s death
or termination for d isability or (ii) the date of an exercise event as described in Section 6, provided that the Option shall be subject to earlier
termination in accordance with this Agreement and the Plan. Until such termination, the Option may, to the extent that this O ption has not
previously been exercised by Optionee, be exercised by the Optionee, in the case of disability, or the Optionee ’s personal representative or the
person entitled to Optionee’s rights under this Agreement, in the case of death. The right to exercise the Option shall rema in subject to
Section 6 of the

                                                                         2
Agreement and the Shares received on exercise shall remain subject to the terms and restrictions of this Agreement.

8.    Retirement of Opti onee

      If the Opt ionee shall retire fro m Continuous Service on or after normal retirement age (defined under this Agreement as age 65), the
vested Options shall remain outstanding subject to termination as otherwise provided in this Agreement or the Plan, and the Optionee’s right to
exercise the Option shall remain subject to the terms of Sect ion 6.

9.    No Rights as Sharehol der

       Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Opt ion until the effective date
of issuance of Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for wh ich the record date
is prior to the date such stock certificate or certificates are issued except as provided in Section 10 of th is Agreement.

10.   Adjustments; Corporate Transacti ons

      In the event of certain changes in the Shares or corporate transactions, this Option is subject to the adjustments and terms provided in
Section 4(b ) and (c) of the Plan.

11.   Modi fication, Extension and Renewal of Opti ons

      The Board or Co mmittee, as described in the Plan, may mod ify, extend or renew this Option or accept its surrender (to the extent not yet
exercised) and authorize the granting of a new option in substitution for it (to the extent not yet exercised), subject at all times t o the Plan, Code
Section 422 and Virgin ia law. Notwithstanding the foregoing provisions of this Section 11, no mod ification shall, without the consent of the
Optionee, alter to the Optionee’s detriment or impair any rights of Optionee under this Agreement.

12.   Investment Intent; Restrictions on Transfer

      (a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acq uire the Shares
upon such exercise for the purpose of investment and not with a view to, or for resale in connection with, any dist ribution thereof, and that
upon the exercise of this Option in who le or in part, Optionee (or any person or persons entitled to exercise this Option und er the provisions of
Sections 7 of this Agreement) shall furnish to the Co mpany a written statement to such effect, satisfactory to the Company in form and
substance. If the Shares represented by this Option are registered under the Securities Act, either before or after the exerc ise of t his Option in
whole or in part, the Optionee shall be relieved of the investment representation and agreement and shall not be required to furn ish the
Co mpany with the written statement.

      (b) Unless and until the Shares represented by this Option are registered under the Securities Act, all certificates represen ting the Shares
and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to a ny stock split, share
reclassification, stock div idend or other similar cap ital event shall bear legends in substantially the fo llowing form:

                               ― THES E S ECURITIES HAVE NOT B EEN REGISTER ED OR OTHERWIS E
                               QUALIFIED UNDER THE S ECURITIES ACT OF 1933 (THE ―S ECURITIES

                                                                          3
       ACT‖) OR UNDER APPLICAB LE S ECURITIES LAWS OF ANY STATE. NEITHER THES E S ECURITIES NOR ANY
       INTEREST THER EIN MAY B E SOLD, TRANSFERRED, PLEDGED OR OTHERWIS E DISPOS ED OF IN THE AB SENCE
       OF REGIS TRATION UNDER THE S ECURITIES ACT OR ANY APPLICAB LE S ECURITIES LAWS OF AN Y STATE,
       UNLESS PURS UANT TO EXEMPTIONS THER EFROM‖.

       ―THE S HARES REPRES ENTED B Y THIS CERTIFICATE HAVE B EEN ISS UED PURS UANT TO THAT CERTAIN
       INCENTIV E STOCK OPTION AGREEMENT DATED (         ) B ETWEEN THE COMPANY AND THE OPTIONEE
       WHICH RES TRICTS TRANS FER OF THES E S HARES WHICH ARE THE S UBJ ECT TO REPURCHAS E B Y THE
       COMPANY UNDER CERTAIN CONDITIONS.‖

The certificates shall bear such other legend or legends as the Co mpany and its counsel deem necessary or appropriate. Approp riate stop
transfer instructions with respect to the Shares have been placed with the Co mpany ’s transfer agent.

13.   Effects of Certain Exercises and Dis position

      Optionee understands that although the Option is intended to qualify as an incentive stock option within the meaning of Section 422 of
the Code, the Co mpany does not guaranty that the exercise of the Option will qualify for incentive stock option treatment . The Optionee
understands that, except in the case of Optionee’s death, the exercise will not be given incentive stock option treatment if it does not occur
within three months following the Optionee’s termination of the employ ment fro m the Co mpany or a Subsidiary or within one year if such
termination is by reason of a total and permanent disability within the mean ing of Section 22(e)(3) of the Code.

      Optionee understands that if the exercise is treated as the exercise of an incentive stock option under Section 422 of the Code and if
Optionee disposes of shares acquired hereunder within 2 years after the date of this Option or within 1 year after the date o f issuance of such
shares to Optionee, (a ―Disqualify ing Disposition‖) the Optionee will be t reated for income tax purposes as having received ordinary inco me at
the time of the disposition of an amount generally measured by the difference between the purchase price and the fair market value of such
stock on the date of exercise, (but not in excess of the consideration received at the time of the disposition, if the disposition is a transaction on
which a loss if incurred would be recognized). Any additional gain or loss resulting fro m a Disqualifying Disposition will be lo ng or short-term
capital gain or loss depending on the Optionee’s holding period. The foregoing amount may be measured differently if Optionee at the time of
exercise is subject to the short-swing profit restrict ions of Section 16 of the Securit ies Exchange Act of 1934. Optionee agrees to notify the
Co mpany within 10 working days of any such disposition.

14.   Stand-off Agreement

      Optionee agrees that in connection with any registration of the Co mpany ’s securities under the Securities Act, and upon the request of the
Co mpany or any underwriter managing an underwritten offering of the Co mpany ’s securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any Shares held by Optionee (other than Shares included in the offering) without the prior written
consent of the Company or such managing underwriter, as applicable, for a

                                                                          4
period of at least six months following the effective date of reg istration of the offering. Additionally, in the event of the occurrence of an IPO,
all employees may be subject to certain black-out periods which restrict the ability to sell shares during those periods in accordance with
applicable SEC regulat ions.

15.   Restrictions While Stock is Not Registered

       (a) Restricted Shares . Any shares of Stock acquired upon exercise of this Option and (i) all shares of the Co mpany’s capital stock
received as a dividend or other distribution upon such shares, and (ii) all shares of capital stock or other securities of the Co mpany into which
shares may be exchanged or to which such shares shall be exchanged, whether through reorganiza tion, recapitalizat ion, stock split-ups or the
like, shall be subject to the provisions of this Section 15 at all t imes, and only at those times, that the shares of the Company ’s Co mmon Stock
or the shares into which they are converted are not registered u nder the Securities Exchange Act of 1934, as amended, (such times during
which the stock is not so registered sometimes hereinafter being referred to as the ―Restricted Period‖) and are during the Restricted Period
hereinafter referred to as the ―Restricted Shares‖.

      (b) No Sale or Pledge of Restricted Shares . Except as otherwise provided herein, Optionee agrees and covenants that during the
Restricted Period he or she will not sell, pledge or encu mber or otherwise transfer or d ispose of, and will not per mit to be sold, encumbered,
attached or otherwise disposed of or transferred in any manner, either voluntarily or by operation of law (all hereinafter co llectively referred to
as ―transfers‖), all or any portion of the Restricted Shares or any interest therein except in accordance with and subject to the terms of this
Section 15.

       (c) Vo luntary Transfer Repurchase Option . If Optionee desires to effect a voluntary transfer of any of the Restricted Shares during the
Restricted Period, Optionee shall first give written notice to the Company of such intent to transfer (the ―Offer Notice‖) specifying (i) the
number of the Restricted Shares (the ―Offered Shares‖) and the date of the proposed transfer (which shall not be less than fifty (50) days after
the giving of the Offer Notice), (ii) the name, address, and principal business of the proposed transferee (the ―Transferee‖), and (iii) the price
and other terms and conditions of the proposed transfer of the Offered Shares to the Transferee. The Offer Notice by Op tionee shall constitute
an offer to sell all, but not less than all, of the Offered Shares, at the price and on the terms specified in such Offer Not ice, to the Co mpany
and/or its designated purchaser. If the Co mpany desires to accept Optionee’s offer to sell, either for itself o r on behalf of its designated
purchaser, the Co mpany shall signify such acceptance by written notice to Optionee within fifty (50) days following the giving of the Option
Notice. Failing such acceptance, Optionee’s offer shall lapse on the fifty-first day follo wing the giving of the Option Notice. With such written
acceptance, the Co mpany shall designate a day not later than ten days following the date of giving its notice of acceptance o n which the
Co mpany or its designated purchaser shall deliver the purchase price of the Offered Shares (in the same form as provided in the Offer Notice)
and Optionee shall deliver to the Co mpany or its designated Purchaser, as applicable, all cert ificates evidencing the Offered Sh ares endorsed in
blank fo r transfer or with separate stock power endorsed in blank for transfer. The Offered Shares so transferred by Optionee to the Transferee
shall continue to be subject to all of the terms and conditions of this Section 15 (including without limitation paragraph (e) of th is Section 15)
and all certificates evidencing the Offered Shares endorsed in blank for t ransfer or with separate stock powers endorsed in b lank fo r transfer.
The Co mpany may in its sole and absolute discretion, notify the Optionee within fifty-one days following the giving of the Option Notice that
it does not permit the transfer of the Offered Shares to the Transferee pursuant to the terms and conditions set forth in the Offer Notice in wh ich
event any such transfer or attempted transfer by the Optionee to the Transferee shall be null and void. Upon the lapse without acceptance by the
Co mpany of Optionee’s offer to sell the Offered Shares, and unless the Company shall provide written notice to the Optionee within fifty -one
days follo wing the giving of the Option Notice that it will not permit the transfer of the Offered Shares to the Transferee

                                                                          5
pursuant to the terms and conditions set forth in the Option Notice, Optionee shall be free to transfer the Offered Shares no t purchased by the
Co mpany or the designated purchaser to the Transferee (and no one else), for a price and on terms and conditions which are no more favorable
to the Transferee than those set forth in the Offer Notice, for a period of thirty days thereafter, but after such period the restrictions of this
Section 15 shall again apply to the Restricted Shares. Co mpany shall have the right to require, as a condition of such transfer, that the
Transferee execute an agreement substantially in the form and content of the provisions of this Section 16, as well as any voting agreement
and/or shareholders agreement required by the Co mpany.

      (d) Involuntary Transfer Repurchase Option . Whenever, during the Restricted Period, Optionee has any notice or knowledge o f any
attempted, pending, or consummated involuntary transfer or lien or charge upon any of the Restricted Shares, whether by opera tion of law or
otherwise, Optionee shall g ive immediate written notice thereof to the Co mpany. Whenever the Company has any other notice or knowledge of
any such attempted, impending, or consummated involuntary transfer, lien, or charge, it shall give written notice thereof to the Optionee. In
either case, Optionee agrees to disclose forthwith to the Company all pert inent informat ion in his possession relating theret o. If during the
Restricted Period any of the Restricted Shares are subjected to any such involuntary transfer, lien, or charge, the Co mpany and its designated
purchaser shall at all t imes have the immediate and continuing option to purchase such of the Restricted Shares upon notice b y the Co mpany to
Optionee or other record holder at a p rice and on terms determined according to Section 15(e) below, and any of the Restricted Shares so
purchased by the Co mpany or its designated purchaser shall in every case be free and clear of such transfer, lien, or charge.

      (e) Repurchase Option After Termination of Continuous Service . Anything set forth in this Agreement to the contrary notwithstanding,
the Co mpany shall have the right (but not the obligation) to purchase or designate a purchaser of all, but not less than all, of the Restricted
Shares (including, without limitation, any Restricted Shares transferred pursuant to Section 15(i)) during the Restricted Period and after
termination of the Optionee’s Continuous Service fo r any reason, for the purchase price and on terms specified in Section 15(f) hereof. The
Co mpany may exercise its right to purchase or designate a purchaser of the Restricted Shares at any time (without any time li mitation) after the
Optionee’s termination of Continuous Service and during the Restricted Period. If the Co mpany chooses to e xercise its right to purchase the
Restricted Shares hereunder, the Co mpany shall give its notice of its exercise of this right to Optionee or h is or her legal representative
specifying in such notice a date not later than ten (10) days follo wing the date of giving such notice on which the Co mpany or its designated
purchaser shall deliver, o r be prepared to deliver, the check or pro missory note for the purchase price and Optionee or his o r her legal
representative shall deliver all stock certificates evidencing such Restricted Shares duly endorsed in blank for transfer or with separate stock
powers endorsed in blank fo r transfer.

       (f) Repurchase Price . For purposes of Sections 15(d) and (e) hereof, the per share purchase price of Restricted Shares shall be an amount
equal to the fair market value of such share, determined by the Board as of any date determined by the Board that is not more than one year
prior to the date of the event giving rise to the Co mpany’s right to purchase such Restricted Shares. Notwithstanding the foregoing, if the event
that gives rise to the Co mpany’s right to repurchase the Restricted Shares is the termination of the Optionee’s Continuous Service ―for cause‖,
(the per share purchase price of the Restricted Shares shall be an amoun t equal to the lesser of (i) the Fair Market Value of such share (as
determined in accordance with the previous sentence), and (ii) the original purchase price per share the Optionee paid for such Restricted
Shares. Any determination of Fair Market Value made by the Board shall be b inding and conclusive on all parties unless shown to have been
made in an arb itrary and capricious manner. The purchase price shall, at the option of the Co mpany, be payable in cash or in the form of the
Co mpany’s promissory note payable in up to three (3) equal annual installments commencing twelve (12) months after the acquisition by the
Co mpany (the ―Restricted Share Acquisition Date‖) of the Restricted Shares,

                                                                        6
together with interest on the unpaid balance thereof at the rate equal to the prime rate of interest as quoted in the Wall St reet Jo urnal on the
Restricted Share Acquisition Date.

      (g) Vot ing Rights . As a condition to Optionee’s exercise of any Option pursuant to this Agreement, the Co mpany may in its discretion
require that Optionee enter into a voting agreement that grants the Company the voting rights for all shares of Stock acquire d p ursuant to the
exercise of such Options, until the earlier of (i) ten (10) years fro m the date of exercise of the Option, or (ii) the end of the Restricted Period,
such voting agreement to be in such form as the Co mpany reasonably may request.

       (h) Acceptance of Restrictions . Acceptance of the Shares shall constitute the Optionee’s agreement to such restrictions and the legending
of his or her cert ificates with respect to the restrictions. Notwithstanding the restrictions, however, so long as the Option ee is the holder of the
Shares, or any portion of them, he or she shall be entitled to receive all d ividends declared on and to vote the Shares and to all o ther rights of a
shareholder with respect to the Shares.

      (i) Permitted Transfers . Notwithstanding any provisions of this Section 16 to the contrary, the Co mmittee, in its’ sole discretion, may
provide the transfer by gift any Shares subject to this Agreement, including for purposes of estate -planning, to the Optionee’s immediate family
members (i.e., spouse, children, grandchildren, or siblings, and including the partic ipant), to trusts for the benefit of such immediate family
members, and to partnerships in which such family members and family trusts are the partners, or for any other purpose deemed by the
Co mmittee to be not inconsistent with the purposes of the Plan, and subject to such terms and conditions as may be specified by the
Co mmittee; provided, that the permitted transferee or transferees shall hold the Shares subject to all the provisions of this Agreement (all
references to the Optionee in this Agreement shall in such cases refer to the permitted transferee); and provided further, that notwithstanding
any other provisions of this Agreement, a permitted transferee may not, in turn, make permitted transfers without the written consent of the
Optionee and the Company.

       (j) Drag-Along Rights . Notwithstanding any provision of this Agreement to the contrary, if at any time the Board of Directors of the
Co mpany approves a sale of the Co mpany while the Shares are Restricted Shares, Optionee agrees that he or she wi ll consent to and raise no
objections against the sale of the Co mpany, and if the sale of the Co mpany is structured as (i) a merger or consolidation of the Co mpany, or a
sale of all or substantially all of the assets of the Co mpany, Optionee will waive any dissenter’s rights, appraisal rights or similar rights in
connection with such merger, consolidation or asset sale, or (ii) a sale of all or substantially all of the Stock of the Co mpany, Optionee agrees to
sell all of Optionee’s shares of Stock in the sale of the Co mpany, on the terms and conditions approved by the Board of Directors. Optionee
agrees to take all necessary and desirable actions approved by the Board of Directors in connection with the consummat ion of t he sale of the
Co mpany, including giving written consent to the sale of the Co mpany and executing such agreements and such instruments and complet ing
other actions reasonably necessary to (x) provide customary representations, warranties, indemnit ies and escrow arrangements relating to such
sale of the company and (y) effectuate the allocation and distribution of the aggregate consideration upon the sale of the Co mpany.

       (k) S Elect ion . Optionee acknowledges that the Company has elected ―S‖ corporation status under the Internal Revenue Code of 1986, as
amended (the ―Code‖). Optionee agrees that he shall execute or cause to be executed any form or docu ment determined by the Co mpany or its
legal counsel to be necessary or appropriate to be executed in order to elect, reinstate, preserve, maintain and maximize the potential benefit o f,
the Co mpany’s ―S‖ corporation status. In addition, Opt ionee hereby agrees and covenants that he will not (i) transfer any shares of Stock to any
individual who is not a cit izen or resident of the Un ited States or to any entity that would cause the Company to cease to be eligible for ―S‖
corporation status under the Code, or (ii) perform or do (or neglect to perform or do) any other act which

                                                                           7
would or might have the effect of disqualifying the Co mpany’s ―S‖ corporation status under the Code. Optionee further agrees that the
Co mpany, upon the consent of a majority of the entire Board, may terminate the ―S‖ corporation elect ion. In such event, Optionee agrees that
he shall execute or cause to be executed any form or document determined by the Co mpany or its legal counsel to be necessary or appropriate
to be executed in order to terminate the Co mpany’s ―S‖ corporation status.

16.   Notices

       Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered u pon receipt
or, in the case of notices by the Company, 5 days after deposit in the U.S. mail, postage prepaid, addressed to Optione e at the address last
provided to the Company by Optionee for his or her employee records.

17.   Agreement Submi t to Plan; Applicable Law

      This Option is made pursuant to the Plan and shall be interpreted to comp ly with it. A copy of the Plan is availab le to Optionee, at no
charge, at the principal office of the Co mpany. Any provision of this Option inconsistent with the Plan shall be considered v oid and replaced
with the applicab le provision of the Plan. Th is Option has been granted, executed and delivered in the Co mmon wealth of Virg inia, and the
interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein.

IN WITNESS WHEREOF, the parties hereto have executed this Option.

NCI, INC.


                                                                   Date:
                            President

OPTIONEE



Optionee, by his or her signature hereon represents that the Optionee is unmarried.



By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing Incentive Stock Option
Agreement.



Spouse of Optionee

                                                                        8
                                                               EXHIB IT A

                                                                NCI, Inc.

                                                      OPTION EXERCIS E FORM


Date:



Attenti on:


The undersigned hereby elects to exercise the Options issued to hi m/her by NCI, Inc. (the ― Company‖) and dated              (the
―Options‖) and to purchase           shares of Common stock of the company ( the ―Shares‖) at an exercise price of              Dollars
($         ) per share or an aggregate purchase price of         Dollars ($          ) ( the ― Exercise Price‖. Pursuant to the terms of
the Opti on Agreement the undersigned has deli vered the Exercise Price herewith i n full in cash or          .

Please issue a certificate or certificates representing sai d shares of Common Stock in the name of the undersigned.


By:



Typed Name:



Address:


                                                                    9
                                                                                                                                    Exhi bit 5.1

                                             PILLSBURY WINTHROP SHAW PITTMA N LLP
                                                       1650 Tysons Boulevard
                                                         McLean, VA 22102

September 2, 2005

NCI, Inc.
11730 Plaza A merica Drive
Reston, VA 20190

           Re:      Up to 5,922,500 Shares of Class A Co mmon Stock to be Offered
                    Through Underwriters

Ladies and Gentlemen :

      We have acted as counsel for NCI, Inc., a Delaware corporation (the ―Co mpany‖), in connection with the issuance and sale of up to
5,572,500 shares of Class A Co mmon Stock of the Co mpany (the ―Shares‖), of which up to 5,572,500 Shares (the ―Co mpany Shares‖) are to be
issued and offered by the Company, and of which up to 350,000 Shares (the ―Stockholder Shares‖) are to be offered by certain selling
stockholders of the Co mpany (the ―Selling Stockholders‖), pursuant to the Underwriting Agreement (the ―Underwrit ing Agreement‖) proposed
to be entered into among the Co mpany, the Selling Stockholders, and Legg Mason Wood Walker, Incorporated, for themselves and as
representatives of the several Underwriters named in Schedule I thereto.

     In rendering this opinion, we have examined such documents and records, including an examination of orig inals or copies certified or
otherwise identified to our satisfaction, and matters of law as we have deemed necessary for purposes of this opinion. Base d upon the foregoing
and subject to the assumptions, qualifications and limitations stated herein, we are of the opinion that:

     1. The Stockholder Shares are duly authorized, and, upon issuance in accordance with the option grant agreements with respect to such
Stockholders Shares, will be valid ly issued, fully paid and nonassessable; and

     2. The Co mpany Shares are duly authorized and, when issued and delivered to the Underwriters pursuant to the terms of the Und erwriting
Agreement against payment of the consideration therefor as provided therein, will be validly issued, fully paid and nonassessable.
NCI, Inc.
Page 2

      Our examination of matters of law in connection with the opinions expressed herein h as been limited to, and accordingly our opinions
herein are limited to, the General Corporation Law o f the State of Delaware, including the applicable provisions of the Const itution of the State
of Delaware and the reported judicial decisions interpreting such law. We express no opinion with respect to any other law of the State of
Delaware o r any other jurisdiction.

       This opinion expressly assumes that resolutions of the Board of Directors of the Co mpany authorizing the Co mpany to issue, of fer, and
sell the Shares will have been adopted by the Board of Directors of the Co mpany, or the Pricing Co mmittee of the Board of Directors of the
Co mpany, and will be in fu ll force and effect at all t imes at wh ich the Shares are offered or sold.

      We hereby consent to the filing of this opinion as Exh ibit 5.1 to the Registration Statement No. 333-127006 on Form S-1 (the
―Registration Statement‖) filed by the Co mpany to effect registration of the Shares under the Securities Act of 1933 (the ―Act‖), and to the
reference to us under the caption ―Legal Matters‖ in the Prospectus constituting a part of such Registration Statement. In giv ing such consent,
we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Co mmission promulgated thereunder.

Very tru ly yours,

/s/ PILLSBURY WINTHROP SHAW PITTMA N LLP
                                                                                                                                       Exhi bit 10.3

                                                   TAX INDEM NIFICATION A GREEM ENT

     TAX INDEM NIFICATION A GREEM ENT, dated as of September 1, 2005 (the ―Agreement‖), between NCI, Inc., a Delaware
corporation (the ―Co mpany‖), and the persons listed on the signature page hereto (the ―Stockholders‖).

      WHEREAS, the execution and delivery by the Co mpany and the Stockholders of this Agreement is a condition to the closing of the
Public Offering (as hereinafter defined);

      WHEREAS, the Co mpany has been an ―S corporation‖ (as defined in section 1361(a)(1) o f the Code (as hereinafter defined)) for federal
tax purposes since August 2005 and the Predecessor (as hereinafter defined) was an S corporation for federal tax purposes sin ce November
1989.

      WHEREAS, the Co mpany and the Stockholders plan to terminate the S corporation status of the Company prio r to the closing of the
Public Offering and, as a result, the Co mpany will be a ―C corporation‖ (as defined in section 1361(a)(2) of the Code) beginnin g on the
Termination Date (as hereinafter defined); and

      WHEREAS, the Co mpany and the Stockholders wish to provide for the termination of this Agreement such that it has no effect should
the Public Offering not close.

      NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of wh ich are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:

                                                                     Article I

1.1 Definiti ons.

The following terms as used herein have the following meanings:

      ―Adjustment A mount‖ means the net increase in taxable inco me of a Stockholder or the Co mpany based on a Final Determination and
that gives rise to a payment pursuant to Section 3.3 or 3.4 hereo f.

     ―Affected Stockholder‖ means the Stockholder whose tax returns are adjusted in a manner wh ich gives rise to an obligation of t he
Co mpany (whether directly or as successor to the Predecessor) pursuant to Section 3.3 hereof.

      ―Blended Rate‖ means a percentage that equals the sum of the maximu m marg inal federal and state individual inco me tax rates for an
individual residing in the Co mmonwealth of Virgin ia (after giv ing effect to the full deductibility of state income taxes for federal income tax
purposes) in effect for the year o f the adjustment to a tax return of the Co mpany, the Predecessor
or a Stockholder that gives rise to a correlative ad justment to a tax return of a Stockholder, the Predecessor or the Company , res pectively. For
example, if an ad justment results in an amount due fro m a Stockholder hereunder, the year of the Co mpany ’s return or the Pred ecessor’s return,
as the case may be, that was adjusted will determine the Blended Rate to be used in computing the amount due.

      ―Closing Date‖ means the date on which the Public Offering closes.

      ―Code‖ means the Internal Revenue Code of 1986, as amended.

     ―C Short Year‖ means that portion of the Company’s year beginning on the Termination Date until and including the last day of the S
Termination Year.

      ―C Taxable Year‖ means any taxable year (or portion thereof) of the Co mpany during wh ich the Co mpany is a C corporation, including
the C Short Year.

      ―Final Determination‖ means the final resolution of any inco me tax liability (including all related interest and penalties) for a taxable
period. A Final Determination will result fro m the first to occur of: (i) the exp irat ion of thirty (30) days after acceptance by the Internal
Revenue Service (the ―IRS‖) of a Waiver of Restrict ions on Assessment and Collection of Deficiency in Tax and Acceptance of
Overassessment (the ―Waiver‖) on Federal Revenue Form 870 or 870-AD (or any successor comparab le form or the expiration of a co mparable
period with respect to any comparable agreement or form under the laws of any other jurisdiction), unless, within such period, t he applicable
taxpayer g ives notice of that taxpayer’s intention to attempt to recover all or part o f any amount paid pursuant to the Waiver by filing a timely
claim fo r refund; (ii) a decision, judg ment, decree or other order by a court of co mpetent jurisdiction that is not subject t o further jud icial
review (by appeal or otherwise) and has become final; (iii) the execution of a closing agreement under section 7121 o f the Code or the
acceptance by the IRS or its counsel of an offer in co mpro mise under section 7122 of the Code or the execution of a co mparabl e agreement
under the laws of any other jurisdiction; (iv) the exp irat ion of the time for filing a claim for refund or for instituting suit in respect of a claim for
refund disallowed in whole or part by the IRS or any other relevant taxing authority; (v) any other final disposition of the tax liability for such
period by reason of the expiration of the applicab le statute of limitations; or (vi) any other event that the parties hereto agree is a final and
irrevocable determination of the liab ility at issue.

     ―Predecessor‖ means NCI Information Systems, Inc., an Virginia corporation, wh ich became a wholly-o wned subsidiary of the Co mpany
on September 1, 2005.

      ―Public Offering‖ means the initial offering of shares of the Company’s Class A Co mmon Stock, $0.01 par value per share, pursuant to
the Registration Statement on Form S-1 orig inally filed by the Co mpany with the Securities and Exchange Co mmission on July 28, 2005.

    ―S Short Year‖ means that portion of the S Termination Year beginning on the first day of such taxable year and ending on the day
immed iately preceding the Termination Date.

                                                                            2
     ―S Taxab le Year‖ means any taxab le year (or portion thereof) of the Co mpany or the Predecessor, as applicable, during which t he
Co mpany, or the Predecessor, as applicable, was an S corporation, including the S Short Year.

        ―S Termination Year‖ means the fiscal year of the Co mpany that includes the Termination Date.

        ―Taxing Authority‖ means the IRS or any comparab le state or foreign taxing authority.

     ―Termination Date‖ means the date on which the S corporation status of the Co mpan y will terminate pursuant to section 1362(d ) of the
Code.

                                                                        Article II

2.1 Termination of S Corporation Status.

        The Co mpany and the Stockholders will cause the Company to terminate its S corporation status at least two (2) days prior to the Closing
Date.

2.2 Allocation Election.

     The Co mpany will elect pursuant to section 1362(e)(3) of the Code to allocate the items described in section 1362(e)(2)(A) o f t he Code
under ―normal tax accounting rules,‖ and the Stockholders will consent to such election and will provide the Co mpany with the statement of
consent described in section 1.1362-6(b) of the Treasury Regulations.

                                                                       Article III

3.1 Liability for Taxes Incurred by Stockhol ders during the S Short Year.

      Each Stockholder will (a) duly include, in his or its federal and state income tax returns, all items of income, gain, loss, deduction or
credit attributable to the S Short Year in a manner consistent with the Form 1120S and the schedules thereto (and the corresponding state
income tax forms and schedules) to be filed by the Co mpany with respect to such period, (b) file such returns no later than t he due date
(including extensions, if any) for filing such returns, and (c) pay any and all taxes required to b e paid fo r his or its taxab le year t hat includes the
S Short Year.

3.2 Liability for Taxes Incurred by the Company during the S Short Year and the C Short Year.

      The Co mpany will (a) be responsible for and effect the filing of all federal and state inco me tax returns for the Co mpany with respect to
the S Short Year and the C Short Year, (b) accurately prepare and timely file such Company returns, and (c) pay any and all t axes required to
be paid by the Company for the S Short Year and the C Short Year.

3.3 Company‘s Indemnification of Stockhol ders for Tax Liabilities.

     In the event of an adjustment to one or more tax returns of the Co mpany or of the Predecessor for an S Taxab le Year based on a Final
Determination that results in a net increase

                                                                            3
in taxable inco me of any Stockholder and a corresponding adjustment to one or more tax returns of the Co mpany for a C Taxab le Year based
on a Final Determination that results in a net decrease in taxab le income of the Co mpany, the Co mpany will pay to the Affected Stockholder an
amount equal to the Adjustment A mount mult iplied by the Blended Rate; provided, however, the total amount due under this Sect ion 3.3 will
not exceed the amount of refund (or an offset against tax that would oth erwise be due and payable) received by the Co mpany that is attributable
to the relevant adjustment. The Co mpany will pay the amount due to the Affected Stockholder within thirty (30) business days after the receipt
of notice fro m the Affected Stockholder that a payment is due by such party to the appropriate Taxing Authority.

3.4 Stockhol ders‘ Indemni ficati on of the Company for Tax Liabilities.

      (a) In the event of an adjustment of one or more tax returns of the Co mpany for a C Taxab le Year based on a Final Determination which
results in a net increase in taxable inco me of the Co mpany for a C Taxab le Year and a corresponding adjustment to one or more tax returns of
the Co mpany or of the Predecessor for an S Taxable Year based on a Final Determination whic h results in a net decrease in taxable inco me of
the Co mpany or of the Predecessor for the S Taxab le Year, each Stockholder agrees to contribute to the capital of the Co mpany his or its share
(based upon the relative amount of Co mpany stock or Predecessor stock, as the case may be, held by the Stockholder during the relevant time
period) of an amount equal to the Adjustment Amount mu ltiplied by the Blended Rate; provided, however, the total amount due u nder this
Section 3.4(a) will not exceed the amount of refund (or an offset against tax that would otherwise be due and payable) received by the
Stockholder that is attributable to the relevant adjustment.

      (b) If, based on a Final Determinat ion, the Co mpany or the Predecessor is deemed to have been a C corpo ration for federal, state or local
income tax purposes during any period in which it reported (or intends to report) its taxable inco me as an S corporation, eac h St ockholder,
subject to the limitations contained in Section 3.4(c), will contribute to the capital of the Co mpany his or its share (based upon the relative
amount of Co mpany stock or Predecessor stock, as the case may be, held by such Stockholder during the relevant time period) o f an amount
equal to the taxes, penalties and interest incurred by the Co mpany as a result of the Co mpany or the Predecessor being deemed to have been a
C corporation.

      (c) Notwithstanding the provisions of this Section 3.4, all pay ments required to be made by a Stockholder to the Co mpany purs uant to
Section 3.4(b ) will not exceed the total distributions to pay taxes made to the Stockholder by the Co mpany and/or the Prede cessor, as the case
may be, during the period beginning on the first day of the first open tax year of the Co mpany and/or the Predecessor, as the case may be, in
which the Co mpany and/or the Predecessor, as the case may be, is deemed to have been a C corpo rat ion and ending on the Termination Date.

       (d) Each Stockholder will contribute to the capital of the Co mpany any amounts calculated in accordance with this Section 3.4 within
thirty (30) business days after the first to occur of (i) the receipt of the refund fro m the appropriate Taxing Authority attributable to such
adjustment, and (ii) delivery o f a notice fro m the Co mpany that a payment is due by the Company to the appropriate Taxing Aut hority.

                                                                         4
                                                                      Article IV

4.1 Contests.

       Whenever a Stockholder or the Co mpany becomes aware of an issue that he or it believes could result in a Final Determination which
could reasonably be expected to give rise to a payment or indemn ification obligation under Article III, the Stockholder or th e Company (as the
case may be) will pro mptly g ive notice of the issue to the other parties hereto. The Affected Stockholder(s) and his or its representatives, at
their expense, will be entitled to participate in all conferences and meetings with or proceeding s before the IRS or any other Taxing Authority
with respect to the issue. The parties will consult and cooperate with each other in the negotiation and settlement or lit iga tion of any adjustment
that may give rise to any payment or indemnificat ion obligation under Article III. All decisions with respect to such negotiation and settlement
or litigation will be made by the parties after full, good faith consultation or pursuant to the dispute resolution provisions of Section 4.2.

4.2 Dispute Resolution.

     (a) If the parties hereto are, after negotiation in good faith, unable to agree upon the appropriate application of the provisions of this
Agreement, the controversy will be settled by an accounting firm of national reputation, other than the Company ’s independent public
accountants, chosen by the Company and the Affected Stockholder(s) (the ―Accounting Firm‖). The decision of the Accounting Firm with
respect thereto will be final, and the Co mpany or the Affected Stockholder(s) will immed iately pay any amou nts due under this Agreement
pursuant to such decision. The applicable expenses of the Accounting Firm will be borne one -half by the Co mpany and one-half by the
Affected Stockholder(s) unless the Accounting Firm specifies otherwise.

       (b) In the event that a Stockholder or the Co mpany receives notice, whether orally or in writing, of any federal, state, local o r fo reign tax
examination, claim, settlement, p roposed adjustment or related matter that may affect in any way the liab ility of the Stockho lder under this
Agreement, he or it will with in ten (10) days notify the other parties hereto in writ ing thereof; provided, however, that any failu re to give such
notice will not reduce a party’s right to indemn ification under this Agreement except to the extent of actual damage incurred by the other party
as a result of such failure. The party who would be required to indemnify ( the ―Indemn ifying Party‖) another party (the ―Indemn ified Party‖)
will be entitled in his or its reasonable discretion and at his or its sole expense to handle, control and compro mise or settle the defense of any
matter that may give rise to a liab ility under this Agreement; provided, however, that such Indemnifying Party fro m time to t ime provides
assurances reasonably satisfactory to the Indemnified Party that (i) the Indemnify ing Party is financially capable of pursuing such defense to its
conclusion, and (ii) such defense is actually being pursued in a reasonable manner.

4.3 Cooperati on.

       The parties will make available to each other, as reasonably requested, and to any Taxing Authority all information, records or documents
relating to any liability for taxes covered by this Agreement and will preserve such information, records and document s until the expiration of
any

                                                                           5
applicable statute of limitations or extensions thereof. The party requesting such information will reimburse the other party for all reasonable
out-of-pocket costs incurred in producing such information.

4.4 Costs.

     Except to the extent otherwise provided herein, each party will bear h is or its own costs in connection with this Agreement.

                                                                     Article V

5.1 Counterparts and Facsimile.

      This Agreement may be executed in several counterparts, each of which will be deemed to be an orig inal, but all of which coun terparts
collectively will constitute a single instrument representing the agreement among the parties hereto. Transmission of facs imile copies of an
executed counterpart of a signature page of this Agreement will have the same effect as delivery of the manually executed cou nterpart of this
Agreement.

5.2 Construction of Terms.

      Nothing herein expressed or imp lied is intended, or w ill be construed, to confer upon or give any person, firm or co rporation, other than
the parties hereto and their respective successors and permitted assigns, any rights or remed ies under or by reason of this Agreement.

5.3 Governing Law.

      This Agreement and the legal relat ions between the parties hereto will be governed by and construed in accordance with the substantive
laws of the Co mmonwealth of Virginia without regard to any choice of law rules.

5.4 Amendment and Modificati on.

     This Agreement may be amended, modified or supplemented only by a writing executed by all the parties hereto.

5.5 Assignment.

      Except by operation of law or in connection with the sale of all or substantially all the assets of a party, this Agreement w ill not be
assignable, in whole or in part, d irect ly or indirectly, by any Stockholder without the written consent of the Co mpany or by the Co mp any
without the written consent of the Stockholders. Any attempt to assign any rights or obligations arising under this Agreement without such
consent will be void. The provisions of this Agreement will be b inding upon and inure to the benefit of, and be enforceable b y, the parties
hereto and their respective successors and permitted assigns.

                                                                         6
5.6 Interpretation.

      The title, article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of
the parties, and will not in any way affect the mean ing or interpretation of this Agreement.

5.7 Severability.

      In the event that any one or more of the provisions of this Agreement is held to be illegal, invalid or unenforceable in any respect, the
same will not in any respect affect the validity, legality or enforceability of the remainder o f th is Agreement, and the parties will use their best
efforts to replace such illegal, invalid or unenforceable provision with an enforceable p rovision approximat ing, to the exten t possible, the
original intent of the parties.

5.8 Entire Agreement.

     This Agreement embodies the entire agreement and understanding of the parties hereto in respect to the subject matter contain ed herein.
There are no representations, promises, warranties, covenants or undertakings other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties with respect to such subject matter.

5.9 Further Assurances.

      Subject to the provisions of this Agreement, the parties will acknowledge such other instruments and documents and take all o ther actions
that may be reasonably required in order to effectuate the purposes of this Agreement.

5.10 Wai vers.

      No failu re or delay on the part of any party in exercising any power or right under this Agreement will operate as a waiver thereof, nor
will any single or part ial exercise of any such right or power or any abandonment or discontinuance of steps to enforce such right or power
preclude any other or further exercise thereof or the exercise of any other right or power. No waiver of any provision of this Agreement nor
consent to any departure by the parties therefrom will in any event be effective unless it is in writing, a nd then such waiver or consent will be
effective only in the specific instance and for the purpose for which it was given.

5.11 Set-off.

     All pay ments to be made by any Stockholder under this Agreement will be made without set -off, counterclaim o r withholding, all of
which are expressly waived.

5.12 Change of Law.

      If, due to any change in applicable law or regulations or the interpretation thereof by any court or other governing body hav ing
jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement is impracticab le or impo ssible, the
parties will use their best efforts to find an alternative means to achieve the same or substantially the same results as are contemplated by such
provision.

                                                                           7
5.13 Notices.

       All notices under this Agreement will be valid ly given if in writing and delivered personally or sent by registered mail, pos tage prepaid to
any Stockholder at the address set forth below his or its name on the signature page to this Agreement or to the Co mpany at: NCI, Inc., 11730
Plaza A merica Drive, Reston, Virgin ia 20190, (703) 707-6900, Attention: Ch ief Financial Officer, or at such other address as either party may,
fro m t ime to time, designate in a written notice given in a like manner. Notice given by mail will be deemed delivered five calendar days after
the date mailed.

5.14 Termination.

      This Agreement will terminate and be void, as if it never had been executed, if the Closing Date does not occur on or before December
31, 2005.

                                                            [ Signature Page Follows ]

                                                                         8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

                                                                           NCI, INC.

                                                                           By:      /s/ Judith L. Bjornaas

                                                                           Name: Judith L. Bjornaas
                                                                           Title: Ch ief Financial Officer

                                                                           STOCKHOLDERS

                                                                             /s/ Charles K. Narang

                                                                           Charles K. Narang, in his individual capacity
                                                                           Address: c/o NCI, Inc..
                                                                           11730 Plaza A merica Drive
                                                                           Reston, Virginia 20190

                                                                           THE SHASHI K. NARA NG 2004 GRAT, UNDER
                                                                           TRUST A GREEM ENT DATED DECEM BER 29,
                                                                           2004

                                                                             /s/ Jonathan M. Forster

                                                                           By: Jonathan M. Forster
                                                                           Title: Trustee

                                                                           THE CHANDER K. NA RANG 2004 GRAT,
                                                                           UNDER TRUST A GREEM ENT DATED
                                                                           DECEM BER 29, 2004

                                                                             /s/ Jonathan M. Forster

                                                                           By: Jonathan M. Forster
                                                                           Title: Trustee

                                                             9
                                                                                                                                  Exhi bit 10.13

                                                  OPTION ASSUMPTION AGREEMENT

      THIS OPTION ASSUMPTION AGREEMENT (this ―Assumption Agreement‖), dated July 29, 2005, is entered into by and between
NCI, Inc., a Delaware corporat ion (―NCI Delaware‖), and Linda Allan (the ―Optionee‖).

      WHEREAS , NCI Informat ion Systems, Inc., a Virgin ia corporation (―NCI Virgin ia‖) and Optionee are party to that certain
Non-Statutory Stock Option Agreement, dated May 4, 2001, a copy of which is attached hereto as Exh ibit A , pursuant to which Optionee was
granted an option to purchase 250 shares of NCI Virginia ’s common stock, par value $0.01 per share (the ―NCI Virgin ia Co mmon Stock‖), at
an exercise price of $1.00 per share, which, by reason of a prior adjustment is currently an option to purchase 700,000 shares of NCI Virg inia
Co mmon Stock at an exercise price of $0.00036 per share (the ―Option Agreement‖);

      WHEREAS , NCI Delaware and NCI Virginia will consummate a series of transactions, as described on Exh ibit B hereto (collectively
referred to as the ―Reincorporation Transaction‖), pursuant to which NCI Virg inia will beco me a wholly owned subsidiary of NCI Delaware;

      WHEREAS , in connection with the Reincorporation Transaction, NCI Delaware has agreed to assume all of the issued and outstanding
options of NCI Virg inia; and

      WHEREAS , each option to purchase one share of NCI Virg inia Co mmon Stock issued by NCI Virginia shall be converted into an
option to purchase one share of Class A common stock of NCI Delaware (each, a ―NCI Class A Share‖) pursuant to NCI Delaware’s 2005
Performance Plan (the ―NCI Delaware Plan‖), substantially in the form attached hereto as Exhib it C ;

      NOW, THER EFORE , the parties agree that, in consideration of the mutual pro mises set forth in this Assumption Agreement, and as of
the effective time of the Reincorporation Transaction:

     1. Subject to the terms and conditions hereof, NCI Delaware hereby as sumes all rights and obligations of NCI Virginia with respect to the
Option Agreement, and Optionee acknowledges and accepts such assumption.

     2. The NCI Virginia Option is hereby converted into an option to purchase 700,000 NCI Delaware Class A Shares, a t an exercise price of
$0.00036 per share, subject to adjustment in accordance with the last paragraph of Section 13(c) of the Opt ion Agreement, on t he terms and
subject to the conditions set forth in the NCI Delaware Plan.

      3. Optionee hereby waives, releases and forever discharges NCI Virginia and NCI Delaware fro m the obligation set forth in the last
sentence of Section 2 of the Option Agreement regarding Optionee’s right to request NCI Delaware to purchase shares issuable upon exercise
of the Option Agreement, as assumed by NCI Delaware.

Option Assumption Agreement
     4. Optionee hereby waives, releases and forever discharges NCI Virginia and NCI Delaware fro m the obligation set forth in Sec tion 10 of
the Option Agreement regarding registration rights.

      5. Optionee hereby waives, releases and forever discharges NCI Virginia and NCI Delaware fro m any obligation to provide additional
shares or options pursuant to Sections 13(a) or (b) and the first paragraph of Section 13 (c) o f the Option Agreement; provid ed, that, the wavier,
release and discharge set forth in this paragraph 5 shall only beco me effective upon the closing of NCI Delaware’s in itial public offering of
Class A Shares under the Securities Act of 1933, as amended (the ―NCI IPO‖).

      6. Except as otherwise provided herein, the terms of the Opt ion Agreement shall remain in full force and effect; provided, that, to the
extent any term or condition of the Option Agreement is inconsistent with or conflicts with any term or condit ion of this Ass umption
Agreement or the NCI Delaware Plan, the term or condition of this Assumption Agreement or the NCI Delaware Plan shall con trol.
Notwithstanding any provision of this Assumption Agreement or the NCI Delaware Plan to the contrary, the parties acknowled ge and agree
that the provisions of Section 7 of the Option Agreement shall continue in full force and effect.

      7. Simultaneously herewith, Optionee is delivering a fully-executed lock-up letter in the form attached hereto as Exhibit D , which letter
shall only become effective on the closing of the NCI IPO. The part ies acknowledge and agree that Optionee may exercise her rights under the
Option Agreement to acquire Class A Shares immediately p rior to the NCI IPO in order to include such shares in that offering, and that NCI
Delaware, and not Optionee, will bear all of the fees , costs and expenses (including underwriting discounts and commissions, but expressly
excluding any applicable taxes) in connection with the offer and sale of such shares. The parties further acknowledge and agr ee that Optionee
may, subject to the terms and conditions of the lock-up letter, exercise her rights under the Option Agreement to acquire Class A Shares at any
time after the NCI IPO.

       8. The p rovisions of this Assumption Agreement are independent and severable. To the extent that any one provision is rendered
inoperative, or is contrary to law, the parties agree that, to the extent possible, all other provisions of the Assumption Ag reemen t shall be given
full force and effect.

      9. Th is Assumption Agreement shall be interpreted and construed under the laws of the Co mmon wealth of Virg inia without regard to its
conflicts of laws principles.

      10. Th is Assumption Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of w hich
together will constitute one and the same instrument.

                                                     [Signatures appear on foll owing page.]

                                                                          2

Option Assumption Agreement
     IN WITNESS WHEREOF , by signing below, the Optionee agrees to be bound by the terms of this Assumption Agreement.

LINDA ALLAN                                                     NCI, INC.

/s/ Linda Allan                                           By:       /s/ Charles K. Narang

                                                                Name:            Charles K. Narang

                                                                Title:           Chairman and CEO


                                                                3

Option Assumption Agreement
                                EXHIB IT A

                              Opti on Agreement

                                (See attached.)

                                      4

Option Assumption Agreement
                                                                 EXHIB IT B

                                                        Reincorporati on Transaction

NCI Virgin ia will beco me a wholly owned subsidiary of NCI Delaware as a result of the following transactions (collectively referred to as the
―Reincorporation Transaction‖):

NCI Delaware will form Acquisition, LLC, a Virgin ia limited liab ility co mpany (―Acquisition‖), as a wholly owned subsidiary.

Charles Narang will contribute each of his shares of NCI Virginia Co mmon Stock to Acquisition in exchange for one share of Class B common
stock of NCI Delaware (each, a ―NCI Delaware Class B Share‖) pursuant to a Share Exchange Agreement.

Acquisition and NCI Delaware will beco me parties to an Agreement and Plan of Merger, pursuant to which (1) NCI Virgin ia will merge with
Acquisition, with NCI Virgin ia being the surviving entity of such merger, and the existence of Acquisition terminating (the ―M erger‖), and (2)
each share of NCI Virgin ia Co mmon Stock issued and outstanding converting, by virtue of the Merger and without any action on the part of the
holder thereof, into a right to receive, upon surrender of the certificate representing such NCI Virg inia Co mmon Stock, one share of Class A
common stock of NCI Delaware (each, a ―NCI Delaware Class A Share‖), with all NCI Virginia Co mmon Stock o wned by NCI Virginia as
treasury stock being no longer outstanding, and automatically can celled and retired without payment of any consideration therefor.

Each NCI Delaware Class A Share will have the same rights and preferences as each NCI Delaware Class B Share, except that eac h NCI
Delaware Class A Share will be entit led to one vote and each NCI Delaware Class B Share will be entitled to ten votes and will be convertible
into one share of NCI Delaware Class A Share.

                                                                       5

Option Assumption Agreement
                                           EXHIB IT C

                              NCI Del aware‘s 2005 Performance Pl an

                                          (See attached.)

                                                6

Option Assumption Agreement
                               EXHIB IT D

                              Lock-Up Letter

                              (See attached.)

                                    7

Option Assumption Agreement
                                                                                                                                    Exhi bit 23.1

                                          Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption ―Experts‖ and to the use of our reports on the consolidated financial statements of
NCI, Inc. dated March 1, 2005 (except as to the Reincorporation Transaction described in Note 1, as to which the date is             , 2005), and
the financial statements of Scientific and Engineering Solutions, Inc. dated March 1, 2005, in A mend ment No. 1 to the Reg istration Statement
on Form S-1 (No. 333-127006) and related Prospectus of NCI, Inc. for the registration of shares of its common stock.

Ernst & Young LLP

McLean, VA

The foregoing consent is in the form that will be signed upon the completion of the Reincorporation Transactions of NCI, Inc . d escribed in
Note 1 to the financial statements.

/s/ Ernst & Young LLP
McLean, VA
August 31, 2005
                                                                                                                             Exhi bit 23.3

INPUT


                                                                                                               10790 Parkridge Boulevard
                                                                                                                                Suite 200
                                                                                                                       Reston, VA 20191
                                                                                                                      Tel (703) 707-3500
                                                                                                                      Fax (703) 707-6201
                                                                                                                         www.input.com


September 1, 2005

Steve,

INPUT authorizes Legg Mason permission to use both verbal and written information received fro m INPUT in NCI S -1 filing with the SEC.

Regards,

/s/ Sue Grothoff

Sue Grothoff
Executive Account Manager
INPUT
10790 Parkridge Blvd.
Reston, VA

sgrothoff@input.com
703-707-3625