Honesty and ServicE

2007 Annual Report Technology and Strategic Consulting Services and Solutions for Government OVERVIEW SRA International, INC.

Corporate Profile Vision SRA is a leading provider of technology and strategic SRA aspires to be the best company in the world, consulting services and solutions to clients in national by every measure — a company that creates real security, civil government, and health care and public value for its customers and employees by delivering health. SRA services include systems design, develop- high-quality technology and strategic consulting ser- ment, and integration; and outsourcing and managed vices and solutions; employs the best people, nurtures services. The Company also delivers business solu- them, and enables them to succeed; and steadfastly tions for contingency and disaster response planning, commits itself to an ethic of honesty and service. information assurance, business intelligence, environ- mental strategies, enterprise architecture, infrastruc- ture management, and wireless integration. Our staff of more than 5,200 talented and dedicated men and women serves clients from our headquarters in Fairfax, Virginia, and offices across the country. The SRA New York Stock Exchange symbol is SRX.

Total Revenue $ Millions

Any statements in this Annual Report about future expectations, plans, and prospects for SRA, including statements about the estimated value of the contracts and work to be performed, and other state- ments containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: our dependence on our contracts with federal government agencies for substantially all of our revenue; our dependence on our GSA schedule contracts and our position as a prime contractor on government-wide acquisition contracts to grow our business; our ability to attract and retain skilled employees; any reductions in or reallocations of the U.S. defense budget or the budgets for civil government agencies; the market price of the company’s stock prevailing from time to time; the nature of other investment opportunities presented to the company from time to time; the company’s cash flow from operations; and other factors discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2007. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this printing. We anticipate that subsequent events and developments will cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. 2007 Annual Report | 

Table of Contents Employees Featured on the Cover

Messages from the Chairman and the President/CEO...... 2 First Row (Left to Right): Jodi Wharff, Project Control Officer;Schirra Gray, Our Business...... 4 Senior Software Engineer; Steve Newburg-Rinn, Director, Information Assurance Annual Report on Form 10-K...... 25 Strategic Initiatives. Second Row: John Dewar, Information Assurance Analyst; and Corporate Officers...... 31 Gina Thansom, Business Operations Analyst. Third Row: Brian Michl, Technical Stockholder Information...... 32 Lead, Army Force Management System; Nyree Waters, Executive Assistant.

Financial Highlights SRA International, Inc. and subsidiaries • All dollar amounts are in thousands except diluted earnings per share FOR YEARS ENDED JUNE 30 2003 2004 2005 2006 2007 Revenue $450,375 $615,802 $881,770 $1,179,267 $1,268,872 Operating Incomea 38,257 56,180 80,015 96,967 92,825 Operating Income Percentage of Revenuea 8.5% 9.1% 9.1% 8.2% 7.3% Net Incomea 27,392 35,642 52,195 62,520 63,430 Net Income Percentage of Revenuea 6.1% 5.8% 5.9% 5.3% 5.0% Diluted Earnings Per Sharea,b .58 .65 .92 1.08 1.09 Diluted Sharesb 47,460 54,738 56,549 57,739 58,382 Total Interest-Bearing Debt 400 – – – – Stockholders’ Equity 283,015 339,268 429,092 533,297 625,455 Cash Flow from Operations 43,311 43,451 65,988 86,831 122,444 Number of Employees 2,638 3,358 4,177 4,963 5,201

a To provide a better comparison with our current results, years ended June 30, 2003, 2004 and 2005 have been presented above including the stock compensation expense and related tax effects associated with FAS 123R as if it was implemented July 1, 2002 rather than July 1, 2005. b Share and per share amounts have been adjusted to reflect a May 2005 two-for-one stock split.

Net Income ($ mil) Cash flow From diluted Earnings NUMBER OF Operations ($ MIL) Per sharea EMPLOYEES 5,201 4,963 $122.4 $1.09 $1.08 $63.4 $62.5 4,177 $.92 $52.2 $86.8 3,358 $.65 $66.0 2,638 $35.6 $.58 $27.4 $43.5 $43.3 03 04 05 06 07 03 04 05 06 07 03 04 05 06 07 03 04 05 06 07  | SRA International, Inc.

Message from The Chairman

This has been a year of transition for SRA International. Dr. Renato DiPentima, an executive in our company for twelve years and CEO for more than two, has retired. The new CEO is Dr. Stanton Sloane, a seasoned and highly successful executive from Lockheed Martin. At the same time, the market has changed. The wars in Iraq and Afghanistan have diverted funds that otherwise would have gone to our traditional markets. Nevertheless, I am optimistic over the long term that the markets will return and that SRA will resume its traditional process of gaining market share. Renny DiPentima has been a significant asset to our company. He served as president and chief executive officer of SRA from January 2005 through March 2007 and as president and chief operating officer prior to that. Before joining SRA in 1995, Renny compiled an excellent record in federal government service. He was deputy commissioner for systems at the Social Security Administration, overseeing and managing all information processing, data, and voice communication systems. He chaired the Federal Information Technology Acquisition Improvement team as part of the President’s National Performance Review initiatives, and later, he chaired the Industry Advisory Council CIO task force. Stan Sloane comes to SRA from Lockheed Martin Corporation where he has held the position of executive vice president for Integrated Systems and Solutions, which provides systems engineering services for information and intelligence systems that support the Department of Defense and other national security customers. Stan began his career as an officer in the Navy. H e joined General Electric Aerospace in 1984 and progressed through engineering, program management, and business development assignments in a variety of GE and subsequently Lockheed Martin businesses. Stan is wasting no time getting started. I am particularly impressed with his initiatives in marketing and sales and profit margin improvement. Over the longer term, he should be able to bring the company more engineering services work. I have been involved in electrical engineering and information technology for more than 50 years, first as a military officer, then as a senior civil servant, and for the past 29 years with SRA. During that long period, there have been many variations in federal government priorities caused by international tensions, wars, recessions, and evolving needs. The market is vast and hard to measure, but I believe it has grown almost every year. There are several reasons for this. First, information technology innovation has always accelerated, particularly electronics and software. This presents new opportunities to do things better, whether through improved weapon systems or better management of large, com- plex organizations. Second, the needs of our country have always increased because of population and economic growth. Third, virtually all political leaders emphasize efficient and effective government. Professional technical services companies like SRA can meet these needs by assisting military leaders and managers of civil agency systems. These market conditions seem likely to continue indefinitely. Therefore, the challenge for SRA is to continue to exploit these wonderful opportunities while enhancing our corporate values and culture which are based on the ethic of honesty and service.

Ernst Volgenau Chairman 2007 Annual Report | 

Message from the President & CEO

SRA delivered another strong year of operational and financial performance. We maintained our unbroken record of revenue growth and profitability and, most importantly, created value for our clients, employees, and stockholders while preserving and enhancing a culture based on honesty and service. Revenue increased by 8% from $1.18 billion to $1.27 billion. Net income for the year was $63 million, and diluted earnings per share were $1.09. We won $1.6 billion in new contract awards, increased our total backlog of signed business orders by 3% to $3.4 billion, and expanded our pipeline of opportunities by 42% to $18.9 billion. For the fiscal year, cash flows from operations totaled $122 million, or 1.9 times net income. Our balance sheet continues to support future growth, with over $212 million in cash and investments and no debt as of June 30, 2007.

New Business Highlights we continue to win significant work with new and long-term clients across a diverse client base. Highlights of our FY07 contract awards include: • A competitive task order to develop and maintain a Web-based supply chain management system for the Department of Agriculture (USDA). The new system represents the company’s largest enterprise resource planning implementation to date and will support all purchases for USDA Food Aid programs worldwide. • A recompete contract to continue delivering enterprise operations and security services for the nationwide network of the Army National Guard. SRA manages the communications infrastructure that connects the Army with Guard locations in all U.S. states and territories. • A competitive task order to provide strategy and execution support to the Department of Homeland Security Office for Interoper- ability and Compatibility to help improve local, tribal, state, and federal emergency preparedness and response. • A new contract to design, develop, and implement a software system for the Pension BenefitG uaranty Corporation to process payments for the pension plans it insures.

Helping Our Clients Achieve Mission Success we strive to create value for our clients by helping them to fulfill their missions through improvements in efficiency and enhanced service to citizens. Here are a few engagement highlights from this year: • SRA modernized a worldwide procurement system for the U.S. Agency for International Development, which provides foreign assistance to other countries. The Global Acquisition System supports the Web-based procurement process at USAID and features a real-time interface with the Agency’s financial system, providing senior managers with integrated reports to aid in decision-making. • The hyperspectral and synthetic radar imagery analysis we provide to the Army Space and Missile Defense Command is contrib- uting to enhanced force protection for coalition forces in combat zones. SRA analysts are also pioneering new technical analysis capabilities for homeland security, border security, and missile defense. • SRA delivers strategic consulting and program management support services to the Department of Homeland Security’s Disaster Management E-Gov Initiative, which develops tools and messaging standards to improve emergency response and recovery. This year, the program won an Excellence.Gov award, recognizing innovation and efficiency gains in ane Government program.

Our Employees SRA would not have enjoyed the success it did in 2007 without an outstanding team of employees. While competition for hiring and retaining talented personnel, particularly those holding security clearances, remains challenging, we were able to expand our workforce from 4,963 a year ago to over 5,200 at the end of FY07. we take great pride in our eighth consecutive appearance on FORTUNE magazine’s list of the “100 Best Companies to Work For.” The list is based on an evaluation of the policies and culture of each company and the opinions of the employees. We view our ongoing commitment to our people not only as good business, but also as the cornerstone of our culture and values.

Looking Ahead we are well positioned to continue delivering innovative solutions to our clients, accelerating the company’s growth, and enhancing stockholder value. As we enter fiscal year 2008, I would like to express my gratitude to our clients for their business, to our employees and board members for their hard work and dedication, and to our stockholders for their ongoing support and confidence.

Stanton D. Sloane President & Chief Executive Officer  | SRA International, Inc.

Our Business Overview

Since 1978, clients across the federal government legacy systems while enabling them to make a seam- have relied on SRA to support their mission-critical less transition to modern technology environments. programs. We sustain that reputation today, work- We work with leaders and their management teams ing with clients to improve productivity, reduce costs, to develop specific implementation plans that achieve transform services to the citizen, and focus on their the established strategies, effectively track and core missions. We provide information technology manage implementation efforts, and measure and and strategic consulting services and solutions to validate results. clients in three principal markets: national security (national defense and homeland security), civil gov- Systems Design, Development, and Integration — ernment, and health care and public health. Our services include project management, systems design, network and systems integration, data anal- ysis and integration, security engineering, software Our Services development, database design and development, Strategic Consulting — We help clients formulate and independent test and evaluation. We analyze business and execution plans to improve performance, system concepts and assess data and information cost effectiveness, and quality of service. We assess needs, define requirements, develop operational current operations, develop targeted strategies prototypes, and integrate complex mission-critical and plans for improvement, define key priorities and systems and solutions that comply with a client’s en- accountabilities, and design enterprise architectures terprise architecture. Based on client requirements, that capitalize on client investments in we may design custom-built systems; integrate and implement commercial off-the-shelf solutions, such

Velda Fleming Accounts Receivables Manager 2007 Annual Report | 

as those for supply chain management, enterprise resource planning, and case management; or com- bine both approaches using service-oriented archi- tecture principles and other industry best practices.

Outsourcing and Managed Services — SRA partners with clients to consolidate and modern- Chris Longe ize existing infrastructures, improve customer ser- Quality Assurance Director, vice, and reduce the total cost of operations through Civil Sector effective use of industry best practices and perfor- mance-based contracting methods. We also support clients with operations management services, some- times referred to as co-sourcing. Based on client needs, we may oversee their technical infrastruc- ture, manage their applications and networks, or op- erate their entire business processes in accordance with service-level agreements.

U.S. Department of Agriculture Web-Based Supply Chain Management System The Department of Agriculture (USDA) relies on a large network of suppliers, warehouses, distribution centers, and transportation channels to distribute commodities to over 30 million Americans and 280 million people abroad. This includes school lunch programs for children across the U.S. A Web-based supply chain management system designed and maintained by SRA will enable USDA to manage the many components of this supply chain more effec- tively. This performance-based contract, worth an estimated $90.5 million over five years if all options are exercised, represents our largest enterprise resource planning implementation to date. When fully operational, the system will feature com- mercial off-the-shelf products and software and help improve USDA’s ability to view the status of their food commodity requests at any stage of the order and fulfillment cycle, with improved demand and supply planning, an enhanced pro- curement process, reduction in order cycle times, timely and more accurate financial processing, and other customer relationship management areas to reduce costs for both USDA and its customers. The SRA team provides program management; requirements analysis; systems design, devel- opment, and integration; information security; operations and maintenance; and training. The U.S. General Services Administration awarded this contract to SRA in FY07.  | SRA International, Inc.

Our Business: National Security SRA has nearly 30 years of experience delivering end-to-end technology and strategic consulting ser- Defense vices to clients across the Department of Defense (DoD). We are playing a major role in transforming the U.S. military into a superior information-centric fight- ing force by designing, developing, integrating, and implementing complex systems in accordance with network-centric and service-oriented enterprise architectures. We are recognized for our subject matter expertise in logistics, transportation, acquisition, personnel, finance, and installation management.

In FY07, we were awarded a new contract to help the U.S. Marine Corps develop an integrated digital work environment for acquisition and life cycle sys- Mahtab Dabir tems management functions. The system developed by SRA will provide a secure and easily accessible Test Lead, Army Force common work environment for Marine Corps Systems Management System Command personnel to work collaboratively with oth- er internal and external stakeholders using consistent, automated business processes leveraging a fully inte- grated data environment. The SRA team is delivering a commercial off-the-shelf-based solution and providing

Army National Guard Enterprise Operations and Security Services SRA has managed and operated the enterprise operations center for GuardNet XXI, the Army National Guard’s (ARNG’s) enterprise network communications structure, since 2001. GuardNet XXI serves as the communication channel for data and video between the Department of the Army and the National Guard Bureau, encompassing 54 states, U.S. territo- ries, the National Capital Region, and the District of Columbia. The network delivers services to support command and con- trol, mobilization, readiness training, and distance learning. In 2006 SRA was awarded a new performance-based contract to continue support to the enterprise ARNG information technology (IT) environment. We man- age several critical enterprise ARNG IT services to achieve over 99.9 percent service availability. This includes wide area network services and other en- terprise systems such as Microsoft’s Active Direc- tory and Exchange Messaging, service desk, and international video operations. SRA provides network engineering, operations, and security; systems design, integration, implementation, and management; facility operations; equipment mainte- nance; and support for a 24x7x365 centralized service desk that receives, routes, and quickly resolves IT support requests from users across all of the states and territories. The team developed and has begun implementation of IT Infrastructure Library best practices to ensure performance targets are aligned with service availability, capacity, and responsiveness to service level objectives. 2007 Annual Report | 

requirements analysis, data architecture, systems der this contract help quickly deploy systems to satisfy engineering and integration, knowledge management, the nation’s security, defense, and business needs. and training services. We received over 20 new task order awards this fis- cal year to deliver services to support Army programs For 20 years SRA has supported the U.S. Trans- around the world. For example, the systems analysis portation Command (USTRANSCOM) in its mission and architecture development work we performed has to deliver transportation, sustainment, and distribution improved network infrastructure capabilities and will services to the nation’s warfighters. The range of ser- help develop a roadmap for future systems develop- vices we currently provide to Directorates across the ment for worldwide customers. Our information as- Command includes joint exercise program manage- surance services support the Army’s Communications ment, enterprise architecture and portfolio manage- Security Logistics Activity’s supply chain management ment, training, critical infrastructure protection, and initiatives. We continued our support for the Army’s data management. In FY07, we expanded our sup- command and control, computers, intelligence, sen- port with new contracts to design and execute table- sors, and reconnaissance systems development top exercises for contingency planning, and to identify at Fort Monmouth, New Jersey, with engineer- geographic information system technologies and best ing work for advance global positioning practices for resource management. system performance analysis.

In 2003, the Army Communications-Electronics Command (CECOM) selected Galaxy Scientific Corpo- ration (acquired by SRA in 2005) as a prime contractor on the Rapid Response (CR2) contract. The compre- hensive information technology services we deliver un-

Representative Clients Department of Defense • Air Mobility Command • Defense Information Systems Agency • Defense Logistics Agency • Defense Manpower Data Center • Department of the Air Force • Department of the Army • Department of the Navy • Joint Chiefs of Staff • Military Sealift Command • National Guard Bureau – Army National Guard • Office of the Secretary of Defense • Surface Deployment and Distribution Command • U.S. Army Reserves • U.S. Marine Corps • U.S. Transportation Command

Kevin Hayden Project Manager, Defense Threat Reduction Agency  | SRA International, Inc.

Our Business: National Security Command and Control, Communications C3I: and Intelligence

The broad range of services we deliver to national security, law enforcement, and intelligence agencies and organizations includes program management; research, systems analysis, and engineering; intelli- gence, surveillance, and reconnaissance; and coun- terintelligence and counterterrorism.

The SRA team’s work on the U.S. Air Force Flexible Access Secure Transfer Technology Evaluation (FAST TE) Project will help enhance coalition force interoper- ability and improve Joint Forces situational awareness and communications. The program management, acquisition planning, spectrum management, model- ing and simulation, and systems engineering services we provide would enable U.S. and NATO military units to exchange secure, real-time data, voice, and video over the air across hundreds of miles.

The U.S. Army Natick Soldier Research Devel- opment and Engineering Center’s Future Force Warrior Advanced Technology Demonstration, the research and development foundation for the Ground Soldier System, is enhancing the safety, mobility, and situational awareness capabilities of U.S. soldiers. SRA plays an integral role in this program through its work with the Air Force Re- Barton Bernales search Laboratory Human Effectiveness Director- Program Manager, IT High ate and Future Force Warrior engineers and sol- Performance Computing diers. For example, the leader system software and Development we are developing condenses a large volume of information into a manageable interface, improving situational awareness for field platoon leaders. We are also integrating existing and emerging technolo- gies, including speech recognition and the Air Force standard XML “Cursor on Target,” and helping to improve and augment ground operations to include route navigation planning, medical evacuation and remote physiological monitoring, unmanned ground sensor data management, and target prosecution and engagement.

The hyperspectral and synthetic imagery analysis we provide to the Army Space and Missile Defense Command is contributing to enhanced force protec- tion for coalition forces in combat zones. In addition, SRA analysts are pioneering new technical analysis capabilities for homeland security, border security, and missile defense. 2007 Annual Report | 

Representative Clients Law Enforcement Organizations and Department of Defense • Defense Advanced Research National Security Agencies Projects Agency GangNet® • Defense Information Systems Agency Violent gang-related crimes are a growing trend across the country, and solving • Department of the Air Force them is complicated by gang members’ mobility and growing realm of influence. • Department of the Navy Our GangNet database system is a browser-based investigative, analysis, and • Missile Defense Agency statistical resource used by law enforcement officials to record and track gang members and their activities. The system includes the individuals’ photos, street Department of Homeland Security names, addresses and known associates, along with gang hand signals • Coast Guard and images of their tattoos. The system is continuously updated with • Customs and Border Protection additional features, such as mapping and facial recognition. • Federal Emergency Management Agency • Immigration and Customs Enforcement GangNet is used by 7,500 law enforcement officers in 14 states • Preparedness Directorate (including cities such as Las Vegas, Los Angeles, and Minne- apolis); the Bureau of Alcohol, Tobacco, Firearms, and • Secret Service Explosives; the Department of Homeland Security’s • Transportation Security Administration Immigration and Customs Enforcement; and the Department of Justice Federal Bureau of Investigation. It is also being • Drug Enforcement Agency used in Canada. Investigators can use the solution’s collaboration and information shar- • Federal Bureau of Investigation ing capabilities across jurisdictions. • Office of Justice Programs • U.S. Trustees Program Intelligence Agencies State and local police, justice, and homeland security departments

Gordon Thigpen Deputy Project Manager, Missile Defense Agency 10 | SRA International, Inc.

Our Business Civil

Cliff Andrews Task Lead, Department of Justice, U.S. Trustees Program SRA is helping civil agencies across the federal gov- ernment take advantage of new technologies while focusing on their core mission to deliver high-quality services to citizens.

As the single systems integrator providing enter- prise-wide information technology (IT) infrastructure management services to the Federal Deposit Insur- ance Corporation (FDIC), SRA supports approximately 7,000 users at FDIC headquarters and 94 field offices nationwide. The innovative services we deliver to this client include program management; client and help desk support; data center and local-area network operations; information security operations; systems and telecommunications engineering and integra- tion support; and hardware/software procurement, distribution, and maintenance. Over the past year, we have led and supported key reengineering and process improvement initiatives — including desk- top refresh for users, year-end processing to meet legislative changes, and automated server builds — to simplify the infrastructure, improve customer service, and reduce costs.

The comprehensive enterprise management in- frastructure services we deliver to the Office of Per- sonnel Management (OPM) are helping modernize and improve network operations and processes. SRA is responsible for the design, architecture, and installation of the current infrastructure to ensure it is available, secure, and responsive to all users; compli- ant with Federal requirements; and scalable to meet OPM’s current and future program needs. We are cur- rently developing a strategic plan for modernizing the Personnel Investigations Processing System and inte- grating all systems that support the OPM personnel security program.

Since 2003, SRA has provided enterprise-wide technology services to help the National Archives and Records Administration (NARA) increase the perfor- mance and reliability of its IT infrastructure aimed at helping this client meet a growing demand for elec- tronic federal records and online services. The team manages and maintains a nationwide network that ties together NARA’s users and offices, including the nationwide records centers and the Presidential Li- braries. In addition to the program management; help desk; and network design, operations, and security services we contribute, SRA continues to analyze and implement emerging technologies to enhance cus- tomer support and upgrade network capabilities. This past year, SRA engineered and implemented a major upgrade to NARA’s enterprise-wide directory and communications infrastructure, greatly enhancing service to all NARA sites. 2007 Annual Report | 11

Representative Clients • Administrative Office of theU .S. Courts • Department of Agriculture Kavita Chandra • Department of Commerce Project Manager, U.S. Agency • Department of Health and Human Services for International Development, – Administration for Children and Families Global Acquisition System – Food and Drug Administration – Health Resources and Services Administration – National Institutes of Health Clinical Center Center for Information Technology National Cancer Institute National Institute of Neurological Disorders and Stroke National Institute on Drug Abuse National Institute of Allergy and Infectious Diseases National Institute of Arthritis and Musculoskeletal and Skin Diseases Office of the Director Office of Extramural Research • Department of Justice • Department of Labor • Department of State – U.S. Agency for International Development • Department of Transportation • Department of the Treasury • Department of Veterans Affairs • Environmental Protection Agency • Federal Deposit Insurance Corporation • General Services Administration • Government Accountability Office • Library of Congress • National Archives and Records Administration • Office of Personnel Management • Pension BenefitG uaranty Corporation • Small Business Administration

U.S. Health Resources and Services Administration National Practitioner Data Bank and Healthcare Integrity and Protection Data Bank SRA developed and manages the National Practitioner Data Bank (NPDB) and the Healthcare Integrity and Protection Data Bank (HIPDB) on behalf of the U.S. Health Resources and Services Administration. These national flagging systems protect the public by collecting and disclosing adverse actions taken against health care practitioners, providers, and suppliers to authorized health care entities. In FY07 SRA was awarded a new contract to continue to operate, maintain, and enhance the data banks. The NPDB, a fee-for-query system, helps to ensure quality health care by providing a national system to verify adverse actions taken against practi- tioners and also helps to safeguard against high-risk practitioners moving from state to state or job to job without disclosing their past history. The HIPDB, also a fee-for-query system, provides information on health care practitioners, providers, and suppliers and related fraud and abuse. The HIPDB serves the public by promoting quality health care and deterring health care fraud and abuse. SRA services include software development, systems engineering, operations services, systems administration, testing, and security services. 12 | SRA International, Inc.

Our Business Business Solutions

Our business solutions span a broad range of ex- in tax-exempt entity filings. We are also developing a pertise gained from considerable experience in spe- suite of predictive models to detect earned income tax cific competencies. These solutions focus on business credit noncompliance. For the Environmental Protec- requirements shared by many of our clients. tion Agency, we are developing data warehousing and reporting solutions for the ENERGY STAR program. Business Intelligence: Text and Data Mining Contingency and Disaster Planning Our business intelligence solutions enable our clients to obtain the greatest benefit from electronic information SRA offers a full spectrum of solutions to help cli- in their internal data repositories and enormous amounts ents prepare for, respond to, and recover from events of information online. We use our text and data mining that could adversely affect operations. Our services tools to help them extract value from this information. include continuity of operations and government, di- saster response and recovery, crisis communications, SRA combines the capabilities of our NetOwl® text and critical infrastructure planning. We have over 25 mining software and our ORIONMagic® knowledge years’ experience supporting clients across federal, management software to offer our clients enhanced state, and local government. For example, SRA sup- means of managing, exploiting, and analyzing large ports the Transportation Security Administration (TSA) amounts of enterprise data. ORIONMagic helps with technical services for a comprehensive TSA-wide clients cull through gigabytes of information, store continuity of operations program. We provide techni- the most relevant pieces, and analytically scour each cal and support services for program, policy, and doc- piece. Our text mining tools collect, search, organize, ument development; planning support; tests, training and analyze large amounts of unstructured text data. and exercises; and technical assistance and review NetOwl software applies advanced natural language as well as operations and support services at various understanding technologies to English, Arabic, Chi- facilities. For the Department of Homeland Security’s nese, Farsi, French, Korean, and Spanish text to ex- (DHS’s) Office of Infrastructure Protection (OIP), we tract otherwise-unobtainable content. provide strategic consulting and operations support, including support to critical infrastructure councils, We provide data mining solutions to help clients an- such as the Sector Partnership Framework and the alyze and identify hidden patterns in large databases, National Infrastructure Advisory Council. SRA also data marts and warehouses, spreadsheets, and text. supports DHS in preparing the private sector for a This gives them foresight into future trends, as well as possible pandemic influenza outbreak. W e developed the ability to predict outcomes and classify transac- the initial pandemic strategy for OIP and constructed tions. In FY07, SRA developed and applied new pre- a pandemic preparedness guide for the private sector. dictive models for the Internal Revenue Service (IRS) SRA is currently supporting DHS in the implementa- to detect refund fraud at lower cost than previous sta- tion of a pandemic guide. tistics-based solutions and to detect noncompliance

Environmental Protection Agency IT and Analytical Services Support for the Brownfields Program Since its inception in 1995, EPA’s Brownfields Program has empowered states, local governments, and other participants in community revitalization to work together to prevent, assess, safely clean up, and sustain- ably reuse brownfields — defined as real property, the expansion, redevelopment, or reuse of which may be complicated by the presence of a hazardous substance, pollutant, or contaminant. SRA has a long history of delivering support to the program, which has become a nationally recognized model of an innovative and suc- cessful public and private partnership. SRA applies industry best practices in technical research and analytical support, legislation and policy analy- sis, program planning, data analysis, communications and outreach, and facilitation and training to help EPA’s Office of Brownfields Cleanup and Redevelopment (OBCR) effectively manage the program. We also develop information management solutions to help OBCR manage, report, and communicate activities, ac- complishments, and performance measures for the program. Under two new contracts awarded to SRA in FY07, we will continue to play a critical role providing the Brownfields Program with integrated, innovative program implementation and IT solutions. 2007 Annual Report | 13

Enterprise Architecture and Portfolio Management Other SRA Business Solutions Federal agencies use information technology (IT) » Case Management investment and governance processes such as enter- » Conflict Resolution and Facilitation prise architecture (EA) — a framework or blueprint to » Customer Relationship Management identify and link processes, systems, databases, and technology to outcomes — and portfolio management » Economic and Statistical Analysis to help them make informed investment decisions and » Geospatial Services to best manage their portfolios of IT projects and pro- » Grants Management grams with reduced risk and cost. » Human Capital Management » Independent Verification & Validation SRA offers complete EA solutions that combine best » Logistics practices with our results-based, holistic EA approach » Next Generation Internet (IPv6) that delivers measurable progress in both added value Outreach and Communications and organizational maturity. We have led numerous fed- » eral and state government EA efforts, turning data into » Performance Management actionable information using a robust set of data and » Strategic Consulting and Change Management process visualization, governance, analysis, and report- » Virtualization ing tools. Our experience includes expertise in imple- » Voice over Internet Protocol (VoIP) menting and executing EA guidance from the Office of Management and Budget (OMB), the Federal Chief Information Officer (CIO) Council, and the Government Accountability Office G( AO).

Our extensive EA and portfolio management experi- ence has been gained during ongoing work with clients including NIH, IRS, EPA, GAO, the Department of Defense (DoD) Missile Defense Agency, the U.S. Marine Corps, and the Depart- ment of Justice.

Rebecca McHale Information Assurance Analyst 14 | SRA International, Inc.

Our Business Business Solutions (Continued)

Enterprise Resource Planning of experience in providing public key-enabled applica- tions, smart card technology, and directory technolo- SRA uses enterprise solutions, such as Oracle, gies with proven processes, techniques, and method- PeopleSoft, SAP, and Siebel applications and tech- ologies to address the privacy, security, technology, nologies, to help our federal government clients and program and change management issues facing improve their organizational performance. Through our clients. These clients include the Departments of strategic planning; software selection; implementation Health and Human Services, Justice, and Homeland of commercial off-the-shelf (COTS) systems; training Security; the EPA; and the Federal Deposit Insurance and change management; and post-implementation Corporation (FDIC). processes and systems optimization, we enable our clients to modernize, consolidate, and unify their finan- cial, human resource, supply chain, and customer Information Assurance and Privacy Solutions relationship management systems. By linking security and privacy considerations, we help clients maximize the value of policy and proce- SRA combines rapid implementation tools and dure development and assessment activities through- proven methodologies to enable clients to quickly out the systems development life cycle. Our innovative realize value from new implementations, as well as approaches enable our clients to achieve regulatory increase their return on investment in existing ones. compliance, ensure business continuity, limit liability, Clients for whom we provide these services include and enhance privacy risk mitigation. Our extensive ex- the U.S. Coast Guard, for whom we designed and im- perience across the federal government includes secu- plemented a service-wide human resources enterprise rity planning and engineering, threat and vulnerability resource planning system, the Department of Agricul- analysis, penetration testing, computer forensic analy- ture, and the Pension BenefitG uaranty Corporation. sis, education and training, intrusion detection and response system support, systems certification and Identity Management accreditation, and privacy impact assessments. This year SRA was one of only four companies to receive Homeland Security Presidential Directive-12 (HSPD- the National Security Agency’s information security as- 12) set policy for a secure, reliable, and common iden- sessment capability maturity model version 3.1 rating, tification standard for federal employees and contrac- which helps organizations select qualified providers to tors. SRA is a founding member of the Federation for assess the security of their information systems. Identity and Cross-Credentialing Systems (FiXs) con- sortium, and is helping to provide the government with SRA delivers a wide range of information assurance the necessary security and standardization to meet and privacy protection services to clients across gov- HSPD-12. The consortium is currently working with ernment, including the Departments of Agriculture, De- the DoD to provide trusted, interoperable identity veri- fense, Education, Health and Human Services, Home- fication and credential authentication for contractors land Security, Justice, Labor, and the Treasury; EPA; accessing secure government facilities and networks. FDIC; the Office of Personnel Management (OPM); the Securities and Exchange Commission; and the U.S. SRA also offers services across every phase of the Agency for International Development (USAID). identity management life cycle. We combine our years

U. S. Agency for International Development Information Technology Services Since 2003, SRA has provided a range of technical services to support USAID, an independent federal agen- cy that delivers economic, development, and humanitarian assistance around the world. In FY07, the SRA team continued to work on critical Agency initiatives, including modernization of a worldwide procurement system. The Global Acquisition System developed by SRA supports the Web-based procurement process at USAID and features a real-time interface with the Agency’s financial system, providing senior managers with integrated system reports to aid in decision making. We also worked with the Peace Corps to install satellite communications from 30 offices worldwide to the headquarters office inW ashington, DC. Our work with USAID’s Office of Economic Growth, Agriculture, and Trade enables us to support the Agency’s use of information and communication technology to help its global missions implement in-country aid programs. For example, SRA installed a wireless network infrastructure for the Government of Haiti and brought phone and Internet access to villages in Vietnam. 2007 Annual Report | 15

Debra Leiss Deputy Director, Business Intelligence

Information Sharing and Knowledge Management SRA provides strategic advice on informa- tion sharing and uses our text and data mining, privacy, security, and identity management ex- pertise to design solutions to meet clients’ needs for secure, efficient information sharing.W e help our clients meet homeland security mandates and exploit the potential of the Internet for real-time analysis and decision-making.

Our knowledge management services and so- lutions help agencies effectively access, capture, retrieve, manage, use, and share enterprise informa- tion to maximize communication and productivity. We integrate commercial-off-the-shelf (COTS) and cus- tom applications to increase organizational knowledge flow and perform knowledge audits, portal design and configuration, usability analysis, taxonomy and meta- data services, and enterprise information manage- ment governance and architectures (including access, content, document, and records management) to en- hance information sharing across systems and orga- nizations. We provide these services for clients across the federal government, including the U.S. Air Force.

Outsourcing, Managed Services, and Infrastructure Modernization We use outsourcing and managed services solu- tions to help clients consolidate and modernize their infrastructures while preserving inherent value, improve customer service, and reduce their cost of operations using industry best practices, repeatable processes, and performance- based contracting methods. We sup- port clients with proven operations

Angie Ashe Project Manager, Department of Veterans Affairs 16 | SRA International, Inc.

Our Business Business Solutions (Continued)

management services and may oversee their technical Our solutions provide best-practice delivery of IT infrastructures, manage their applications and net- Infrastructure Library (ITIL) standards-based processes works, or operate their entire business processes in and the ISO 20000 standard for IT service manage- accordance with service-level agreements. Clients we ment. We deliver IT service management consulting, provide these services for include the Health Resourc- education, and implementation services as part of es and Services Administration, the National Guard a comprehensive delivery methodology, which we Bureau, FDIC, GAO, OPM, and USAID. integrate with our CMMI Level 3 processes to ensure that we give our clients reliable, high-quality services to SRA delivers infrastructure management solutions, manage their infrastructures. including IT service management consulting and enter­ prise systems management, to support our clients’ evolving business needs and missions. We help them Service-Oriented Architecture to manage, successfully and cost-effectively, the With constant advances in IT, our clients have complexity of geographically dispersed IT infrastruc- an ongoing need for a service-oriented architecture tures and obtain increased operational efficiencies by (SOA) — a disciplined, standards-based framework aligning infrastructure and application performance for building and managing enterprise systems using measures with business performance measures. shared services and infrastructure to increase busi- We enable them to get the most value from their ness agility, reduce redundancy, and enable new existing information and knowledge assets while modes of interaction. SRA applies SOA processes, securely transmitting data through network design, patterns, and technologies across the IT life cycle to implementation, and migration; systems and database align our clients’ resources with their missions, identify administration; monitoring and managing network redundant services, capture business processes, and performance and availability; enterprise implement governance structures in existing enter- backup and recovery; and video and prise architectures. We have experience in applying data network consolidation. a wide range of service-oriented technologies, tools, and platforms, including Web service standards, ser- vice registries, enterprise service bus products, and large-scale integrated SOA application suites.

SRA delivers SOA-based solutions to the Depart- ments of Agriculture and Defense; the Library of Con- gress; and USAID. Many of our ERP implementations are built on SOA-based templates, industry best prac- tices, and product roadmaps.

Training, Modeling, and Simulation Our training services and solutions range from custom tools to integration of commercial systems; all are designed to enhance workforce perfor­ mance at any level. We use our systematic development approach, based on rigorous Instructional System Development (ISD)

Michael Baker Systems Engineer 2007 Annual Report | 17

standards, to develop curriculum, computer- or Web- based distance learning, and e-learning solutions. SRA provides full life cycle services for implementing learning management systems and integrating the systems with legacy or COTS products. Our closed Mandana Sattari loop system processes connect training to actual job Enterprise Architect performance and provide a mechanism to monitor, evaluate, and validate that the training achieves the desired outcomes through demonstrable on-the- job performance outcomes. SRA has designed and implemented training systems for clients across DoD and civil agencies.

Wireless Integration Services Our wireless integration services include full life cycle consulting and security planning, enterprise deployment and integration, and application develop- ment. These services enable our clients to cost- effectively expand their infrastructures to the wireless enterprise. This makes information more accessible and offers essential portability, flexibility, security, and reliability. The scope of our wireless services ensures that SRA can provide the technical solution that best addresses an organization’s mission.

Clients for whom we provided wireless integration services in FY07 included the Navy Exchange Ser- vice Command, where we performed an assessment and provided industry best practices for the security of their wireless environment, and the FDIC, where we developed and implemented cost savings methodologies.

National Institutes of Health Enterprise Architecture Support SRA supports NIH’s Office of Research Services in planning for and responding to a possible pandemic flu. This year we expanded the enterprise architec- ture model to aid executives and senior managers in responding to a pandemic involving an extreme loss of personnel. The architecture enhances manage- ment planning by providing a high-level view of the enterprise to aid managers who may be quickly put into new positions during a pandemic. It supports cross-organizational analysis by identifying essential functions and resources available through management dashboards. We also facilitated the development of an enter- prise-wide pandemic plan that saved time and improved planning effort results. 18 | SRA International, Inc.

Our Business Touchstone Consulting Group

Touchstone Consulting Group (Touchstone) has In FY07, Virginia’s progress was elevated to a best an established record of working with senior leaders practices model for the nation for emergency plan- in federal government and commercial organizations ning. The Commonwealth received international rec- to develop, launch, and manage their strategies to ognition for implementing a common language pro- achieve powerful outcomes. The management con- tocol to standardize radio language, and established sulting services and solutions we deliver — including a statewide-deployable back-up communications complex organizational and technical interoperability, resource that is essential during large events or cata- governance, change management, strategy develop- strophic loss of communications. ment, strategic communication, performance mea- surement, program management, and workshop and The Small Business Administration’s Business Gate- meeting facilitation services — help our clients manage way initiative provides businesses with a one-stop re- their technological and transformational initiatives. source to easily find compliance resources, tools, and data from all major U.S. federal agencies regulating Our work for the Virginia Governor’s Office of Com- or serving small businesses. Since 2004, Touchstone monwealth Preparedness is helping the state’s pub- has delivered strategic planning, stakeholder man- lic safety community effectively communicate during agement, and project management services for the daily operations and major emergencies. Our practi- business.gov Internet portal that serves as the center- tioner-driven process for planning and implementation piece of the initiative. In FY07, the team relaunched leverages expertise throughout the state to improve the site with new content and enhanced graphics and standard operating procedures, technology, and train- navigation functions to continue to meet the changing ing and exercises for interoperable communications. needs of the small business community.

Department of Homeland Security, Office for Interoperability and Compatibility Strategy and Execution Support Services The Department of Homeland Security (DHS) established the Office for Interoperability and Com- patibility (OIC) in 2004 to strengthen efforts to improve local, tribal, state, and federal emergency preparedness and response. Key components of OIC include the SAFECOM and Disaster Man- agement (DM) programs. SAFECOM creates the capacity for increased levels of communica- tions interoperability. DM enables the secure, effective exchange of incident-related data and information. Touchstone has provided DHS with strategic consulting services and compre- hensive program management support to improve emergency response communications and interoperability since 2002. In 2006, DHS awarded Touchstone a new contract to continue to provide strategy and execution support services to OIC. The team delivers program management support; communications and outreach; governance and stakeholder coordination; development of near- and long-term strategies to improve interoperability and incident response; method and tool development; and standards and requirements development and acceleration. Recent accomplishments include the successful roll- out of incident management tools to all major U.S. Navy facilities and statewide strategic planning pilots in three states. Our services have had a positive impact on over 60,000 emergency re- sponse agencies and 2.5 million first responders. This year the Disaster Management initiative received an Excellence.gov award, which recognizes government programs that have dem- onstrated excellence in eGovernment innovation, from the American Council for Technology’s Industry Advisory Council. 2007 Annual Report | 19

Representative Clients • City of Los Angeles • Department of Commerce: National Oceanic and Atmospheric Administration • Department of Defense – Assistant Secretary of Defense for Homeland Defense and America’s Security Affairs – Joint Staff Logistics (J4) – Missile Defense Agency – National Geospatial-Intelligence Agency Martha Johnson – Office of the Army Chief Information Vice President and Director, Officer (CIO/G6) Management Consulting, • Department of Homeland Security Touchstone Consulting Group • Maricopa County, Arizona • Metro Boston Homeland Security Region • Office of Management and Budget • Office of Personnel Management • Small Business Administration • State of Virginia

Tim Wang Principal Consultant, Touchstone Consulting Group 20 | SRA International, Inc.

Our Business RABA Technologies

October 2006 marked the completion of our acquisition of RABA Technologies, LLC, a privately held provider of high-end technical Karl Gumtow services to the national security and intelligence communities. Vice President and Director, Intelligence and Space RABA brings highly skilled, security-cleared professionals and enables SRA to offer a more comprehensive suite of capabilities to address the complex challenges faced by the intelligence community and support national security by providing leading-edge software development and information technology engineering services. These comprehensive capabilities span the systems life cycle, from the analytics required for red teaming to hardware and software reverse engineering technical expertise. RABA is a part of the SRA Command and Control, Communications and Intelligence (C3I) business.

FY07 Highlights A Web-based reporting and management system we have developed for a federal law enforcement agency is helping to improve reporting time and data accuracy for criminal investigations. The portal is accessed by thou- sands of users across the United States to track and re- port criminal investigations by local and state agencies and features an advanced search capability and data capture mechanism to quickly disseminate information related to criminal activity. We have migrated over 30 years of legacy data into the new system and have developed a Web interface to simplify data entry.

Our AVALON rapid prototyping environment supports custom application development for the intelligence and aerospace communities. Using our experience and capa- bilities in service-oriented architecture, we have designed and developed a Web-services capability to enable users to access AVALON’s analytic capabilities through a Web browser. We continue to enhance this solution through government-funded research and development contracts.

U.S. Intelligence Community Research and Development Since 2004, RABA has performed a wide and expanding range of research and development services for the U.S. intelligence community, including software development and engineering to support prototype implementation, text mining, embedded programming, and analytical support. These solutions support our client in pro- ducing new organizational capabilities and providing computer application integrity and system and net- work protection. We are conducting research into emerging computing systems and technologies to produce smaller, faster com- ponents with greater computing power. We are also build- ing a prototype to ensure secure, user-specific downloads with a newly designed data containment service that pro- tects computer systems and networks from viruses and worms and provides a safe area for users to work. 2007 Annual Report | 21

SRA welcomes the 185 employees of RABA Technologies, LLC Robert Addison • Sharri Arnold • Ronald Aubin • Kathleen Bailey • Stephen Barney • Kevin Barrett • James Baruch • Robert Baruch Curt Bathras • Tammy Bazinet • Kristen Bell • Ivan Bella • Bill Bieman • Gregory Bishop • Michael Brazinski • Sherry Brewer • Emerson Brooks Keith Brown • Joseph Bruce • Joe Budsock • Brian Burke • Mark Butler • Gerald Caponera • Nathan Carpenter • Stephen Cavanaugh Yaakov Chaikin • Kurt Christensen • John Coffie • Bruce Cohen • Kevin Colligan • Steven Colombo • Lawrence Compton • Jim Costabile Anna Critchfield • Set Cruz • Justin Cutler • Jeffrey Czorapinski • Mark Daniel • Scott Daw • Sherri Dembowski • Vincent DiLosa • Jason Dixon David Dodge • John Dwyer • Delali Dzirasa • John Earnest • David Edwards • John Eiben • Mark Ellis • Jennifer Falk • Scott Finkelstein Keith Fisher • Paul Franceus • Tad Franson • Craig Fuhrman • Toni Fung • Ricky Garris • Anthony Geminden • Paul Gianni • Patrick Gilroy Whitney Gornichec • Michael Gottleib • Peter Gough • David Grannas • Karl Gumtow • Richard Gumtow • Michael Haberman • Alain Hajjar Mark Hale • Joe Harris • Peter Haupt • Jacob Hayes • Jeffrey Hider • Richard Hilton • Tarisa Holbrook • James Honeywell • Erik Hudson Heidi Hulett • Roger Hunt • Sally Hunt • Dominic Hunter • Richard Impett • John Irish • Frank Jaworski • Kevin Jenkins • Andrew Jett Howard Johnson • Horace Jones • Cathy Jung • Peter Kilpe • Jason Kirby • Eugene Kogan • Michael Kolodny • Courtney Koy • John Kreger Keith Lacey • Paula Logan • Kenneth Luquette • Alvin Lyons • Cecil Maccannon • Jeremiah Mahoney • David Martin • Tracy Martin Andria Mattsen • Kimberly Mayfield • Rogan McAllister • Timothy McCarthy • Jeffrey McIsaac • Rodney McJimpsey • Mark McLarnon Mark Messersmith • Jason Meyer • Brian Miller • Michael Miller • Troy Miller • James Moore • James Morgan • Michael Myers • Daren Nelson Thomas Nelson • Hieu Nguyen • Tu Nguyen • John O’Loughlin • Bernadette Olean • John Ormonde • John Ortiz • Robert Overberg Kyong Park • Brad Parlette • James Pell • James Peugh • Theresa Pines • Bruce Press • Julie Press • Clark Price • Jeffrey Qualls • Carl Rabbin Jennifer Rager • Eric Ragin • Mark Raugas • John Reel • Robert Reese • Kevin Reid • Brent Reusing • Calvin Rich • Gilbert Richardson Clark Richey • David Ritch • Vicente Rodriguez • Lynn Rogala • Thomas Rogers • David Rose • Todd Sauter • Frank Schick • Michael Schiller Mark Schneider • Randy Schrickel • Michael Schumell • Ronald Scott • William Simonds • John Skordas • Jay Slagle • Calvin Smith Shawn Smith • Natalie Smolyak • Donovan Snyder • Patrick Sponaugle • Kelley Stachurski • James Stafford • Ricardo Stewart • Kevin Suffecool Phillip Swack • Richard Trappen • Jeffrey Turner • Joseph Unger • Robert Watson • Mark Wehner • Michael West • Sally Williams Jonathan Windsor • Larry Wolpert • Joseph Yaver • Lawrence Young • Thomas Ziebro • Jon Zombek

Robert Baruch Vice President and Director, C3I Emerging Markets 22 | SRA International, Inc.

Our Business Research & Development

SRA is committed to helping clients stay on the lead- semantic coverage in areas as diverse as national ing edge of technology, and our research and develop- security, law enforcement, and bioinformatics. This ment (R&D) efforts focus on identifying and developing year we added “smart geocoding,” or the ability to next-generation solutions to help improve capabilities assign correct latitude and longitude values to place and solve current and future business challenges. We names while eliminating ambiguity; e.g., Springfield, have a long history of pursuing internally- and govern- Massachusetts, rather than Springfield, Illinois. This ment-funded R&D in such areas as data mining, natu- capability significantly enhances our clients’ ability to ral language understanding, knowledge management, exploit NetOwl output in geospatial analysis. In ad- information assurance, and wireless applications. dition, NetOwl Extractor provides capabilities to sup- port large-scale solutions, including those utilizing Web services. Multilingual Text Mining Systems NetOwl Extractor addresses our clients’ needs Our NetOwl DocMatcherTM document comparison to exploit large amounts of unstructured data and categorization software uses advanced linguistic and supports the analysis of documents features and sophisticated machine learning algo- in English as well as Arabic, Chinese, rithms for a variety of question-and-answer-matching Farsi, French, Korean, and Spanish. tasks. These range from intelligence analysis applica- It identifies key concepts and auto­ tions that match incoming reports against established matically translates extracted information needs to customer relationship manage- foreign language phrases to ment, patent analysis, and résumé routing. English, and offers broad Geollect™ Our Geollect software combines real-time vehicle, personnel, and asset tracking; high-resolution imag- ery displays; in-vehicle navigation; vehicle telematics; text, audio, and video collaboration; and command and control features to enable clients to securely co- ordinate personnel and vehicles from their operation centers. They can monitor vehicle location and status, transmit destinations and turn-by-turn spoken direc- tions to drivers, and set up dynamic collaborations among deployed teams. Geollect runs on wireless global positioning system-enabled personal digital assistants, cell phones, and navigation systems and is accessible through secure Web programs. It mini- mizes necessary wireless bandwidth and supports high-resolution imagery and map displays for drivers even when the network is not available, giving users maximum flexibility.

Geollect’s capabilities are currently being used by the Department of Defense and other national security clients to enhance information collection and mission planning for warfighters, who upload photographs, videos, and audio annotations to the system. The software’s powerful search capacity enables users to sketch their planned routes on maps and retrieve in- formation, such as where incidents have occurred, to plan safe, effective missions. Users can also annotate photos and reports to share information. Geollect’s applications in the national security community in- clude surveillance, battlefield handoffs, trend detec- tion, and reconnaissance; it is a powerful tool that Mike Gross enables users to visually convey a precise situation, Senior Software Engineer location, or general area. 2007 Annual Report | 23

Radio Frequency Location System Our radio frequency location system provides an easy-to-use, Web-based system to locate equipment and staff in buildings, visualizing two- and three-di- mensional, multi-floor facilities. Users obtain a live view of equipment locations, can automatically track the movement of individual items, and can use auto- mated path planning to find the shortest distance from user to equipment. Secure, role-based authentication enables clients to manage user access. The system, which can be used in conjunction with state-of-the- art wireless tracking technology, has been deployed to facilities across the country.

Sensor Network Analytical Platform The SRA Sensor Network Analytical Platform (SNAP) is a situation awareness tool for operation center and field personnel. It offers a portable, real-time environ- ment for collecting, exploiting, and disseminating data from deployed networked sensors. SNAP integrates real-time sensor feeds with aerial and satellite images, maps, video, and other sources to generate an ac- curate, high-quality visual image of the location and movement of objects, including unmanned vehicles. The Defense Advanced Research Projects Agency (DARPA) will use SNAP for a third time to provide situa- tion awareness for its personnel during the 2007 DARPA Urban Challenge autonomous vehicle event. SRA is enhancing SNAP’s simulation capabilities to include realistic simulation of missions in urban terrain; these capabilities will help optimize the missions assigned to teams and will assist in training event personnel.

Virtual Operations Center The SRA-developed Virtual Operations Center (VOC) provides a real-time, interactive, three-dimen- sional operations center in one desktop application. The VOC aids clients who simultaneously monitor nu- merous information sources — including news tick- ers, real-time video, Web pages, and other desktop Bill Niehaus applications — by combining them into a single, uni- Senior Software Architect fied view. Its innovative alerting capability shows users critical changes that might occur across a large set of monitored sources, panning and zooming a virtual camera to those displays to highlight updates. The VOC extends the benefits of organizations’ traditional operations centers to remote users, and its remote desktop control capabilities enable its use for such applications as remote server administration and mo- bile operations centers. The VOC has been enhanced to launch from an organization’s Web site, making it easier to deploy and maintain. 24 | SRA International, Inc. Year in Review

July 27, 2006 January 8, 2007 March 28, 2007 Department of Homeland Security Awards Mark Connel Joins SRA as Vice President and U.S. Marine Corps Awards $17.8 Million $42.2 Million Contract to SRA to Provide Strategy Executive Director, Contracts and Procurement Contract to SRA to Develop Integrated and Execution Support to Office for Interoperability Digital Environment and Compatibility January 8, 2007 June 7, 2007 SRA on FORTUNE Magazine’s “100 Best September 28, 2006 Companies to Work For” List for Eighth SRA Receives Award for Community Service at SRA Awarded $30.6 Million Contract to Consecutive Year Annual Human Resource Leadership Awards of Support Defense Technical Information Center Greater Washington January 16, 2007 September 28, 2006 June 11, 2007 SRA Receives Rating from National Army National Guard Awards $173 Million Security Agency to Perform Information SRA Promotes Timothy Atkin and John Gilligan to Enterprise Operations and Security Services Security Assessments Senior Vice President Contract to SRA January 18, 2007 June 20, 2007 October 4, 2006 EPA Awards $40.3 Million Brownfields SRA Announces Signing of Definitive SRA Announces Signing of Definitive Analytical and Technical Support Agreement to Acquire Constella Group, LLC Agreement to Acquire RABA Technologies, LLC Contract to SRA June 29, 2007 October 16, 2006 January 30, 2007 SRA Awarded $68.6 Million Task Order Pension BenefitG uaranty Corporation Awards SRA Founder and Chairman Ernst Volgenau to Support National Practitioner Data Bank/ $12.3 Million Contract to SRA to Develop New Named Virginia Outstanding Industrialist by the Healthcare Integrity and Protection Data Bank Transaction-Based System Science Museum of Virginia and Governor Timothy Kaine November 7, 2006 February 23, 2007 General Services Administration Awards $90.5 Million Department of Agriculture SRA Announces CEO Succession: Contract to SRA to Design Web-Based Renny DiPentima Retires as President and CEO Supply Chain Management System on April 1; Stan Sloane Named Successor

December 18, 2006 March 5, 2007 SRA Wins $10.5 Million Contract to Continue SRA’s Jean-Paul Boucher and Tim Wang to Support Environmental Protection Agency’s Named Federal 100 Winners by Brownfields Program Federal Computer Week

December 20, 2006 March 7, 2007 Department of Defense Awards $13.6 Million Jennifer Smith Joins SRA as Vice President and Contract to SRA to Support TRICARE Deputy Director, Marketing and Sales Management Activity Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No.  Operator pm1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

(Mark One)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended June 30, 2007

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-31334

SRA International, Inc. (Exact name of Registrant as Specified in its Charter)

Delaware 54-1360804 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.)

4300 Fair Lakes Court, Fairfax, Virginia 22033 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (703) 803-1500

Securities registered pursuant to Section 12(b) of the Act:

Title of Class Name of Exchange on Which Registered Class A common stock, $0.004 par value per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes  No  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer  Accelerated filer  Non-accelerated filer  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No  The aggregate market value of common stock held by non-affiliates of the registrant as of December 31, 2006, based upon the closing price of SRA International, Inc. class A common stock on the New York Stock Exchange on December 29, 2006, was $1,103,408,730. As of August 10, 2007, there were 43,024,386 shares outstanding of the registrant’s class A common stock and 14,199,828 shares outstanding of class B common stock. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the definitive proxy statement to be used in connection with the SRA International, Inc. annual meeting of stockholders, to be held on October 23, 2007, and to be mailed to stockholders of record as of September 10, 2007, are incorporated by reference into Part III of this Form 10-K.

Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No.  Operator pm1

SRA INTERNATIONAL, INC. FORM 10-K TABLE OF CONTENTS

Page Part I Item 1. Business ...... 3 Item 1A. Risk Factors ...... 19 Item 1B. Unresolved Staff Comments ...... 31 Item 2. Properties...... 31 Item 3. Legal Proceedings ...... 32 Item 4. Submission of Matters to a Vote of Security Holders...... 32 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ...... 32 Item 6. Selected Financial Data ...... 34 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations...... 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk ...... 47 Item 8. Financial Statements and Supplementary Data...... 47 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...... 48 Item 9A. Controls and Procedures...... 48 Item 9B. Other Information...... 51 Part III Item 10. Directors, Executive Officers and ...... 52 Item 11. Executive Compensation ...... 52 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...... 52 Item 13. Certain Relationships and Related Transactions, and Director Independence...... 52 Item 14. Principal Accountant Fees and Services ...... 52 Part IV Item 15. Exhibits and Financial Statement Schedules ...... 53 Signatures ...... 55 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No.  Operator pm1

PART I

Forward-Looking Statements Some of the statements under “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Form 10-K constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward- looking statements. In some cases, you can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” and “would” or similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to predict or control accurately. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this Form 10-K, provide examples of risks, uncertainties, and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-K. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

Item 1. BUSINESS

OVERVIEW We are a leading provider of technology and strategic consulting services and solutions to clients in national security, civil government, and health care and public health. Our largest market, national security, includes the Department of Defense, the National Guard, the Department of Homeland Security, the intelligence agencies, and other federal organizations with homeland security missions. We offer a broad range of services that spans the information technology life-cycle: strategic consulting; systems design, development, and integration; and outsourcing and managed services. In addition, to address recurring client needs, we develop business solutions for contingency and disaster response planning, information assurance, business intelligence, privacy protection, enterprise architecture, infrastructure management, and wireless integration. We combine a comprehensive knowledge of our clients’ business processes with the practical application of advanced information technology tools, techniques, and methods to create value-added solutions for our clients. We have provided technology and strategic consulting services and solutions to federal government clients for over 29 years and have longstanding relationships with many of them. We have served clients within the Departments of the Army, Navy, and Air Force, the Joint Chiefs of Staff, the Office of the Secretary of Defense, the Department of the Treasury, and the Federal Emergency Management Agency for over 25 years. We currently serve approximately 300 government clients on over 900 active engagements. Our business is diversified, with no single client or client group accounting for more than 12% of our revenue during any of the last three fiscal years. For each of the last three fiscal years, we have been the prime contractor on engagements representing over 86% of our total revenue. Our founder and chairman, Ernst Volgenau, has been with us since our inception. Our 86 officers have an average tenure with our company of approximately 14 years, including any prior service with acquired companies. Our management team is supported by a high quality staff of more than 5,200 people, approximately 97% of whom are professional staff. Our professional staff is highly educated, with approximately one-third possessing advanced degrees. In addition, over two-thirds of our employees hold federal government security clearances. From fiscal 2002 to fiscal 2007, we increased our revenue at a compound annual growth rate of approximately 28.6%. Our revenue for the fiscal year ended June 30, 2007 was $1.27 billion, a 7.6% increase over the prior fiscal year. As of June 30, 2007, our backlog was approximately $3.4 billion, of which $600.4 million was funded. As of June 30, 2006, our backlog was $3.3 billion, of which $512.8 million was funded. In January 2002, we acquired The Marasco Newton Group, Ltd., or MNG, our first government services acquisition. In January 2003, we acquired Adroit Systems, Inc., or

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Adroit, for its expertise in the areas of command and control, communications, computers, intelligence, surveillance, and reconnaissance, or C4ISR. In January 2004, we acquired ORION Scientific Systems, or Orion, a privately-held company focused on counterterrorism and counterintelligence. In April 2005, we acquired Touchstone Consulting Group, Inc., or Touchstone, a privately-held management consultancy with an established track record of serving senior executives in the federal government. In July 2005, we acquired Galaxy Scientific Corporation, or Galaxy, a provider of systems engineering, information technology, and tactical communications services and solutions to the federal government. In November 2005, we acquired Spectrum Solutions Group, Inc., or Spectrum, a privately-held provider of enterprise solutions to clients throughout the federal government. In April 2006, we acquired Mercomms Unlimited, Inc., or Mercomms, which specializes in advanced maritime and defense communications technologies for the federal government. In October 2006, we acquired RABA Technologies, LLC, or RABA, a provider of high-end technical services to the national security and intelligence communities. Subsequent to fiscal 2007, in August 2007, we acquired Constella Group, LLC, or Constella, a provider of global health consulting services. We expect these acquisitions will enable us to sell a more comprehensive set of services and solutions to a larger client base and to jointly pursue potential new opportunities.

INDUSTRY BACKGROUND The federal government is the largest consumer of information technology services and solutions in the United States. We believe that the federal government’s spending on information technology will continue to increase in the next several years, driven by the expansion of national defense and homeland security programs, increased reliance on information technology outsourcing, demand for greater government efficiency and effectiveness, and the continuing impact of federal procurement reform. According to the Federal IT Market Forecast, FY 2007 - FY 2012 report published by INPUT, an independent federal government market research firm, the contracted portion of federal government spending on information technology is forecasted to grow at an annual rate of 5.6% from $65.2 billion in federal fiscal year 2007 to $85.6 billion in federal fiscal year 2012. Increased Spending on National Defense and Homeland Security. The terrorist attacks of September 11, 2001, the war in Iraq, and other recent international events have intensified the federal government’s commitment to strengthen our country’s military, intelligence, and homeland security capabilities and increased the need for information technology capable of supporting these functions. We believe intelligence agencies will increase demand for data and text mining solutions to enable them to extract, analyze, and present data gathered from the massive volumes of information available through open sources such as the Internet. This increased focus on national security, homeland security, and intelligence has also reinforced the need for interoperability among the many disparate information technology systems throughout the federal government. We believe the Department of Homeland Security, or DHS, and the intelligence agencies are increasingly interested in enterprise systems that enable better coordination and communication within and among agencies and departments. Increased Reliance on Information Technology Outsourcing. Outsourcing of information technology operations is becoming an increasingly attractive alternative for federal agencies that are striving to maintain their core functions with limited technical resources and a shrinking information technology workforce, while at the same time upgrading technology and standardizing and streamlining operations. We expect reductions in the federal information technology workforce to continue due to, among other factors, a projected increase in the number of retiring government employees. Demand for Greater Government Efficiency and Effectiveness. Budget-constrained federal government agencies are under increasing pressure to cut costs, while at the same time continuing to improve and upgrade their technological capabilities. We believe government chief information officers will increasingly pursue initiatives such as adopting an enterprise architecture and requiring a business justification for program approvals. We believe new services, including web and wireless services, will be particularly important as government agencies respond to the necessity for interoperability among the information technology systems throughout the government and the demand for comprehensive electronic services to the public. Continuing Impact of Federal Procurement Reform. Over the past decade, federal government agencies have adopted procurement processes that are more similar to typical commercial contract acquisition practices. Changes in the procurement process have streamlined the process of purchasing information technology services by reducing procurement time and acquisition costs. These changes provide increased flexibility and enable government entities to award contracts based on factors other than price alone, such as successful past performance and distinguishing corporate and technical capabilities.

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There are currently two widely used contract methods in federal procurement, single award/defined statement of work contracts and indefinite delivery/indefinite quantity contracts: • Single award/defined statement of work contracts. Under this contract method, which can take a year or more to complete, an agency solicits, qualifies, and then requests proposals from interested contractors. The agency then evaluates the bids and typically awards the contract to a single contractor for a specified service. Historically, single award/defined statement of work contracts were the most prevalent type of contract award used by federal government clients; however, the use of this type of contract has been declining for the past several years. • Indefinite delivery/indefinite quantity contracts. Under this contract method, a federal government agency can form preferred provider relationships with one or more contractors. This category includes agency- specific indefinite delivery/indefinite quantity, or ID/IQ, contracts; blanket purchase agreements, or BPAs; government-wide acquisition contracts, or GWACs; and General Services Administration, or GSA, schedule contracts. These umbrella contracts outline the basic terms and conditions under which federal government agencies may order services. ID/IQ contracts are typically managed by one agency, the sponsoring agency, and may be either for the use of a specific agency or available for use by any agency of the federal government. ID/ IQ contracts available for use by any agency of the federal government are commonly referred to as GWACs. Contractors within the industry compete to be pre-selected to perform work under an ID/IQ contract. An ordering agency then issues delivery orders for services to be performed under the contract. If the ID/IQ contract has a single prime contractor, only that contractor may be awarded delivery orders. If the contract has multiple prime contractors, the award of each delivery order typically will be competitively determined among the pre-selected contractors. GSA schedules are listings of services and products, along with their respective prices, offered by federal government contractors. The schedules are maintained by the GSA for use by any federal agency or other authorized entity, including state and local governments. In order for a contractor to enter into a contract with the GSA and be listed on a GSA schedule, the contractor must be pre-qualified and selected by the GSA. When an agency selects services under a GSA schedule contract, the user agency, or the GSA on its behalf, will typically conduct a competitive process, limited to qualified GSA schedule contractors. Due to the lower contract procurement costs, reduced procurement time, and increased flexibility associated with ID/IQ contracts, BPAs, GWACs and GSA schedule contracts, these vehicles have been utilized frequently in the last several years. Market Opportunity. The federal government’s demand for information technology services has increased, and is expected to continue to increase, as a result of planned increases in spending for national defense and homeland security; increased reliance on outsourced information technology programs; demand for greater government efficiency and effectiveness; and the continuing impact of federal procurement reform. We believe that for information technology providers to win contract awards from the federal government they must possess strong and stable management, highly skilled personnel, a deep knowledge of the government’s business processes, demonstrated technological expertise, a strong record of past performance, and key positioning on multiple award contract vehicles such as GSA schedule contracts, GWACs and agency-specific ID/IQ contracts.

OUR APPROACH We are a high-end technology and strategic consulting services and solutions provider focused on delivering results that create tangible value for our clients. We maintain the comprehensive information technology skills required to support the entire life-cycle of our clients’ systems, from strategic planning to operational support. We employ interdisciplinary teams to staff our engagements, which enables us to deliver services and solutions that combine our comprehensive knowledge of our clients’ business processes with the necessary technical expertise. Depending on client needs, we may integrate commercially available products with existing systems or develop a comprehensive solution that involves designing, integrating, maintaining, and upgrading a custom-built system. To maximize our ability to deliver consistent results that successfully meet client needs, we have developed a proprietary project management and technical execution methodology, which we call ELITE. We train our project managers and technical leaders on this methodology, which emphasizes using mature, repeatable processes that reduce risk and maximize successful project completion. As a result, our company, including all its sectors and business units, has received a Capability Maturity Model Integrated, or CMMI, level 3 rating under the standards established by the

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Software Engineering Institute. This rating reflects that we have mature, repeatable processes that we believe help reduce risk, improve technical delivery, improve product quality, contain costs, and meet demanding schedules. Often the federal government requires a CMMI level 3 rating as a qualification to bid on complex software development and systems integration projects. We believe we are able to execute our approach successfully as a result of five core strengths:

Strong, Stable Management and Highly Skilled Personnel Our 86 officers have an average tenure with our company of approximately 14 years, including any prior service with acquired companies, providing extensive industry experience and strong continuity of management. Several members of our management team are former senior military officers or government officials who have deep knowledge of the federal government and its information technology needs. Our corporate culture fosters teamwork and excellence, which has contributed to our being named in 2007 by Fortune magazine as one of the “100 Best Companies to Work For” for the eighth straight year. This, in turn, has enhanced our ability to recruit and retain highly skilled personnel. Our professional staff is highly educated, with approximately one-third holding advanced degrees.

Knowledge of Government Clients’ Business Processes We have served clients within the Departments of the Army, Navy, and Air Force, the Joint Chiefs of Staff, the Office of the Secretary of Defense, the Department of the Treasury, and the Federal Emergency Management Agency for over 25 years. As a result of these longstanding relationships, we have an in-depth knowledge of our clients’ business processes, which enables us to design solutions that address their strategic goals and integrate with their existing systems. We have also recruited strategic hires with significant governmental or technical experience who have added to our knowledge of our clients’ business processes and who have extended our expertise into new areas.

Technical Expertise We invest in research and development in areas such as data mining, natural language understanding, knowledge management, information assurance, and wireless applications in order to offer clients the most up-to-date technological solutions. We continue to use our domain expertise and advanced technical knowledge to anticipate, identify, and develop forward-looking technologies to enable clients to meet their mission objectives. We use our proprietary intellectual property, including our ELITE life-cycle methodology, to provide value-added solutions for our clients.

Proven Record of Past Performance We have provided technology and strategic consulting services and solutions to the federal government for over 29 years and have longstanding relationships with many of our clients. In order to promote high quality results and client satisfaction, we emphasize long-term assignment of required staff and consistently review our project performance, including regularly surveying our customers regarding their perceptions of our performance. On competitively awarded engagements on which we were the incumbent, we have a renewal rate of at least 90% for each of the last three fiscal years. We calculate our contract renewal rate based on the number of engagements that come up for recompetition during the period and the number of those recompetitions that we win.

Key Positioning as a Prime Contractor We are currently a prime contractor on three of the federal government’s four largest information technology services GWACs: Millennia, Millennia Lite, and CIO-SP2i. SRA was also recently awarded a prime contract under GSA’s newest GWAC, Alliant. We hold six GSA schedule contracts and we are a prime contractor on more than 35 agency- specific ID/IQ contracts. This broad contract portfolio gives us extensive reach as a preferred provider and enables us to deliver the full range of our services and solutions to any organization in the federal government. Serving as a prime contractor positions us to achieve better client relationships, to exert more control and influence over quality results, to have clearer visibility into future opportunities, and to earn enhanced profit margins.

GROWTH STRATEGY Our objective is to continue to profitably grow our business as a leading provider of technology and strategic consulting services and solutions to a wide variety of federal government organizations. Our growth strategy includes the following.

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Leverage Our Longstanding Client Relationships to Cross-Sell Our Full Range of Services We plan to continue expanding the scope of the services we provide to our existing clients. We are adept at penetrating, cross-selling to, and building-out existing client accounts through our successful performance and comprehensive knowledge of their business, which has led to many long-term contract relationships. We believe our high level of client satisfaction and deep knowledge of our clients’ business processes enhance our ability to cross-sell additional services.

Expand Our Client Base We believe that the federal government’s increasing reliance on outsourcing and the increased emphasis on national security and homeland security, coupled with the changes in procurement reform, have significantly increased our market opportunity. We have a longstanding heritage of supporting the federal government in the areas of contingency and disaster response planning; information assurance; critical infrastructure protection; and command and control, communications, and intelligence. We intend to leverage this broad experience to expand our client base to include organizations in the federal government for which we have not historically worked. We believe our ability to win new clients is enhanced by our position as a prime contractor on three of the four largest information technology services GWACs. These contracts enable us to sell our services and solutions to virtually any federal government agency. In addition, we intend to continue strategic hiring to expand the breadth of our expertise into new areas of the federal government or new technologies. We have used strategic hires as a cost-effective way to build-out client accounts, to establish new competencies, and to penetrate new markets.

Focus Our Applied Research and Development Investments to Enhance Our Core Business We intend to continue to invest in applied research and development initiatives to enhance our competitive position within our business. For example, we have employed proprietary intellectual property developed through these initiatives in engagements relating to hyperspectral imagery, a virtual operations center, a sensor network analytical platform, visual radio frequency identification analyzer, foreign language text analysis, and information extraction systems which can automatically adapt to new extraction requirements.

Pursue Strategic Acquisitions We plan to continue to pursue strategic acquisitions to complement internal growth and to position ourselves to capitalize on anticipated high growth areas. For example, we acquired MNG in January 2002, Adroit in January 2003, Orion in January 2004, Touchstone in April 2005, Galaxy in July 2005, Spectrum in November 2005, Mercomms in April 2006, RABA in October 2006, and Constella in August 2007. Our acquisition strategy is focused on firms that will enable us to cost-effectively add new clients, specific agency knowledge, or technical expertise. We intend to continue to selectively acquire high quality companies that accelerate our access to existing or new markets that we believe have strong growth dynamics.

OUR SERVICES AND BUSINESS SOLUTIONS

Our Services We offer a broad range of technology and strategic consulting services that spans the information technology life cycle, including: strategic consulting; systems design, development, and integration; and outsourcing and managed services. Strategic Consulting. We help clients formulate business and execution plans to improve performance, cost effectiveness, and quality of service. We assess current operations, develop targeted strategies and plans for improvement, define key priorities and accountabilities, and design enterprise architectures that capitalize on client investments in legacy systems while enabling them to make a seamless transition to modern technology environments. We work with leaders and their management teams to develop specific implementation plans that achieve the established strategies, effectively track and manage implementation efforts, and measure and validate results. Systems Design, Development, and Integration. Our services include project management, systems design, network and systems integration, data analysis and integration, security engineering, software development, database design and development, and independent test and evaluation. We analyze system concepts and assess data and information needs, define requirements, develop operational prototypes, and integrate complex mission-critical systems and solutions that comply with a client’s enterprise architecture. Based on client requirements, we may design custom-built systems;

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integrate and implement commercial off-the-shelf solutions, such as those for supply chain management, enterprise resource planning, and case management; or combine both approaches using service-oriented architecture principles and other industry best practices. Outsourcing and Managed Services. We partner with clients to consolidate and modernize existing infrastructures, improve customer service, and reduce the total cost of operations through effective use of industry best practices and performance-based contracting methods. We also support clients with operations management services, sometimes referred to as co-sourcing. Based on client needs, we may oversee their technical infrastructure, manage their applications and networks, or operate their entire business processes in accordance with service-level agreements.

Our Business Solutions We have developed business solutions that focus on specific business requirements that are common to many of our clients. These business solutions generally apply to clients within each of our target markets. Our core business solutions include business intelligence: text and data mining; contingency and disaster planning; enterprise architecture and portfolio management; enterprise resource planning; identity management; information assurance and privacy protection; information sharing and knowledge management; outsourcing, managed services, and infrastructure modernization; service-oriented architecture; training, modeling, and simulation; and wireless integration services. These business solutions consist of repeatable tools, techniques, and methods that reflect the specific competencies we have gained from significant experience in these areas. Our current business solutions are enhanced through our focus on applied research and development in the areas of data mining, natural language understanding, knowledge management, and wireless applications. Business Intelligence: Text and Data Mining. We provide data mining solutions to help clients analyze and identify hidden patterns in large databases, data marts and warehouses, spreadsheets, and text. This gives them foresight into future trends, as well as the ability to predict outcomes and classify transactions. We combine the capabilities of our NetOwl® text mining software and our ORIONMagic® knowledge management software to offer our clients enhanced means of managing, exploiting, and analyzing large amounts of enterprise data. ORIONMagic helps clients cull through gigabytes of information, store the most relevant pieces, and analytically scour each piece. Our text mining tools collect, search, organize, analyze and turn large amounts of unstructured text data into structured data for greater utilization. NetOwl software applies advanced natural language understanding technologies to English, Arabic, Chinese, Farsi, French, Korean, and Spanish text to extract content. In fiscal 2007, we developed and applied new predictive models for the Internal Revenue Service, or IRS, to detect refund fraud at lower cost than previous statistics-based solutions and to detect noncompliance in tax-exempt entity filings. We are also developing a suite of predictive models to detect earned income tax credit noncompliance. For the Environmental Protection Agency, or EPA, we are developing data warehousing and reporting solutions for the ENERGY STAR program. Contingency and Disaster Planning. We offer a broad spectrum of solutions to help clients prepare for, respond to, and recover from events that could adversely affect operations. Our services include continuity of operations and government, disaster response and recovery, crisis communications, and critical infrastructure planning. We have over 25 years’ experience supporting clients in these areas across federal, state, and local government. For example, we support the Transportation Security Administration, or TSA, with technical services for a comprehensive TSA-wide continuity of operations program. We provide technical and support services for program, policy, and document development; planning support; tests, training and exercises; and technical assistance and review as well as operations and support services at various facilities. For the Department of Homeland Security’s, or DHS’s, Office of Infrastructure Protection, or OIP, we provide strategic consulting and operations support, including support to critical infrastructure councils, such as the Sector Partnership Framework and the National Infrastructure Advisory Council. We also support DHS in preparing the private sector for a possible pandemic influenza outbreak. We developed the initial pandemic strategy for OIP and constructed a pandemic preparedness guide for the private sector. We are currently supporting DHS in the implementation of a pandemic guide. Our work for the Virginia Governor’s Office of Commonwealth Preparedness is helping the state’s public safety community effectively communicate during daily operations and major emergencies. Our practitioner-driven process for planning and implementation makes use of expertise throughout the state to improve standard operating procedures, technology, and training and exercises for interoperable communications.

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In 2006, we received a contract to continue to provide strategy and execution support services to DHS’s Office for Interoperability and Compatibility. We deliver program management support; communications and outreach; governance and stakeholder coordination; development of near- and long-term strategies to improve interoperability and incident response; method and tool development; and standards and requirements development and acceleration. Recent accomplishments include the successful roll-out of incident management tools to all major U.S. Navy facilities and statewide strategic planning pilots in three states. Enterprise Architecture and Portfolio Management. Federal agencies use information technology, or IT, investment and governance processes such as enterprise architecture — a framework or blueprint to identify and link processes, systems, databases, and technology to outcomes — and portfolio management to help them make informed investment decisions and to best manage their portfolios of IT projects and programs with reduced risk and cost. We offer enterprise architecture solutions that combine best practices with our results-based, holistic enterprise architecture approach that delivers measurable progress in both added value and organizational maturity. We have led numerous federal and state government enterprise architecture efforts, turning data into actionable information using a robust set of data and process visualization, governance, analysis, and reporting tools. Our experience includes expertise in implementing and executing enterprise architecture guidance from the Office of Management and Budget, or OMB, the Federal Chief Information Officer, or CIO, Council, and the Government Accountability Office, or GAO. We have gained extensive enterprise architecture and portfolio management experience during ongoing work with clients including NIH, IRS, EPA, GAO, the Department of Defense, or DoD, Missile Defense Agency, the U.S. Marine Corps, and the Department of Justice. We support NIH’s Office of Research Services in planning for and responding to a possible pandemic flu. This year we expanded the enterprise architecture model to aid executives and senior managers in responding to a pandemic involving an extreme loss of personnel. The architecture enhances management planning by providing a high-level view of the enterprise to aid managers who may be quickly put into new positions during a pandemic. It supports cross- organizational analysis by identifying essential functions and resources available through management dashboards. We also facilitated the development of an enterprise-wide pandemic plan. Enterprise Resource Planning. We use enterprise solutions, such as Oracle, PeopleSoft, SAP, and Seibel applications and technologies, to help our federal government clients improve performance by modernizing, consolidating, and unifying their financial, human resource, supply chain, and customer relationship management systems. Clients for whom we provide these services include the U.S. Coast Guard, for whom we designed and implemented a service-wide human resources enterprise resource planning system, the Department of Agriculture, and the Pension Benefit Guaranty Corporation. The Department of Agriculture, or USDA, relies on a large network of suppliers, warehouses, distribution centers, and transportation channels to distribute commodities to over 30 million Americans and 280 million people abroad. This includes school lunch programs for children across the U.S. We designed and maintain a Web-based supply chain management which enables USDA to manage the many components of this supply chain more effectively. This performance-based contract, worth an estimated $90.5 million over five years if all options are exercised, represents our largest enterprise resource planning implementation to date. When fully operational, the system will feature commercial off-the-shelf products and software and help improve USDA’s ability to view the status of their food commodity requests at any stage of the order and fulfillment cycle, with improved demand and supply planning, an enhanced procurement process, reduction in order cycle times, timely and more accurate financial processing, and other customer relationship management areas to reduce costs for both USDA and its customers. Identity Management. Homeland Security Presidential Directive-12 set policy for a secure, reliable, and common identification standard for federal employees and contractors. We are a founding member of the Federation for Identity and Cross-Credentialing Systems consortium, and are helping to provide the government with the necessary security and standardization to meet this directive. The consortium is currently working with the DoD to provide trusted, interoperable identity verification and credential authentication for contractors accessing secure government facilities and networks. We combine our experience in providing public key-enabled applications, smart card technology, and directory technologies with processes, techniques, and methodologies to address the privacy, security, technology, and program and change management issues facing our clients. These clients include the Departments of Health and Human Services, Justice, and Homeland Security; the EPA; and the Federal Deposit Insurance Corporation, or FDIC.

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Information Assurance and Privacy Solutions. Our information assurance and privacy solutions enable our clients to achieve regulatory compliance, ensure business continuity, limit liability, and enhance privacy risk mitigation. Our experience in the federal government includes security planning and engineering, threat and vulnerability analysis, penetration testing, computer forensic analysis, education and training, intrusion detection and response system support, systems certification and accreditation, and privacy impact assessments. We deliver a wide range of information assurance and privacy protection services to clients across government, including the Departments of Agriculture, Defense, Education, Health and Human Services, Homeland Security, Justice, Labor, and the Treasury; EPA; FDIC; the Office of Personnel Management, or OPM; the Securities and Exchange Commission; and the U.S. Agency for International Development, or USAID. Information Sharing and Knowledge Management. We provide strategic advice on information sharing and we use our text and data mining, privacy, security, and identity management expertise to design solutions to meet clients’ needs for secure, efficient information sharing. We help our clients meet homeland security mandates and exploit the potential of the Internet for real-time analysis and decision-making. Our knowledge management services and solutions help agencies effectively access, capture, retrieve, manage, use, and share enterprise information to maximize communication and productivity. We integrate commercial-off-the-shelf and custom applications to increase organizational knowledge flow and perform knowledge audits, portal design and configuration, usability analysis, taxonomy and metadata services, and enterprise information management governance and architectures, including access, content, document, and records management to enhance information sharing across systems and organizations. We provide these services for clients in the federal government, including the U.S. Air Force. Outsourcing, Managed Services, and Infrastructure Modernization. We provide outsourcing and managed services solutions to help clients consolidate and modernize their infrastructures while preserving inherent value, improving customer service, and reducing the cost of operations using industry best practices, repeatable processes, and performance-based contracting methods. We support clients with operations management services and we may oversee their technical infrastructures, manage their applications and networks, or operate their entire business processes in accordance with service-level agreements. Clients we provide these services for include the Health Resources and Services Administration, the National Guard Bureau, FDIC, GAO, OPM, and USAID. We deliver infrastructure management solutions, including IT service management consulting and enterprise systems management, to support our clients’ evolving business needs and missions. We help them to manage, successfully and cost-effectively, the complexity of geographically dispersed IT infrastructures and obtain increased operational efficiencies by aligning infrastructure and application performance measures with business performance measures. Our solutions provide delivery of IT Infrastructure Library standards-based processes and the ISO 20000 standard for IT service management. We deliver IT service management consulting, education, and implementation services as part of a delivery methodology, which we integrate with our CMMI Level 3 processes. Service-Oriented Architecture. With constant advances in IT, our clients have an ongoing need for a service- oriented architecture — a disciplined, standards-based framework for building and managing enterprise systems using shared services and infrastructure to increase business agility, reduce redundancy, and enable new modes of interaction. We apply service-oriented architecture processes, patterns, and technologies across the IT life cycle to align our clients’ resources with their missions, identify redundant services, capture business processes, and implement governance structures in existing enterprise architectures. We have experience in applying a wide range of service-oriented technologies, tools, and platforms, including Web service standards, service registries, enterprise service bus products, and large-scale integrated service-oriented architecture application suites. We deliver service-oriented architecture-based solutions to the Departments of Agriculture and Defense; the Library of Congress; and USAID. Many of our ERP implementations are built on service-oriented architecture-based templates, industry best practices, and product roadmaps. Training, Modeling, and Simulation. Our training services and solutions range from custom tools to integration of commercial systems. All are designed to enhance workforce performance at any level. We use our systematic development approach, based on rigorous Instructional System Development standards, to develop curriculum, computer- or Web-based distance learning, and e-learning solutions. We provide full life cycle services for implementing learning management systems and integrating the systems with legacy or commercial off-the-shelf products. Our closed loop system processes connect training to actual job performance and provides a mechanism to monitor, evaluate, and validate that the training achieves the desired outcomes through demonstrable on-the-job performance outcomes. We have designed and implemented training systems for clients across DoD and civil agencies. 10 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. 11 Operator pm1

Wireless Integration Services. Our wireless integration services include full life cycle consulting and security planning, enterprise deployment and integration, and application development. These services enable our clients to cost- effectively expand their infrastructures to the wireless enterprise. This makes information more accessible and offers portability, flexibility, security, and reliability. Clients for whom we provided wireless integration services in fiscal 2007 include the Navy Exchange Service Command, where we performed an assessment and provided industry best practices for the security of their wireless environment, and the FDIC, where we developed and implemented cost savings methodologies.

TARGET MARKETS We deliver our technology and strategic consulting services and solutions primarily to federal government clients within three target markets: • national security, which consists of two components: • command and control, communications, and intelligence, and • information systems for the Department of Defense; • civil government; and • health care and public health. We also provide technology and strategic consulting services and solutions to a few commercial clients. The following is a summary of our business in each of our markets:

Total Revenue Contract Fiscal year ended Fiscal year ended Backlog as of Market June 30, 2007 June 30, 2006 June 30, 2007 (in millions) National security ...... $ 745.3 $ 697.2 $1,953.3 Civil government ...... 395.6 374.5 1,030.1 Health care and public health ...... 115.5 100.0 416.6 Commercial ...... 12.5 7.6 10.2 Total ...... $ 1,268.9 $1,179.3 $3,410.2

National Security We view the national security market as consisting of two distinct components: command and control, communications, and intelligence, and defense information systems. Command and Control, Communications, and Intelligence. The broad range of services we deliver to national security, law enforcement, and intelligence agencies and organizations includes program management; research, systems analysis, and engineering; intelligence, surveillance, and reconnaissance; and counterintelligence and counterterrorism. Our work on the U.S. Air Force Flexible Access Secure Transfer Technology Evaluation Project will help enhance coalition force interoperability and improve Joint forces situational awareness and communications. The program management, acquisition planning, spectrum management, modeling and simulation, and systems engineering services we provide are designed to enable U.S. and NATO military units to exchange secure, real-time data, voice, and video over the air across hundreds of miles. The U.S. Army Natick Soldier Research Development and Engineering Center’s Future Force Warrior Advanced Technology Demonstration, the research and development foundation for the Ground Soldier System, is enhancing the safety, mobility, and situational awareness capabilities of U.S. soldiers. We play an integral role in this program through our work with the Air Force Research Laboratory Human Effectiveness Directorate and Future Force Warrior engineers and soldiers. For example, the leader system software we are developing condenses a large volume of information into a manageable interface, improving situational awareness for field platoon leaders. We are also integrating existing and emerging technologies, including speech recognition and the Air Force standard XML “Cursor on Target,” and helping to improve and augment ground operations to include route navigation planning, medical evacuation and remote physiological monitoring, unmanned ground sensor data management, and target prosecution and engagement.

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The hyperspectral and synthetic imagery analysis we provide to the Army Space and Missile Defense Command is contributing to enhanced force protection for coalition forces in combat zones. In addition, our analysts are pioneering new technical analysis capabilities for homeland security, border security, and missile defense. We perform a wide and expanding range of research and development services for the U.S. intelligence community, including software development and engineering to support prototype implementation, text mining, embedded programming, and analytical support. These solutions support our client in producing new organizational capabilities and providing computer application integrity and system and network protection. Violent gang-related crimes are a growing trend across the country, and solving them is complicated by gang members’ mobility and growing realm of influence. Our GangNet database system is a browser-based investigative, analysis, and statistical resource used by law enforcement officials to record and track gang members and their activities. The system includes the individuals’ photos, street names, addresses and known associates, along with gang hand signals and images of their tattoos. The system is continuously updated with additional features, such as mapping and facial recognition. GangNet is used by law enforcement officers in 14 states (including cities such as Las Vegas, Los Angeles, and Minneapolis); the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Department of Homeland Security’s Immigration and Customs Enforcement; and the Federal Bureau of Investigation. It is also being used in Canada. Investigators can use the solution’s collaboration and information sharing capabilities across jurisdictions. A Web-based reporting and management system we have developed for a federal law enforcement agency is helping to improve reporting time and data accuracy for criminal investigations. The portal is accessed by thousands of users across the United States to track and report criminal investigations by local and state agencies and features an advanced search capability and data capture mechanism to quickly disseminate information related to criminal activity. We have migrated over 30 years of legacy data into the new system and have developed a Web interface to simplify data entry. Our AVALON rapid prototyping environment supports custom application development for the intelligence and aerospace communities. Using our experience and capabilities in service-oriented architecture, we have designed and developed a Web-services capability to enable users to access AVALON’s analytic capabilities through a Web browser. We continue to enhance this solution through government-funded research and development contracts. We are conducting research into emerging computing systems and technologies to produce smaller, faster components with greater computing power. We are also building a prototype to ensure secure, user-specific downloads with a newly designed data containment service that protects computer systems and networks from viruses and worms and provides a safe area for users to work. Defense Information Systems. We design, develop, integrate, and implement complex systems in accordance with network-centric and service-oriented enterprise architectures. We have subject matter expertise in logistics, transportation, acquisition, personnel, finance, and installation management. In fiscal 2007, we were awarded a new contract to help the U.S. Marine Corps develop an integrated digital work environment for acquisition and life cycle systems management functions. The system will provide a secure and easily accessible common work environment for Marine Corps Systems Command personnel to work collaboratively with other internal and external stakeholders using consistent, automated business processes leveraging a fully integrated data environment. We are delivering a commercial off-the-shelf-based solution and providing requirements analysis, data architecture, systems engineering and integration, knowledge management, and training services. For 20 years, we have supported the U.S. Transportation Command in its mission to deliver transportation, sustainment, and distribution services to the nation’s troops. The range of services we currently provide to Directorates across the Command includes joint exercise program management, enterprise architecture and portfolio management, training, critical infrastructure protection, and data management. In fiscal 2007, we expanded our support with new contracts to design and execute tabletop exercises for contingency planning, and to identify geographic information system technologies and best practices for resource management. In 2003, the Army Communications-Electronics Command selected Galaxy Scientific Corporation, which we acquired in 2005, as a prime contractor on the Rapid Response contract. The information technology services we deliver under this contract help quickly deploy systems to satisfy the nation’s security, defense, and business needs. We received over 20 new task order awards in fiscal 2007 to deliver services to support Army programs around the world. For example, the systems analysis and architecture development work we performed has improved network infrastructure capabilities and will help develop a roadmap for future systems development. Our information assurance services support the Army’s Communications Security Logistics Activity’s supply chain management initiatives.

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We have managed and operated the enterprise operations center for GuardNet XXI, the Army National Guard’s enterprise network communications structure, since 2001. GuardNet XXI serves as the communication channel for data and video between the Department of the Army and the National Guard Bureau, encompassing 54 states, U.S. territories, the National Capital Region, and the District of Columbia. The network delivers services to support command and control, mobilization, readiness training, and distance learning. In 2006, we were awarded a new performance- based contract to continue support to the enterprise Army National Guard IT environment. We manage several critical enterprise Army National Guard IT services. This includes wide area network services and other enterprise systems such as Microsoft’s Active Directory and Exchange Messaging, service desk, and international video operations. We provide network engineering, operations, and security; systems design, integration, implementation, and management; facility operations; equipment maintenance; and support for a full time centralized service desk that receives, routes, and resolves IT support requests from users across all of the states and territories. We developed and have begun implementation of IT Infrastructure Library best practices designed to maximize performance targets in the areas of service availability, capacity, and responsiveness to service level objectives.

Civil Government and Health Care and Public Health We help clients in civil agencies develop and implement strategies and use advanced technology to enable operational efficiencies and delivery of service-oriented solutions to citizens. Our clients include the Departments of Agriculture, Commerce, Justice, Labor, Transportation, the Treasury, and Veterans Affairs; the Environmental Protection Agency; the Federal Deposit Insurance Corporation; the Government Accountability Office; the Library of Congress; the National Archives and Records Administration; the U.S. Agency for International Development; and the Department of Health and Human Services including such agencies as the National Institutes of Health and the Food and Drug Administration. As the single systems integrator providing enterprise-wide IT infrastructure management services to the Federal Deposit Insurance Corporation, or FDIC, we support approximately 7,000 users at FDIC headquarters and 94 field offices nationwide. The services we deliver to this client include program management; client and help desk support; data center and local-area network operations; information security operations; systems and telecommunications engineering and integration support; and hardware/software procurement, distribution, and maintenance. During fiscal 2007, we led and supported key reengineering and process improvement initiatives — including desktop refresh for users, year-end processing to meet legislative changes, and automated server builds — to simplify the infrastructure, improve customer service, and reduce costs. The comprehensive enterprise management infrastructure services we deliver to the Office of Personnel Management, or OPM, are helping modernize and improve network operations and processes. We are responsible for the design, architecture, and installation of the current infrastructure to ensure it is available, secure, and responsive to users; compliant with Federal requirements; and scalable to meet OPM’s current and future program needs. We are currently developing a strategic plan for modernizing the Personnel Investigations Processing System and integrating all systems that support the OPM personnel security program. Since 2003, we have provided enterprise-wide technology services to help the National Archives and Records Administration, or NARA, increase the performance and reliability of its IT infrastructure aimed at helping this client meet a growing demand for electronic federal records and online services. We manage and maintain a nationwide network that ties together NARA’s users and offices, including the nationwide records centers and the Presidential Libraries. In addition to the program management, help desk, and network design, operations, and security services we contribute, we continue to analyze and implement emerging technologies to enhance customer support and upgrade network capabilities. In fiscal 2007, we engineered and implemented a major upgrade to NARA’s enterprise-wide directory and communications infrastructure, enhancing service to all NARA sites. We developed and manage the National Practitioner Data Bank, or NPDB, and the Healthcare Integrity and Protection Data Bank, or HIPDB, on behalf of the U.S. Health Resources and Services Administration. These national flagging systems protect the public by collecting and disclosing adverse actions taken against health care practitioners, providers, and suppliers to authorized health care entities. In fiscal 2007 we were awarded a new contract to continue to operate, maintain, and enhance the data banks. The NPDB, a fee-for-query system, helps to ensure quality health care by providing a national system to verify adverse actions taken against practitioners and also helps to safeguard against high-risk practitioners moving from state to state or job to job without disclosing their past history. The HIPDB, also a fee-for query system, provides information on health care practitioners, providers, and suppliers and related fraud and

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abuse. The HIPDB serves the public by promoting quality health care and deterring health care fraud and abuse. Our services include software development, systems engineering, operations services, systems administration, testing, and security services. We have a long history of delivering support to the EPA’s Brownfields Program. We provide technical research and analytical support, legislation and policy analysis, program planning, data analysis, communications and outreach, and facilitation and training to help EPA’s Office of Brownfields Cleanup and Redevelopment effectively manage the program. We also develop information management solutions to help them manage, report, and communicate activities, accomplishments, and performance measures for the program. Under two new contracts awarded in fiscal 2007, we will continue to provide the Brownfields Program with integrated program implementation and IT solutions. Since 2003, we have provided a range of technical services to support USAID, a federal agency that delivers economic, development, and humanitarian assistance around the world. In fiscal 2007, we continued to work on critical agency initiatives, including modernization of a worldwide procurement system. The Global Acquisition System we developed supports the Web-based procurement process at USAID and features a real-time interface with the agency’s financial system, providing senior managers with integrated system reports to aid in decision making. We also worked with the Peace Corps to install satellite communications from 30 offices worldwide to the headquarters office in Washington, DC. We work with USAID’s Office of Economic Growth, Agriculture, and Trade to support their use of information and communication technology to help their global missions implement in-country aid programs. For example, we installed a wireless network infrastructure for the Government of Haiti and helped bring phone and Internet access to villages in Vietnam.

EXISTING CONTRACT PROFILE Contract Types. As of June 30, 2007 we had over 900 active contract engagements, each employing one of three types of price structures: cost-plus-fee, time-and-materials, and fixed-price. Cost-plus-fee contracts. Cost-plus-fee contracts provide for reimbursement of allowable costs and the payment of a fee, which is our profit. Cost-plus-fixed-fee contracts specify the contract fee in dollars. Cost-plus-award-fee contracts may provide for a base fee amount plus an award fee that varies, within specified limits, based upon the client’s assessment of our performance as compared to contractual targets for factors such as cost, quality, schedule, and performance. Time-and-materials contracts. Under a time-and-materials contract, we are paid a fixed hourly rate for each direct labor hour expended and we are reimbursed for allowable material costs and out-of-pocket expenses. To the extent our actual direct labor and associated costs vary in relation to the fixed hourly billing rates among various labor categories provided in the contract, we will generate more or less profit or could incur a loss. Fixed-price contracts. Under a fixed-price contract, we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less than the anticipated amount of profit or could incur a loss. Some fixed-price contracts have a performance-based component, pursuant to which we can earn incentive payments or incur financial penalties based on our performance. We generally do not undertake complex, high-risk work under fixed-price terms. Our historical contract mix, measured as a percentage of total revenue for the periods indicated, is summarized in the table below.

Year Ended June 30, 2007 2006 2005 Cost-plus-fee...... 43% 45% 46% Time-and-materials ...... 42 40 34 Fixed-price...... 15 15 20

Government Wide Acquisition Contracts and GSA Schedule Contracts. We are a leading supplier of technology and strategic consulting services and solutions to federal government clients under GWACs and are currently a prime contractor on three of the four largest information technology services GWACs, measured by the aggregate dollar amount of delivery order awards as of June 30, 2007. We also hold six GSA schedule contracts: Schedule 70, MOBIS, Environmental Advisory Services, Professional Engineering Services, Training and Course Development, and Logistics Worldwide. Despite recent reorganization challenges at GSA, GWACs and GSA schedule contracts remain popular contract award methods, offering flexible, cost-effective, and rapid procurement processes.

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The following table sets forth our GSA schedule contracts and the GWAC contracts on which we currently act as a prime contractor. The period of performance indicated below includes all option years.

Contract name Host agency Period of performance Contract ceiling value (in billions) CIO-SP2i...... NIH December 2000–December 2010 $ 20.0 Millennia...... GSA FAS April 1999–April 2009 25.0 Millennia Lite...... GSA FAS June 2000–June 2010 20.0 Alliant...... GSA FAS August 2007–August 2017 50.0 GSA Schedule 70...... GSA FAS May 1997–August 2007 No ceiling GSA MOBIS...... GSA FAS June 1998–September 2007 No ceiling GSA EAS...... GSA FAS September 1999–August 2009 No ceiling GSA PES...... GSA FAS October 2000–October 2010 No ceiling GSA LOGWORLD...... GSA FAS August 2004–August 2009 No ceiling GSA Training and Course Development. . . . GSA FAS December 2006-December 2011 No ceiling

Revenue under our GWAC and GSA schedule contracts accounted for 54% of our total federal government revenue in fiscal year 2007, 59% in fiscal year 2006 and 60% in fiscal year 2005. We were awarded a prime contract by GSA under the new Alliant contract in 2007. Although GSA’s intent is for Alliant to replace the Millennia and ANSWER contracts, task orders on the Millennia contract may be extended for up to five years beyond April 2009, the current end date for its period of performance.

BACKLOG As of June 30, 2007, our backlog was approximately $3.4 billion, of which $600.4 million was funded. As of June 30, 2006, our backlog was $3.3 billion, of which $512.8 million was funded. We define backlog to include funded and unfunded orders for services under existing signed contracts, assuming the exercise of all options relating to those contracts, less the amount of revenue we have previously recognized under those contracts. Backlog includes all contract options that have been priced but not yet funded. Backlog also includes the contract value under single award ID/IQ contracts against which we expect future task orders to be issued without competition. Backlog does not take contract ceiling value into consideration under multiple award contracts, nor does it include any estimate of future potential delivery orders that might be awarded under multiple award ID/IQ vehicles, GWACs, or GSA schedule contracts. We define funded backlog to be the portion of backlog for which funding currently is appropriated and obligated to us under a contract or other authorization for payment signed by an authorized purchasing authority. We currently expect to recognize revenue during fiscal year 2008 from approximately 25% of our total backlog as of June 30, 2007. Our backlog includes orders under contracts that in some cases extend for several years, with the latest expiring at the end of calendar year 2016. We cannot guarantee that we will recognize any revenue from our backlog. The federal government has the prerogative to cancel any contract or delivery order at any time. Most of our contracts and delivery orders have cancellation terms that would permit us to recover all or a portion of our incurred costs and potential fees in such cases. Backlog varies considerably from time to time as current contracts or delivery orders are executed and new contracts or delivery orders under existing contacts are won. Our estimate of the portion of the backlog as of June 30, 2007 from which we expect to recognize revenue during fiscal year 2008 is likely to be inaccurate because the receipt and timing of any revenue is subject to various contingencies, many of which are beyond our control.

SUBCONTRACTORS When we act as a prime contractor, as we typically do, we derive revenue primarily through our own direct labor services, but also through the efforts of our subcontractors. As part of the contract bidding process, we may enter into teaming agreements with subcontractors to enhance our ability to bid on large, complex engagements or to more completely address a particular client’s requirements. Teaming agreements and subcontracting relationships are useful because they permit us as a prime contractor to compete more effectively on a wider range of projects. In addition, we may engage a subcontractor to perform a discrete task on a project, or a subcontractor may approach us because of our position as a prime contractor. When we are a prime contractor on an engagement, we are ultimately responsible for the overall engagement as well as the performance of our subcontractors. Revenue derived from work performed by

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subcontractors represented approximately 29%, 30%, and 32% of our revenue for fiscal year 2007, 2006, and 2005, respectively. No single subcontractor performed work that accounted for more than 5% of our revenue during any of the last three fiscal years.

APPLIED RESEARCH AND DEVELOPMENT AND INTELLECTUAL PROPERTY We are dedicated to giving our clients the innovative solutions they need to meet their most difficult technology challenges, both now and in the future. Our research and development, or R&D, team works with professionals across the company to assess client needs and ensure that our investments focus on meeting them. For over 25 years, we have pursued internally- and government-funded R&D in such areas as data mining, natural language understanding, knowledge management, information assurance, and wireless applications. We continue to use our domain expertise and advanced technical knowledge to anticipate, identify, and develop forward-looking technologies to enable clients to meet their mission objectives. We rely upon a combination of nondisclosure and other contractual arrangements and copyright, trademark, patent, and trade secret laws to protect our proprietary rights. We also enter into confidentiality and intellectual property agreements with all of our employees that require them to disclose any inventions created during employment, that convey all rights to inventions to us, and that restrict the distribution of proprietary information.

CLIENTS Our federal government clients typically exercise independent contracting authority, and even offices or divisions within an agency or department may directly, or through a prime contractor, use our services as a separate client so long as that client has independent decision-making and contracting authority within its organization. We consider each office or division within an agency or department, which engages us directly or through a prime contractor, to be a separate client. The National Guard, as a client group, accounted for approximately 10%, and 11% of our revenue in fiscal years 2006, and 2005, respectively. The United States Agency for International Development, as a client, accounted for approximately 10%, and 12% of our revenue in fiscal years 2006, and 2005, respectively. No other client or client group accounted for more than 10% of our revenue in any of the last three fiscal years. In our fiscal year ended June 30, 2007, federal government clients accounted for 99% of our revenue, with approximately 1% attributable to commercial clients. In our fiscal year ended June 30, 2007, we derived approximately 58% of our revenue from national security clients, approximately 31% from civilian agencies and departments, approximately 9% from health care and public health clients, and approximately 1% from commercial clients. We currently support 14 of the 15 federal departments in the executive branch, all branches of the military services, and the judicial and legislative branches of the federal government.

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The following table sets forth some of our current clients for each of our federal government businesses. Selected current federal government clients

National security Civil government Health care and public health Department of Defense: Department of the Treasury: Department of Health and Human Services: Department of the Army Internal Revenue Service Office of the Secretary Department of the Navy U.S. Mint National Institutes of Health Department of the Air Force Department of Education Food and Drug Administration U.S. Army Reserves Department of Energy Centers for Disease Control and Prevention U.S. Marine Corps Department of Justice Health Resources and Services Administration Joint Chiefs of Staff Department of the Interior Administration for Children and Families U.S. Transportation Command Department of Labor Centers for Medicare & Medicaid Services Air Mobility Command Department of State Department of Defense: Military Sealift Command U.S. Agency for International Development Assistant Secretary of Defense for Health Surface Deployment and Distribution Department of Commerce Affairs Command Department of Veterans Affairs Army Medical Command U.S. Army Forces Command Department of Transportation: Office of the Army Surgeon General Office of the Secretary of Defense Federal Aviation Administration Defense Manpower Data Center Department of Agriculture Defense Advanced Research Projects U.S. Peace Corps Agency Environmental Protection Agency Defense Logistics Agency Small Business Administration Defense Information Systems Agency National Archives and Records Administration National Guard Bureau Library of Congress Various intelligence agencies General Services Administration Department of Homeland Security Government Accountability Office Defense Threat Reduction Agency Administrative Office of the U.S. Courts Pension Benefit Guaranty Corporation National Science Foundation Office of Personnel Management Federal Deposit Insurance Corporation Securities and Exchange Commission Executive Office of the President Office of Management and Budget US Nuclear Regulatory Commission

SALES AND MARKETING We have a highly disciplined sales and marketing process that relies upon the business units addressing each of our target markets to further penetrate and build-out their existing accounts and our centralized federal sales and marketing organization to win new competitive procurements. Primary responsibility for selling additional services to existing clients, including client account build-out and capture of follow-on work, rests with our business units. Recognizing the importance of client account management, we assign entrepreneurial managers and executives to oversee our major accounts. Primary responsibility for identifying, qualifying, bidding, and winning new competitive procurements, either for new clients or for large strategic new programs within existing clients, rests with our centralized federal sales and marketing organization. We have approximately 70 experienced sales and marketing professionals that perform business development, task order sales, corporate communications, procurement support, pricing, and proposal development. Members of our sales and marketing organization work closely with their counterparts in our business units as we compete to win new business.

COMPETITION We compete to win single award contracts and multiple award contracts, such as agency-specific indefinite delivery/ indefinite quantity, GWACs, and GSA schedule contracts. After we have won a multiple award contract, we then compete for individual delivery orders under the contract. For example, GSA schedule contracts and prime contractor positions on GWACs are typically awarded to multiple contractors. A multiple award contract will list both the providers and the labor categories of products and services that can be performed under the contract. An individual agency that desires to obtain a service typically invites approved providers to compete based on technological expertise, resources, price, or some other basis.

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We encounter many of the same competitors in each of our three target markets. These competitors include: • Federal systems integrators such as Booz Allen Hamilton Inc., CACI International Inc., Computer Sciences Corporation, Electronic Data Systems Corporation, ManTech International Corporation, Science Applications International Corporation, and Unisys Corporation; • Divisions of large defense contractors such as General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, and Raytheon Company; • Consulting firms such as Accenture Ltd, BearingPoint, Inc., and International Business Machines Corporation; and • Other smaller and specialized government information technology contractors.

EMPLOYEES AND CORPORATE CULTURE Our success as a technology and strategic consulting services and solutions company is highly dependent on our employees. We believe we have been successful in developing a culture that enables our employees to succeed. We emphasize three essential attributes—an ethic of honesty and service, quality work and client satisfaction, and caring about our people. We reinforce these principles regularly in our recruiting process, training programs, proposals, company meetings, and internal communications. Our active recruiting effort is aligned with our strategic business units and relies heavily on employee referrals in addition to a variety of other recruiting methods. Our primary source of our new recruits is employee referrals, which accounted for approximately 51% of our new hires in fiscal 2007. We have found these referrals to be a reliable source of excellent employees. As a result of our continued focus on our employees, in 2007 we were named by FORTUNE magazine as one of the “100 Best Companies to Work for” for the eighth consecutive year. As of June 30, 2007, we had over 5,200 employees. Over two-thirds of our employees have federal government security clearances. Approximately 97% of our employees are professionals or managers with technology or domain expertise, and approximately 3% are administrative managers or support specialists. Our professional staff is highly educated, with approximately one-third holding advanced degrees. We have no employees represented by collective bargaining agreements, and we consider our relations with our employees to be good.

CORPORATE INFORMATION We were incorporated as Systems Research and Applications Corporation in Virginia in 1976 and began operations in 1978. We reincorporated in Delaware as SRA International, Inc. in 1984. We generally contract with the federal government through our wholly-owned subsidiary, Systems Research and Applications Corporation, but we do business as SRA International, Inc.

WEBSITE ACCESS TO SEC REPORTS Our Internet website can be found at http://www.sra.com. Information contained on our Internet website is not part of this report. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the Section 16 filings of our officers, directors, and shareholders beneficially owning 10% or more of our common stock are available on our website, free of charge, as soon as reasonably practicable after such reports are filed with or furnished to the SEC. Alternatively, you may access these reports at the SEC’s Internet website: http://www.sec.gov.

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EXECUTIVE OFFICERS OF THE REGISTRANT Our executive officers and their ages as of July 31, 2007, are as follows:

Name Age Title Stanton D. Sloane...... 56 President and chief executive officer Stephen C. Hughes...... 50 Chief financial officer and executive vice president operations Barry S. Landew...... 48 Executive vice president for strategic development Ernst Volgenau...... 73 Chairman of board of directors Stanton D. Sloane joined us in April 2007 as our president and chief executive officer. He became a member of the Board of Directors in August 2007. Previously, Dr. Sloane served as executive vice president for Integrated Systems and Solutions at Lockheed Martin Corporation from 2004 to 2007 and as president for Lockheed Martin Management/ Data Systems from 2003 to 2004. He began his career with General Electric Aerospace in 1984 and progressed through engineering, program management, and business development assignments in a variety of General Electric Aerospace and subsequently Lockheed Martin businesses. Dr. Sloane also served as an officer in the . Stephen C. Hughes is our chief financial officer and executive vice president operations. He has served as our chief financial officer since March 1996 and became executive vice president in August 2005. From May 1993 to August 2005 he served as senior vice president of finance and accounting. From March 1989 to May 1993, he was our vice president of finance; from April 1986 to March 1989, he served as our comptroller; and from 1984 to 1986, he served as our manager of accounting. Mr. Hughes practiced in the computer audit and tax groups of Coopers and Lybrand, which is now a part of PricewaterhouseCoopers LLP, from 1983 to 1984. Barry S. Landew is our executive vice president for strategic development. He has served as our vice president for corporate development from 1989 through April 1993 and became executive vice president in August 2005. From 1980 to 1989, he served in various positions with us, including software engineer, program manager, and the head of marketing and sales and proposal development. Ernst Volgenau is our founder and has served as our chairman of the Board of Directors since October 2003. He served as the Company’s chief executive officer from October 2003 until December 2004. From 1978 to October 2003, he served as the Company’s president and as a director. From 1976 to 1978, he served as the director of inspection and enforcement for the U.S. Nuclear Regulatory Commission. Dr. Volgenau retired from active duty with the U.S. Air Force as Colonel in 1976. His military service included positions in the Office of the Secretary of Defense and as director of data automation for the Air Force Logistics Command.

Item 1A. RISK FACTORS

Risks Related To Our Industry

A reduction in the U.S. defense budget or the diversion of funding from IT services and solutions to support the war against terrorism or the reconstruction of Iraq could result in a substantial decrease in our revenue. Revenue from contracts with clients in the Department of Defense and the National Guard accounted for 48%, 49%, and 53% of our revenue for the fiscal years ended June 30, 2007, 2006, and 2005, respectively. A decline in overall U.S. military expenditures, or in the portion of those expenditures allocated to information technology services and solutions, could cause a decrease in our revenue and profitability. The reduction in the U.S. defense budget during the early 1990s caused some defense-related government contractors to experience decreased sales, reduced operating margins and, in some cases, net losses. Defense spending levels may not continue at present levels, and future levels of expenditures and authorizations for existing programs may decline, remain constant, or shift to agencies or programs in areas where we do not currently have contracts. A significant decline in defense expenditures, or a shift in expenditures away from agencies or programs that we support, could cause a material decline in our revenue.

A reduction in U.S. civil government agency budgets, including a reduction caused by the diversion of funding to support the war against terrorism, the reconstruction of Iraq, or natural disaster recovery could result in a substantial decrease in our revenue.

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Revenue from contracts with civil agency clients accounted for 51%, 50%, and 46% of our revenue for the fiscal years ended June 30, 2007, 2006, and 2005, respectively. We expect civil agency clients will continue to represent a substantial portion of our future revenue. A decline in expenditures by civil agencies, or in the portion of those expenditures allocated to information technology services and solutions, could cause a material decrease in our revenue and profitability. In particular, a shift of funds away from civil agencies to pay for programs within other agencies, for example the Department of Defense, to reduce federal budget deficits, or to fund tax reductions, could cause a material decline in our revenue. In particular, it is possible that funding for civil agencies may be diverted to support the ongoing war against terrorism, the reconstruction of Iraq, natural disaster recovery, or other international conflicts.

Changes in the spending policies or budget priorities of the federal government could cause us to lose revenue. We derived 99% of our revenue for all periods presented herein from contracts with federal government agencies. Accordingly, changes in federal government fiscal or spending policies could directly affect our financial performance. Among the factors that could harm our federal government contracting business are: • the curtailment of the federal government’s use of technology services firms; • a significant decline in spending by the federal government in general, or by specific departments or agencies in particular; • a reduction in spending or shift of expenditures from existing programs to pay for an international conflict or related reconstruction efforts; • a failure of Congress to pass adequate supplemental appropriations to pay for an international conflict, or to pay for the cost of related reconstruction efforts; • reductions in federal government programs or requirements; • the adoption of new laws or regulations that affect companies that provide services to the federal government; • delays in the payment of our invoices by government payment offices; • new legislation, procurement regulations, or union pressure that cause federal agencies to adopt restrictive procurement practices regarding the use of outside information technology providers; • changes in policy and goals by the government providing set aside funds to small businesses, disadvantaged businesses, and other socio-economic requirements in the allocation of contracts; and • general economic and political conditions. These or other factors could cause federal government agencies and departments 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 us to lose revenue. We have substantial contracts in place with many federal departments and agencies, and our continued performance under these contracts, or award of additional contracts from these agencies, could be materially harmed by federal government spending reductions or budget cutbacks at these departments or agencies.

The failure by Congress to approve budgets on a timely basis for the federal agencies we support could delay or reduce spending and cause us to lose revenue. On an annual basis, Congress must approve budgets that govern spending by each of the federal agencies we support. When Congress is unable to agree on budget priorities and is unable to pass the annual budget on a timely basis, Congress typically enacts a continuing resolution. A continuing resolution allows government agencies to operate at spending levels approved in the previous budget cycle. When government agencies must operate under a continuing resolution, it may delay funding we expect to receive from clients on work we are already performing and will likely result in any new initiatives being delayed, and potentially cancelled.

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The Office of Management and Budget process for ensuring government agencies properly support capital planning initiatives, including information technology investments, could reduce or delay federal information technology spending and cause us to lose revenue.

The Office of Management and Budget, or OMB, supervises spending by federal agencies, including enforcement of the Government Performance Results Act. This Act requires, among other things, that federal agencies make an adequate business justification to support capital planning initiatives, including all information technology investments. The factors considered by the OMB include, among others, whether the proposed information technology investment is expected to achieve an appropriate return on investment, whether related processes are contemporaneously reviewed, whether inter-operability with existing systems and the capacity for these systems to share data across government has been considered, and whether existing off-the-shelf products are being utilized to the extent possible. If our clients do not adequately justify proposed information technology investments to the OMB, the OMB may refuse funding for their new or continuing information technology investments, and we may lose revenue as a result.

Federal government contracts contain provisions giving government clients a variety of rights that are unfavorable to us, including the ability to terminate a contract at any time for convenience.

Federal government contracts contain provisions and are subject to laws and regulations that provide government clients with rights and remedies not typically found in commercial contracts. These rights and remedies allow government clients, among other things, to: • terminate existing contracts, with short notice, for convenience, as well as for default; • reduce or modify contracts or subcontracts; • terminate our facility security clearances and thereby prevent us from receiving classified contracts; • cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • decline to exercise an option to renew a multi-year contract; • claim rights in products, systems, and technology produced by us; • prohibit future procurement awards with a particular agency due to a finding of organizational conflict of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors; • subject the award of GSA schedule contracts, GWACs, and other ID/IQ contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit bids for the contract or in the termination, reduction, or modification of the awarded contract; and • suspend or debar us from doing business with the federal government or with a particular governmental agency. If a government client terminates one of our contracts for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If a federal government client were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts or suspend or debar us from doing business with government agencies, our revenue and operating results would be materially harmed.

Our failure to comply with complex procurement laws and regulations could cause us to lose business and subject us to a variety of penalties. We must comply with laws and regulations relating to the formation, administration, and performance of federal government contracts, which affect how we do business with our government clients and may impose added costs on our business. Among the most significant regulations are:

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• the Federal Acquisition Regulation, and agency regulations analogous or supplemental to the Federal Acquisition Regulation, which comprehensively regulate the formation, administration, and performance of government contracts, including provisions relating to the avoidance of conflicts of interest and intra-organizational conflicts of interest; • the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with some contract negotiations; • the Procurement Integrity Act, which requires evaluation of ethical conflicts surrounding procurement activity and establishing certain employment restrictions for individuals who participate in the procurement process; • the Cost Accounting Standards, which impose accounting requirements that govern our right to reimbursement under some cost-based government contracts; • laws, regulations, and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of specified products, technologies, and technical data; • laws surrounding lobbying activities a corporation may engage in and operation of a Political Action Committee established to support corporate interests; and • compliance with antitrust laws. If a government review or investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, harm to our reputation, suspension of payments, fines, and suspension or debarment from doing business with federal government agencies. The government may in the future reform its procurement practices or adopt new contracting rules and regulations, including cost accounting standards, that could be costly to satisfy or that could impair our ability to obtain new contracts. Any failure to comply with applicable laws and regulations could result in contract termination, price or fee reductions, or suspension or debarment from contracting with the federal government, each of which could lead to a material reduction in our revenue.

Risks Related To Our Business

We depend on contracts with U.S. federal government agencies for substantially all of our revenue, and if our relationships with these agencies were harmed, our business would be threatened. Revenue from contracts with U.S. federal government agencies accounted for 99% of our revenue for all periods presented herein. Revenue from contracts with clients in the Department of Defense and the National Guard accounted for 48%, 49%, and 53%, of our revenue for the fiscal years ended June 30, 2007, 2006, and 2005, respectively. For this reason, any issue that compromises our relationship with agencies of the federal government in general, or within the Department of Defense and the National Guard in particular, would cause serious harm to our business. Among the key factors in maintaining our relationships with federal government agencies and departments are our performance on individual contracts and delivery orders, the strength of our professional reputation, and the relationships of our senior management with client personnel. The loss of any member of our senior management could impair our ability to identify and secure new contracts and to maintain good client relations. Additionally, to the extent that our performance does not meet client expectations, or our reputation with one or more key clients is impaired, our revenue and operating results could be materially harmed.

We face intense competition from many competitors that have greater resources than we do, which could result in price reductions, reduced profitability, and loss of market share. We operate in highly competitive markets and generally encounter intense competition to win contracts. If we are unable to successfully compete for new business or win recompetitions of existing business, our revenue growth and operating margins may decline. Many of our competitors are larger and have greater financial, technical, marketing, and public relations resources, larger client bases, and greater brand or name recognition than we do. Larger competitors include federal systems integrators such as Computer Sciences Corporation and Science Applications International Corporation, divisions of large defense contractors such as General Dynamics Corporation, Lockheed Martin Corporation, and Northrop Grumman Corporation, and consulting firms such as Accenture Ltd. and BearingPoint, Inc. Our larger competitors may be able to compete more effectively for very large-scale government contracts. Our larger competitors

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also may be able to provide clients with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past performance on large-scale contracts, geographic presence, the ability to provide a broader range of services without creating conflicts of interest or intra-organizational conflicts of interest, price, and the availability of key professional personnel. Our competitors also have established or may establish relationships among themselves or with third parties, including through mergers and acquisitions, to increase their ability to address client needs. Accordingly, it is possible that new competitors or alliances among competitors may emerge.

We derive significant revenue from contracts awarded through a competitive bidding process, which can impose substantial costs upon us, and we will lose revenue if we fail to compete effectively. We derive significant revenue from federal government contracts that are awarded through a competitive bidding process. We expect that most of the government business we seek in the foreseeable future will be awarded through competitive bidding. Competitive bidding imposes substantial costs and presents a number of risks, including: • the need to bid on engagements in advance of knowing the complete design or full requirements, which may result in unforeseen difficulties in executing the engagement and cost overruns; • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may not be awarded to us; • the need to accurately estimate the resources and costs that will be required to service any contract we are awarded; • the possibility that difficult market conditions will cause our competitors to strive for growth by reducing their bid pricing and compel us to choose between bidding at unprofitable levels or losing contracts and foregoing revenue; • the expense and delay that may arise if our competitors protest or challenge contract awards made to us pursuant to competitive bidding, and the risk that any such protest or challenge could result in the resubmission of bids on modified specifications, or in termination, reduction, or modification of the awarded contract; and • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue. To the extent we engage in competitive bidding and are unable to win particular contracts, we not only incur substantial costs in the bidding process that would negatively affect our operating results, but we may be precluded from operating in the market for services that are provided under those contracts for a number of years. Even if we win a particular contract through competitive bidding, our profit margins may be depressed as a result of the costs incurred through the bidding process.

Loss of our General Services Administration, or GSA, schedule contracts or our position as a prime contractor on one or more of our government-wide acquisition contracts, or GWACs, or our other multiple-award contracts would impair our ability to win new business. We believe that one of the key elements of our success is our position as the holder of six GSA schedule contracts and as a prime contractor under three GWACs and more than 35 agency-specific indefinite delivery/indefinite quantity, or ID/IQ, contracts. For the fiscal years ended June 30, 2007, 2006, and 2005, revenue from GSA schedule contracts, GWACs, and other ID/IQ contracts accounted for approximately 77%, 76%, and 77%, respectively, of our revenue from federal government clients. If we were to lose our position on one or more of these contracts, we could lose revenue and our operating results could suffer. The Department of Defense has issued guidance providing that procurements of services that are not performance- based or that are to be procured using a contract vehicle outside of the Department of Defense must be approved in advance. This could result in the Department of Defense limiting its future use of GWACs and GSA schedule contracts. Initiatives taken by the Department of Defense or other government agencies and departments, or the impact of the ongoing reorganization by the GSA, could cause services we provide on existing contracts to migrate to contract vehicles on which we are not a prime contractor. Should this occur, our ability to compete for business from these organizations in the future may be harmed. Orders under GSA schedule contracts, GWACs, and other ID/IQ contracts typically have a one- or two-year initial term with multiple options that may be exercised by our government clients to extend the contract for successive periods of one or more years. We can provide no assurance that our clients will exercise these options.

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If subcontractors on our prime contracts are able to secure positions as prime contractors, we may lose revenue. For each of the past several years we have received substantial revenue from government clients relating to work performed by other information technology providers acting as subcontractors to us. In some cases, companies that have not held GSA schedule contracts or secured positions as prime contractors on GWACs have approached us in our capacity as a prime contractor, seeking to perform services as our subcontractor for a government client. Some of these providers that are currently acting as subcontractors to us may in the future secure positions as prime contractors. If one or more of our current subcontractors are awarded prime contractor status in the future, it could reduce or eliminate our revenue for the work they were performing as subcontractors to us. Revenue derived from work performed by our subcontractors represented approximately 29%, 30%, and 32% of our revenue for the fiscal years ended June 30, 2007, 2006, and 2005, respectively.

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 often rely significantly upon other companies as subcontractors to perform work we are obligated to deliver to our clients. Revenue derived from work performed by our subcontractors represented approximately 29%, 30%, and 32% of our revenue for the fiscal years ended June 30, 2007, 2006, and 2005, respectively. A failure by one or more of our subcontractors to satisfactorily perform the agreed-upon services on a timely basis may compromise our ability to perform our obligations as a prime contractor. In some cases, we have limited involvement in the work performed by the subcontractor and may have exposure as a result of problems caused by the subcontractor. In extreme cases, performance deficiencies on the part of our subcontractors could result in a government client terminating our contract for default. A default termination could expose us to liability for the agency’s costs of re-procurement, damage our reputation, and hurt our ability to compete for future contracts. Additionally, we may have disputes with our subcontractors that could impair our ability to execute our contracts as required.

Our quarterly operating results may fluctuate significantly as a result of factors outside of our control, which could cause the market price of our class A common stock to decline. Our revenue and operating results could vary significantly from quarter to quarter. In addition, we cannot predict with certainty our future revenue or results of operations. As a consequence, our operating results may fall below the expectations of securities analysts and investors, which could cause the price of our class A common stock to decline. Factors that may affect our operating results include: • fluctuations in revenue earned on contracts; • commencement, completion, or termination of contracts during any particular quarter; • variable purchasing patterns under GSA schedule contracts, GWACs, and agency-specific indefinite delivery/ indefinite quantity contracts; • providing services under a share-in-savings or performance-based contract; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy; • timing of significant bid and proposal costs; • contract mix, the extent of use of subcontractors, and the level of third-party hardware and software purchases for customers; • changes in presidential administrations and senior federal government officials or their priorities that affect the timing of technology procurement; • changes in policy or budgetary measures that adversely affect government contracts in general; • interruption by events beyond our control such as earthquakes, power losses, telecommunications failures, hurricanes, and incidents of terrorism; and • the seasonality of our business.

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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 receive corresponding payments or revenue in that same quarter. We may also incur significant or unanticipated expenses when contracts expire, when they are terminated, or when they are not renewed. In addition, payments due to us from government agencies may be delayed due to billing cycles or as a result of failures of governmental budgets to gain Congressional and administration approval in a timely manner.

If we fail to attract and retain skilled employees, we might not be able to staff recently awarded engagements and sustain our profit margins and revenue growth. We must hire significant numbers of highly qualified individuals who have advanced information technology and technical services skills and who work well with our clients in a government environment. In some cases, they are required to have security clearances issued by the Department of Defense or other government agencies. These employees are in great demand and are likely to remain a limited resource for the foreseeable future. If we are unable to recruit and retain a sufficient number of these employees, our ability to staff recently awarded engagements and to maintain and grow our business could be limited. We are operating in a tight labor market and, if it continues to tighten, we could be required to engage larger numbers of subcontractor personnel, which could cause our profit margins to suffer. In addition, some of our contracts contain provisions requiring us to commit to staff an engagement with personnel the client considers key to our successful performance under the contract. In the event we are unable to provide these key personnel or acceptable substitutions, the client may terminate the contract, and we may not be able to recover our costs.

We may lose revenue and our cash flow and profitability could be negatively affected if expenditures are incurred prior to final receipt of a contract or contract funding modification. We provide professional services and sometimes procure materials on behalf of our government clients under various contract arrangements. From time to time, in order to ensure that we satisfy our clients’ delivery requirements and schedules, we may elect to initiate procurements or provide services in advance of receiving formal contractual authorization from the government client or a prime contractor. If our government or prime contractor requirements should change or the government directs the anticipated procurement to a contractor other than us, or if the materials become obsolete or require modification before we are under contract for the procurement, our investment might be at risk. If we do not receive the required funding, our cost of services incurred in excess of contractual funding may not be recoverable. This could reduce anticipated revenue or result in a loss, negatively affecting our cash flow and profitability.

We may lose money on some contracts if we underestimate the resources we need to perform under the contract. We provide services to the federal government under three types of contracts: cost-plus-fee, time-and-materials, and fixed-price. For the fiscal year ended June 30, 2007, we derived 43%, 42%, and 15% of our revenue from cost-plus- fee, time-and-materials, and fixed-price contracts, respectively. Each of these types of contracts, to differing degrees, involves the risk that we could underestimate our cost of fulfilling the contract, which may reduce the profit we earn or lead to a financial loss on the contract. • Under cost-plus-fee contracts, which are subject to a ceiling amount, we are reimbursed for allowable costs and paid a fee, which may be fixed or performance-based. However, if our costs exceed the ceiling or are not allowable under the terms of the contract or applicable regulations, we may not be able to recover those costs. • Under time-and-materials contracts, we are reimbursed for labor at negotiated hourly billing rates along with the cost of certain expenses, and we assume the risk that our costs of performance may exceed the negotiated hourly rates. • Under fixed-price contracts, we perform specific tasks for a fixed price. Compared to cost-plus-fee contracts and time-and-materials contracts, fixed-price contracts involve greater financial risk due to the potential for cost overruns. To the extent our actual costs exceed the estimates upon which the price was negotiated, we will generate less than the anticipated amount of profit or could incur a loss. For all three contract types, we bear varying degrees of risk associated with the assumptions we use to formulate our pricing for the work. To the extent our working assumptions prove inaccurate, we may lose money on the contract, which would adversely affect our operating results.

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We may lose money or incur financial penalties if we agree to provide services under a performance-based contract arrangement. Under certain performance-based contract arrangements, we are paid only to the extent our customer actually realizes savings or achieves some other performance-based improvements that result from our services. In addition, we may also incur certain penalties. Performance-based contracts could impose substantial costs and risks, including: • the need to accurately understand and estimate in advance the improved performance that might result from our services; • the lack of experience both we and our primary customers have in using this type of contract arrangement; and • the requirement that we incur significant expenses with no guarantee of recovering these expenses or realizing a profit in the future. Even if we successfully execute a performance-based contract, our interim operating results and cash flows may be negatively affected by the fact that we may be required to incur significant up-front expenses prior to realizing any related revenue.

Contracts with state and local governments, other governments, international entities, or other organizations with special standing, could impose substantial additional liability and costs upon us. As organizations seek to enhance their security, particularly state and local governments, other governments, international entities, and other organizations with special standing, such as the World Bank, we have the opportunity to expand our services beyond our core federal government client base. Contracting with such entities involves additional risks that may result in additional costs to us, including: • the additional costs associated with evaluating, qualifying, and negotiating such opportunities; • a requirement to understand and comply with the specific procurement laws and/or regulations of each individual state, locality, other government, international entity, or other party with special standing; • the contractual acceptance of liability provisions that impose, for example, liquidated damages or other monetary damages in excess of the amount of services we provide, which in some cases are unlimited; • the unavailability of certain protections that would typically be available under federal or common law; and • an increased risk of additional costs associated with dispute resolution.

International sales may pose potentially greater risks. International business may pose greater risks than domestic business due to the potential for changes in foreign economic, regulatory and political environments. International business may also be highly sensitive to changes in foreign national priorities and government budgets. Work performed in foreign locations may be subject to foreign income and other taxes. We will incur costs in monitoring and complying with the tax laws and regulations in the various foreign locations where we do business, and these costs could be significant. Among other things, we could face scrutiny of transfer pricing arrangements by authorities in countries in which we operate. Failure to comply with all foreign tax laws and regulations may result in penalties and interest in addition to any tax liability owed. There are also U.S. and international regulations relating to investments, exchange controls and repatriation of earnings, as well as varying currency, political and economic risks. It may be more difficult to enforce contracts and collect accounts receivable in foreign markets, and we may encounter longer payment cycles. In addition, some countries may provide reduced protection for our intellectual property rights. We will also be required to comply with complex U.S. laws regulating the export of technology.

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We may not be successful in identifying acquisition candidates and, if we undertake acquisitions, they could be expensive, increase our costs or liabilities, or disrupt our business. Additionally, if we are unable to successfully integrate companies we acquire, our revenue and operating results may be impaired. One of our strategies is to augment our organic growth through acquisitions. We have completed nine acquisitions of complementary companies that provide services in one of our three target markets. We may not be able to identify suitable acquisition candidates at prices that we consider appropriate or to finance acquisitions on terms that are satisfactory to us. Acquisitions of businesses or other material operations may require additional debt or equity financing, resulting in leverage or dilution of ownership. Additionally, negotiations of potential acquisitions and the integration of acquired business operations could disrupt our business by diverting management attention away from day-to-day operations and we may not be able to successfully integrate the companies we acquire. We also may not realize cost efficiencies or synergies that we anticipated when selecting our acquisition candidates. Acquired companies may have liabilities or adverse operating issues that we fail to discover through due diligence. Any costs, liabilities, or disruptions associated with future acquisitions could harm our operating results. In addition, following the integration of acquired companies, we may experience increased attrition, including but not limited to key employees of acquired companies, which could reduce our future revenue. Our most recent acquisition of Constella Group, LLC, or Constella, is our largest acquisition to date. While substantially all of Constella’s revenues are generated in the health care and public health market, primarily under contracts with the U.S. government, approximately 40% of Constella’s revenues are from work performed outside the United States, and approximately 30% of its revenues are from commercial contracts primarily with customers in the pharmaceutical industry. The Constella acquisition expands our capabilities in the health care and public health market, but also exposes us to greater risks related to international and commercial work. We will likely be required to devote significant management attention and resources to manage and staff Constella’s international operations and we expect to incur increased travel, infrastructure and legal compliance costs associated with multiple international locations. In particular, Constella’s decentralized operations and financial systems will require us to incur significant costs to upgrade internal controls to become compliant with the Sarbanes Oxley Act of 2002.

Unfavorable government audit results could force us to adjust previously reported operating results and could subject us to a variety of penalties and sanctions. The federal government audits and reviews our performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations, and standards. Like most large government contractors, our contracts are audited and reviewed on a continual basis by federal agencies, including the Defense Contract Management Agency, or DCMA and the Defense Contract Audit Agency, or DCAA. An audit of our work, including an audit of work performed by companies we have acquired or may acquire or subcontractors we have hired or may hire, could result in a substantial adjustment to our previously reported operating results. Audits for costs incurred on work performed after fiscal year 2005 have not yet been completed. In addition, non- audit reviews by the government may still be conducted on all our government contracts. If a government audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with U.S. federal government agencies. In addition, we could suffer serious harm to our reputation if allegations of impropriety were made against us, whether or not true. If we were suspended or debarred from contracting with the federal government generally, or any specific agency, if our reputation or relationship with government agencies were impaired, or if the government otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our revenue and operating results would be materially harmed.

If we experience systems, service, or product failure, our reputation could be harmed and our clients could assert claims against us for damages or refunds. We create, implement, and maintain information technology solutions, as well as sell products, that are often critical to our clients’ operations, including operations in war zones and other hazardous environments. 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 our solutions, services, products, including third party products we may resell to our clients, or other applications have significant defects or errors, are subject to delivery delays, or fail to meet our clients’ expectations, we may:

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• 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; or • suffer claims for substantial damages against us. In addition to any costs resulting from product or service warranties, contract performance, or required corrective action, these failures may result in increased costs or loss of revenue if clients postpone subsequently scheduled work or cancel or fail to renew contracts. While many of our contracts limit our liability for consequential damages that may arise from negligence in rendering services to our clients, these contractual provisions may not be legally sufficient to protect 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. As we continue to grow and expand our business into new areas, our insurance coverage may not be adequate. The successful assertion of any large 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.

Our business commitments require our employees to travel to potentially dangerous places, which may result in injury to our employees. Our business involves providing services that require our employees to operate in various countries around the world, including Iraq. These countries may be experiencing political upheaval or unrest, and in some cases war or terrorism. Senior level employees or executives may, on occasion, be part of the teams deployed to provide services in these countries. As a result, it is possible that certain of our employees or executives will suffer injury or bodily harm in the course of these deployments. It is also possible that we will encounter unexpected costs in connection with additional risks inherent with sending our employees to dangerous locations, such as increased insurance costs, as well as the repatriation of our employees or executives for reasons beyond our control.

Our employees may engage in misconduct or other improper activities, which could harm our business. 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 activities, seeking reimbursement for improper expenses or falsifying time records. Employee misconduct could also involve the improper use of our clients’ sensitive or classified information, which could result in regulatory sanctions against us and serious harm to our reputation. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, which could harm our business.

Our failure to obtain and maintain necessary security clearances may limit our ability to perform classified work for government clients, which could cause us to lose business. Some government contracts require us to maintain facility security clearances and require some of our employees to maintain individual security clearances. We have seen a recent increase in the number of clients requiring special security clearances and the types of clearances required. If our employees lose or are unable to timely obtain security clearances, or we lose a facility clearance, the government client can terminate the contract or decide not to renew it upon its expiration. As a result, to the extent we cannot obtain the required security clearances for our employees working on a particular contract, or we fail to obtain them on a timely basis, we may not derive the revenue anticipated from the contract, which could harm our operating results.

Security breaches in sensitive government systems could result in loss of clients and negative publicity. Many of the systems we develop, install, and maintain involve managing and protecting information used in intelligence, national security, and other sensitive or classified government functions. A security breach in one of these systems could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further

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work on sensitive or classified systems for federal government clients. We could incur losses from such a security breach that could exceed the policy limits under our insurance. Damage to our reputation or limitations on our eligibility for additional work resulting from a security breach in one of our systems could materially reduce our revenue.

We depend on our intellectual property and our failure to protect it could enable competitors to market products and services with similar features that may reduce demand for our products. Our success depends in part upon the internally developed technology, proprietary processes, and other intellectual property that we utilize to provide our services and incorporate in our products. 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. Federal government clients typically retain a perpetual, world-wide, royalty-free right to use the intellectual property we develop for them in any manner they deem appropriate, including providing it to our competitors in connection with their performance of other federal government contracts. We typically seek governmental authorization to re-use intellectual property developed for the federal government or to secure export authorization. Federal government clients typically grant contractors the right to commercialize software developed with federal funding. However, if we were to improperly use intellectual property even partially funded by the federal government, the federal government could seek damages or royalties from us, sanction us, or prevent us from working on future government contracts. We may be unable to prevent unauthorized parties from attempting 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 our intellectual property as fully as those in the United States. Others, including our employees, may compromise the trade secrets and other intellectual property that we own. Although we require our employees to execute non-disclosure and intellectual property assignment agreements and comply with related policies and procedures, these agreements may not be legally or practically sufficient to protect our rights. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, and to determine the validity and scope of the proprietary rights of others. Any litigation could result in substantial costs and diversion of resources, with no assurance of success.

We may be harmed by intellectual property infringement claims. We may become subject to claims from our employees or third parties who assert that software and other forms of intellectual property that we use in delivering services and business solutions to our clients infringe upon intellectual property rights of such employees or third parties. Our employees develop much of the software and other forms of intellectual property that we use to provide our services and business solutions to our clients, but we also license technology from other vendors. If our vendors, our employees, or third parties assert claims that we or our clients are infringing on their intellectual property, we could incur substantial costs to defend those claims. In addition, if any of these infringement claims are ultimately successful, we could be required to: • cease selling or using products or services that incorporate the challenged software or technology; • obtain a license or additional licenses from our vendors or other third parties; or • redesign our products and services that rely on the challenged software or technology.

Activation of military and National Guard reserves could significantly reduce our revenue and profits. Activation of military reserves, in connection with international conflicts or otherwise, could result in some clients and client contracting staff being activated into the military services. This could delay contract awards that might be in the evaluation or award process, which could in turn reduce our revenue until such time as our clients are able to complete the evaluation and award process, or could even result in the loss of the potential contract award. As of June 30, 2007 we had approximately 200 employees who serve as reserves for a branch of the military or the National Guard. In the event of a significant call-up we will pay these employees the differential between their military pay and their salary for up to one year. Our standard practice in the absence of a significant call-up is to provide for up to 15 days of differential pay for military leave. To the extent those called for military duty are directly billable on our contracts, our revenue could be reduced. Additionally, our fringe benefit expenses would be increased by any differential payments, which could reduce our profits.

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Other Risks Related To Our Stock

Our stock price is volatile and could decline. The stock market in general, and the market for technology-related stocks in particular, has been highly volatile. As a result, the market price of our class A common stock is likely to be similarly volatile, and holders of our class A common stock may experience a decrease in the value of their stock, including decreases unrelated to our operating 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 and others such as: • our operating performance and the performance of other similar companies or companies deemed to be similar; • actual or anticipated differences in our quarterly operating results; • changes in our revenue or earnings estimates or recommendations by securities analysts; • publication of research reports about us or our industry by securities analysts; • additions and departures of key personnel; • contract mix and the extent of use of subcontractors; • strategic decisions by us or our competitors, such as acquisitions, consolidations, divestments, spin-offs, joint ventures, strategic investments, or changes in business strategy; • federal government spending levels, both generally and by our particular government clients; • the passage of legislation or other regulatory developments that adversely affect us or our industry; • the failure by Congress to approve budgets on a timely basis; • speculation in the press or investment community; • changes in the government information technology services industry; • changes in accounting principles; • terrorist acts; • general market conditions, including economic factors unrelated to our performance; and • military action related to international conflicts, wars, or otherwise. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources.

Our chairman, whose interests may not be aligned with yours, controls our company, which could result in actions of which you or other stockholders do not approve. As of August 10, 2007, Ernst Volgenau, our chairman, beneficially owned 112,768 shares of class A common stock and 12,050,736 shares of class B common stock, which represented approximately 65.1% of the combined voting power of our outstanding common stock. As of August 10, 2007, our executive officers, directors and former chairman of the board of directors as a group beneficially owned an aggregate of 2,122,244 shares of class A common stock and 14,199,828 shares of class B common stock, which represented approximately 77.3% of the combined voting power of our outstanding common stock. As a result, these individuals acting together, or Dr. Volgenau acting alone, will be able to control the outcome of all matters that our stockholders vote upon, including the election of directors, amendments to our certificate of incorporation, and mergers or other business combinations. In addition, upon the death of Dr. Volgenau and the conversion of his class B common stock into class A common stock, William K. Brehm, the former chairman of our board of directors, if he survives Dr. Volgenau, would beneficially own all of the outstanding class B common stock and could exercise significant influence over corporate matters requiring stockholder approval. This concentration of ownership and voting power may also have the effect of delaying or preventing a change in control of our company and could prevent stockholders from receiving a premium over the market price if a change in control is proposed.

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Provisions of our charter documents and Delaware law may inhibit potential acquisition bids that you and other stockholders may consider favorable, and the market price of our class A common stock may be lower as a result. There are provisions in our certificate of incorporation and by-laws that make it more difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control was considered favorable by you and other stockholders. For example, our board of directors has the authority to issue up to 5,000,000 shares of preferred stock. The board of directors can fix the price, rights, preferences, privileges, and restrictions of the preferred stock without any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result, the market price of our class A common stock and the voting and other rights of our stockholders may be adversely affected. This issuance of shares of preferred stock may result in the loss of voting control to other stockholders. Our charter documents contain other provisions that could have an anti-takeover effect, including: • the high-vote nature of our class B common stock; • only one of the three classes of directors is elected each year; • stockholders have limited ability to remove directors without cause; • stockholders cannot take actions by written consent; • stockholders cannot call a special meeting of stockholders; and • stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our class A common stock. These provisions may also prevent changes in our management.

Item 1B. UNRESOLVED STAFF COMMENTS We have not received written comments from the commission staff regarding our periodic or current reports under the Securities Exchange Act of 1934 that remain unresolved.

Item 2. PROPERTIES We lease our office facilities and we do not own any facilities or real estate. We have leased our corporate headquarters at 4300 Fair Lakes Court in Fairfax, Virginia 22033 since 1991. Both of our headquarters’ leases expire on December 31, 2015. We also lease facilities in the following locations: Alexandria, Virginia Fort Walton Beach, Florida Rockville, Maryland Arlington, Virginia Hatboro, Pennsylvania Sacramento, California Atlanta, Georgia Herndon, Virginia San Antonio, Texas Baltimore, Maryland Jacksonville, FL San Diego, California Boston, MA Kingstowne, Virginia Seattle, Washington Chesapeake, Virginia Landover, Maryland Shrewsbury, New Jersey College Park , Georgia Lexington Park, Maryland St. Louis, MO Colorado Springs, Colorado Minneapolis, Minnesota Warner Robins, Georgia Columbia, Maryland New York, New York Washington, DC Dayton, Ohio Newport Beach, California Durham, North Carolina Newport News, Virginia Eatontown, New Jersey Panama City, FL Egg Harbor Township, New Jersey Portsmouth, New Hampshire Falls Church, Virginia Portsmouth, New Hampshire Fayetteville, North Carolina Reston, Virginia In addition, we have employees who work on engagements at other smaller operating locations around the United States.

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Item 3. LEGAL PROCEEDINGS From time to time, we are involved in various legal matters and proceedings concerning matters arising in the ordinary course of business. We currently believe that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fourth quarter of fiscal year 2007, there were no matters submitted to a vote of security holders through the solicitation of proxies or otherwise.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES On May 2, 2005, our board of directors declared a two-for-one stock split in the form of a 100 percent stock dividend on our common stock. The dividend was paid on May 27, 2005 to shareholders of record on May 13, 2005. Since May 24, 2002, our class A common stock has been publicly traded on the New York Stock Exchange under the symbol “SRX.” Prior to May 24, 2002, our class A common stock was not publicly traded. From July 1, 2005 to June 30, 2007 the ranges of high and low sale prices of our class A common stock as reported by the New York Stock Exchange for each quarter during this period were as follows:

High Low Year ended June 30, 2007: First Quarter ...... $30.31 $ 23.31 Second Quarter ...... 32.40 25.50 Third Quarter ...... 28.19 20.65 Fourth Quarter ...... 26.38 23.95

Year ended June 30, 2006: First Quarter ...... $38.29 $ 32.21 Second Quarter ...... 35.75 27.40 Third Quarter ...... 38.28 30.15 Fourth Quarter ...... 37.73 26.63

As of August 10, 2007, there were approximately 93 holders of record of our class A common stock and two holders of record of our class B common stock. The number of holders of record of our class A common stock is not representative of the number of beneficial holders because many shares are held by depositories, brokers or nominees. As of August 3, 2007, the closing price of our class A common stock was $24.38. We have never declared or paid any cash dividends on our common stock. We currently intend to retain earnings, if any, to support our growth strategy and do not anticipate paying cash dividends in the foreseeable future.

Sale of Unregistered Securities We issued 46,392, 56,142, and 107,730 shares of our class A common stock to our SRA International, Inc. 401(k) Plan through matching contributions as determined by our board of directors during the fiscal years ended June 30, 2007, 2006, and 2005, respectively. These issuances were not sales within the meaning of the Act.

Share Repurchases Our Board of Directors has authorized the repurchase of up to $40 million of our class A common stock. The timing, price, quantity and manner of the purchases can be determined at the discretion of our chief executive officer. We have not repurchased any shares in accordance with this authorization.

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Equity Compensation Plan Information Information regarding our equity compensation plans and the securities authorized for issuance thereunder is incorporated by reference in Item 12.

Stock Performance Graph The information included under this heading “Stock Performance Graph” is “furnished” and not “filed” and shall not be deemed to be “soliciting material” or subject to Regulation 14A, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act. The following graph compares the cumulative total stockholder return on our class A common stock from June 30, 2002 to June 30, 2007 with the cumulative total return of (i) the Russell 2000 stock index and (ii) the services sector index of the Goldman Sachs Technology Index, or the GSTI services index. This graph assumes the investment of $100.00 at the closing price on June 30, 2002 in our class A common stock, the Russell 2000 stock index, and the GSTI services index, and assumes any dividends are reinvested. The historical information set forth below is not necessarily indicative of future performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among SRA International, Inc., The Russell 2000 Index And GSTI Services Index

$300

$250

$200

$150

$100

$50

$0 6/02 6/03 6/04 6/05 6/06 6/07

SRA International, Inc. Russell 2000 GSTI Services Index

* $100 invested on 6/30/02 in stock or index-including reinvestment of dividends. Fiscal year ending June 30.

June 30, 2002 2003 2004 2005 2006 2007 SRA International, Inc...... 100.00 118.61 156.86 257.38 197.41 187.25 Russell 2000...... 100.00 98.36 131.18 143.57 164.50 191.53 GSTI Services Index...... 100.00 90.35 105.06 103.60 121.08 150.65

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Item 6. SELECTED FINANCIAL DATA The following selected financial data should be read in conjunction with our financial statements and the related notes, and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in this Form 10-K. The statement of operations data for the fiscal years ended June 30, 2007, 2006, and 2005, and the balance sheet data as of June 30, 2007 and 2006, are derived from our financial statements that have been audited by Deloitte & Touche LLP, our independent registered public accounting firm, and are included in this Form 10-K. The statement of operations data for the fiscal years ended June 30, 2004 and 2003, and the balance sheet data as of June 30, 2005, 2004, and 2003, are derived from our financial statements that have been audited by Deloitte & Touche LLP and not included in this Form 10-K. The selected financial data reflect our adoption of Statement of Financial Accounting Standards, or SFAS, No. 123R in July 2005 and our acquisitions of Adroit Systems, Inc. in January 2003, ORION Scientific Systems in January 2004, Touchstone Consulting Group in April 2005, Galaxy Scientific Corporation in July 2005, Spectrum Solutions Group, Inc. in November 2005, Mercomms Unlimited, Inc. in April 2006, and RABA Technologies, LLC in October 2006. For more information on these more recent acquisitions, see Note 16 to our financial statements.

Year Ended June 30, 2007 2006 2005 2004 2003 (in thousands, except share and per share data) Statement of Operations Data: Revenue ...... $ 1,268,872 $ 1,179,267 $ 881,770 $ 615,802 $ 450,375 Operating costs and expenses: Cost of services ...... 954,656 880,802 653,115 442,771 316,672 Selling, general and administrative (b) . . 200,204 183,297 126,404 100,919 82,753 Depreciation and amortization . . . . 21,187 18,201 13,141 10,511 8,962 Total operating costs and expenses . . 1,176,047 1,082,300 792,660 554,201 408,387 Operating income ...... 92,825 96,967 89,110 61,601 41,988 Interest income (expense), net ...... 6,276 4,232 3,442 1,474 1,387 Gain on equity method investment . . . . — — — — 1,031 Gain on sale of Assentor practice ...... — — — — 4,685 Gain on sale of Mantas, Inc...... 3,674 — — — — Other income ...... — — — 153 — Income before taxes ...... 102,775 101,199 92,552 63,228 49,091 Provision for income taxes ...... 39,345 38,679 34,829 24,291 19,431 Net income ...... $ 63,430 $ 62,520 $ 57,723 $ 38,937 $ 29,660 Earnings per share: (a) ...... Basic ...... $ 1.12 $ 1.14 $ 1.09 $ 0.76 $ 0.69 Diluted ...... $ 1.09 $ 1.08 $ 1.02 $ 0.71 $ 0.62 Weighted-average shares: (a) ...... Basic ...... 56,476,927 55,064,138 52,965,623 51,008,978 42,690,310 Diluted ...... 58,381,788 57,738,875 56,549,303 54,738,028 47,459,972

As of June 30, 2007 2006 2005 2004 2003 Balance Sheet Data: Cash and cash equivalents ...... $ 212,034 $ 173,564 $ 162,973 $ 143,367 $ 158,264 Short-term investments ...... 85 9,834 20,156 9,076 433 Working capital ...... 297,085 299,567 285,489 229,796 219,655 Total assets ...... 847,684 724,722 572,399 466,380 367,651 Total stockholders’ equity ...... 625,455 533,297 429,092 339,268 283,015

(a) Share and per share amounts have been adjusted to reflect the May 2005 two-for-one stock split. (b) Years ended June 30, 2007 and 2006 include $11.5 million and $13.2 million, respectively, of stock compensation expense recognized in accordance with SFAS No. 123R.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis in conjunction with our financial statements and the related notes included elsewhere in this Form 10-K. This discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “RISK FACTORS” and elsewhere in this Form 10-K.

ABOUT THIS MANAGEMENT’S DISCUSSION AND ANALYSIS The discussion and analysis that follows is organized to: • provide an overview of our business; • describe selected key metrics evaluated by management; • explain the year-over-year trends in our results of operations; • describe our liquidity and capital resources; and • explain our critical accounting policies, describe certain line items of our statements of operations, and define certain other terms we use in our discussion and analysis. Readers who are not familiar with our company or the financial statements of federal government information technology services providers should closely review the “DESCRIPTION OF CRITICAL ACCOUNTING POLICIES,” the “DESCRIPTION OF STATEMENT OF OPERATIONS ITEMS,” and the “DEFINITION OF CERTAIN TERMS USED IN THIS MANAGEMENT’S DISCUSSION AND ANALYSIS” sections that appear at the end of this discussion and analysis. These sections provide background information that can help readers in understanding and analyzing our financial information.

OVERVIEW We are a leading provider of technology and strategic consulting services and solutions to the federal government. We offer a broad range of services that span the information technology life-cycle: strategic consulting; systems design, development and integration; and outsourcing and managed services. In addition, to address recurring client needs, we develop business solutions for contingency and disaster response planning; information assurance; business intelligence; privacy protection; enterprise architecture; infrastructure management; and wireless integration. We provide services in three target markets: national security, civil government, and health care and public health. Our largest market, national security, includes the Department of Defense, the National Guard, the Department of Homeland Security, the intelligence agencies, and other federal organizations with homeland security missions. Since our founding in 1978 we have derived substantially all of our revenue from services provided to federal government clients. Although the federal information technology market is currently facing challenges as a result of the shift in expenditures to pay for the war against terrorism and other international conflicts, we believe that the federal government’s spending on IT will continue to increase over the next several years. According to the Federal IT Market Forecast, FY2007 – FY2012 report published by INPUT, an independent federal government market research firm, the contracted portion of the federal government spending on information technology budget is forecasted to grow at a compound annual growth rate of 5.6% over the next five years. In order to grow more rapidly than the market, we will need to take market share from our competitors. Our growth is driven in part by contract awards and how we build-out our contracts. Ideally, the level of quarterly business awards would exceed the revenue booked in the quarter to drive backlog growth. In the near term, we face some uncertainties due to the current business environment. First, the Department of Defense continues to divert funding away from certain information technology initiatives to support the war against terrorism and the reconstruction of Iraq. Second, all civil agencies are operating under a continuing resolution through the end of the government’s fiscal year ending September 30, 2007, limiting spending for most agencies to the fiscal 2006 level. The resulting budget tightness has slowed industry growth. As growth has slowed in these areas of our market, we have experienced pricing pressure on new business opportunities. Increased competition, combined with the shortage of experienced contracting staff among government agencies, has increased the frequency of contract protests, which has in

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turn caused delays in many new awards. Additionally, it is difficult to hire and retain highly qualified individuals who have advanced technology and technical services skills and who work well with our clients in a government environment, especially those with security clearances. We work with the federal government under three primary contract types: cost-plus-fee, time-and-materials, and fixed-price contracts. Cost-plus-fee contracts are typically lower risk arrangements and thus yield lower profit margins than time-and-materials and fixed-price arrangements. Time-and-materials and fixed-price contracts typically generate higher profit margins reflecting their generally higher risk. Where customer requirements are clear, we prefer to enter into time-and-materials and fixed-price arrangements rather than cost-plus-fee arrangements. Typically under time-and- materials and fixed-price, as compared with cost-plus-contracts, the customer can save money and we can earn better margins, given the more specific delivery requirements of these structures. Most of our revenue is generated based on services provided either by our employees or subcontractors. To a lesser degree, the revenue we earn includes reimbursable travel and other items to support the contractual effort, and may include third-party hardware and software that we purchase and integrate for customers as part of the solutions that we provide. Thus, once we win new business, the key to delivering the revenue is through hiring new employees to meet customer requirements, retaining our employees, and ensuring that we deploy them on direct-billable jobs. Therefore, we closely monitor hiring success, attrition trends, and direct labor utilization. Since we earn higher profits from the labor services that our employees provide compared with subcontracted efforts and other reimbursable items such as hardware and software purchases for customers, we seek to optimize our labor content on the contracts we win. The level of hardware and software purchases we make for customers may vary from period to period depending on specific contract and customer requirements. Cost of services includes labor, or the salaries and wages of our employees, plus fringe benefits; the costs of subcontracted labor and outside consultants; third-party materials, such as hardware and software that we purchase for customer solutions; and other direct costs such as travel incurred to support contract efforts. Since we earn higher profits on our own labor services, we expect the ratio of cost of services to 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 customers increase relative to our own labor services, we expect the ratio of cost of services to revenue to increase. As we continue to bid and win larger contracts, our own labor services component could decrease. This is because the larger contracts typically are broader in scope and require more diverse capabilities resulting in more subcontracted labor with the potential for more third-party hardware and software purchases. In addition, we can face hiring challenges in staffing larger contracts. While these factors could lead to a higher ratio of cost of services to revenue, the economics of these larger jobs are nonetheless generally favorable because they increase income, broaden our revenue base, and have a favorable return on invested capital. We have been able to build and effectively use what we refer to as a central services model. This central services model employs the use of central services for marketing, business development, human resources, recruiting, finance and accounting, infrastructure and other core administrative services. This central services model allows us to reduce selling, general and administrative expenses as a percentage of revenue as revenue grows organically and through selective acquisitions, thereby contributing to the growth in operating income. Depreciation and amortization expenses are affected by the level of our annual capital expenditures and the amount of identified intangibles related to acquisitions. We do not presently foresee significant changes in our capital expenditure requirements, which have been approximately 1.0% to 2.0% of revenue over the last three fiscal years. As we continue to make selected strategic acquisitions, the amortization of identified intangible assets may increase as a percentage of our revenue. Our operating income, or revenue minus cost of services, selling, general and administrative expenses, and depreciation and amortization, and thus our operating margin, or the ratio of operating income to revenue, is driven by the mix and execution on our contracts, how we manage our costs, and the amortization charges resulting from acquisitions. Our cash position is driven primarily by the level of net income, working capital in accounts receivable, capital expenditures and acquisition activities.

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SELECTED KEY METRICS EVALUATED BY MANAGEMENT We manage and assess the performance of our business by evaluating a variety of metrics. Selected key metrics are discussed below.

Revenue Growth Our revenue growth is primarily organic, but has been augmented by selective strategic acquisitions. Our total revenue growth rate was 7.6% in fiscal year 2007. Our organic revenue growth rate was 3.4% in fiscal year 2007, driven by building-out existing accounts, broadening our client base, and leveraging our research and development into high value services. The table below details our largest contract awards that have contributed to our organic growth:

Initial Contract Client Contract Period of Performance Award Value (in millions) Federal Deposit Insurance Technology Infrastructure Corporation...... Support September 2004 –September 2009 $ 341.0 U.S. Agency for International PRIME 2.2 Enterprise–Wide IT Development...... Services December 2003 – January 2010 328.0 Environmental Protection Agency. . . . Information Technology April 2005 – April 2010 148.0 Solutions-Business Information Strategic Support (ITS-BISS) National Guard Bureau...... Advanced Information March 2003 – September 2007 Technology Services 115.0 Government Accountability Office. . . IT Infrastructure Support February 2003 – February 2009 105.0

A part of our growth strategy includes pursuing acquisitions. As of June 30, 2007, we have made the following acquisitions:

Acquisition Strategic Value Closing Date Purchase Price (in millions) The Marasco Newton Group, Ltd.. . . . Environment January 4, 2002 $16.2 Adroit Systems, Inc...... Command and Control, Communications, January 31, 2003 Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) 38.3 ORION Scientific Systems...... Counterterrorism January 30, 2004 34.7 Touchstone Consulting Group, Inc.. . . Strategic Consulting April 21, 2005 37.0 Galaxy Scientific Corporation...... Command and Control, Communications, July 1, 2005 Computers, Intelligence (C4I) 98.7 Spectrum Solutions Group, Inc...... Enterprise Resource Planning November 2, 2005 17.7 Mercomms Unlimited, Inc...... Maritime and Defense Communications April 10, 2006 0.6 RABA Technologies, LLC...... Intelligence October 26, 2006 95.0

Contract Backlog Future growth is dependent upon the strength of our target markets, our ability to identify opportunities, and our ability to successfully bid and win new contracts. Our success can be measured in part based upon the growth of our backlog. The following table summarizes our contract backlog at the end of the year:

Year Ended June 30, 2007 2006 2005 (in millions) Backlog: Funded ...... $ 600.4 $ 512.8 $ 453.2 Unfunded ...... 2,809.8 2,748.8 2,296.9 Total backlog ...... $ 3,410.2 $ 3,261.6 $ 2,750.1

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Our total backlog of approximately $3.4 billion as of June 30, 2007 represented a 4.6% increase over the fiscal year 2006 backlog. We currently expect to recognize revenue during fiscal year 2008 from approximately 25% of our total backlog as of June 30, 2007.

Contract mix Contract profit margins are generally affected by the type of contract. We can typically earn higher profits on fixed- price and time-and-materials contracts than cost-plus-fee contracts. Thus, an important part of growing our operating income is to increase the amount of services delivered under fixed-price and time-and-materials contracts. The following table summarizes our historical contract mix, measured as a percentage of total revenue, for the periods indicated:

Year Ended June 30, 2007 2006 2005 Cost-plus-fee...... 43% 45% 46% Time-and-materials ...... 42 40 34 Fixed-price...... 15 15 20

While our government clients typically determine what type of contract will be awarded to us, where we have the opportunity to influence the type of contract awarded, we will pursue time-and-materials and fixed-price contracts for the reasons discussed above.

Headcount and Labor Utilization Because most of our revenue derives from services delivered by our employees, our ability to hire new employees and deploy them on direct-billable jobs is critical to our success. The following table represents our headcount and our direct labor utilization over the past three years:

Year Ended June 30, 2007 2006 2005 Headcount...... 5,215 4,975 4,177 Direct labor utilization...... 78.8% 78.5% 78.8%

Operating Margin Operating margin, or the ratio of operating income to revenue, is affected by the mix of our contracts and how we manage our costs. Our operating margins were 7.3%, 8.2%, and 10.1% for the years ended June 30, 2007, 2006, and 2005, respectively. The decrease in operating margin between fiscal 2006 and 2007 is primarily attributable to lower margins on recompeted contracts during fiscal 2007 compared to fiscal 2006. Additionally, the amortization associated with identified intangibles recorded as a result of our acquisition of RABA Technologies, LLC, or RABA, reduced operating margin in the year ended June 30, 2007. The decrease in operating margin between fiscal 2005 and 2006 is primarily due to the compensation expense related to share-based payment transactions recognized in accordance with the adoption of SFAS No. 123R on July 1, 2005.

Days Sales Outstanding Days sales outstanding, or DSO, is a measure of how efficiently we manage the billing and collection of our accounts receivable, our most significant working capital requirement. Accounts receivable represents the most significant asset we report on our balance sheet. We reported DSO of 73 and 74 days for the year ended June 30, 2007 and 2006, respectively. The decrease in DSO was due to continued initiatives to improve our invoicing and collections processes.

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RESULTS OF OPERATIONS The following tables set forth some items from our consolidated statements of operations, and these items expressed as a percentage of revenue, for the periods indicated. Year Ended June 30, 2007 % Change 2006 % Change 2005 (in thousands) Revenue...... $1,268,872 7.6% $1,179,267 33.7% $ 881,770 Operating costs and expenses: Cost of services ...... 954,656 8.4 880,802 34.9 653,115 Selling, general, and administrative(a) (b) ...... 200,204 9.2 183,297 45.0 126,404 Depreciation and amortization ...... 21,187 16.4 18,201 38.5 13,141 Total operating costs and expenses ...... 1,176,047 8.7 1,082,300 36.5 792,660 Operating income...... 92,825 (4.3) 96,967 8.8 89,110 Interest income, net ...... 6,276 48.3 4,232 23.0 3,442 Gain on sale of Mantas, Inc...... 3,674 100.0 — — — Income before taxes...... 102,775 1.6 101,199 9.3 92,552 Provision for income taxes...... 39,345 1.7 38,679 11.1 34,829 Net income...... $ 63,430 1.5% $ 62,520 8.3% $ 57,723

(as a percentage of revenue) Revenue...... 100.0% 100.0% 100.0% Operating costs and expenses: Cost of services ...... 75.2 74.7 74.1 Selling, general and administrative(b) ...... 15.8 15.5 14.3 Depreciation and amortization ...... 1.7 1.5 1.5 Total operating costs and expenses ...... 92.7 91.8 89.9 Operating income...... 7.3 8.2 10.1 Interest income, net ...... 0.5 0.4 0.4 Gain on sale of Mantas, Inc...... 0.3 — — Income before taxes...... 8.1 8.6 10.5 Provision for income taxes...... 3.1 3.3 4.0 Net income...... 5.0% 5.3% 6.5%

(a) Years ended June 30, 2007 and 2006 include $11.5 million and $13.2 million, respectively, of stock compensation expense recognized in accordance with SFAS No. 123R. (b) Excluding the SFAS No 123R expense, selling, general, and administrative expense would have been 14.9% and 14.4% of revenue in fiscal 2007 and 2006, respectively.

Revenue Our revenue increased 7.6% to $1.27 billion in fiscal 2007 from $1.18 billion in fiscal 2006. Organic revenue growth was 3.4% for the year, with the remainder of growth mostly attributable to our October 2006 acquisition of RABA which generated approximately $43 million in revenue during fiscal 2007. Our organic growth has been driven primarily by our Federal Deposit Insurance Corporation, or FDIC, contract, which generated approximately $25.5 million in additional revenue during fiscal 2007 compared to fiscal 2006. Our revenue increased 33.7% to $1.18 billion in fiscal 2006, from $881.8 million in fiscal 2005. Organic revenue growth was 17.2% for the year, with the remainder of growth mostly attributable to our April 2005 and July 2005 acquisitions of Touchstone and Galaxy, respectively. Our organic growth has been driven in part by three large contracts, representing approximately 7.8% of our fiscal 2006 organic growth. Our FDIC contract, our Advanced Information Technology Services, or AITS, contract with the National Guard, and our United States Agency for International Development, or USAID, contract were significant drivers of our revenue growth, generating approximately $79 million of additional revenue during fiscal 2006 compared to fiscal 2005.

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Cost of Services Cost of services increased 8.4% to $954.7 million in fiscal 2007, from $880.8 million in fiscal 2006. This increase in cost of services was due primarily to the increased volume of services provided under our FDIC contract, and the volume of services attributable to RABA’s existing contracts. As a percentage of revenue, cost of services increased to 75.2% in fiscal 2007, from 74.7% in fiscal 2006. This increase as a percentage of revenue was attributable primarily to lower margin on a re-competed contract during fiscal 2007 compared to fiscal 2006. Cost of services increased 34.9% to $880.8 million in fiscal 2006, from $653.1 million in fiscal 2005. This increase in cost of services was due primarily to the increased volume of services provided under our FDIC, AITS, and USAID contracts, and the volume of services attributable to Touchstone’s and Galaxy’s contracts. As a percentage of revenue, cost of services increased to 74.7% in fiscal 2006, from 74.1% in fiscal 2005. This increase as a percentage of revenue was attributable primarily to an increased amount of direct material purchases made by us and delivered to clients in connection with our services. Typically, direct material purchases generate lower profit, which increases the ratio of cost of services to revenue. While this higher direct material content can drive our operating margin down, it should have a positive impact on our earnings and return on invested capital.

Selling, General and Administrative Expenses Selling, general and administrative expenses increased 9.2% to $200.2 million in fiscal 2007, from $183.3 million in fiscal 2006. As a percentage of revenue, selling, general and administrative expenses increased to 15.8% in fiscal 2007 from 15.5% in fiscal 2006. This increase as a percentage of revenue resulted primarily from an increase in our allowance for doubtful accounts related to a potentially uncollectible receivable. Additionally, increased spending to recruit and retain staff during fiscal 2007 increased the ratio of selling, general and administrative expenses to revenue as compared to fiscal 2006. Selling, general and administrative expenses increased 45.0% to $183.3 million in fiscal 2006, from $126.4 million in fiscal 2005. As a percentage of revenue, selling, general and administrative expenses increased to 15.5% in fiscal 2006 from 14.3% in fiscal 2005. This increase as a percentage of revenue resulted primarily from the adoption of SFAS No. 123R on July 1, 2005. Under SFAS No. 123R, share-based payments not fully vested as of July 1, 2005 and those granted in the year ended June 30, 2006 and future periods are measured at estimated fair value and included in selling, general and administrative expenses over the appropriate earning period. We recognized approximately $13.2 million of compensation costs in accordance with SFAS No. 123R in fiscal 2006. Excluding the impact of SFAS No. 123R, selling, general and administrative expenses as a percentage of revenue was 14.4% and 14.3% for the years ended June 30, 2006 and 2005, respectively. This increase as a percentage of revenue resulted primarily from increased costs associated with bid and proposal efforts and lower revenue due to the related transition of professional staff off of billable engagements to support the higher proposal activity.

Depreciation and Amortization Depreciation and amortization increased 16.4% to $21.2 million in fiscal 2007, from $18.2 million in fiscal 2006. As a percentage of revenue, depreciation and amortization increased to 1.7% in fiscal 2007, from 1.5% in fiscal 2006. This increase in depreciation and amortization resulted primarily from the amortization associated with the identified intangibles recorded as a result of our acquisition of RABA. Depreciation and amortization increased 38.5% to $18.2 million in fiscal 2006, from $13.1 million in fiscal 2005. This increase in depreciation and amortization resulted primarily from the amortization associated with the identified intangibles recorded as a result of our acquisitions of Galaxy and Spectrum. As a percentage of revenue, depreciation and amortization was 1.5% in both fiscal 2006 and 2005.

Interest Income, net Interest income, net increased to $6.3 million in fiscal 2007, from $4.2 million in fiscal 2006. This increase was due to a general rise in interest rates and a greater average cash and cash equivalents balance. Interest income, net increased to $4.2 million in fiscal 2006, from $3.4 million in fiscal 2005. This increase was due to a general rise in interest rates and interest earned on amended tax return refunds from previous years.

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Income Taxes In fiscal 2007, our effective income tax rate increased slightly to 38.3%, from 38.2% in fiscal year 2006. In fiscal 2006 our effective tax rate increased to 38.2% from 37.6% in fiscal 2005. This increase was due primarily to additional services performed in higher taxing jurisdictions. The estimated effective tax rate is based on current tax law and current income and expense projections. The effective tax rate may be affected by future acquisitions, by changes in interest income from tax-advantaged municipal bond investments, or by the receipt of certain tax credits or refunds.

SEASONALITY Our quarterly operating margins are affected by, among other things, seasonality in our business model. We may experience a sequential decline in operating margins between our quarter ending June 30 and our quarter ending September 30. In the quarter ending September 30, we generally experience lower staff utilization rates. These lower utilization rates are attributable both to summer vacations and to increased proposal activity in connection with the end of the federal fiscal year. We typically transition a significant number of professional staff temporarily off of billable engagements to support this increased proposal activity.

LIQUIDITY AND CAPITAL RESOURCES Our primary liquidity needs are to finance the costs of operations pending the billing and collection of accounts receivable, to acquire capital assets, to invest in research and development, and to make selective strategic acquisitions. As of June 30, 2007, our total cash and investments balances were $212.1 million. We used a total of approximately $102.2 million of cash in fiscal 2007 related to the acquisitions of RABA and Spectrum. From our May 2002 initial public offering through June 30, 2007, we have been able to meet all of our liquidity requirements with cash generated from our operations. We believe we have adequate capital resources to fund our operating and liquidity and capital expenditure needs through at least fiscal 2008, and that our funds on hand and borrowing capacity are sufficient to execute our financial and operating strategy for the foreseeable future.

Cash Flow Accounts receivable represent our largest working capital requirement. We bill most of our clients monthly after services are rendered. Our operating cash flow is primarily affected by the overall profitability of our contracts, our ability to invoice and collect from our clients in a timely manner, and our ability to manage our vendor payments. We continue to improve our invoicing and collections procedures to maximize cash flows from operations.

Fiscal 2007 Compared to Fiscal 2006 Net cash provided by operating activities was $122.4 million in fiscal 2007, compared to $86.8 million in fiscal 2006, or 1.9 and 1.4 times net income for fiscal 2007 and 2006 respectively. The higher cash provided by operating activities was driven primarily by increased customer collections as a result of internal process initiatives implemented to improve our invoicing and collection of accounts receivable. Additionally, the payment of year-end incentive compensation was made after year-end, whereas in prior years such payments were made in June of each year. We used $101.2 million in net cash for investing activities in fiscal 2007, compared to $104.7 million in fiscal 2006. Three factors drive our investing cash outflows: capital expenditures, the purchase, sale or maturity of investments with maturities that exceed 90 days, and acquisitions. The lower cash used for investing activities in fiscal 2007 was due primarily to lower cash generated from the sale and maturity of investments in fiscal 2007 compared to fiscal 2006 which was partially offset by the proceeds received in the sale of our interest in Mantas, Inc. Net cash provided by financing activities was $17.2 million in fiscal 2007, compared to $28.5 million in fiscal 2006. The decrease was due to lower stock option exercises and related tax benefits.

Fiscal 2006 Compared to Fiscal 2005 Net cash provided by operating activities was $86.8 million in fiscal 2006, compared to $66.0 million in fiscal 2005, or 1.4 and 1.1 times net income for fiscal 2006 and 2005, respectively. The ratio of cash provided by operating activities to net income in fiscal 2006 was positively affected by the increase in our accounts payable and accrued

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expenses balance. Account payable and accrued expenses increased due to the timing of certain vendor payments. Net cash provided by operating activities in fiscal 2006 was also affected by the adoption of SFAS No. 123R, which resulted in the reclassification of excess tax benefits from operating cash flows to financing cash flows. We used $104.7 million in net cash for investing activities in fiscal 2006, compared to $61.0 million in fiscal 2005. The higher amount of cash used was primarily the result of our acquisitions of Galaxy and Spectrum in July 2005 and November 2005, respectively. We spent approximately $68.0 million more on acquisitions in fiscal 2006 than fiscal 2005. Net cash provided by financing activities was $28.5 million in fiscal 2006, compared to $14.6 million in fiscal 2005. The higher amount of cash provided by financing activities in the fiscal 2006 was primarily the result of our adoption of SFAS No. 123R in July 2005. Under SFAS No. 123R, excess tax benefits from share-based payments are presented as sources of financing activity cash flows.

Credit Facility and Borrowing Capacity

Acquisition of Constella Group, LLC On August 9, 2007, we completed our acquisition of all of the outstanding stock of Constella Group LLC, or Constella, for approximately $186.9 million in cash. Approximately $51.6 million of the purchase price was used to repay all outstanding debt obligations of Constella on the closing date. Approximately $16.0 million was placed into escrow as security for the payment, if any, of post-closing net asset adjustments and to secure indemnification obligations. The equity purchase agreement has been filed as Exhibit 2.2 to this report. Constella is a privately-held provider of global health consulting services. Headquartered in Durham, NC, Constella is organized by three interrelated service offerings: domestic health sciences, international health development and global drug development. Financing for the acquisition consisted of available cash and borrowings under a credit facility obtained prior to closing.

Revolving Credit Facility On August 9, 2007, we entered into a $100.0 million five-year unsecured revolving credit facility. The agreement has an accordion feature enabling the credit facility to be increased by an additional $100.0 million, subject to specified conditions. Outstanding borrowings under the agreement bear interest at a LIBOR based interest rate (currently LIBOR plus 75 basis points). Interest is payable throughout the period a borrowing is outstanding. We borrowed $100.0 million under this credit line to fund part of the acquisition of Constella.

STOCK PURCHASE AGREEMENT On August 30, 2005, we and our chairman of the board of directors terminated a stock purchase agreement that required us to repurchase shares from the chairman’s estate upon his death. We had purchased term life insurance policies on our chairman to meet these repurchase obligations. We have terminated all related term life insurance policies. Expenses recognized under these policies were $49,000 for the year ended June 30, 2005.

OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements.

CONTRACTUAL OBLIGATIONS The following table summarizes our contractual obligations as of June 30, 2007 that require us to make future cash payments. For contractual obligations, we included payments that we have an unconditional obligation to make. We did not include amounts already recorded on our balance sheet as liabilities at June 30, 2007.

Payments due by period Less than 1 Years 2 Years 4 After 5 Contractual obligations: Total Year and 3 and 5 Years (in thousands) Operating lease obligations, net...... $ 171,171 $28,971 $49,834 $35,744 $56,622 Total contractual obligations ...... $ 171,171 $28,971 $49,834 $35,744 $56,622

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In the normal course of our business, we enter into agreements with subcontractors and vendors to provide products and services that we consume in our operations or that are delivered to our customers. These products and services are not considered unconditional obligations until the products and services are actually delivered, at which time we record a liability for our obligation.

RELATED PARTY TRANSACTIONS In May 2001, Mantas, which was previously one of our service offerings, was contributed to a separate company, Mantas, Inc., which was formed with funding and other contributions received from unrelated third parties. Mantas, Inc. is a provider of services to the financial services industry to address anti-money laundering and other data mining issues. In fiscal 2005, we leased space and provided services to Mantas, Inc., for which we were reimbursed. In October 2006, i-flex solutions completed its acquisition of Mantas, Inc. Our portion of the net sale proceeds was approximately $4.4 million, including a portion to be held in escrow. We recognized a total pre-tax gain of approximately $3.7 million during fiscal 2007. The remaining amount held in escrow will be recognized as a gain upon the release of funds pursuant to the terms of the escrow agreement.

DESCRIPTION OF CRITICAL ACCOUNTING POLICIES The preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, as well as the disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates including those related to revenue recognition, doubtful accounts receivable, goodwill and other intangible assets, and other contingent liabilities. We base our estimates on our historical experience and various other factors that we believe are reasonable at the time the estimates are made. Actual results may differ significantly from our estimates under different assumptions or conditions. We believe the critical accounting policies requiring us to make significant estimates and judgments are revenue recognition, contract cost accounting, and accounting for acquisitions, including the identification of intangible assets and the ongoing impairment assessments of the intangible assets. If any of these estimates or judgments proves to be incorrect, our reported results could be materially affected.

Revenue Recognition We recognize revenue when persuasive evidence of an arrangement exists, services have been rendered or goods delivered, the contract price is fixed or determinable, and collectibility is reasonably assured. We have a standard management process that we use to determine whether all required criteria for revenue recognition have been met. This standard management process includes a regular review of our contract performance. This review covers, among other matters, outstanding action items, progress against schedule, effort and staffing, requirements stability, quality, risks and issues, subcontract management, cost, commitments, and client satisfaction. During this review we determine whether the overall progress on a contract is consistent with the effort expended. Absent evidence to the contrary, we recognize revenue as follows. Revenue on cost-plus-fee contracts is recognized to the extent of costs actually incurred plus a proportionate amount of the fee earned. We consider fixed fees under cost- plus-fee contracts to be earned in proportion to the allowable costs actually incurred in performance of the contract. Revenue on time-and-materials contracts is recognized based on the hours actually incurred at the negotiated contract billing rates, plus the cost of any allowable material costs and out-of-pocket expenses. Revenue on fixed-price contracts where we perform systems design, development and integration is recognized using the percentage-of-completion method of contract accounting. Unless it is determined as part of our regular contract performance review that overall progress on a contract is not consistent with costs expended to date, we determine the percentage completed based on the percentage of costs incurred to date in relation to total estimated costs expected upon completion of the contract. Revenue on fixed-price outsourcing and managed services contracts is generally recognized ratably over the contract period. Revenue on fixed-price strategic consulting contracts is generally recognized based on costs incurred because these services are directed by our customers and are subject to their needs which fluctuate throughout the contract period. We consider performance-based fees, including award fees, under any contract type to be earned when we can demonstrate satisfaction of performance goals, based upon historical experience, or we receive contractual notification from a client that the fee has been earned. Billings for hardware or software purchased by customers under one of our contracts where we act as an agent to the transaction are excluded from our revenue and cost of services, except to the extent of any fee or profit earned.

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Contract revenue recognition inherently involves estimation. Examples of estimates include the contemplated level of effort to accomplish the tasks under contract, the cost of the effort, and an ongoing assessment of our progress toward completing the contract. From time to time, as part of our standard management processes, facts develop that require us to revise our estimated total costs or revenue. To the extent that a revised estimate affects contract profit or revenue previously recognized, we record the cumulative effect of the revision in the period in which the facts requiring the revision become known. The full amount of an anticipated loss on any type of contract is recognized in the period in which it becomes probable and can be reasonably estimated. We may proceed with work based on client direction prior to the completion and signing of formal contract documents. We have a formal review process for approving any such work. Revenue associated with such work is recognized only when it can be reliably estimated and realization is probable. We base our estimates on previous experiences with the client, communications with the client regarding funding status, and our knowledge of available funding for the contract or program. We maintain reserves for doubtful accounts receivable that may arise in the normal course of business. This allowance for doubtful accounts is based on several factors, including the customer’s payment history, the age of the accounts receivable, and management’s judgment regarding the likelihood of collection. Historically, we have not had significant write-offs of doubtful accounts receivable related to work we perform for the federal government. However, we do perform work on contracts and task orders where, on occasion, issues arise that lead to accounts receivable not being collected. It is our policy to provide reserves for the collectibility of accounts receivable when we determine that it is probable that we will not collect all amounts due and the amount of the reserve requirements can be reasonably estimated.

Contract Cost Accounting As a contractor providing services primarily to the federal government, we must categorize our costs as either direct or indirect and allowable or unallowable. Direct costs are those costs that are identified with specific contracts. These costs include labor, subcontractor and consultant services, third party materials we purchase under a contract, and other non-labor costs incurred in support of a contract. Indirect costs are those costs not identified with specific contracts. Rather, indirect costs are allocated to contracts in accordance with federal government rules and regulations. These costs typically include our selling, general and administrative expenses, fringe benefit expenses, and depreciation and amortization costs. Direct and indirect costs that are not allowable under the Federal Acquisition Regulation or specific contract provisions cannot be considered for reimbursement under our federal government contracts. We must specifically identify these costs to ensure we comply with these requirements. Our unallowable costs include a portion of our executive compensation, certain employee morale activities, certain types of legal and consulting costs, and the amortization of identified intangible assets, among others. A key element to our recent margin expansion has been our success at controlling indirect cost growth and unallowable costs. In addition, as we acquire and integrate new companies, we have been able to manage our indirect costs by realizing opportunities for cost synergies and integrating the indirect support function of acquired companies into our own. Accounting for Acquisitions and Asset Impairment The purchase price that we pay to acquire the stock or assets of an entity must be assigned to the net assets acquired based on the estimated fair market value of those net assets. The purchase price in excess of the estimated fair market value of the tangible net assets and separately identified intangible assets acquired represents goodwill. The purchase price allocation related to acquisitions involves significant estimates and management judgments that may be adjusted during the purchase price allocation period, but generally not beyond one year from the acquisition date. We must evaluate goodwill for impairment on an annual basis, or during any interim period if we have an indication that goodwill may be impaired. We assess the potential impairment of goodwill by comparing the carrying value of the assets and liabilities of our reporting unit to which goodwill is assigned to the estimated fair value of the reporting unit using a discounted cash flow approach. We performed our annual goodwill impairment analysis as of January 1, 2007. There was no indication of goodwill impairment as a result of our impairment analysis. If we are required to record an impairment charge in the future, it could materially affect our results of operations. The estimated fair market value of identified intangible assets is amortized over the estimated useful life of the related intangible asset. We have a process pursuant to which we typically retain third-party valuation experts to assist us in determining the fair market values and useful lives of identified intangible assets. We evaluate these assets for impairment when events occur that suggest a possible impairment. Such events could include, but are not limited to, the

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loss of a significant client or contract, decreases in federal government appropriations or funding for specific programs or contracts, or other similar events. None of these events have occurred for the periods presented. We determine impairment by comparing the net book value of the asset to its future undiscounted net cash flows. If an impairment occurs, we will record an impairment expense equal to the difference between the net book value of the asset and its estimated discounted cash flows using a discount rate based on our cost of capital and the related risks of recoverability.

DESCRIPTION OF STATEMENT OF OPERATIONS ITEMS The following is a description of certain line items of our statements of operations.

Revenue Most of our revenue is generated on the basis of services provided to the federal government, either by our employees or by our subcontractors. To a lesser degree, the revenue we earn may include third-party hardware and software that we purchase and integrate when requested by the client as a part of the solutions that we provide to our clients. Contract Types. When contracting with our government clients, we enter into one of three basic types of contracts: cost-plus-fee, time-and-materials, and fixed-price. • Cost-plus-fee contracts. Cost-plus-fee contracts provide for reimbursement of allowable costs and the payment of a fee, which is our profit. Cost-plus-fixed-fee contracts specify the contract fee in dollars. Cost-plus-award- fee contracts may provide for a base fee amount, plus an award fee that varies, within specified limits, based upon the client’s assessment of our performance as compared to contractual targets for factors such as cost, quality, schedule, and performance. • Time-and-materials contracts. Under a time-and-materials contract, we are paid a fixed hourly rate for each direct labor hour expended and we are reimbursed for allowable material costs and out-of-pocket expenses. To the extent our actual direct labor and associated costs vary in relation to the fixed hourly billing rates provided in the contract, we will generate more or less profit, or could incur a loss. • Fixed-price contracts. Under a fixed-price contract, we agree to perform the specified work for a pre- determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less than the anticipated amount of profit or could incur a loss. Some fixed-price contracts have a performance-based component, pursuant to which we can earn incentive payments or incur financial penalties based on our performance.

Cost of Services Cost of services includes the direct costs to provide our services and business solutions to clients. The most significant of these costs are the salaries and wages, plus associated fringe benefits, of our employees directly serving clients. Cost of services also includes the costs of subcontractors 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 direct costs, such as travel expenses incurred to support contract efforts.

Selling, General and Administrative Expenses Selling, general and administrative expenses include the salaries and wages, plus associated fringe benefits, of our employees not performing work directly for clients. Among the functions covered by these costs are asset and facilities management, business development, research and development, contracts and legal, finance and accounting, executive and senior management, human resources, and information system support. Facilities-related costs are also included in selling, general and administrative expenses.

Depreciation and Amortization Depreciation and amortization includes depreciation of computers and other equipment, the amortization of software we use internally, the amortization of leasehold improvements, and the amortization of identified intangible assets.

DEFINITION OF CERTAIN TERMS USED IN THIS MANAGEMENT’S DISCUSSION AND ANALYSIS The following is our definition of certain terms we have used in our discussion and analysis.

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Backlog We define backlog to include funded and unfunded orders for services under existing signed contracts, assuming the exercise of all options relating to those contracts, less the amount of revenue we have previously recognized under those contracts. Backlog includes all contract options that have been priced but not yet funded. Backlog also includes the contract value under single award indefinite delivery, indefinite quantity, or ID/IQ, contracts against which we expect future task orders to be issued without competition. Backlog does not take contract ceiling value into consideration under multiple award contracts, nor does it include any estimate of future potential delivery orders that might be awarded under multiple award ID/IQ vehicles, government-wide acquisition contracts, or GWACs, or General Services Administration, or GSA, schedule contracts. We define funded backlog to be the portion of backlog for which funding currently is appropriated and obligated to us under a contract or other authorization for payment signed by an authorized purchasing authority. We cannot guarantee that we will recognize any revenue from our backlog. The federal government has the prerogative to cancel any contract or delivery order at any time. Most of our contracts and delivery orders have cancellation terms that would permit us to recover all or a portion of our incurred costs and potential fees in such cases. Backlog varies considerably from time to time as current contracts or delivery orders are executed and new contracts or delivery orders under existing contracts are won.

Days Sales Outstanding We calculate days sales outstanding, or DSO, by dividing the average accounts receivable at the beginning and end of the period, net of average billings in excess of revenue, by revenue per day in the period. Revenue per day for a quarter is determined by dividing total revenue by 90 days. Revenue per day for a year is determined by dividing total revenue by 360 days.

Direct Labor Utilization We define direct labor utilization as the ratio of labor dollars worked on customer engagements to total labor dollars worked. We include every working employee of the company in the computation. We exclude leave taken, such as vacation time or sick leave, so that we can understand how we are applying worked labor. Leave actually taken by our employees is largely beyond the control of management in the near term.

Organic Growth We calculate organic growth by comparing our actual reported revenue in the current period, including revenue attributable to acquired companies, with adjusted revenue from the prior-year period. In arriving at prior-year revenue, we include the revenue of acquired companies for the prior-year periods comparable to the current-year periods for which the acquired companies are included in our actual reported revenue. The resulting growth rate is intended to represent our organic, or non-acquisitive, growth year-over-year, including comparable period growth attributable to acquired companies. For illustrative purposes, we compute our fiscal 2007 organic growth rate of 3.4% as follows:

Year Ended June 30, % 2007 2006 Increase Revenue, as reported ...... $ 1,268,872 $ 1,179,267 7.6% Plus: Revenue from acquired companies for the comparable prior year period. . — 48,022 Organic Revenue ...... $ 1,268,872 $ 1,227,289 3.4%

Recent Accounting Pronouncements In July 2006, the Financial Accounting Standards Board, or FASB, issued Interpretation (FIN) 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109,” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure,

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and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. We are currently evaluating what effect the adoption of FIN 48 will have on our financial position, results of operations, or cash flows, particularly with respect to our recent acquisition of Constella. During September 2006, the Securities and Exchange Commission released Staff Accounting Bulletin, or SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 requires a registrant to quantify all misstatements that could be material to financial statement users under both the “rollover” and “iron curtain” approaches. If either approach results in quantifying a misstatement that is material the registrant must adjust its financial statements. SAB No. 108 is applicable for our fiscal year ended June 30, 2007. Our adoption of SAB No. 108 did not have a material impact on our consolidated financial statements. In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 provides a new single authoritative definition of fair value and enhanced guidance for measuring the fair value of assets and liabilities. It requires additional disclosures related to the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating what effect, if any, the adoption of SFAS No. 157 will have on our financial position, results of operations, or cash flows. In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating what effect, if any, the adoption of SFAS No. 159 will have on our financial position, results of operations, or cash flows.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Financial instruments that potentially subject us to credit risk consist primarily of cash equivalents, short- and long- term investments, and accounts receivable. We believe that concentrations of credit risk with respect to cash equivalents and investments are limited due to the high credit quality of these investments. Our investment policy requires that investments be in direct obligations of the U.S. government, certain U.S. government sponsored entities, investments that are secured by direct or sponsored U.S. government obligations, or certain corporate or municipal debt obligations rated at least single-A or A-1/P-1, as applicable, by both Moody’s Investor Service and Standard and Poor’s. Our policy does not allow investment in any equity securities or the obligations of any entity under review for possible downgrade by a major rating service to a debt rating below single-A. Investments in both fixed and floating rate interest earning instruments carry a degree of interest rate risk. Fixed securities may have their fair market value adversely affected because of a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations because of changes in interest rates or we may suffer losses in principal if forced to sell securities which have seen a decline in market value because of changes in interest rates. Investments are made in accordance with an investment policy approved by our board of directors. Under this policy, no investment securities may have maturities exceeding two years and the average duration of the portfolio cannot exceed nine months. We believe that concentrations of credit risk with respect to accounts receivable are limited as they are primarily federal government receivables. As of June 30, 2007 and 2006, the carrying value of financial instruments approximated fair value. These investments primarily consist of corporate and municipal bonds with maturities of 4 months or less that are classified as held-to-maturity.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements of SRA International, Inc. and subsidiaries are submitted on pages F-1 through F-24 of this report.

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2007. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2007, our disclosure controls and procedures were effective at the reasonable assurance level. No change in our internal control over financial reporting occurred during the fiscal quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. The certifications of our chief executive officer and chief financial officer required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report. Additionally, in 2006, our Chief Executive Officer certified to the New York Stock Exchange (NYSE) that he was not aware of any violation by the company of the New York Stock Exchange corporate governance listing standards.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of SRA International, Inc. and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Exchange Act Rule 13a-15(f), and for assessing the effectiveness of internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability and fair presentation of published financial statements in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including our chief executive officer and chief financial officer, management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2007 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. This assessment excluded the internal control over financial reporting at RABA Technologies, LLC which was acquired on October 26, 2006 and whose financial statements reflect eight percent and one percent of net and total assets, respectively, three percent of revenue and six percent of net income of the related consolidated financial statement amounts as of and for the year ended June 30, 2007. Based on this assessment, management determined that the Company’s internal control over financial reporting was effective as of June 30, 2007. Deloitte & Touche LLP (“D&T”), an independent registered public accounting firm, has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting. The D&T report immediately follows this report.

/s/ STANTON D. SLOANE President and Chief Executive Officer

/s/ STEPHEN C. HUGHES Chief Financial Officer and Executive Vice President Operations

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Stockholders of SRA International, Inc. and Subsidiaries We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that SRA International, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of June 30, 2007, based on the criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at RABA Technologies LLC., which was acquired on October 26, 2006 and whose financial statements constitute eight percent and one percent of net and total assets, respectively, three percent of revenue, and six percent of net income of the consolidated financial statements as of and for the year ended June 30, 2007. Accordingly, our audit did not include the internal control over financial reporting at RABA Technologies LLC. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions. A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of June 30, 2007, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by COSO. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2007, based on the criteria established in Internal Control—Integrated Framework issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended June 30, 2007 of the Company and our report dated August 10, 2007 expressed an unqualified opinion on those financial statements and financial statement schedule. /s/ DELOITTE & TOUCHE LLP

McLean, VA August 10, 2007

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Item 9B. OTHER INFORMATION None.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required to be set forth herein is contained under the heading “Executive Officers of the Registrant” in Part I of this report. Other information required by this Item will be included under the headings “Proposal 1— Election of Directors” , “Corporate Governance” and “Section 16(a) Beneficial Ownership reporting Compliance” in the definitive proxy statement for our 2007 annual meeting of stockholders, or the 2007 proxy statement, which sections are incorporated herein by reference.

Item 11. EXECUTIVE COMPENSATION The information required by this Item will be included under the headings “Director Compensation,” “Executive Compensation,” “Compensation Committee Report on Executive Compensation,” and “Compensation Committee Interlocks and Insider Participation,” in the 2007 proxy statement, which sections are incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item will be included under the headings “Beneficial Ownership of Common Stock” and “Equity Compensation Plan Information” in the 2007 proxy statement, which sections are incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be included under the heading “Certain Relationships and Related Transactions” in the 2007 proxy statement, which section is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item will be included under the heading “Proposal 2—Ratification of Selection of Independent Auditors” in the 2007 proxy statement, which section is incorporated herein by reference.

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PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Documents filed as part of the report:

(1) Consolidated Financial Statements

Page Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements...... F-1 Consolidated Balance Sheets...... F-2 Consolidated Statements of Operations...... F-4 Consolidated Statements of Changes in Stockholders’ Equity...... F-5 Consolidated Statements of Cash Flows ...... F-6 Notes to Consolidated Financial Statements...... F-7

(2) Financial Statement Schedule

Schedule II—Valuation and Qualifying Accounts for the three years ended June 30, 2007 F-25

 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

(3) Exhibits

Exhibit Number Description 2.1††† Agreement and Plan of Merger, by and among SRA International, Inc., Alex Acquisition Corporation, and Adroit Systems, Inc., dated January 3, 2003. Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits and schedules of the Agreement and Plan of Merger are omitted. 2.2 Equity Purchase Agreement dated June 20, 2007 and Closing Agreement dated August 9, 2007, by and among SRA International, Inc., Systems Research Applications Corporation, Constella Group, LLC, and Donald A. Holzworth, as Seller Representative and certain identified shareholders of Constella. Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits and schedules of the Equity Purchase Agreement and Closing Agreement are omitted. 3.1†† Amended and Restated Certificate of Incorporation of the Registrant 3.2† Amended and Restated By-Laws of the Registrant 4.1† Specimen common stock certificate 4.2 See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation and By-Laws of the Registrant defining the rights of holders of common stock of the Registrant 10.1† 1994 Stock Option Plan, as amended* 10.2† 1985 Key Employee Incentive Plan* 10.3† 2002 Stock Incentive Plan* 10.4† Deferred Compensation Plan for Key Employees, as amended* 10.5† Office Lease Agreement, dated May 11, 1999, between the Registrant and Fair Lakes North and South L.P., as amended

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10.6† Office Lease Agreement, dated May 11, 1999, between the Registrant and Fair Lakes North and South L.P., as amended 10.8† 401(k) Savings Plan, as amended and restated effective January 1, 2001* 10.8a^ Amendment to 401(k) Savings Plan* 10.11† Stockholders Agreement among the Registrant, General Atlantic Partners 75, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC, GAPCO GmbH & Co. KG and the stockholders named therein, dated April 23, 2002 10.12† Registration Rights Agreement among the Registrant, General Atlantic Partners 75, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC, and GAPCO GmbH & Co. KG and the stockholders named therein, dated April 23, 2002

10.13† Stock Purchase Agreement among the Registrant, General Atlantic Partners 75, L.P., GAP Coinvestment Partners II, L.P., GapStar, LLC, GAPCO GmbH & Co. KG and the stockholders named therein, dated April 22, 2002 10.14†††† Employment Agreement dated April 18, 2007 between SRA International, Inc. and Stanton D. Sloane* 21.1 Subsidiaries of the Registrant 23.1 Consent of Independent Registered Public Accounting Firm 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended 31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

† Previously filed and incorporated by reference to the Registrant’s Registration Statement on Form S-1 filed on May 21, 2002 (333-83780). †† Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002 (File No. 001-31334). ††† Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on February 13, 2002 (File No. 001-31334). †††† Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007. (File No. 001-31334). ^ Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2003 (File No. 001-31334). * Management contract or compensatory plan, contract or arrangement.

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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Fairfax, Virginia on the 15th day of August, 2007.

SRA INTERNATIONAL, INC.

By: /s/ Stanton D. Sloane Stanton D. Sloane President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ STANTON D. SLOANE President and Chief Executive Officer August 15, 2007 Stanton D. Sloane (Principal Executive Officer)

/s/ STEPHEN C. HUGHES Chief Financial Officer and Executive Vice August 15, 2007 Stephen C. Hughes President Operations (Principal Financial and Accounting Officer)

Chairman Ernst Volgenau

/s/ JOHN W. BARTER Director August 15, 2007 John W. Barter

/s/ Renato A. DiPentima Director August 15, 2007 Renato A. DiPentima

/s/ Larry R. Ellis Director August 15, 2007 Larry R. Ellis

/s/ MILES R. GILBURNE Director August 15, 2007 Miles R. Gilburne

/s/ MICHAEL R. KLEIN Director August 15, 2007 Michael R. Klein

Director David H. Langstaff

Director Delbert C. Staley

/s/ Gail R. Wilensky Director August 15, 2007 Gail R. Wilensky

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SRA INTERNATIONAL, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE CONSOLIDATED FINANCIAL STATEMENTS To the Board of Directors and Stockholders of SRA International, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of SRA International, Inc. and subsidiaries (the “Company”) as of June 30, 2007 and 2006, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2007. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of SRA International, Inc. and subsidiaries as of June 30, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of June 30, 2007, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 10, 2007 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

McLean, Virginia August 10, 2007

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SRA International, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands)

Assets June 30, 2007 2006 Current assets: Cash and cash equivalents ...... $ 212,034 $ 173,564 Short-term investments ...... 85 9,834 Accounts receivable, net ...... 262,409 268,908 Prepaid expenses and other ...... 26,285 23,382 Deferred income taxes, current ...... 5,860 4,839 Total current assets ...... 506,673 480,527 Property and equipment, net ...... 36,685 37,462 Other assets: Goodwill ...... 256,530 169,334 Identified intangibles, net ...... 30,849 26,169 Deferred income taxes, noncurrent ...... 8,163 3,462 Deferred compensation trust ...... 8,784 7,768 Total other assets ...... 304,326 206,733 Total assets ...... $ 847,684 $ 724,722

The accompanying notes are an integral part of these consolidated financial statements.

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SRA International, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts)

Liabilities and Stockholders’ Equity June 30, 2007 2006 Current liabilities: Accounts payable and accrued expenses ...... $ 110,897 $ 115,545 Accrued payroll and employee benefits ...... 81,711 59,463 Billings in excess of revenue recognized ...... 16,980 5,952 Total current liabilities ...... 209,588 180,960 Long-term liabilities: Other long-term liabilities ...... 12,641 10,465 Total long-term liabilities ...... 12,641 10,465 Total liabilities ...... 222,229 191,425 Commitments and contingencies

Stockholders’ equity: Preferred stock, par value $0.20 per share; 5,000,000 shares authorized; none issued . . — — Class A common stock, par value $0.004 per share; 180,000,000 shares authorized; 43,576,434 and 42,158,048 shares issued as of June 30, 2007 and 2006; 42,865,008 and 41,403,312 shares outstanding as of June 30, 2007 and 2006 ...... 174 169 Class B common stock, par value $0.004 per share; 55,000,000 shares authorized; 14,199,828 and 14,459,828 shares issued and outstanding as of June 30, 2007 and 2006 ...... 57 58 Additional paid-in capital ...... 302,970 274,552 Treasury stock, at cost ...... (5,996) (6,302) Retained earnings ...... 328,250 264,820 Total stockholders’ equity ...... 625,455 533,297 Total liabilities and stockholders’ equity ...... $ 847,684 $ 724,722

The accompanying notes are an integral part of these consolidated financial statements.

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SRA International, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except share and per share amounts)

Year Ended June 30, 2007 2006 2005 Revenue ...... $ 1,268,872 $ 1,179,267 $ 881,770 Operating costs and expenses: Cost of services ...... 954,656 880,802 653,115 Selling, general and administrative ...... 200,204 183,297 126,404 Depreciation and amortization ...... 21,187 18,201 13,141 Total operating costs and expenses ...... 1,176,047 1,082,300 792,660 Operating income ...... 92,825 96,967 89,110 Interest income, net ...... 6,276 4,232 3,442 Gain on sale of Mantas, Inc...... 3,674 — — Income before taxes ...... 102,775 101,199 92,552 Provision for income taxes ...... 39,345 38,679 34,829 Net income ...... $ 63,430 $ 62,520 $ 57,723 Earnings per share: Basic ...... $ 1.12 $ 1.14 $ 1.09 Diluted ...... $ 1.09 $ 1.08 $ 1.02 Weighted-average shares: Basic ...... 56,476,927 55,064,138 52,965,623 Diluted ...... 58,381,788 57,738,875 56,549,303

The accompanying notes are an integral part of these consolidated financial statements.

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SRA International, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share amounts)

Class A Class B Additional Deferred Common Stock Common Stock Paid-In Treasury Stock Stock-Based Retained Shares Amount Shares Amount Capital Shares Amount Compensation Earnings Total Balance, July 1, 2004 ...... 47,177,442 $194 20,374,410 $ 78 $ 241,695 (15,776,376) $(46,560) $ (716) $144,577 $339,268 Net income ...... — — — — — — — — 57,723 57,723 Issuance of common stock (a) . . . 2,134,537 9 — — 10,128 — — 56 — 10,193 Reissuance of treasury stock . . . . — — — — 4,030 122,530 405 — — 4,435 Adjustment due to stock split . . (10,937,171) (49) (3,882,352) (12) (41,255) 14,834,323 41,316 — — — Tax benefits of stock option exercises ...... — — — — 17,156 — — — — 17,156 Shares converted between classes ...... 864,592 3 (864,592) (3 ) — — — — — — Compensatory stock options issued or modified . . . . . — — — — — — — 240 — 240 Amortization of deferred stock-based compensation . . — — — — — — — 77 — 77 Balance, June 30, 2005 . . . . . 39,239,400 157 15,627,466 63 231,754 (819,523) (4,839) (343) 202,300 429,092 Net income ...... — — — — — — — — 62,520 62,520 Issuance of common stock (a) . . . 1,751,010 7 — — 13,911 — — (919) — 12,999 Reissuance of treasury stock . . . . — — — — 3,198 134,162 799 — — 3,997 Purchase of treasury stock ...... — — — — — (69,375) (2,262) — — (2,262) Tax benefits of stock option exercises ...... — — — — 13,774 — — — — 13,774 Shares converted between classes ...... 1,167,638 5 (1,167,638) (5) — — — — — — FAS 123(R) stock based compensation ...... — — — — 12,803 — — — — 12,803 Amortization of deferred stock-based compensation . . — — — — — — — 374 — 374 Balance, June 30, 2006 . . . . . 42,158,048 169 14,459,828 58 275,440 (754,736) (6,302) (888) 264,820 533,297 Net income ...... — — — — — — — — 63,430 63,430 Issuance of common stock (a) . . . 1,158,386 4 — — 8,872 — — 674 — 9,550 Reissuance of treasury stock . . . . — — — — 855 46,392 390 — — 1,245 Purchase of treasury stock ...... — — — — — (3,082) (84) — — (84) Tax benefits of stock option exercises ...... — — — — 6,521 — — — — 6,521 Shares converted between classes ...... 260,000 1 (260,000) (1) — — — — — — FAS 123(R) stock based compensation ...... — — — — 11,282 — — — — 11,282 Amortization of deferred stock-based compensation . . — — — — — — — 214 — 214 Balance, June 30, 2007 . . . . . 43,576,434 $174 14,199,828 $ 57 $ 302,970 (711,426) $ (5,996) $ — $ 328,250 $625,455

(a) Relates to the exercise of stock options, vesting of restricted stock, and the issuance of common stock for the ESPP.

The accompanying notes are an integral part of these consolidated financial statements.

F-5 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-6 Operator pm1

SRA International, Inc. and Subsidiaries Consolidated statements of cash flows (in thousands)

Year Ended June 30, 2007 2006 2005 Cash flows from operating activities: Net income ...... $ 63,430 $ 62,520 $ 57,723 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ...... 21,187 18,201 13,141 Stock-based compensation ...... 11,496 13,177 317 Tax benefits of stock option exercises ...... — — 17,156 Deferred income taxes ...... (5,722) (1,901) (3,570) Gain on sale of Mantas, Inc...... (3,674) — — Changes in assets and liabilities, net of the effect of acquisitions: Accounts receivable ...... 17,425 (41,822) (39,172) Prepaid expenses and other ...... (2,667) 2,250 2,941 Accounts payable and accrued expenses ...... (8,991) 32,609 7,704 Accrued payroll and employee benefits ...... 17,385 2,534 8,226 Billings in excess of revenue recognized ...... 11,028 (664) 1,622 Other ...... 1,547 (73) (100) Net cash provided by operating activities ...... 122,444 86,831 65,988 Cash flows from investing activities: Capital expenditures ...... (12,624) (15,639) (21,353) Purchases of investments ...... — (9,748) (18,516) Sales and maturities of investments ...... 9,749 25,723 15,983 Acquisition of Touchstone Consulting Group, net of cash acquired . . — — (37,124) Acquisition of Galaxy Scientific Corporation, net of cash acquired . . — (95,645) — Acquisition of Spectrum Solutions Group, net of cash acquired . . . . (8,000) (8,802) — Acquisition of Mercomms Unlimited, net of cash acquired ...... — (637) — Acquisition of RABA Technologies, net of cash acquired ...... (94,005) — — Proceeds from sale of Mantas, Inc...... 3,674 — — Net cash used in investing activities ...... (101,206) (104,748) (61,010) Cash flows from financing activities: Issuance of common stock ...... 9,550 12,999 10,193 Tax benefits of stock option exercises ...... 6,521 13,774 — Reissuance of treasury stock ...... 1,245 3,997 4,435 Purchase of treasury stock ...... (84) (2,262) — Net cash provided by financing activities ...... 17,232 28,508 14,628 Net increase in cash and cash equivalents ...... 38,470 10,591 19,606 Cash and cash equivalents, beginning of period ...... 173,564 162,973 143,367 Cash and cash equivalents, end of period ...... $ 212,034 $ 173,564 $ 162,973 Supplemental disclosures of cash flow information: Cash paid during the period: Income taxes ...... $ 38,012 $ 26,377 $ 21,211 Cash received during the period: Interest ...... $ 6,103 $ 4,219 $ 3,897 Income taxes ...... $ 938 $ 1,038 $ 652

The accompanying notes are an integral part of these consolidated financial statements.

F-6 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-7 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended June 30, 2007, 2006, and 2005 1. Summary of Significant Accounting Policies: Principles of Consolidation The accompanying consolidated financial statements include the accounts of SRA International, Inc. (a Delaware corporation), and its wholly-owned subsidiaries (SRA or the Company). All intercompany transactions and balances have been eliminated.

Nature of Business SRA provides technology and strategic consulting services and solutions primarily to clients in national security, civil government, and health care and public health. Since SRA’s founding in 1978, the Company has derived substantially all of its revenue from services provided to federal government clients. Revenue from contracts with federal government agencies was 99 percent of total revenue for all periods presented herein. The National Guard, as a client group, accounted for approximately 10 percent, and 11 percent of revenue for the years ended June 30, 2006, and 2005, respectively. The United States Agency for International Development, as a client, accounted for approximately 10 percent, and 12 percent of revenue for the years ended June 30, 2006, and 2005, respectively. No other client or client group accounted for more than 10 percent of revenue in the periods presented herein.

Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments in determining the reported amounts of assets, liabilities, revenue and expenses, as well as the disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, doubtful accounts receivable, goodwill and other intangible assets, and other contingent liabilities. The Company bases its estimates on historical experience and various other factors that are deemed reasonable at the time the estimates are made. Actual results may differ from estimates under different assumptions or conditions. See the Revenue Recognition section of this Note and Notes 2, 5, 10, and 11 for additional information on certain estimates included in the Company’s consolidated financial statements.

Revenue Recognition

Contract Accounting The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered or goods delivered, the contract price is fixed or determinable, and collectibility is reasonably assured. The Company has a standard management process that we use to determine whether all required criteria for revenue recognition have been met. This standard management process includes a regular review of the Company’s contract performance. This review covers, among other matters, outstanding action items, progress against schedule, effort and staffing, requirements stability, quality, risks and issues, subcontract management, cost, commitments, and client satisfaction. During this review the Company determines whether the overall progress on a contract is consistent with the effort expended. Absent evidence to the contrary, the Company recognizes revenue as follows. Revenue on cost-plus-fee contracts is recognized to the extent of costs actually incurred plus a proportionate amount of the fee earned. The Company considers fixed fees under cost-plus-fee contracts to be earned in proportion to the allowable costs actually incurred in performance of the contract. Revenue on time-and-materials contracts is recognized based on the hours actually incurred at the negotiated contract billing rates, plus the cost of any allowable material costs and out-of-pocket expenses. Revenue on fixed-price contracts where the Company performs systems design, development and integration is recognized using the percentage-of-completion method of contract accounting. Unless it is determined as part of the Company’s regular contract performance review that overall progress on a contract is not consistent with costs expended to date, the Company determines the percentage completed based on the percentage of costs incurred to date in relation to total estimated costs expected upon completion of the contract. Revenue on fixed-price outsourcing and managed services contracts is generally recognized ratably over the contract period. Revenue on fixed-price strategic consulting contracts

F-7 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-8 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 is generally recognized based on costs incurred because these services are directed by the Company’s customers and are subject to their needs which fluctuate throughout the contract period. The Company considers performance-based fees, including award fees, under any contract type to be earned when it can demonstrate satisfaction of performance goals, based upon historical experience, or the Company receives contractual notification from a client that the fee has been earned. Billings for hardware or software purchased by customers under one of the Company’s contracts where we act as an agent to the transaction are excluded from the Company’s revenue and cost of services, except to the extent of any handling fee or profit earned. Contract revenue recognition inherently involves estimation. Examples of estimates include the contemplated level of effort to accomplish the tasks under contract, the cost of the effort, and an ongoing assessment of the Company’s progress toward completing the contract. From time to time, as part of its standard management processes, facts develop that require the Company to revise our estimated total costs or revenue. To the extent that a revised estimate affects contract profit or revenue previously recognized, the Company records the cumulative effect of the revision in the period in which the facts requiring the revision become known. The full amount of an anticipated loss on any type of contract is recognized in the period in which it becomes probable and can be reasonably estimated. The Company may proceed with work based on client direction prior to the completion and signing of formal contract documents. The Company has a formal review process for approving any such work. Revenue associated with such work is recognized only when it can be reliably estimated and realization is probable. The Company bases its estimates on previous experiences with the client, communications with the client regarding funding status, and its knowledge of available funding for the contract or program. The Company maintains reserves for doubtful accounts receivable that may arise in the normal course of business. This allowance for doubtful accounts is based on several factors, including the customer’s payment history, the age of the accounts receivable, and management’s judgment regarding the likelihood of collection. Historically, the Company has not had significant write-offs of doubtful accounts receivable related to work performed for the federal government. However, the Company does perform work on contracts and task orders where, on occasion, issues arise that lead to accounts receivable not being collected. Revenue for the years ended June 30, 2007, 2006, and 2005 was earned from the following contract types:

2007 2006 2005 Cost-plus-fee...... 43% 45% 46% Time-and-materials ...... 42 40 34 Fixed-price...... 15 15 20

Software Licensing and Related Activities The Company enters into arrangements, which may include the sale of licenses of the Company’s proprietary software, consulting services and maintenance, or various combinations of each element. The Company recognizes revenue based on Statement of Position (SOP) 97-2, “Software Revenue Recognition,” as amended, and modified by SOP 98-9, “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” SOP 98-9 modified SOP 97-2 by requiring revenue to be recognized using the “residual method” if certain conditions are met. Revenue is recognized based on the residual method when an agreement has been signed by both parties, the fees are fixed or determinable, collection of the fees is probable, delivery of the product has occurred, and no other significant obligations remain. In the limited cases where return or refund rights have been offered, the Company defers all revenue recognition until the end of the return or refund period. Total software licensing and related activities revenue was $5,368,000, $3,961,000, and $4,148,000 for the years ended June 30, 2007, 2006, and 2005, respectively. Software licensing of the Company’s proprietary software and related activities revenue was less than one percent of consolidated revenue for all periods presented.

F-8 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-9 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Research and Development Costs Research and development costs are expensed as incurred. Total research and development costs, which are included in selling, general and administrative expenses, were $1,215,000, $1,290,000, and $1,638,000 for the years ended June 30, 2007, 2006, and 2005, respectively.

Internal-Use Computer Software The Company capitalizes costs incurred to license and implement software for internal-use in accordance with SOP 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal-Use.” Such costs are amortized over periods ranging from three to seven years. Internal-use software costs capitalized were $213,000, $638,000, and $2,813,000 for the years ended June 30, 2007, 2006, and 2005, respectively.

Impairment of Long-Lived Assets Whenever events or changes in circumstances indicate that the carrying amount of long-lived assets and other intangibles may not be fully recoverable, the Company evaluates the probability that future undiscounted net cash flows, without interest charges, will be less than the carrying amount of the assets. If an impairment is indicated as a result of this review, the Company recognizes a loss based on the amount by which the carrying amount exceeds the estimated discounted future cash flows.

Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities less valuation allowances, if required. Enacted statutory tax rates are used to compute the tax consequences of these temporary differences.

Deferred Compensation Plan Certain key employees of the Company are eligible to defer a specified percentage of their cash compensation by having it contributed to a nonqualified deferred compensation plan. Eligible employees may elect to defer up to 50 percent of their base salary and up to 100 percent of performance bonuses, reduced by any amounts withheld for the payment of taxes or other deductions required by law. The Company funds its deferred compensation liabilities by making cash contributions to a Rabbi Trust at the time the salary or bonus being deferred would otherwise be payable to the employee. Gains or losses on amounts held in the Rabbi Trust are fully allocable to plan participants. As a result, there is no net impact on the Company’s results of operations, and the liability to plan participants is fully funded at all times.

Cash and Cash Equivalents The Company considers all highly liquid investments with a current maturity of 90 days or less to be cash equivalents.

Investments in Debt Securities The Company considers all investments with current maturity dates of one year or less that do not qualify as cash equivalents to be short-term investments. The Company does not purchase investments with original maturity dates that exceed two years. The Company classifies all investments in debt securities as held-to-maturity and accounts for these investments at amortized cost.

Property and Equipment Property and equipment, including major additions or improvements thereto, are recorded at cost and depreciated over their estimated useful lives ranging from three to seven years using the straight-line method. Leasehold improvements are amortized over the lesser of the lease term or the asset’s estimated useful life, but typically not exceeding seven years,

F-9 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-10 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 using the straight-line method. Depreciation and amortization expense related to property and equipment, including capitalized internal-use computer software, was $14,428,000, $13,205,000, and $11,150,000 for the years ended June 30, 2007, 2006, and 2005, respectively.

Goodwill and Intangible Assets Goodwill, which represents the excess of the cost of an acquired entity over the net amounts assigned to assets acquired and liabilities assumed, is assessed for impairment under Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” (Note 5). Intangible assets with finite lives are amortized on a straight-line basis over their useful lives, typically determined with the assistance of an outside valuation firm, of 5 to 12 years. Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets.” Concentration of Credit Risk and Fair Value of Financial Instruments Financial instruments that potentially subject the Company to credit risk consist primarily of cash equivalents, short- and long-term investments, and accounts receivable. The Company believes that concentrations of credit risk with respect to cash equivalents and investments are limited due to the high credit quality of these investments. The Company’s investment policy requires that investments be in direct obligations of the U.S. government, certain U.S. government sponsored entities, investments that are secured by direct or sponsored U.S. government obligations, or certain corporate or municipal debt obligations rated at least single-A or A-1/P-1, as applicable, by both Moody’s Investor Service and Standard and Poor’s. The Company’s policy does not allow investment in any equity securities or the obligations of any entity under review for possible downgrade by a major rating service to a debt rating below single-A. Investments in both fixed and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely affected because of a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations because of changes in interest rates or the Company may suffer losses in principal if forced to sell securities which have seen a decline in market value because of changes in interest rates. Investments are made in accordance with an investment policy approved by the Company’s board of directors. Under this policy, no investment securities may have original maturities exceeding two years and the average duration of the portfolio cannot exceed nine months. The Company believes that concentrations of credit risk with respect to accounts receivable are limited as they are primarily federal government receivables. As of June 30, 2007 and 2006, the carrying value of financial instruments approximated fair value. These investments primarily consist of corporate and municipal debt obligations with maturities of 4 months or less that are classified as held-to-maturity.

Stock Split On May 2, 2005, the Company’s board of directors declared a two-for-one split of the Company’s outstanding common stock in the form of a 100 percent stock dividend. The stock dividend was distributed on May 27, 2005 to stockholders of record on May 13, 2005. The par value of the Company’s common stock was not adjusted with the stock split and remains at $0.004 per share. As a result, the Company reclassified amounts from additional paid-in capital to class A and class B par value of common stock based on the total shares of common stock issued. The Company used treasury shares to satisfy a portion of the stock dividend. The issuance of treasury shares was accounted for by transferring the book value of those shares from treasury stock to additional paid-in capital. All per share amounts, outstanding shares of common stock, and common stock equivalents reported in the accompanying consolidated financial statements and notes thereto have been adjusted to retroactively reflect the stock split.

F-10 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-11 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Earnings Per Share The Company calculates basic and diluted earnings per share (EPS) in accordance with SFAS No. 128, “Earnings Per Share.” Basic EPS is computed by dividing reported net income by the basic weighted-average number of common shares outstanding. Diluted EPS considers the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The difference between basic and diluted weighted- average common equivalent shares with respect to the Company’s EPS calculation is due to the effect of potential future exercises of stock options and vesting of restricted stock shares. The Company currently has outstanding shares of class A and class B common stock. Our class A and class B common stock have equal dividend and liquidation rights. The only difference between the two classes is that holders of our class A common stock are entitled to one vote per share and holders of our class B common stock are entitled to ten votes per share. Each share of class B common stock is convertible at any time at the option of the holder into one share of class A common stock. Basic and diluted EPS have been calculated using the if-converted method for class A common stock and the two-class method for class B common stock pursuant to SFAS 128. The two-class method is an earnings allocation formula that determines EPS for each class of common stock according to the weighted-average of dividends declared, outstanding shares per class and participation rights in undistributed earnings. The computation of EPS by applying the two-class method does not yield a different result than that provided under the if-converted method. Undistributed earnings are calculated as follows (in thousands):

Year Ended June 30, 2007 2006 2005 Net income...... $63,430 $62,520 $57,723 Less: dividends...... — — — Undistributed earnings...... $63,430 $62,520 $57,723

Weighted-average common shares outstanding are calculated as follows (in thousands):

Year Ended June 30, 2007 2006 2005 Class A Class B Class A Class B Class A Class B Basic weighted-average common shares outstanding...... 42,151 14,326 40,270 14,794 36,937 16,028 Assumed conversion of class B shares...... 14,326 — 14,794 — 16,028 — Effect of potential exercise or vesting of stock-based awards. . . . 1,905 — 2,675 — 3,584 — Diluted weighted-average common shares outstanding ...... 58,382 14,326 57,739 14,794 56,549 16,028

Stock options that were not included in the computation of diluted weighted-average common shares outstanding, because to do so would have been antidilutive were 1,749,771, 1,490,708, and 375,000 for the years ended June 30, 2007, 2006, and 2005, respectively.

F-11 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-12 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Basic and diluted EPS are calculated as follows (in thousands, except per share amounts):

Year Ended June 30, 2007 2006 2005 Class A Class B Class A Class B Class A Class B Basic Weighted-average shares outstanding...... 42,151 14,326 40,270 14,794 36,937 16,028 Divided by: Total weighted-average shares outstanding (class A and class B)...... 56,477 56,477 55,064 55,064 52,966 52,966 Multiplied by: Undistributed earnings...... $63,430 $63,430 $62,520 $62,520 $57,723 $57,723 Subtotal...... $47,340 $16,090 $45,723 $16,797 $40,255 $17,468 Divided by: Weighted-average shares outstanding...... 42,151 14,326 40,270 14,794 36,937 16,028 Earnings per share...... $ 1.12 $ 1.12 $ 1.14 $ 1.14 $ 1.09 $ 1.09 Diluted Weighted-average shares outstanding...... 58,382 14,326 57,739 14,794 56,549 16,028 Divided by: Total weighted-average shares outstanding (class A and class B)...... 58,382 58,382 57,739 57,739 56,549 56,549 Multiplied by: Undistributed earnings...... $63,430 $63,430 $62,520 $62,520 $57,723 $57,723 Subtotal...... $63,430 $15,565 $62,520 $16,019 $57,723 $16,361 Divided by: Weighted-average shares outstanding...... 58,382 14,326 57,739 14,794 56,549 16,028 Earnings per share...... $ 1.09 $ 1.09 $ 1.08 $ 1.08 $ 1.02 $ 1.02

Recent Accounting Pronouncements In July 2006, the FASB issued Interpretation (FIN) 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109,” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating what effect the adoption of FIN 48 will have on its financial position, results of operations, or cash flows, particularly with respect to its recent acquisition of Constella. In September 2006, the Securities and Exchange Commission released Staff Accounting Bulletin (SAB) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 requires a registrant to quantify all misstatements that could be material to financial statement users under both the “rollover” and “iron curtain” approaches. If either approach results in quantifying a misstatement that is material the registrant must adjust its financial statements. SAB No. 108 is applicable for the Company’s fiscal year ended June 30, 2007. The adoption of SAB No. 108 did not have a material impact on the Company’s consolidated financial statements. In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 provides a new single authoritative definition of fair value and enhanced guidance for measuring the fair value of assets and liabilities. It requires additional disclosures related to the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating what effect, if any, the adoption of SFAS No. 157 will have on its financial position, results of operations, or cash flows.

F-12 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-13 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating what effect, if any, the adoption of SFAS No. 159 will have on its financial position, results of operations, or cash flows.

Reclassifications Certain reclassifications have been made to prior-period balances to conform to the current-period presentation, including the reclassification of prepaid software licenses and maintenance on cost-plus-fee and time–and-materials contracts from accounts receivable to billings in excess of revenue recognized.

2. Accounts Receivable: Accounts receivable, net as of June 30, 2007 and 2006 consisted of the following (in thousands):

2007 2006 Billed and billable, net of allowance of $2,689 and $1,614 as of June 30, 2007 and 2006, respectively ...... $ 240,735 $ 245,007 Unbilled: Retainages ...... 4,508 5,347 Revenue recorded in excess of milestone billings on fixed-price contracts . . . 11,585 7,210 Revenue recorded in excess of contractual authorization, billable upon receipt of contractual amendments/documents ...... 7,188 13,079 Allowance for unbillable amounts ...... (1,607) (1,735) Total unbilled ...... 21,674 23,901 Total accounts receivable ...... $ 262,409 $ 268,908

The billable receivables included in the billed and billable line item above represent primarily revenue earned in the final month of the reporting period and were billable as of the balance sheet date. These billable receivables are typically billed and collected within 90 days of the balance sheet date. Consistent with industry practice, certain receivables related to long-term contracts are classified as current, although a portion of these amounts is not expected to be billed and collected within one year. Unbilled accounts receivable at June 30, 2007 are expected to be billed and collected within one year except for approximately $1.5 million related to a portion of retainages.

3. Prepaid Expenses and Other: Prepaid expenses and other as of June 30, 2007 and 2006 consisted of the following (in thousands):

2007 2006 Hardware and equipment purchased on behalf of customers ...... $ 1,706 $10,468 Prepaid maintenance and software...... 17,610 7,385 Other...... 6,969 5,529 Total prepaid expenses and other...... $26,285 $23,382

F-13 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-14 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005

4. Property and Equipment: The components of property and equipment as of June 30, 2007 and 2006 are as follows (in thousands):

2007 2006 Leasehold improvements...... $ 25,853 $ 24,653 Furniture, equipment, and software...... 65,636 59,387 Subtotal...... 91,489 84,040 Less: Accumulated depreciation and amortization...... (54,804) (46,578) Total property and equipment, net...... $ 36,685 $ 37,462

5. Goodwill and Identified Intangibles: The components of goodwill and identified intangible assets as of June 30, 2007 and 2006 are as follows (in thousands):

2007 2006 Goodwill ...... $ 256,530 $ 169,334 Identified intangibles ...... 46,704 35,265 Subtotal ...... 303,234 204,599 Less: Accumulated amortization ...... (15,855) (9,096) Total goodwill and identified intangibles ...... $ 287,379 $ 195,503

Goodwill must be reviewed annually for impairment. The Company performs this review at the beginning of each calendar year. The Company performed the annual goodwill impairment analysis as of January 1, 2007 and concluded that there was no impairment of goodwill. Amortization expense of identified intangibles was $6,759,000, $4,996,000, and $1,991,000 for the years ended June 30, 2007, 2006, and 2005, respectively. Identified intangibles are being amortized on a straight-line basis over a period of 5 to 12 years. The changes in the carrying amount of goodwill were as follows (in thousands):

Balance as of July 1, 2005 ...... $ 89,214 Acquisition of Galaxy and Spectrum ...... 80,120 Balance as of June 30, 2006 ...... 169,334 Acquisition of RABA and Spectrum ...... 87,196 Balance as of June 30, 2007 ...... $ 256,530

Estimated amortization expense is as follows for the periods indicated (in thousands): Years ending June 30, 2008 ...... $ 7,533 2009 ...... 6,983 2010 ...... 6,206 2011 ...... 4,845 2012 ...... 2,199 Thereafter ...... 3,083 Total ...... $30,849

F-14 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-15 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 6. Accounts Payable and Accrued Expenses: Accounts payable and accrued expenses as of June 30, 2007 and 2006 consisted of the following (in thousands):

2007 2006 Vendor obligations...... $ 101,877 $ 108,803 Current taxes payable and other...... 9,020 6,742 Total accounts payable and accrued expenses...... $ 110,897 $ 115,545

7. Accrued Payroll and Employee Benefits: Accrued payroll and employee benefits as of June 30, 2007 and 2006 consisted of the following (in thousands):

2007 2006 Accrued salaries and incentive compensation...... $35,018 $17,714 Accrued leave...... 32,334 27,858 Accrued fringe benefits...... 14,359 13,891 Total accrued payroll and employee benefits...... $81,711 $59,463

8. Other Long-Term Liabilities: Other long-term liabilities as of June 30, 2007 and 2006 consisted of the following (in thousands):

2007 2006 Liability to deferred compensation plan participants ...... $ 8,784 $ 7,768 Incentives for tenant improvements and other...... 3,857 2,697 Total other long-term liabilities...... $12,641 $10,465

9. Benefit Plan: The Company maintains a defined contribution plan, the SRA International, Inc. 401(k) Savings Plan (Plan). All regular and full-time employees are generally eligible to participate in the Plan. The board of directors of SRA may elect to make matching or other discretionary contributions to the Plan. The Company’s matching contribution expense was $12,484,000, $10,026,000, and $7,477,000 for the years ended June 30, 2007, 2006, and 2005, respectively, including the value of the stock described in the next paragraph. Plan participants may elect to receive matching contributions in cash, company stock, or a combination of the two. Matching contributions are earned by participants on the basis of their calendar year contributions to the Plan. The Company makes the matching contributions, including the transfer of class A common stock, each January for participant contributions made during the previous calendar year. The Company contributed 46,392, 56,142, and 107,730 shares of class A common stock to the Plan during the years ended June 30, 2007, 2006, and 2005, respectively.

10. Stockholders’ Equity and Stock Options: Preferred Stock The Company is authorized to issue 5,000,000 shares of preferred stock, $0.20 par value per share, the terms and conditions of which are determined by the board of directors at each issuance. No preferred stock has been issued.

Common Stock Holders of class A common stock are entitled to dividends per share in an amount equal to dividends per share declared and paid on class B common stock. Holders of both classes of common stock vote as a single class, with each share of class A common stock having one vote per share and each share of class B common stock having ten votes per share. Holders of both classes of common stock would share ratably in the net assets of the Company upon its liquidation or dissolution.

F-15 Job Title SRA International AR Revision 2 Serial <12345678> Date / Time Thursday, August 23, 2007 /8:54 PM Job Number 150099 Type Clean Page No. F-16 Operator pm1

SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Treasury Stock In limited circumstances, the Company may elect to repurchase shares of outstanding common stock from employees upon the exercise of stock options, or upon the vesting of restricted stock, for the purpose of satisfying the minimum required tax withholding. Our Board of Directors has authorized the repurchase of up to $40 million of the Company’s class A common stock. The timing, price, quantity and manner of the purchases can be determined at the discretion of the Company’s CEO. The Company has not repurchased any shares in accordance with this authorization.

Stock Options Accounting for Stock-Based Compensation:

Stock-Based Benefit Plans The Company maintained a key employee incentive plan that was approved by the Company’s stockholders in November 1994. All options granted by the Company from November 1994 until January 2002 were granted under this 1994 plan. Following completion of the Company’s initial public offering of stock in May 2002, no additional options were granted under this plan. Under the terms of the plan, options to purchase class A common stock or class B common stock were granted by the board of directors to key employees. The option price per share was determined by the board of directors and generally was no less than the fair value of the stock on the date of grant of the option. Prior to becoming publicly traded, the Company retained an independent valuation firm to assist the board of directors in assessing the fair value of the stock. Each option is exercisable within periods and in increments determined by the board of directors. In March 2002, the Company adopted the SRA International, Inc. 2002 Stock Incentive Plan. Upon adoption, up to 7,058,822 shares of class A common stock were reserved for issuance under the 2002 plan. Pursuant to the terms of the 2002 plan, the number of shares authorized for issuance automatically increases at the beginning of each fiscal year, beginning with the fiscal year ended June 30, 2004. An additional 8,074,514 shares of class A common stock were reserved for issuance pursuant to the automatic increase feature of the 2002 plan through July 1, 2007. The 2002 plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, and other stock-based awards. The 2002 plan is administered by the compensation committee of the board of directors, which determines the number of shares covered by options, and the exercise price, vesting period, and duration of option grants. The board of directors also has the authority under the 2002 plan to determine the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of such awards. The 2002 plan expires in March 2012.

Adoption of SFAS No. 123R Effective July 1, 2005, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment,” which requires that compensation costs related to share-based payment transactions be recognized in financial statements. The Company applied the modified prospective method under which compensation costs for all awards granted after the date of adoption and the unvested portion of previously granted awards outstanding at the date of adoption are measured at estimated fair value and included in operating expenses over the vesting period during which an employee provides service in exchange for the award. The Company’s restricted stock awards are considered nonvested share awards as defined under SFAS No. 123R. Prior to the adoption of SFAS No. 123R, the Company reported all tax benefits resulting from the exercise of stock options as operating cash flows in the consolidated statements of cash flows. In accordance with SFAS No. 123R, for the period beginning July 1, 2005, excess tax benefits from the exercise of stock options are presented as financing cash flows. The excess tax benefits totaled $6.5 million and $13.8 million for the years ended June 30, 2007 and 2006, respectively. Such benefits were $17.2 million for the year ended June 30, 2005, and are presented as a component of operating cash flows.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Under the provisions of SFAS No. 123R, the Company recorded $11.5 million and $13.2 million of stock-based compensation expense in its statement of operations for the years ended June 30, 2007 and 2006, respectively. This stock-based compensation expense reduced both basic and diluted earnings per share by $0.12 and $0.14 for the years ended June 30, 2007 and 2006, respectively.

Fair Value Determination The fair value concepts were not changed significantly in SFAS No. 123R; however, in adopting this Standard, companies must choose among alternative valuation models and amortization assumptions. The Company has elected to continue to use both the Black-Scholes-Merton option pricing model and straight-line amortization of compensation expense over the requisite service period of the grant. The Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate, or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. The Company has 10-year and 15-year options. The following weighted-average assumptions were used for option grants during the years ended June 30, 2007, 2006 and 2005: Expected Volatility. The expected volatility of the Company’s shares was estimated based upon the historical volatility of the Company’s share price. The expected volatility factor used in valuing options granted during the years ended June 30, 2007, 2006, and 2005 was 31 percent, 32 percent and 31 percent, respectively. Expected Term. The expected term was estimated based upon exercise experience of option grants made in the past to Company employees. Historical experience shows that employees typically exercise options prior to the end of the contractual term. The expected term used in valuing options granted for all periods presented was 5 years. Risk-free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes-Merton valuation method on the implied yield available on a U.S. Treasury note with a term equal to the expected term of the underlying grants. The weighted-average risk-free interest rate used in valuing options granted during the years ended June 30, 2007, 2006 and 2005 was 4.7 percent, 4.2 percent, and 3.6 percent, respectively. Dividend Yield. The Black-Scholes-Merton valuation model calls for single expected dividend yield as an input. The Company has not paid dividends in the past nor does it expect to pay dividends in the future. As such, the Company used a dividend yield percentage of zero for all periods presented.

Stock Compensation Expense In accordance with SFAS No. 123R, the Company estimates forfeitures and is recognizing compensation expense only for those share-based awards that are expected to vest. SFAS No. 123R requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our estimate of the forfeiture rate is based primarily upon historical experience of employee turnover. The Company recorded $11.5 million and $13.2 million of stock-based compensation expense for the years ended June 30, 2007 and 2006, respectively. The lower stock-based compensation expense reflects adjustments to account for the forfeitures of certain share-based awards in excess of what was estimated at the time of grant. As of June 30, 2007, there was $23.8 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. This cost is expected to be fully amortized in four years, with half of the total amortization cost being recognized within the next 14 months.

Stock Option Activity During the year ended June 30, 2007, the Company granted stock options to purchase 627,202 shares of class A common stock at a weighted-average exercise price of $25.48 per share based on the fair value of class A common stock on the date of grant. The Black-Scholes-Merton weighted-average value of options granted for the years ended June 30, 2007, 2006, and 2005, was $9.27, $12.32, and $7.80, respectively. Using the Black Scholes-Merton model, the total value of the options granted for the years ended June 30, 2007, 2006, and 2005, was $5.2 million, $18.1 million, and $16.3 million respectively. The options vest at the rate of 25 percent per year over four years, beginning on the date of grant and expire ten years from the grant date.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 The following table summarizes stock option activity for the year ended June 30, 2007:

Weighted- Aggregate Number of Average Intrinsic Value Shares Exercise Price (in thousands) Shares under option, July 1, 2006 ...... 7,666,784 $ 18.00 $80,365 Options granted ...... 627,202 25.48 $ — Options exercised ...... (1,137,725) 7.33 $21,144 Options cancelled and expired ...... (537,464) 29.44 $ 1,087 Shares under option, June 30, 2007 ...... 6,618,797 $ 19.62 $51,440 Options exercisable at June 30, 2007 ...... 3,983,695 $ 14.83 $45,846 Shares reserved for equity awards at June 30, 2007 . . . 6,268,751

Information with respect to stock options outstanding and stock options exercisable at June 30, 2007 was as follows:

Weighted-Average Options Remaining Weighted-Average Range of Exercise Price Outstanding Contractual Life Exercise Price $3.17 - $5.07 ...... 1,209,458 6.8 years $ 4.12 $10.85 - $16.80 ...... 1,774,089 8.2 $14.37 $19.39 - $25.81 ...... 2,037,180 7.6 $22.10 $26.09 - $35.40...... 1,598,070 8.0 $34.02 6,618,797 Weighted-Average Options Remaining Weighted-Average Range of Exercise Price Exercisable Contractual Life Exercise Price $3.17 - $5.07 ...... 1,209,458 6.8 years $ 4.12 $10.85 - $16.80 ...... 1,512,103 8.5 $14.00 $19.39 - $25.81 ...... 751,664 6.9 $20.92 $26.09 - $35.40...... 510,470 7.6 $33.69 3,983,695

During the years ended June 30, 2007 and 2006, the Company also granted 295,337 and 35,450 nonvested restricted shares at a weighted-average grant date fair market value of $26.02 and $30.06 per share, respectively. These shares vest at the rate of 25 percent per year over four years. The following table summarizes restricted stock activity for the year ended June 30, 2007:

Number Weighted-Average of Shares Grant-Date Value Nonvested restricted shares at July 1, 2006...... 44,450 $ 27.75 Restricted shares granted ...... 295,337 26.02 Restricted shares vested ...... (13,276) 27.09 Restricted shares forfeited ...... (18,465) 26.07 Nonvested restricted shares at June 30, 2007...... 308,046 $ 26.65

As of June 30, 2007, there were 6,268,751 shares of Class A common stock reserved for issuance under the 2002 Stock Incentive Plan.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Pro Forma Disclosures Under the modified prospective method, results for the year ended June 30, 2005 were not restated to include stock option expense. The previously disclosed pro forma effects of recognizing the estimated fair value of stock-based employee compensation for the year ended June 30, 2005 (in thousands, except per share amounts) are presented below.

2005 Net income, as reported ...... $57,723 Add: Stock-based employee compensation expense included in reported net income, net of related tax effects ...... 317 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects ...... (5,845) Pro forma net income ...... $52,195 Earnings per share: Basic—as reported ...... $ 1.09 Basic—pro forma ...... $ 0.99 Diluted—as reported ...... $ 1.02 Diluted—pro forma ...... $ 0.92

Employee Stock Purchase Plan The Company maintains the SRA International, Inc. 2004 Employee Stock Purchase Plan (ESPP) and has reserved 500,000 shares for issuance thereunder. The ESPP was available to all eligible employees beginning on January 1, 2005. The ESPP permits eligible employees to purchase class A common stock, through payroll deductions of up to 15% of the employee’s compensation, at a price equal to 100% of the average of the high and low price of the common stock on the last day of each offering period. Employees purchased 47,347 and 36,179 shares for the years ended June 30, 2007 and 2006, respectively, under the ESPP.

11. Income Taxes: The provision for federal and state income taxes for the years ended June 30, 2007, 2006, and 2005, included the following (in thousands):

2007 2006 2005 Current provision: Federal ...... $37,789 $33,802 $31,328 State ...... 7,278 6,778 7,071 Deferred provision: Federal ...... (5,127) (1,622) (2,268) State ...... (595) (279) (1,302) Total income tax provision ...... $39,345 $38,679 $34,829

The Company’s effective income tax rate varied from the statutory federal income tax rate for the years ended June 30, 2007, 2006, and 2005 as follows:

2007 2006 2005 Statutory federal income tax rate...... 35.0% 35.0% 35.0% State income taxes, net of federal income tax benefit...... 4.2 4.2 4.2 Stock-based compensation...... 0.0 0.1 0.1 Municipal bond interest...... (0.9) (0.5) (0.9) Refunds and credits ...... (0.1) (0.8) (1.0) Nondeductible expenses and other...... 0.1 0.2 0.2 Effective tax rate...... 38.3% 38.2% 37.6%

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 The components of the net deferred tax asset as of June 30, 2007 and 2006 were as follows (in thousands):

2007 2006 Deferred tax assets: Compensated absences and other accruals not yet deductible for tax purposes ...... $ 16,973 $ 14,762 Financial statement depreciation in excess of tax depreciation ...... 6,037 3,464 Deferred compensation ...... 2,569 1,987 Nonqualified stock awards ...... 9,061 4,927 State job creation credits ...... 201 399 Total deferred tax assets ...... 34,841 25,539 Deferred tax liabilities: Identified intangibles ...... (8,188) (5,809) Prepaid expenses ...... (6,571) (2,804) Unbilled contract revenue ...... (4,579) (7,228) Capitalized software ...... (1,480) (1,397) Other ...... — — Total deferred tax liabilities ...... (20,818) (17,238) Net deferred tax asset ...... $ 14,023 $ 8,301

12. Commitments and Contingencies: Government Contracting

Payments to the Company on cost-plus-fee contracts are provisional and are subject to adjustment upon audit by the Defense Contract Audit Agency. Audits through June 30, 2005 have been completed. In the opinion of management, audit adjustments that may result from audits for periods after June 30, 2005 are not expected to have a material effect on the Company’s financial position, results of operations, or cash flows. Additionally, federal government contracts, by their terms, generally can be terminated at any time by the federal government, without cause, for the convenience of the federal government. If a federal government contract is so terminated, the Company would be entitled to receive compensation for the services provided and costs incurred through the time of termination, plus a negotiated amount of profit. Federal government contractors who fail to comply with applicable government procurement-related statutes and regulations may be subject to potential contract termination, suspension and debarment from contracting with the government, or other remedies. Management believes the Company has complied with all applicable procurement-related statutes and regulations.

Leases Net rent expense for the years ended June 30, 2007, 2006, and 2005 was as follows (in thousands):

2007 2006 2005 Office space ...... $30,637 $27,649 $23,726 Sublease income ...... (1,486) (1,085) (936) Subtotal ...... 29,151 26,564 22,790 Furniture and equipment ...... 707 881 737 Total ...... $29,858 $27,445 $23,527

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 The following table summarizes our future minimum rental commitments under noncancellable operating leases, primarily for office space, as of June 30, 2007 (in thousands).

Sublease Net Rental Commitments Income Commitments Years ending June 30, 2008 ...... $ 28,971 $ 631 $ 28,340 2009 ...... 26,732 632 26,100 2010 ...... 23,102 — 23,102 2011 ...... 18,954 — 18,954 2012 ...... 16,790 — 16,790 Thereafter...... 56,622 — 56,622 Total minimum lease payments...... $ 171,171 $1,263 $ 169,908

The Company leases all of its office facilities. Leases for certain office space entitle the Company to incentives for tenant improvements, rent holidays, or rent escalation clauses pursuant to its lease agreements. The incentives for tenant improvements are recorded as liabilities and amortized as reductions in rent expense over the term of the respective leases. The Company recognizes rent expense, including escalated rent and rent holidays, on a straight-line basis over the term of the lease. Certain lease commitments are subject to adjustment based on changes in the Consumer Price Index. Capitalized lease obligations included in accounts payable and accrued expenses were $58,000 and $146,000 as of June 30, 2007 and 2006 and represent the current portion of amounts due under leases for the use of computers and other equipment. The long-term portion of the capital lease obligations was approximately $350,000 and $46,000 at June 30, 2007 and 2006, respectively and is included in other long-term liabilities. Included in property and equipment are related assets of $1,018,879 and $1,362,000 less accumulated amortization of $522,000 and $1,187,000 as of June 30, 2007 and 2006, respectively.

13. Litigation The Company is involved in various legal proceedings concerning matters arising in the ordinary course of business. The Company currently believes that any ultimate liability arising out of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

14. Related Party Transactions: In May 2001, Mantas, which was previously one of our service offerings, was contributed to a separate company, Mantas, Inc., which was formed with funding and other contributions received from unrelated third parties. Mantas, Inc. is a provider of services to the financial services industry to address anti-money laundering and other data mining issues. In October 2006, i-flex solutions completed its acquisition of Mantas, Inc. The Company’s portion of the net sale proceeds was approximately $4.4 million, including a portion to be held in escrow. The Company recognized a total pre-tax gain of approximately $3.7 million during fiscal 2007. The remaining amount held in escrow will be recognized as a gain upon the release of funds pursuant to the terms of the escrow agreement. For the periods presented, Mantas, Inc. utilized certain services provided by the Company, for which Mantas, Inc. reimbursed the Company for such services. The Company allowed Mantas, Inc. to obtain certain travel and insurance- related services utilizing the Company’s existing relationships with vendors. The total of such services received by Mantas, Inc. was approximately $183,000 for the year ended June 30, 2005. Additionally, the Company provided labor services when requested by Mantas, Inc. to support its administrative and client support activities. Approximately $304,000 of such labor services were provided for the year ended June 30, 2005.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 15. Segment Reporting: Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Although the Company is organized by strategic business unit, the Company considers each of its government contracting units to have similar economic characteristics, provide similar types of services, and have a similar customer base. Accordingly, the Company reports one operating segment for financial reporting purposes, the Consulting & System Integration (C&SI) business, which aggregates all of its current operations. The C&SI segment represents the Company’s core business and includes high-end consulting services and information technology solutions primarily for federal government clients. Since October 2002, the C&SI segment has represented all of the Company’s ongoing operations.

16. Acquisitions: Touchstone Consulting Group, Inc. In April 2005, the Company completed its acquisition of Touchstone Consulting Group, Inc., or Touchstone, a privately-held management consultancy with an established track record of serving senior executives in the federal government. Touchstone provides strategic consulting services to its customers throughout the federal government, including the Department of Homeland Security, Department of Defense, intelligence agencies, and the Office of Management and Budget. The Company acquired Touchstone for approximately $37.0 million net of acquisition costs, from cash on hand. Approximately $6.5 million of the purchase price was allocated to identified intangibles and approximately $26.5 million to goodwill. Pursuant to the requirements of SFAS No. 141 “Business Combinations,” the effect of the acquisition did not meet the criteria of a material and significant acquisition, and therefore, pro forma disclosures are not presented in these consolidated financial statements.

Galaxy Scientific Corporation In July 2005, the Company completed its acquisition of Galaxy Scientific Corporation, or Galaxy, a privately-held provider of systems engineering, information technology, and tactical communication services and solutions to the federal government. Galaxy specializes in command and control, communications, computers and intelligence (C4I) tactical systems; information assurance; information technology; training systems; engineering support; and safety and security technologies. The Company acquired Galaxy for approximately $98.7 million, net of acquisition costs, from cash on hand. Approximately $12.0 million of the purchase price was allocated to identified intangibles and approximately $73.4 million to goodwill. Pursuant to the requirements of SFAS No. 141, “Business Combinations,” the acquisition did not meet the criteria of a material and significant acquisition, and therefore, pro forma disclosures are not presented in these consolidated financial statements.

Spectrum Solutions Group, Inc. In November 2005, the Company acquired Spectrum Solutions Group, Inc., or Spectrum, a privately-held provider of enterprise solutions such as Oracle, SAP, PeopleSoft, and Seibel applications and technologies to the federal government. The Company acquired Spectrum for approximately $9.7 million, net of acquisition costs, from cash on hand. Approximately $0.9 million of the purchase price was allocated to identified intangibles and approximately $6.7 million to goodwill. The Company agreed to make additional purchase price payments contingent upon the achievement of certain milestones by Spectrum. In January 2007, the Company paid former shareholders of Spectrum $8.0 million in additional purchase price. This additional purchase price payment resulted in an $8.0 million addition to goodwill. A final additional purchase price payment, if certain milestones are met, will be paid to the former shareholders of Spectrum in the quarter ending September 30, 2008. Pursuant to the requirements of SFAS No. 141, “Business Combinations,” the acquisition did not meet the criteria of a material and significant acquisition, and therefore, pro forma disclosures are not presented in these consolidated financial statements.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 Mercomms Unlimited, Inc. Effective April 10, 2006, SRA acquired Mercomms Unlimited, Inc., or Mercomms, which specializes in advanced maritime and defense communications technologies for the federal government. Mercomms was acquired for approximately $637,000, substantially all of which was assigned to identified intangibles. Pursuant to the requirements of SFAS No. 141, “Business Combinations,” the acquisition did not meet the criteria of a material and significant acquisition, and therefore, pro forma disclosures are not presented in these consolidated financial statements.

RABA Technologies, LLC In October 2006, the Company completed its acquisition of RABA Technologies, LLC or RABA, a provider of high-end technical services to the national security and intelligence communities. RABA’s services include software development, systems integration and operational support. The Company acquired RABA for approximately $95.0 million, net of acquisition costs, from cash on hand. Approximately $11.4 million of the purchase price was allocated to identified intangible assets and approximately $79.2 million to goodwill. If certain milestones are met, an additional purchase price payment of up to $5.0 million will be paid to the former stockholders of RABA. If paid, this contingent payment will result in additional goodwill in fiscal year 2009. Pursuant to the requirements of SFAS No. 141 “Business Combinations,” the acquisition did not meet the criteria of a material and significant acquisition, and therefore, pro forma disclosures are not presented in these consolidated financial statements.

17. Quarterly Financial Data (Unaudited) (in thousands, except per share amounts):

Income Earnings Operating Before Net Per Share (a) Revenue Income Taxes Income Basic Diluted Year Ended June 30, 2007 1st Quarter...... $ 304,034 $22,831 $24,674 $15,121 $ 0.27 $ 0.26 2nd Quarter...... 321,045 22,064 27,209 16,683 0.30 0.29 3rd Quarter...... 317,586 22,779 23,952 14,973 0.26 0.26 4th Quarter...... 326,207 25,151 26,940 16,653 0.29 0.28

Year Ended June 30, 2006 1st Quarter...... $ 280,695 $22,788 $23,521 $14,390 $ 0.27 $ 0.25 2nd Quarter...... 305,313 24,220 25,257 15,903 0.29 0.28 3rd Quarter...... 296,098 23,019 23,845 14,783 0.27 0.26 4th Quarter...... 297,161 26,940 28,576 17,444 0.31 0.30

(a) The sum of earnings per share for the four quarters may differ from the annual earnings per share due to the required method of computing the weighted-average number of shares in the interim period.

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SRA International, Inc. and Subsidiaries Notes to Consolidated Financial Statements—(Continued) Years Ended June 30, 2007, 2006, and 2005 18. Subsequent Event: Acquisition of Constella Group, LLC On August 9, 2007, the Company completed its acquisition of all of the outstanding stock of Constella Group LLC, or Constella, for approximately $186.9 million in cash. Approximately $51.6 million of the purchase price was used to repay all outstanding debt obligations of Constella on the closing date. Approximately $16.0 million was placed into escrow as security for the payment, if any, of post-closing net asset adjustments and to secure indemnification obligations. The equity purchase agreement has been filed as Exhibit 2.2 to this report. Constella is a privately-held provider of global health consulting services. Headquartered in Durham, NC, Constella employs more than 1,500 professionals organized by three interrelated service offerings: domestic health sciences, international health development and global drug development. Financing for the acquisition consisted of available cash and borrowings under a credit facility obtained prior to closing.

Revolving Credit Facility On August 9, 2007, the Company entered into a $100.0 million five-year unsecured revolving credit facility. The agreement has an accordion feature enabling the credit facility to be increased by an additional $100.0 million, subject to specified conditions. Outstanding borrowings under the agreement bear interest at a LIBOR based interest rate (currently LIBOR plus 75 basis points). Interest is payable throughout the period a borrowing is outstanding. The Company borrowed $100.0 million under this credit line to fund part of the acquisition of Constella.

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SRA International, Inc. and Subsidiaries

Years Ended June 30, 2007, 2006, and 2005 Schedule II—Valuation and Qualifying Accounts Activity in the Company’s allowance accounts for the years ended June 30, 2007, 2006, and 2005, was as follows (in thousands): Allowance for Doubtful Accounts

Balance at Charged to Beginning of Costs and Balance at End Period Period Expenses Deductions Other of Period 2007 ...... $1,614 $ 1,510 $567 $ 132* $2,689 2006 ...... 1,159 75 49 429* 1,614 2005...... 1,425 74 380 40* 1,159

Allowance for Unbillable Amounts

Balance at Charged to Beginning of Costs and Balance at End Period Period Expenses Deductions Other of Period 2007 ...... $1,735 $ –– $128 $ — $1,607 2006 ...... 1,852 21 138 — 1,735 2005...... 1,861 51 60 — 1,852

* Represents allowances assumed in connection with acquisitions.

F-25 2007 Annual Report | 26 SRA Employees

1978 • ERNST VOLGENAU • TED LEGASEY • WILLIAM BREHM • 1979 • BOB DAY • STUART RUBENS • 1980 • ANDY COHEN • SHERMAN GREENSTEIN • BARRY LANDEW • DIANE PULLIAM • 1981 • GAYNELL FRITZ • STEVE HUGHES • 1982 MATTHEW BLACK • SHURMAN BRYANT • JON HERTZOG • KEMP PRUGH • JUDY SAKOWITZ • RICHARD SHULLAW • 1983 • SUE AUSTIN • MIKE DUFFY • HELEN HORNER • ALAN JONES • SHERRIE JONES • THIA KIM • 1984 • GENE CARTIER DAVID GARFIELD • BOB HANNAH • MARK LEAMAN • STAN LUCAS • GARY SCHWEIGERT • ANITA STOLAROW • 1985 • ANN ROWLEY • LISA THAMASETT • 1986 • HATTE BLEJER • BOB BORAH • MONICA CLEARY • BERNIE COHEN LARISSA CURTIS • MARJORIE DAVIS • FRANK DOWLING • KEVIN GRAVES • CONNIE HAITH • RICHARD HORNER • TOM HUTTON • STUART KOPPERMAN • MARVIN LERFALD • TYRON MEADOWS • PHILIP OBER • LAWLEY PAISLEY-JONES MARIANN REDDY • CARLA SAIA • JOAN VAN STEYN • JOHN VICKERS • WANDA WELLS-HINES • 1987 • MARGARET BARTON • JAN BATTEN • ALICE CANERDAY • ALFREDA CLARK • DAVE CONETSCO • SONYA FULLER • VICKI HOLIDAY • JIM JONES RICHARD LABASH • JIM MCCOY • BOB MCLAUGHLIN • ROB MORRIS • ELLEN MOYER • CHARLIE PAYNE • JIM RODGERS • SEYMOUR SAMUELS • MIKE SIMMONS • JEFF SPURLIN • JOHN STRAIN • JEFFREY WESTERHOFF • JIM WOLFE • 1988 DELILAH BINES • DONNA BOUTTÉ SMITH • THERESA BROWN • ROB BURCIAGA • TOM CANAVAN • JILL CARTER • BILL CODY • ANDY COSTA • LUCINDA COX • KAY CURLING • MICHAEL FOX • LETETIA JOHNSON • DICK LOWE • MARTI MORANO JOHN MORGAN • ALAN PAIGE • CHUCK PERRY • PAUL RIZZO • BILL SCHERER, SR. • GEORGE SILVAS • KATHY SIMMONS • 1989 • BEN LAM • JOHN MALONEY • ANGIE MCNEILL • CAL MILLER • ELISE OPPENHEIMER • ANGIE POORE SEBASTIAN REYES • ROBERT RUE • SANDY SHINN • JAY SIEGEL • MIJ STRANGE • BRIAN THACKER • 1990 • ANNE DONOHUE • KEVIN FAGAN • JOHN KELLER • BOB MOORE • CHARLES OLAH • ROBERT PUGH • STEVE RATHERT • JOYCE REEVES SANDRA ROGERS • DEBORAH SHIRLEY • MARSHA WESTON • 1991 • YOVONDA ALEXANDER • CHINATSU AONE • EMMA ARTINIAN • CLAIRE AVERY • LYNDA BADGER • AL BORNMANN • TOM BREIDENBACH • JAMES COE • MARK COONEY VINNIE DEVITO • ALIX EVANS • JENNIFER KURZHALS • EMMET LUNG • MAC MCSWEENEY • MICHAEL MERCHANT • SUSAN MORGAN • JAMES MURPHY • DAVID PARK • CARL ROSENBLATT • JAMES SINGER • NGOC TRAN • OLGA VELAZQUEZ BILL VERDOORN • 1992 • LESLIE AUCOIN • BILL BASS • DONNA BIRGE • KIMBERLY BLANCHFIELD • ALBERT BROOKS • VERONICA BURGESS • PAT BURKE • JIM CHOULAS • FRED CONNOLLY • PAUL COOK • TIM COOKE • JOHN COVENTRY PAT COWAN • BRIAN CROSS • DANIELLE DANCY • TRACY DENISON • MIKE FISHER • LARRY FOBIAN • GENE FRANK • BRUCE GILBERT • BRENDA GRAVES • MAX HALL • GEORGE HARLEY • KATRINA HAWKINS • SCOTT HOGE • KATHLEEN HUTCHINSON SUZANNE KOROW • ERIC KURZHALS • PAT LITTLE • ANNE MARSHALL • JIM MCCOLLOUGH • WILLIAM MCELYEA • DANNY MICHAEL • WENDI MITCHELL • MARK MULLER • KATHY NIELSEN • STEVE PORTER • GILES SCONYERS • TIM TWOMEY WALT WILLIAMS • DAVID WILSON • 1993 • SCOTT BENNETT • TAMMIE BOWEN • PATRICK BRADLEY • DENNIS BRENNAN • DAVID BROWN • LINDA CALVERT • ARCEL CASTILLO • LINDA BURAK CHAPPELL • EILEEN CLARK • SARAH COBURN CHUCK CROTTY • DENNIS EDWARDS • PETER FABRY • RAYMOND GOOD • BARBARA HARNEY • CYLINA HICKS • STEPHEN HORNE • JOCELYN HSU • BRAD JEFFERSON • CHUCK JOHNSON • MARIA KIERNAN • DANIEL KOBASA • STEPHEN LINDBLOM DEBORAH MOORE • NORM MORALES • DAVID MOSCOVITZ • JOYCE MOSHER • PATRICK PHELPS • COURTNEY PUGH • TINA RAPP • SCOTT READY • MIKE REDMAN • PETER ROTHSCHILD • MANDANA SATTARI • CHARLIE SEIFERT • PHILIP SIMON SEAN SINCLAIR • DIANA SISLER • MORGAN SMITH • ALAN STANTON • PAT VALVO • STEVEN WILEY • 1994 • KAKALI BANERJEE • ANDREA BILLEWICZ • BILL CARDEN • BILL COCKAYNE • KEVIN CONROY • SHERRY DAVIS • ALLEN DEITZ DAN DUKANAUSKAS • KENNETH EKMAN • CAROL HALLAM • THOMAS HOLDER • MELISSA HOUGHTON • MICHAEL HUFF • BOBBI JACKSON • CELESTE KENNY • LAURA LUKE • JOHN LUONGO • AARON MARKEL • JEFF MARKOVITZ • MARWAN MINA JOHN MOHN • LEN MORRIS • DONALD MYNATT • DAVID PAGE • THOMAS PARKE • BRYAN POLK • DARLENE REINHARD • JIM SCHNEIDER • CYNTHIA SCRUGGS • BRUCE SHARPE • FRANK SHARTLE • JON SIMON • KEVIN STEVENSON • DAVID TATUM MARK TRAMONTOZZI • FRANK VARACALLI • DINESH VERMA • WENDELIN WINSLOW • BILL WRIGHT • TYLER WRIGHT • ST. CLAIR WYRE • 1995 • DENNIS ALFORD • PETER BEAVINS • WILLIAM BERNACKI • ED BITZER • THOMAS BODINE KENNETH CAMPBELL • SUE CARAVELLI • YENSHI CHEN • TERRY CHHENG • SERGEI CHIBANOV • PETER CHO • GWENDOLYN CONVERSE • VAN DANG • MIKE DAY • NIKKI DINH • RENATO DIPENTIMA • SIMON FINLOW • RICHARD FISHER MARVIN FLOOM • JOHN GALLAGHER • BARBARA GORLINSKY • JAMES GORLINSKY • CHRIS HALYSHYN • THOMAS HAMPTON • BARBARA HARRIS • BOB JOHNSON • MARGARET JONES • ALLISON KENNETT • CHRISTOPHER LAWRENCE RICHARD LEDMAN • ERICA LEWIS • WILLIAM MATHIS • PATRICIA MERCADO • SANDRA MIDDLETON • JANET MILLION • JEAN MURPHY • DAT NGO • RENEE O’BRIEN • BRYAN RICHARDS • KENNETH ROHRER • TAMMY SMITH • EDWARD STAUDT CHARLES STEVENSON • MIKE STOCKWELL • ELAINE SYKES • MICHELLE VITTITOW • KAREN VULETA • DONNA WALLS • LYNN WESTPHAELINGER • 1996 • AHMED ABDURREZAK • ERIC ANDERSON • ERIC BARTHOLOW • BOB BENJAMIN KARL BOEHM • DIANNE BOLDEN • MAGGIE BOND • GARY BRIGGS • PHIL BROWN • FRANCESCA BRUNNER-KENNEDY • GEORGE BUEHNER • ELLIOTT BUTLER • BROOKE CALDWELL • LUCILLE CLARK • JO COTT • PATRICIA DAUGHTRY • AL DUNCAN L. EVERETT • PAOLA FERGERSTROM • THEODORE FISCHER • STAN FORD • STEVEN FOX • PISEY FREDERICK • ARLENE GATCHALIAN • RHONDA GIBULA • SRIKUMAR GOPALAKRISHNA • JENNIFER GREENE • PETER HALVERSON • PAUL HANSEN SUZANNE HARNED • CORKY HARRIS • RICHARD HOOPER • BRIAN HOOVER • CONNIE JOHNSON • ELORA JONES • ERIC JUNKER • SUMI KAUSHIK • JOHNNY KICKLIGHTER • GAIL KIDWELL • JOHN KOLMAN • ELLEN KONG • ERIK LARSON DIANE LEDONNE • AMY S. LEE • LAN LEUNG • TERENCIA LIPFORD • SUDHA LLOYD • ROBERT LYNCH • MICHAEL MALONE • ROBERT MILLER • DOUGLAS MILLION • KOH MORRISEY • SONNY NGUYEN • VICTORIA NGUYEN • BILL NIEHAUS JOSETTE O’NEIL • KACY ORA • DEVANG PATEL • ELENI PECJAK • KEVIN PHELPS • RICHARD PITTMAN • NICHELLE POE • LORI POGASH • CLAUDIA REDA • KATHIE REED • WAYNE ROE • BILL SCHERER, JR. • MATTHEW SHAKER • MICHAEL SMITH STEPHEN G. SMITH • KENT SOMMERS • VENKATARAMAN SRINIVASAN • STEVE TEW • LAURA URBAN • DAVE VENNERGRUND • BELINDA VINES • PHUONG VU • DAVID WALLIS • PHILIP ZELLNER 1997 • MINTER ALEXANDER • KENNETH ALLGOOD • ESTHER ASAKI • DEIRDRE BAKER • MICHAEL BARRETTA • ROBERT BASINGER • ANN BERIN • JEFFREY BIELOT • EDWIN BOUTON MICHAEL BOWLING • NORMA BOWLING • JANICE BURROWS • TONYA CARTMILL • JAMES CHRISTOPHER • NANCY CIRANNI • JUDY CLARY • JEANNE COGLIANESE • TRACY COLE STEVEN DELLAPORTA • ROOPALEE DESHMUKH • DAVID DUBOSE • WILLIAM DUCE • FRANK DURSO • MELISA EPES • AN FANG • JEFFERY FARSCHON • DANIEL FLECK PHYLLIS FOLEY • MITRA GALT • SANDRA GILL • DIANE GONZALEZ • DAVID GRAY • CHIENYUNG HAN • HELEN HARNED • WILLIAM HART • ROBERT HATTON • JOCELYN HODGES SUE-FANG HSU • JUNE HUNT • BARON JACKSON • VANESSA JACKSON • THOMAS JOSTEN • DAVID KANE • PRIYA KOWDLEY • JAMES LATIMER • SUSAN LILLY WILLIAM LOVELACE • TERESA MCCARGO • MELODY MCCLEARY • BRIAN MICHL • PAUL NAGEL • LINH NGUYEN • PHILLIP NONEZ • DAVE O’NEILL • MARY PADILLA GIOVANNA PATTERSON • PHILIP PAU • NICHOLA PELOT • MICHAEL PETTIGREW • GERRY PIKUS • LESLEY PLITZ • MILA RAMOS-SANTACRUZ • JOHN REPHLO KEVIN ROBBINS • JOE RYAN • THOMAS SIELAFF • MARSHALL SNYDER • ALAN THOMPSON • NANCY THORNES • RICK TOSSAVAINEN • JON VETTERLEIN CHEN-YU VORABHANDA • DAVID WALLEN • LINDA WELCH • ANDY WHITE • LARRY WHITE • WALTER WHITE • CARL WILLIS-FORD • DEBBIE WINFIELD CHI-LIN WOOLF • 1998 • SAID ABBOU • KYLE ADAMS • PAM ALLEN • OURY BAH • PATRICIA BAKER • STEVEN BASSETT • VICKI BECK • MARDI BESS SHELLIE BINGHAM • EBRU BJARNASON • JEAN-PAUL BOUCHER • JENNIFER BREEDEN • TRISH BROUD • DAVE BROWN • MICHAEL BUCHNER MARSHA BULLOCK • RICK BURGESS • KAJORNDEJ BURNS • JILL CABALLERO • ERIC CAHOON • CRISTINA CAMPBELL • JIM CAMPBELL • HONG CAO REGINA CARTER • VINCENT COLBERT • JASON COLE • ROBERT COLEMAN • DOYLE COOK • JEFFREY CROOK • VU DANG • BARBARA DAVIS SHIRLEY DAVIS • JAMES DAWSON • DAVID DIKEL • JENNY ELKINS • MARJORIE EYRE • DAVE FEURTADO • TONI FORTES • ALEXANDER GALANES THERESA GERACI • ROBERT GICKING • KEVIN GILBERT • RONALD GINGRAS • MICHAEL GROSS • CHARLES GROW • MOLLY HAASE • SCOTT HALE CHRISTOPHER HARNEY • CHARLES HARP • AARON HAWES • CINDY HEFLIN • MAUREEN HENRIKSEN • JOSEPH HERLICA • KAREN HERR KYLE HOLMQUIST • JIM HUANG • DOUGLAS HURD • ROSE JANKE • JEFFREY JOHNSON • KATHLEEN JONES • MADELINE KEELEY • PETER KELLY TODD KIHNLEY • JOHN KIM • ANTHONY KLAPP • SARALA KUMARI • STEPHEN LANGLAIS • AMY LEE • RONNIE LEE • CYNTHIA LOMAX MAURICE LYNCH • MICHELE MARQUIS • AMY MARTIN • REGINA MAXIM • BILL MAY • SUSAN MCDONALD • MADELYN MCGRATH LARRY MCMILLION • ALPHONSO MESSAM • JOHN MESSINA • JOSEPH MILLER • SUEANNE MORSE • SANDY MURPHY • BRITT NALLEY NHA NICKERSON • SANDRA NICKERSON • JOHN OLIVER • LORETTA ORTMAN • JACLYN PAEK • HELEN PAINE • KAY PATTERSON REBECCA PATTERSON • ELLERY PAYTON • MY-PHUONG PHAN • THUAN PHAN • BOB PICKETT • DANA PITTMAN • ROBERT PIXLEY Van Dang DIANNE PRETANIK • ELIZABETH PRICE • GERALD PRICE • BRENDA PROCTOR • MARILYN RAY • ELAINE REEDER • CHRISTIANE RHODES MARY RICHARDSON • GARY ROBINSON • JOHN ROUTH • JENNIFER RUSS • PAMELA SANDERS • JOHN SCHMITZ • GRANT SCOTT Project Manager, Department of TERESA SHALAP • JASON SIGMON • RICHARD SIMMS • CHRISTINE SIMPSON • JULIANNA SIMPSON • KAREN SINGLETON • JAMES SMITH GARY SOKOLA • NANCY SPAIN • TYLER SPEARING • JOY TANG • ANTHONY TAYLOR • MICHELE THAMASETT • ALAN THOMAS Homeland Security, Immigration DIANE THOMPSON • PAUL THOMPSON • DENISE TIMPKO • KARLA TRUJILLO • DIANNE TSUJI • PHILLIP TULL • ANTHONY VALLETTA DAVID WALTERS • WILLIAM WASNER • JANE WEBER • ROBERT WELLS • AMARENDRA YAVATKAR • MICHAEL YOCOM • ANGELICA YOUNG and Customs Enforcement JEFFREY YOUNG • MITCHELL ZOCCHI • 1999 • KATHY ADAMS • DAVID AHERN • LINDA ALKIRE • KAREN AMATO • CHERYL AMOS CHARLES ANDERSON • AKYVA ASHTON • TIMOTHY ATKIN • PATRICK AUMENT • LESLIE BAINBRIDGE • RICHARD BAKER • CHUCK BANE LENORA BARNES • SHAWN BELL • TODD BENSON • LARISA BLINDER • JAY BREEDEN • PHILIP BROU • KWASI BROWN EDWARD BURTON • CHRISTINE CANEPA • HECTOR CARO • KRISTIN CASAD • SUSAN CASTILLO • THOMAS CHADWICK SHEILA CHAMBERS • JAMES CHENVERT • RUTH CLARK • DOROTHY CLEAL • TIMOTHY COLLINS • MARY ELLEN CONDON STEPHEN COTT • TONYA COX • MICHELLE CUTCHINS • MAHTAB DABIR • DAVID DAILY • EVERETT DALLEY • TUYEN DAM PHONG DANG • JOHN DANKOWSKI • JOSEPH DO • MAX DUNN • LYNN FAHNESTOCK • JUDY FISHER • VELDA FLEMING LILIANA FONSECA • FRANCINE FOREST • GORDON FRASER • ANDREW GEORGE • PAULA GIBBY • KAREN GILES • CHRISTIAN GONZALEZ WILLIAM GORDON • HARI GOURU • ANDREW GRAHAM • SEAN GREEN • JOHN GREENE • SANDRA GROSS • ASHOK GUNTU IHAB HADDADIN • ASELE HAILE • REBECCA HAMIL • RICK HARRIS • HAIRONG HE • JOANN HECK • ERIK HEINE • GEORGE HENDERSON JULIE HOPKINS • JOUNG HUH • SHIRLEY JACKSON • LINDA JENIFER • PHILIP JOE • LINDA JOHNSON • CHARLES KENDRICK BRANDON KENNEDY • DIPENDRA KHILLARKAR • VENKATA KOMMOJU • ELAINE KRAMER • PAUL KRAUSS • SUNIL KUMAR RANDALL LAU • PAUL LAWRENCE • LOAN LE • RICKEY LEE • SHAWN LEE • BETH LEWIS • CHRIS LONGE • SHEILA LOVE CAROLYN MACDONALD • ED MACDONALD • PRUDVI MANTHENA • NADIA MASOUDIAN • STEVEN MATNEY • LISA MCCRAY SEAN MCDOWELL • ANGELA MCMILLIAN • DENNIS MEANEY • KATHLEEN MEYER • LOIS MISSIMER • LISA MONTANARO ROB NEUMER • MICHAEL NGAN • LAM NGUYEN • DICK NORMAN • JOSEPH PAGLIUCA • DANA PARKER • LEROY PARKER DONNA PETERSON • ROBERT PITTS • LEIGH-ANNE POLOWY • AMY QUAN • HAROLD REDDISH • SOMA REDDY • STEVEN ROERIG LARRY ROMAINE • LINDA SAMUELS • KIMBERLY SEGERMARK • LORIE SHAULL • NIMISH SHETH • ALAN SHULTZ • MEREDITH SIGMON MARY SLATE • MONICA SMITH • STEPHEN SMITH • JEFF SONG • PAULA SOTTIN • GEORGE SPLAIN • KEEFE SPRIGGS • MARK STAPLETON BRAD STEFFEY • ANATOLI STETSIOURA • JAMES SULLIVAN • REBECCA TAIT • DONNA TAPER • PARRIS TOWNES • BAO TRANG JAMES TRAYERS • FRANK VEGA • ANNETTE VERNA • LYNN WALTHALL • GLEN WHITE • JOE YANICHECK • IL YOO • DICK ZORN 2000 • JILL ADAMS • GINA ADIACONITEI • RANDY ADKINS • MICHELLE AITKEN • RENATE ALEXANDER • THOMAS ALSTON ROBERT ARNOLD • ANDREW BECK • WILLIAM BELL • EUNESA BENOMAN • JOHN BORDEAUX • FRANCES BOYD • VALERIE BOYKIN-PAIR STEVEN BRADY • DIANE BRISCOE • MATTHEW BROOKS • SANDRA BROWN • AL BRYARS • MICHAEL CARPENTER • VENKAT CHALASANI DAN CHANDLER • SANDRA CHAPMAN • DAVID CLARK • BRIAN COATES • ANTHONY COLYANDRO • LEE DEFIBAUGH • HORACE DESORMEAUX HARITHA DEVULAPALLY • CHRISTOPHER DOUGLAS • ERIN EAST • ALIREZA EHTESHAMZADEH • DANIEL ELWELL • SUJIRA ENGKAVANISH LAMONDA FRALEY • DAVID GALLAURESI • CARL GARDNER • SYLWIA GASIOREK–NELSON • ANNA GATLING • SOLOMON GEBREAB MARK GINEVAN • GREGORY GOODSON • CYNTHIA GRANDISON • EILEEN GREENE • DEBBIE HAGSTROM • WALT HARE • TOM HASMAN PETER HEWITT • JEANNE HUDSON • TAM HUYNH • FARIS IDRIS • ZORANA ILIC • SANJEEV INJETY • MARYLOU JEFFORDS • LUCIA JENKINS RICHARD JEWELL • RUDOLPH JORDAN • MAHESH KAKA • SHANTA KARUNARATNE • DAVID KELLY • HENRY KO • JOANNE KONDEK STUART KRAMER • DEEANN KUO • LOUIS LARSON • PHILIP LESLIE • ALFREDO LOPEZ • EDWARD MACDONALD • THOMAS MARTIN NIKKI MCCANN • BEVERLY MCCLINTON • CARA MCFADDEN • ANN MCGILL • MARK MCMAKIN • DOUGLAS MINNIG • GEORGE MORGAN IRINA MOROZ • STEVEN NEWBURG-RINN • MARCELLE NEWSOME • THANH NGUYEN • TIMOTHY NOONAN • BOSEDE OLAGBAJU OLANIKE OYEFESO • RHONDA PEKELO • JAMES POLSKI • ROB PURKAT • TIM RATLIFF • SUSAN RECAME • SCOTT REHRIG • NATHAN REIMOLD KENNETH REYNOLDS • JASON ROBBINS • DAVE ROBERTS • NORMA ROBINSON • TIFFANY RODNEY • MARK ROLINCIK • CORI SEILER ASHVINDER SETHI • SHANE SHEPHERD • GENE SHORTS • FRANK SIEVERS • LORA BETH SMAYDA • MARK D. SMITH • MARK S. SMITH BRADLEY SORENSEN • RONALD SPITZ • ANITA STANTON • GRAHAM STEVENS • JENIFER TAGGART • PAUL TORICK • KYUNG TORRENCE TAO TRAN • HUNG TRINH • DANIEL VANBELLEGHEM • JORGE VASQUEZ • KOURTNEY WALKER • GARY WATTS • TERRANCE WHITEHEAD JON WHITMORE • WADE WILBUR • TINA WOOLNER • DMITRY ZELENKO • 2001 • REMZY ABDULMOEN • JOSEPH ADAMS • MILLER ADAMS MICHAEL K. BAKER • MARY BALDWIN • CHARLES BARNETT • LEA BAVARO • JERRY BENNETT • WILLIE BENTON • VILAWAN BIERMAN • LEE BINETTE JOHN BLAIR • MICHAEL BRITTON • TEENA BROACH • SCOTT BUFFARDI • MICHAEL CAMPBELL • MARGARET CARTER • ROSENDO CASANOVA DARNELL CEPHAS • PETER CHOE • ARTHUR COLEMAN • MICHAEL COSEO • MICHAEL CRAWFORD • RICKY DANIELS • STEVE DANIELS • KEITH DAVIS MICHAEL DEVOS • DALE DIMICK • CHARLES DYE • HAROLD ERICKSON • JÖRGEN FÄGERQUIST • JAMES FIREOVED • CAROLINE FLOOD JENNIFER FRANCIS • STEPHEN FRATI • LAURA GEIGER • DENNIS GEORGE • RIJU GEORGE • SAUL GOAR • DOMINIC GOMES • SHIRLEY GUSTAFSON JAMES HACKMAN • GARY HAMMOND • PATRICK HANLEY • DAVE HARNEY • DAVID HARRISON • ROBERT HECKMAN • ROGER HENRY • ERNEST HINES JESSIE HODGE • ROSEMARY HOLLY • RICHARD HOWE • SCOTT HUGHSTON • THEODORE JACKSON • ABHIJIT JADEJA • LEENA JAYAMOHAN CHRIS JOHNSON • IRIS JOHNSON • LINDA JONES • DAVID KELLEY • DAN KIMBALL • JOHN KING • MICHAEL KITTRELL • FABIAN LA MAESTRA • CON LAI WILLIAM LEA • NEAL LENZIE • NADINE LIEPMAN • RONALD LIMCAOCO • JANET MARTIN • MAUREEN MARTINEZ • BENNIE MCCARTY • DAVID MCMULLEN HAMILTON MILLER • MICHAEL MILLER • MARTIN MINTZELL • TERRENCE MISICH • ROBERTO MOJICA • CHARLES MONTAGUE • JASON MOORE • TORRI MUMM KARTIK NAIR • HANH NGUYEN • MAI NGUYEN • WEN NIE • EDD OLDS • JAY OLSEN • WALES PATTERSON • SHARON PLATER • KIM PLEASANT • ANTHONY POU MARY PROFFITT • WAJID RAJA • MARK REDMAN • JOE REEVES • LOUIS RICHARDSON • TERRI ROSE • ARTHUR ROUBIK • DONNA RUGGLES • PAUL RYCZAK BENYAM SAMUEL • STEVEN SANTONI • TOBY SCHAEFFER • TERI SCOTT • STEVEN SEMRAU • DAVID SHARP • ROBERT SHELBY • AILLEEN SHERIDAN MARK SHERIDAN • LISA SHIELDS • DAVID SHURTLIFF • STEPHEN SLYFIELD • BRIAN SMITH • CHARLES SMITH • ROBIN SMITH • SUSAN SONG • CHRISTINE SORENSON DEBRA SPINNER • PAUL STIVERS • MARGOT SUNSHINE • MAURINE TAPSCOTT • STEVEN TASWELL • JASON TIBBETTS • CLAIRE TILTON • LONG TRUONG OGBONNAYA UDUKA • KERRY VANCE • ALLA VELIKOVICH • ZHOU WANG • WARNER WHITEHEAD • ANTHONY WILBURN • JEANNE WILGUS • CHARLEEANNE WUNDERLIN RAEANNE YAMAMOTO • SOLEIL YOU • LISA ZAPATA • 2002 • FADL ABIDEEN • JASON ADOLF • DATRICE AFRIYE-OPOKU • MICHAEL ALFORD • CATHERINE ALLEN 27 | SRA International, Inc.

SRA Employees (Continued)

SCOTT ANDERSON • ELLEN APOSTOLICO • MARY APOSTOLICO • MATTHEW ARNTT • JOHN ARVANITIS • NANA ASAH-KWASHIE • STEVE AVERBACH • STEPHEN BABB • DARBY BADE • CHRIS BAILEY • CHERIE BARNES • CHUCK BARRY DON BASNIGHT • ANNETTE BEACHAM • DAVID BEIER • BILL BELL • CLAIRE BERGER • JAMES BERRY • MATTHEW BIANCHETTI • DOUGLAS BLACK • NORRITTA BLANCHARD • TED BLOSS • SHERRY BOOTH • ROBERT BOWES • BRENDAN BOWLER CLARECA BRANDON • DOUG BRASHEAR • MICHAEL BRAUS • LEON BRITTAIN • NORMAN BROWNE • MARK BUCEVICIUS • PAUL BUCHANAN • STACEY BURGER • KATRINA CAIN • TRISTA CALDWELL • DIANE CALLESON • TINA CARR • MEG CARTER JOHN CASTLE • JUDY CHAPMAN • KEITH CHERNIKOFF • TAYLOR CHESNIK • CHARLES CHOI • KAREN CLARKE • MARY CLARKE • SHELDON CLARKE • BARRY CLUKEY • SARITA COLEMAN • NEIL CONLEY • DEBRA CONNELLA • ANGELA CONROY NATE CONROY • ASHLEY COOK • BRIAN CRAMER • JOSH CRISS • JAMI CUMMINGS • JAMES CURTIS • DARYL DAVIS • JACOB DAVIS • JACK DEPPE • MEGAN DEPPE • MELANIE DESTAFFANEY • DAVID DEWENTER • MICHAEL 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BROWN • SEAN BRUCK • SHAWN BRUMBACK • MICHAEL BRUNETTO • JAMES BRYDON • DANIEL BUCKELEW • DANIEL BULLOCK KIMBERLY BULLOCK • KYLE BUNTING • CHRISTA BURCH • RICHARD BURCH • CHRISTOPHER BURGER • JERRY BURNS • JAMES BURTON ANGELA BUTLER • JESSICA BYNUM • STEVEN BYRD • SAMANTHA CALDWELL • CHRISTOPHER CALHOUN • LOUISA CALLOWAY • JOHN CAMM JOHN CAPPELLARI • JAIME CARDENAS • BRIAN CARLSON • MICHAEL CARON • WILLIAM CARR • ANDREW CARROLL • KEITH CARROLL CARL CARSON • CARRIE CARTER • CHRISTOPHER CARTER • VICTOR CASTILLO • PARKER CASTLE • JAMES CAYER • DICK CECKA KENNETH CHADWICK • JASON CHAN • RANJANA CHANDRA • GILES CHARLESTON • WEI CHEN • WILLIAM CHEN • DANIEL CHENOK CHRISTIAN CHILDERS • IKWON CHO • LISA CITRO • ARTHUR CLABON • WILLIAM CLAFLIN • NICOLE CLARKE • DONNA COHEN • THOMAS COLEMAN GEORGE COLLATOS • SEAN CONNALLY • NORRIS CONNELLY • THOMAS CONNELLY • ROGER CONSTANTIN • TY CONWAY • MICHELLE COOK BENJAMIN COOPER • DANIEL CORBETT • KELLY COX • ASHLEY CRAIGHILL • JASON CRAWLEY • GEOFFREY CREIGHTON • CALVIN CROSSMAN CHAD CROWE • ROBERT CULLEN • SCOTT CUNNEEN • DANIEL CUSIMANO • MICHAEL D’ANDREA • JINSONG DAI • BROOKY DARGAN • SARAH DAVIS TRACENE DAVIS • USHA DAVULURI • DAVID DAWSON • MICHELE DAWSON • REBECCAH DEBLOIS • BESSIE DECLOUETTE • GONTRAN DEDJINOU AYESHA DELORENZO • LINDA DEMPSEY • JANET DENT • JOSEPH DESANTIS • JULIE DETTER • LAUNDREW DIAMOND • ERIC DIEHL • NORMAND DILLON AMANDA DIMAGGIO • JIM DINWIDDIE • JOSEPH DIONNE • DEBORAH DIXON • EDWARD DODSON • JOHN DOMIGAN • ALPHONSE DOMINIQUE RACHEL DRUCKER • LAURA DRYDEN • ADAM DUNCAN • CALE DUNN • JOHN DUNNE • ALAN EARLY • EYRIA EATMON • ALLAN EDMONDS CHARLES EDWARDS • POUYA EFTEKHARI • MARC ELLINGTON • ELISE EMMONS • LUVY EMRALINO • JORDAN ENGEL • RICHARD ENNIS • SHARON EVERETT 2007 Annual Report | 28

WILL FAIR • DENNIS FAVER • ROBERT FAY • CLIFF FERNANDES • ERNEST FIELDS • ERIC FILLOON • BENOIT FLIPPEN • NIKKI FLOYD • PATRICIA FLYNN • MEGAN FORD • JAMES FORNANGO • LARRY FORRESTER • STEVEN FOWLER • ROBERT FRANK MARGARET FRAZIER • KENDA FREDERICK • MICHAEL FREEMAN • LAWRENCE FREIE • TED FUJIMOTO • MICHAEL FULLER • DEBRA FULMER • HEATHER FULMINES • JOEL FUNK • DAVID FURMAN • JOYCE FUTRAL • NAGESH GADAMSETTY VICKIE GARNER • THOMAS GATES • MARI GAVIN • ADRIENNE GEFFERT • JULIE GESUELE • JOE GIBBONS • CHARLES GILLILAND • BARBARA GILSTRAP • JOHN GLASER • THOMAS GLASS • RUSS GOETZ • DANIELLE GOODMAN • LARRY GOODWIN AJAYDEEP GORAYA • MICHAEL GOTTOVI • MICHAEL GOUGE • CONSUELO GRABENSTEIN • JASON GRAMLING • JAMES GRECO • LEROY GREENE • TERRY GRIFFIN • VICKY GRIFFIN • JOHN GRIFFITHS • TIMOTHY GROELINGER • CYNTHIA GRUBBS VANI GULLAPALLI • NEERAJ GUPTA • GERALD GUSTINE • JAMES HAGARTY • JIM HAGGERTY • STEPHEN HALLER • SHANNA HAMILTON • FREDRICK HAMRELL • SCOTT HANDSHY • DONNA HARDEMAN • WILLARD HARMON • LANCE HARRINGTON LAMONTA HARRIS • RHONDA HARRISON • DANNY HAVARD • CHARLIE HAZARD • YIWEN HE • ERIN HEISER • STEPHEN HENDERSON • MATTHEW HENDREY • FLORIDA HENDRICKS • KEVIN HENRY • THOMAS HERBST • JENA HIGGINS TANYA HILDENBRAND • JEFFREY HILL • MARIA HILL • TERI HINES • HANS HINKAMP • BILL HIRNER • DONALD HIRSCH • LONNIE HOFFA • RICHARD HOFFMAN • DAN HOLLISTER • RYAN HOLMES • VALERIE HONAKER • JILL HOPPER • SEAN HOSKINS BLAKE HOSTER • ELENA HOUSER • LAURINE HOUSTON • JEFF HOWARD • VIRGINIA HOWES • STEPHEN HU • ERIC HUANG • KATHRYN HUDSON • RICHARD HUDSON • JOEL HULEN • DAVID HURLEY • DALE HURTT • MICHAEL HYLTON ISHMAEL INTSIFUL • STEPHANIE IRELAND • IQBAL ISMAILWALA • MARIELL JACKSON • VIKRAM JAIRATH • RONALD JAMES • FREDERICK JAMISON • TRAVIS JANSON • JIM JEROME • DICKSON JESUOROBO • JEANETTE JOERGER • ARLETTE JOHNSTON DAVID JOHNSTON • JAMES JONES • NINA JONES • ROBERT JORDAN • MICHAEL JUMP • STEVE JUNG • DEBORAH KAERCHER • ARI KAHN • RICHARD KALINEY • KEITH KAMINSKY • SAVITH KANDALA • SANG KANG • WEY KAO • HARRY KAPLAN ROBYN KAPLAN • EVANGELIA KARMOKOLIAS • SAYEDEH KASMAI-NAZERAN • BIJAN KATEBINI • HARRY KELLAM • JAMES KELLY • JI-FANG KENNELLY • KIMBERLY KEYS • ABU KHAN • IDRIS KHAN • VIKAS KHATOR • JILL KIZEWSKI • DUANE KLATT ALEXANDER KLOETZEL • BOB KNIGHT • DARLENE KNIGHT • JEFFREY KNISHKOWY • STEVEN KRAHLING • STEVEN KUBRAK • BENJAMIN KUPERBERG • KRISTIN LA • JOHN LAMPASONA • JEFFREY LANDIS • SANDRA LASH • DONALD LASSITER AMY LE • CHRISTIAN LECCA • CHIA-YU LEE • JOYCE LEIBOWITZ • MICHAEL LENGLE • J.F. LEONARD • LEAH LEUSCHNER • MICHELLE LEVATINO • JOEL LEWERENZ • WILLIAM LEWIS • ARTHUR LEYTON • ANNE LIAUTAUD • JAMES LILEK NANCY LIMAURO • CATHY LOCKWOOD • ANTHONY LOGAN • ROB LOHMEYER • SUSAN LORD • JULIE-ANN LORFANO • AMY LOWE • DARYL LOWE • CHRISTOPHER LUCAS • ROBY LUNA • DAVID LUTZ • JAMES LUTZ • KELLY LYMPANY MATTHEW LYONS • YANMEI MA • WILLIAM MACHT • SHELLY MADDEN • NADINE MAJOR • BOBBY MAN • SHAUN MANDELKORN • DAVE MANN • RUSS MARINO • DENNIS MARRIOTT • RICHARD MARSH • KEVIN MARSHALL • CHRISTOPHER MARUCA JOHN MATHEW • MARK MATHEWS • GARRETT MATTINGLY • ROBERT MATTISON • BARBARA MAXWELL • ALTERMAN MCALLISTER • MIKEL MCCALL • GEORGE MCCLAUGHERTY • JAMES MCCLAVE • DOUGLAS MCGAUGHEY • MATTHEW MCGINLEY MEGHAN MCGINTY • PATRICK MCGOWEN • BENJAMIN MCGRAW • RICHARD MCILROY • JOSEPH MCMAHON • HAROLD MCNAIR • NA’ETTA MCNAIR • LAURA MEDICI • NIKETA MEHTA • PETER MEIXNER • SAMUEL MESSINGER • OLEG MEYERSON RICHARD MICKLE • KRISTINE MIKULA • GARY MILLS • MICHAEL MITCHELL • LINDA MOELTER • ELIZABETH MOLYE • BRENDA MONTAGUE • JIMMY MORA • ROBERT MORAN • YVONNE MORGAN • RICK MORRIS • TODD MORRIS • WILLIAM MORRIS DONALD MORRIS-JONES • COLLEEN MULLIGAN • DAVID MUTRYN • DAVID NACHTSHEIM • JEFF NEELY • KIMBERLY NEISON • RUTH ANN NELSON • DARREL NEROVE • JESSICA NEUMANN • STEVEN NEUMILLER • STEVEN NEWTON • PHU NGO LUU NGUYEN • THANH N. NGUYEN • SEAN NORTH • KATHLEEN NUCCETELLI • PETE O’DONNELL • DON OCKIMEY • RICHARD OESTREICH • DEBORAH OGUNSHAKIN • MATTHEW OLENN • RACHEL OLFATO • RENO OLFATO • GLENN OLSEN THOMAS OLSON • DAVID OMOROGBE • MELISSA OPALSKI • JAMES OVERHOLSER • CLARISSE OWENS • TIMOTHY PACHTER • LISA PALMA • VISHAL PAREKH • HYEREE PARK • JENNY PASCUA • DIPTI PATEL • MANUEL PATIO • ROSALIE PATRICK SAMUEL PATTON • DAN PAVAN • MICHAEL PEARSON • JOHN PEDERSEN • JOHN PEELER • JENNIFER PEILER • STACY PELLEK • ANDREW PENDERGAST • SHARON PENDLETON • SCOTT PERLICK • DANIEL PETONITO • THOMAS PETZOLD CHHUN PHE • JOHN PHILLIPS • CJ PHILYAW • MICHAEL PITT • ALONZO POINTER • DAVID POLLACK • ROBERT POMROY • BRENDA POMS • ELENA PONTI • KATHERINE POPPERT • STACEY PORTER • JIM POWELL • ERICA POWELL-NORMAN VALINE POWELL-SMITH • VINNIE PRABHU • MAUREEN PREMO • MICHAEL PRIEST • DANIEL PRINCE • JOHN PROSS • NICHOLAS PURKAT • BO QIAN • JAMES QUAID • ROBERT QUINN • SONYA RAHMANI • JULIEN RAMA • IVAN RAMISCAL NEIL RANLY • ROBERT RANSOM • MARIA RAY • DEIRDRE RAYBURN • LEVI RAZICS • KIPP REED • PATRICK REGAN • KIMBERLY REID • MICHAEL REID • JOSHUA REINHART • TRISH REKAS • ALLISON REMICK • LEIGH RENFROW • ALLYSON RENZELLA MARY RESSLER • MATTHEW REZVANI • BRYAN RHEEM • DUSTY RHOADS • ANNA RICHARDSON • DANIEL RICKETTS • TERRY RICKS • RAYMOND RIDEOUT • RICHARD RISDON • ADA RIVERA • SARAH ROCK • MARNIE RODE • BRIAN RODGER KENT ROGERS • JOSEPH ROMANO • MORELLA ROSALES-HANNER • SANDRA ROSENBLATT • NICHOLAS ROSENGARTEN • ROBERT ROSS • RALPH ROSSETTI • JAY RUHNKE • NEIL RYAN • MARTHA RYDER • OMAR SADIQ • MARY SANDERS AVINASH SARIN • KRISTINA SAWYER • JOSEPH SCALIONE • JULIE SCHETTINO • STEVEN SCHORLING • JOSEPH SCHUPP • SHELLY SCOTT • GEETA SHAH • ELLEN SHAKER • MARK SHAUGHNESSY • MITCHELL SHAW • DAVE SHAY RUTHANNE SHEPHERD • FRANK SHER • DOUG SHERWOOD • PANNA SHETTY • BRENDAN SIBRE • GAIL SIEKMANN • MICHAEL SIMMONS • LAURA SIMS • ROBERT SIMS • RUCHIKA SINDHI • PAUL SINGH • STEVE SMAGIN • ROBERT SMALLWOOD CARL SMITH • CARLTON SMITH • CHARLES A. 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THOMAS • MARIE THOMAS • JOHN THOMPSON • MARYLOU THOMPSON • RICHARD THORP • LORENZO THWEATT • CYRUS TIBBS • LINDA TILTON • NHI TO • IRENA TOL • SHERYL TOLBERT-JOHNSON • DONALD TOMPKINS • LILIAN TONG LUIS TORRES • ELIECER TORRES-PEREZ • JOHN TOTH • SALLY TRAN • RON TRAWICK • LEE TREICHLER • KAREN TRIPLETT • THO TRUONG • CHUN TUNG • RICK TUOZZO • ANDREW TURNER • JOSHUA UNGAR • ANDREA UPCHURCH DILAWAR UTHMAN • RUPESH VADREV • LARA VALOSIO • FABIENNE VAN CAPPEL • CHANDY VARGHESE • PAIGE VARNEY • DEBORAH VAUGHAN • STEVE VAUGHAN • CHERI VEGA • NOEMI VENTURA JENNIFER VINCENT • ECOLA VIRGIL • TIM VOELZ • MICHAEL VOGEL • RICH VOGEL • MIKE WAGNER • JOSEPH WALKER • SEAN WALSH • THOMAS WALSH • JEFFREY WALTER ANDREW WALTERS • CHINO WALTERS • JASON WAMPLER • ETHEL WARD • GRACE WARD • TONY WASHINGTON • PHILLIP WASULA • MARK WATSON • KEVYN WEINER TZVETELINA WEINER • WILLIAM WELLS • KATHRYN WENDT • PATRICIA WESSEL • JEFFREY WHITE • JOHNNY WHITE • ROBERT WHITE • RUSSELL WHITE • STEPHANIE WHITE MARK WHITESIDE • TOMMYLEE WHITLOCK • STEVEN WILBURN • THOMAS WILLIAMS • MIKE WILSON • PAUL WILSON • RYISHEED WILSON • WENDELL WILSON • KERRY WILT MARTIN WITTEL • JONELLE WOODARD • JOYCELYNNE WU • JEFFREY WYNNE • DEBRA YAMANAKA • RODNEY YOUNG • BENJAMIN YOUTHER • MARLA ZALIS STEVEN ZARESKI • MARK ZEHNER • KAI ZHENG • SIIKA ZHIVKOVA • ERIC ZIDENBERG • LESLIE ZIEGLER • BARBARA ZISELBERGER • JOHN ZURCHER • 2005 KENNETH ABBOTT • SARAH ABDI • JEFFREY ACKERSON • ASHLEY ADAIR • PENNY ADAMS • TAMARA ADAMS • SHABANA AHMED • WAJIHA ALAM • ERIC ALBERTINE KIMBERLY ALEXANDER • TANYA ALGOZZINI • ASHLEY ALLEN • BEVERLY ALLEN • JOSEPH ALLEN • JAMIE ALPERS • DAN ALTOBELLI • MARCO ALVAREZ MICHAEL ALVAREZ • DENISE ANDERSON • STEVEN ANDERSON • JANET ANDREWS • MICHELLE ANGELICCHIO • CHAD ANTHONY • MICHAEL ANTHONY HUMA ANWAR • DAVID APPLER • LAURA ARCIERI • ZACHARY ARNOLD • NINO ARVANITIS • MARIE ARVELO-PEREZ • BLAINE ASATO • HEBER ASHBROOK TESFAY ASMELASH • MAHABIBI ASSANIE • BEVERLEY AUGUSTITUS • KIM AVENTS • MATTHEW AVERY • DINESH BABU • JOHN BAGOT • BRIAN BAILEY Nick Srebrow DUANE BAILEY • LANNY BAILEY • LOUGENIA BAILEY • MATTHEW BALLON • BRENDA BALTA • CRAIG BAMBROUGH • MIKE BANDY • ERNEST BANKS LINDA BANKS • KEVIN BARNES • MARK BARNETTE • MARIBEL BARRETT • BIRAT BASHYAL • THERESA BASQUEZ • DANIEL BATES • ELIZABETH BATON Program Manager, Office DONALD BATTIN • ANDREW BAUER • BRAD BAUER • MARCUS BAXLEY • TONI BAXTER • ELIZABETH BECKER • LILA BEDNAR • WILLIAM BEEBE ANNA BEHAR • EDWARD BEJZAK • KEBADU BELACHEW • DALE BELL • JEFFREY BENOIT • BRIAN BERRY • ERIC BETANOFF • STEPHEN BIERNESSER of Personnel Management, PAUL BLACK • ASHLEY BLAIR • CARLOS BLAZQUEZ • NATALIE BOLCH • COREY BOLLING • ANJANA BORDOLOI • GREGORY BORNHOFT TALIA BORODIN • MARY BOTTIN • BRIAN BOULWARE • RYAN BOURNE • KELLY BOWEN • PAUL BOWERS • RYAN BOWERS • STEVEN BOWLES Touchstone Consulting Group ROBERT BOYD • JAMES BRACKIN • RENEE BRADFORD • JEFFREY BRASHER • DARYL BREITBACH • TIMOTHY BRENNAN • DAVID BREZNA MIWA BRINSON • MARK BRISTOW • ANTONIO BROWN • GRETCHEN BROWN • RENEE BROWN • KEVIN BRUNNER • SANETA BRYAN PAIGE BRYANT • ERICKA BUCK • MARK BUCKLEY • WARREN BUCKLEY • MELISSA BURGUM • JENNIFER BURKE • THOMAS BURKE THOMAS E. 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Photos courtesy of Departments of Agriculture, Air Force, and Defense; and Research in Motion. Photos of SRA employees by Rick Steele and Bob Merhaut. 31 | SRA International, Inc.

Board of Directors 2 2 Dr. Ernst Volgenau Larry R. Ellis David H. Langstaff Dr. Gail R. Wilensky Chairman, Founder, President & CEO, Former President and CEO, Economist & Senior Fellow, and Former CEO, DHB Industries; Veridian Corporation; Co-Chairman Project HOPE; Former Administrator, SRA International, Inc. General, U.S. Army (Retired) and CEO, The Olive Group Health Care Financing Administration; Chair, MedPAC 1, 3 John W. Barter 1, 3 Miles R. Gilburne Dr. Stanton D. Sloane Former Chief Financial Officer, Retired Senior Vice President, President & CEO, Committee Memberships AlliedSignal, Inc.; Former President, America Online; Managing Member, SRA International, Inc. 1 - Audit and Finance ZG Ventures, LLC 2 - Compensation and Personnel AlliedSignal Automotive 1, 2 Delbert C. Staley 3 - Governance 3 Dr. Renato A. DiPentima Michael R. Klein Retired Chairman & Chief Executive Former President & CEO, SRA International, Chairman, CoStar Group, Inc.; Officer, NYNEX; Chairman, Inc.; Former Deputy Commissioner, Vice Chairman, Perini Corporation; TVG Capital Partners Ltd. Social Security Administration Chairman, Sunlight Foundation

Directors EMERITI William K. Brehm Edward E. Legasey Chairman Emeritus, SRA International, Inc.; Chairman, The CNA Corporation; Director Emeritus and Former Executive Vice President & Trustee and Past Chairman, Fuller Theological Seminary Chief Operating Officer, SRA International, Inc.

Corporate Officers Dr. Ernst Volgenau Dr. Scott W. Bennett Mike D’Andrea Karl R. Gumtow John M. Miller Chairman Director, Research & Director, Homeland Security Director, Intelligence and Space Director, Operations, Development and Law Enforcement, Touchstone Consulting Group Dr. Stanton D. Sloane Orion Center Max N. Hall President & CEO Dr. Hatte R. Blejer Deputy Director, Civil Sector David G. Page Director, Technology Strategy John R. Dankowski Enterprise Solutions Stephen C. Hughes for Information Sharing and Director, National Contingency Donald J. Hirsch Chief Financial Officer and Homeland Security Programs and Strategies Director, Financial and Giovanna S. Patterson Executive Vice President, Government Operations Director, Acquisition Integration Operations Charles D. Brooks Allen H. Deitz Government Affairs Director, Strategic Initiatives, Anna M. Hogan Kenneth A. Rohrer Barry S. Landew Defense Sector Director, C4ISR Center Deputy Director, Financial and Executive Vice President, Robert A. Burciaga Government Operations Strategic Development Deputy Director, Operations, Anne M. Donohue, Esq. Jill Yacone Hopper Integrated Solutions Chief Legal Officer Government Relations Gregory A. Roman Director, Remote Sensing Senior Vice Presidents Melissa A. Burgum Dr. Michael K. Duffy Martha N. Johnson Programs Corporate Controller Financial Management Director, Civilian Agencies, Timothy J. Atkin Touchstone Consulting Group Carl B. Rosenblatt Director, Civil Sector Timothy A. Campen Donald E. Edwards Director, Proposal Development James H. Jones Patrick Burke Director, Orion Center Director, National Guard Bureau AITS Enterprise Data Architecture Judith K. Sakowitz Director, C3I Sector Gene N. Cartier Quality Systems Officer Infrastructure Engineering Michele A. Engelhart David F. Keffer Michael M. Fox Investor Relations Cindy C. Shephard Director, Marketing & Sales Director, Defense Business Daniel J. Chenok Development Controller, Civil Sector Director, Business Technology Herbert C. Kemp John M. Gilligan Director, C4ISR Operations, Sonu Singh Director, Defense Sector Offerings Dennis G. Evans Deputy Director, Customer C4ISR Center Director, SRA Spectrum Jeffrey B. Westerhoff Bernard A. Cohen Relations, Integrated Solutions Solutions Group Civil Agency Business Stuart L. Kramer Director, Government-Wide Business Program Manager, Jennifer E. Smith Acquisition Contracts Development Kevin J. Fagan Director, Command and Health Care Systems Deputy Director, Mary Ellen Condon Marketing and Sales Operations Solutions Mark I. Leaman Vice Presidents Director, Strategic Initiatives Michael B. Fisher Director, Process and Thomas E. Snyder Dr. Chinatsu Aone David M. Conetsco Director, Mergers & Knowledge Management Director, Tactical Director, Natural Language Deputy Director, Intelligence Acquisitions Communications Systems Technology and Space John M. Luongo Eugene S. Frank Director, Capture Strategy Thomas A. Summerlin Craig Bambrough Mark D. Connel Managing Director, Consulting, Director, Defense Bryan Maizlish Deputy Director, Executive Director, Contracts International Initiatives Touchstone Consulting Group Technology Solutions and Procurement Director, Advanced Programs Bruce A. Gilbert and Chief Innovation Officer Stephen M. Tolbert Kakali Banerjee Dr. Timothy W. Cooke Director, Financial Oversight Director, Security and Systems Jim McClave Business Program Manager, Director, Strategic Initiatives, Engineering Solutions Business Programs International Development and Environmental and Organiza- Deputy Director, C3I Sector Diplomatic Solutions Program tional Services Ronald E. Gornto Peter B. Trick John J. McGrath Director, Environmental and Director, Technology Solutions Director, Transportation Safety Robert A. Baruch Brian W. Cross Organizational Services Director, C3I Emerging Markets Program Manager, Kevin D. Graves and Technologies GuardNet XXI Director, Asset Management Craig P. Weston William H. Bell Danny R. Michael Deputy Director, C4ISR Center Director, Information Assurance Charles G. Crotty Director, Integrated Solutions and Privacy Solutions Director, Corporate Compliance and Systems Support Michael L. Yocom Director, Integrated Solutions Stockholder Information

Stock Listing Additional Information SRA International, Inc. is traded on the New York Stock The SRA Web site (www.sra.com) contains valuable Exchange under the symbol SRX. information, such as financial results, corporate news releases, and management profiles. Inquiries for additional investor information should be directed to: Stockholder Services David Keffer All questions concerning registered stockholder Vice President, Investor Relations accounts and stock transfer matters, including name (703) 502-7731 or address changes and transfers, should be directed [email protected] to our transfer agent and registrar:

American Stock Transfer and Trust Company Certifications 59 Maiden Lane New York, NY 10007 SRA International, Inc. has filed with theU .S. Securities (800) 937-5449 and Exchange Commission the annual certifications www.amstock.com required by Rule 13a-14(a) of the Securities Exchange Act of 1934 as exhibits 31.1 and 31.2 to the Company’s Annual Report on Form 10-K for the fiscal year Independent Auditors ended June 30, 2007. Additionally, in 2006, the Chief Deloitte & Touche LLP Executive Officer submitted an annual certification to 1750 Tysons Boulevard the New York Stock Exchange (NYSE) stating that he McLean, VA 22102 was not aware of any violation of the NYSE corporate governance listing standards by the Company. Annual Meeting The annual meeting of stockholders will be held in October 2007. For additional information, please visit the Investor Relations section of the SRA Web site (www.sra.com).

Annual Report on Form 10-K Stockholders may obtain without charge a copy of the SRA Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, by writing to: SRA International, Inc. Investor Relations 4300 Fair Lakes Court Fairfax, VA 22033 Headquarters 4300 Fair Lakes Court Fairfax, VA 22033 Tel. 703.803.1500 Fax 703.803.1509 www.sra.com

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