##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 30, 2003

OR

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to

Commission file number 0-21682

SPARTA, Inc.




(Exact name of registrant as specified in its charter)


|                                |  |                                     
|------------------------------- |  | ------------------------------------
|Delaware                        |  | 63-0775889                          
|                                |  |                                     
|(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
|incorporation or organization)  |  |                                     

|                                                         |  |           
|-------------------------------------------------------- |  | ----------
|23041
Avenida de la Carlota, Suite 325, Laguna Hills, CA |  | 92653-1595
|                                                        
|(Address of principal executive offices)                 |  | (Zip Code)

(949) 768-8161




(Registrants telephone number, including area code)


Not Applicable




(Former name, former address and former fiscal year, if changed since last report)


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 (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]    No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X]    No [  ]

As of March 30, 2003, the registrant had 4,987,432 shares of common stock, $.01
par value per share, issued and outstanding.





---

TABLE OF CONTENTS



|                          |                                                                                                |  |  |  |  |  |  | 
|------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                   
|                          | Item 1 Financial Statements                                                                   
|                          | Item 2   Managements Discussion and Analysis of Financial Condition and Results of Operations
|                          | Item 3 Quantitative and Qualitative Disclosures about Market Risk                             
|                          | Item 4 Controls and Procedures                                                                
|Part II OTHER INFORMATION
|                          | Item 1 Legal Proceedings                                                                      
|                          | Item 2 Changes in Securities and Use of Proceeds                                              
|                          | Item 3 Defaults Upon Senior Securities                                                        
|                          | Item 4 Submission of Matters to a Vote of Security Holders                                    
|                          | Item 5 Other Information                                                                      
|                          | Item 6 Exhibits and Reports on Form 8-K                                                       
|Signature                
|Certification            
|Exhibit Index            
|EXHIBIT 99.1             
|EXHIBIT 99.2             



---



##### Table of Contents



SPARTA, Inc.

QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 30, 2003

INDEX

|               |  |                                                                                       |  |  |  | 
|-------------- |  | ------------------------------------------------------------------------------------- |  |  |  | 
|PART I         |  | FINANCIAL INFORMATION                                                                 |  |  |  | 
|Item 1         |  | Financial Statements                                                                  |  |  |  | 
|Item 2         |  | Managements Discussion and Analysis of Financial Condition and Results
of Operations |  |  |  | 
|Item 3         |  | Quantitative and Qualitative Disclosures About Market Risk                            |  |  |  | 
|Item 4         |  | Controls and Procedures                                                               |  |  |  | 
|PART II        |  | OTHER INFORMATION                                                                     |  |  |  | 
|Item 1         |  | Legal Proceedings                                                                     |  |  |  | 
|Item 2         |  | Changes in Securities and Use of Proceeds                                             |  |  |  | 
|Item 3         |  | Defaults Upon Senior Securities                                                       |  |  |  | 
|Item 4         |  | Submission of Matters to a Vote of Security Holders                                   |  |  |  | 
|Item 5         |  | Other Information                                                                     |  |  |  | 
|Item 6         |  | Exhibits and Reports on Form 8-K                                                      |  |  |  | 
|Signature      |  |                                                                                       |  |  |  | 
|Certifications |  |                                                                                       |  |  |  | 

- 1 -



---



##### Table of Contents






PART I




Item 1      Financial Statements

- 2 -



---



##### Table of Contents



SPARTA, Inc.
CONSOLIDATED BALANCE SHEET

|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |            | 
|------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ---------- | ----------- | ---------- | ------------ | ---------- | ----------- | ---------- | 
|                                           |                                                                                                                                               |                            |            | March 31,   |            | December 31,
|                                           |                                                                                                                                               |                            |            | 2003        |            | 2002        
|                                           |                                                                                                                                               |                            |            |             |            |             
|                                           |                                                                                                                                               |                            |            | (Unaudited) |            |             
|ASSETS                                     |                                                                                                                                               |                            |            |             |            |              |            |            
|Current Assets                             |                                                                                                                                               |                            |            |             |            |              |            |            
|                                           | Cash and cash equivalents                                                                                                                     |                            | $          | 12,187,000  |            |              | $          | 17,780,000  |           
|                                           | Short-term investments                                                                                                                        |                            |            | 1,000,000   |            |              |            |            |           
|                                           | Receivables, net                                                                                                                              |                            |            | 32,603,000  |            |              |            | 31,883,000  |           
|                                           | Prepaid expenses                                                                                                                              |                            |            | 987,000     |            |              |            | 614,000     |           
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|                                           |                                                                                                                                               | Total current assets       |            |             | 46,777,000 |              |            |             | 50,277,000 | 
|                                           | Equipment and improvements, net                                                                                                               |                            |            | 6,803,000   |            |              |            | 7,054,000   |           
|                                           | Other assets                                                                                                                                  |                            |            | 1,971,000   |            |              |            | 2,033,000   |           
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|                                           |                                                                                                                                               | Total Assets               |            | $           | 55,551,000 |              |            | $           | 59,364,000 | 
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|LIABILITIES AND STOCKHOLDERS EQUITY       |                                                                                                                                               |                            |            |             |            |              |            |            
|Current Liabilities                        |                                                                                                                                               |                            |            |             |            |              |            |            
|                                           | Accrued compensation                                                                                                                          |                            | $          | 7,035,000   |            |              | $          | 12,805,000  |           
|                                           | Accounts payable and other accrued expenses                                                                                                   |                            |            | 5,521,000   |            |              |            | 7,757,000   |           
|                                           | Current portion of subordinated notes payable                                                                                                 |                            |            | 2,483,000   |            |              |            | 2,258,000   |           
|                                           | Income taxes payable                                                                                                                          |                            |            | 1,911,000   |            |              |            | 1,454,000   |           
|                                           | Deferred income taxes                                                                                                                         |                            |            | 1,327,000   |            |              |            | 1,327,000   |           
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|                                           |                                                                                                                                               | Total current liabilities  |            |             | 18,277,000 |              |            |             | 25,601,000 | 
|Subordinated notes payable                 |                                                                                                                                               |                            | 7,487,000  |             |            |              | 8,095,000  |            
|Deferred income taxes                      |                                                                                                                                               |                            | 666,000    |             |            |              | 666,000    |            
|Stockholders equity                       |                                                                                                                                               |                            |            |             |            |              |            |            
|                                           | Common stock, $.01 par value, 25,000,000 shares
authorized; 6,065,769 and 5,719,162 shares issued;
4,987,432 and 4,795,213 shares outstanding |                            |            | 61,000      |            |              |            | 57,000      |           
|                                           | Additional paid-in capital                                                                                                                    |                            |            | 40,462,000  |            |              |            | 35,559,000  |           
|                                           | Retained earnings                                                                                                                             |                            |            | 10,047,000  |            |              |            | 7,534,000   |           
|                                           | Treasury stock, at cost                                                                                                                       |                            |            | (21,449,000 | )          |              |            | (18,148,000 | )         
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|                                           |                                                                                                                                               | Total stockholders equity |            |             | 29,121,000 |              |            |             | 25,002,000 | 
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           
|Total Liabilities and Stockholders Equity |                                                                                                                                               | $                          | 55,551,000 |             |            | $            | 59,364,000 |            
|                                           |                                                                                                                                               |                            |            |             |            |              |            |             |           

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

- 3 -



---



##### Table of Contents



SPARTA, Inc.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

|                                            |                                  |                          |            |                              |            |      |            |            |            | 
|------------------------------------------- | -------------------------------- | ------------------------ | ---------- | ---------------------------- | ---------- | ---- | ---------- | ---------- | ---------- | 
|                                            |                                  |                          |            | Three Months ended March 31,
|                                            |                                  |                          |            |                             
|                                            |                                  |                          |            | 2003                         |            | 2002
|                                            |                                  |                          |            |                              |            |     
|Sales                                       |                                  | $                        | 47,148,000 |                              |            | $    | 35,928,000 |           
|                                            |                                  |                          |            |                              |            |      |            |           
|Costs and expenses:                         |                                  |                          |            |                              |            |      |            |           
|                                            | Labor costs and related benefits |                          |            | 24,412,000                   |            |      |            | 20,592,000 |           
|                                            | Subcontractor & other costs      |                          |            | 14,572,000                   |            |      |            | 8,321,000  |           
|                                            | Facility costs                   |                          |            | 2,474,000                    |            |      |            | 2,569,000  |           
|                                            | Travel and other                 |                          |            | 1,500,000                    |            |      |            | 1,057,000  |           
|                                            |                                  |                          |            |                              |            |      |            |           
|                                            |                                  | Total costs and expenses |            |                              | 42,958,000 |      |            |            | 32,539,000 | 
|                                            |                                  |                          |            |                              |            |      |            |           
|Income from operations                      |                                  |                          | 4,190,000  |                              |            |      | 3,389,000  |           
|Interest expense (income), net              |                                  |                          | 2,000      |                              |            |      | (24,000    | )         
|                                            |                                  |                          |            |                              |            |      |            |           
|Income before provision for
taxes on income |                                  |                          | 4,188,000  |                              |            |      | 3,413,000  |           
|Provision for taxes on income               |                                  |                          | 1,675,000  |                              |            |      | 1,365,000  |           
|                                            |                                  |                          |            |                              |            |      |            |           
|Net income                                  |                                  | $                        | 2,513,000  |                              |            | $    | 2,048,000  |           
|                                            |                                  |                          |            |                              |            |      |            |           
|Basic earnings per share                    |                                  | $                        | 0.51       |                              |            | $    | 0.38       |           
|                                            |                                  |                          |            |                              |            |      |            |           
|Diluted earnings per share                  |                                  | $                        | 0.47       |                              |            | $    | 0.35       |           
|                                            |                                  |                          |            |                              |            |      |            |           

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

- 4 -



---



##### Table of Contents



SPARTA, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |           |           |            |  
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ---------------------------------- | ---------------------------------------------------- | ------- | ---------------------------- | ---------- | ---------- | --------- | --------- | ---------- | -
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         | Three Months ended March 31,
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                             
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         | 2003                         |            | 2002      
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |           
|Cash flows from operating activities:              |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |           
|                                                   | Net income                                                                        |                                                                                       | $                                  | 2,513,000                                            |         |                              | $          | 2,048,000  |          
|                                                   | Adjustments to reconcile net income to net
cash provided by operating activities: |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   |                                                                                       | Depreciation and amortization      |                                                      |         | 470,000                      |            |            |           | 538,000   |           
|                                                   |                                                                                   |                                                                                       | Loss on sale of equipment          |                                                      |         |                             |            |            |           | 4,000     |           
|                                                   |                                                                                   |                                                                                       | Stock-based compensation           |                                                      |         | 2,338,000                    |            |            |           | 2,091,000 |           
|                                                   |                                                                                   |                                                                                       | Tax benefit relating to stock plan |                                                      |         | 721,000                      |            |            |           | 787,000   |           
|                                                   |                                                                                   |                                                                                       | Changes in assets and liabilities: |                                                      |         |                              |            |            |           |           |           
|                                                   |                                                                                   |                                                                                       |                                    | Receivables, net                                     |         |                              | (720,000   | )          |           |           | (2,075,000 | )
|                                                   |                                                                                   |                                                                                       |                                    | Prepaid expenses                                     |         |                              | (373,000   | )          |           |           | (339,000   | )
|                                                   |                                                                                   |                                                                                       |                                    | Other assets                                         |         |                              | 62,000     |            |           |           | 22,000     |  
|                                                   |                                                                                   |                                                                                       |                                    | Accrued compensation                                 |         |                              | (5,770,000 | )          |           |           | (5,056,000 | )
|                                                   |                                                                                   |                                                                                       |                                    | Accounts payable and other accrued expenses          |         |                              | (2,236,000 | )          |           |           | 80,000     |  
|                                                   |                                                                                   |                                                                                       |                                    | Income taxes payable                                 |         |                              | 457,000    |            |           |           | 18,000     |  
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   |                                                                                       |                                    | Net cash provided by (used for) operating activities |         |                              | (2,538,000 | )          |           |           | (1,882,000 | )
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|Cash flows from investing activities:              |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |           
|                                                   | Purchase of equipment and improvements                                            |                                                                                       |                                    | (219,000                                             | )       |                              |            | (295,000   | )        
|                                                   | Purchase of short-term investments                                                |                                                                                       |                                    | (1,000,000                                           | )       |                              |            |            |          
|                                                   | Proceeds from sale of short-term investments                                      |                                                                                       |                                    |                                                      |         |                              |            | 6,456,000  |          
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   |                                                                                       |                                    | Net cash provided by (used for) investing activities |         |                              | (1,219,000 | )          |           |           | 6,161,000  |  
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|Cash flows from financing activities:              |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |           
|                                                   | Proceeds from issuance of stock                                                   |                                                                                       |                                    | 1,848,000                                            |         |                              |            | 1,336,000  |          
|                                                   | Redemption of preferred stock                                                     |                                                                                       |                                    |                                                     |         |                              |            | (1,000,000 | )        
|                                                   | Cash purchases of treasury stock                                                  |                                                                                       |                                    | (3,118,000                                           | )       |                              |            | (4,520,000 | )        
|                                                   | Principal payments on subordinated notes payable                                  |                                                                                       |                                    | (566,000                                             | )       |                              |            | (431,000   | )        
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   |                                                                                       |                                    | Net cash provided by (used for) financing activities |         |                              | (1,836,000 | )          |           |           | (4,615,000 | )
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|Net decrease in cash                               |                                                                                   |                                                                                       | (5,593,000                         | )                                                    |         |                              | (336,000   | )         
|Cash and cash equivalents at beginning of period   |                                                                                   |                                                                                       | 17,780,000                         |                                                      |         |                              | 10,303,000 |           
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|Cash and cash equivalents at end of period         |                                                                                   | $                                                                                     | 12,187,000                         |                                                      |         | $                            | 9,967,000  |           
|                                                   |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |            |          
|Supplemental disclosures of cash flow information: |                                                                                   |                                                                                       |                                    |                                                      |         |                              |            |           
|                                                   | Cash paid during the period for:                                                  |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   | Interest                                                                              |                                    | $                                                    | 64,000  |                              |            | $          | 55,000    |          
|                                                   |                                                                                   | Income taxes                                                                          |                                    | $                                                    | 548,000 |                              |            | $          | 577,000   |          
|                                                   | Non-cash investing and financing activities:                                      |                                                                                       |                                    |                                                      |         |                              |            |            |          
|                                                   |                                                                                   | Issuance of subordinated notes payable in connection
with purchases of treasury stock |                                    | $                                                    | 183,000 |                              |            | $          | 3,450,000 |          

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

- 5 -



---



##### Table of Contents



SPARTA, INC.
Notes to Consolidated Financial Statements
(Unaudited)

Note A - Basis of Presentation

The accompanying financial information has been prepared in accordance
with the instructions to Form 10-Q and therefore does not necessarily include
all information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles.

The Companys fiscal year is the 52 or 53 week period ending on the Sunday
closest to December 31. The Companys last fiscal year ended on December 29,
2002, its first quarter ended March 30, 2003, and its corresponding first
quarter last year ended on March 31, 2002. To aid the reader of the financial
statements, the year-end has been presented as December 31, 2002 and the
three-month period ends have been presented as March 31, 2003 and March 31,
2002.

In the opinion of management, the unaudited financial information for the
three-month periods ended March 31, 2003 and March 31, 2002 reflects all
adjustments (which include only normal, recurring adjustments) necessary for a
fair presentation thereof.

Note B - Income Taxes

Income taxes for interim periods are computed using the estimated annual
effective rate method.

Note C  Computation of Earnings Per Share

|                     |                   |   |                              |      |      |   |           |      | 
|-------------------- | ----------------- | - | ---------------------------- | ---- | ---- | - | --------- | ---- | 
|                     |                   |   | Three months ended March 31,
|                     |                   |   |                             
|                     |                   |   | 2003                         |      | 2002
|                     |                   |   |                              |      |     
|Basic EPS            |                   |   |                              |      |      |   |           |     
|Net income           |                   | $ | 2,513,000                    |      |      | $ | 2,048,000 |     
|Accretion adjustment |                   |   |                              |      |      |   | (182,000  | )   
|                     |                   |   |                              |      |      |   |           |     
|                     |                   | $ | 2,513,000                    |      |      | $ | 1,866,000 |     
|                     |                   |   |                              |      |      |   |           |     
|Shares outstanding   |                   |   | 4,946,425                    |      |      |   | 4,958,553 |     
|                     | Per share amounts |   | $                            | 0.51 |      |   | $         | 0.38 | 
|                     |                   |   |                              |      |      |   |           |     
|Dilutied EPS         |                   |   |                              |      |      |   |           |     
|Net income           |                   | $ | 2,513,000                    |      |      | $ | 2,048,000 |     
|Accretion adjustment |                   |   |                             |      |      |   | (182,000  | )   
|                     |                   |   |                              |      |      |   |           |     
|                     |                   | $ | 2,513,000                    |      |      | $ | 1,866,000 |     
|                     |                   |   |                              |      |      |   |           |     
|Shares outstanding   |                   |   | 4,946,425                    |      |      |   | 4,958,553 |     
|Stock options        |                   |   | 313,134                      |      |      |   | 333,512   |     
|Restricted stock     |                   |   | 73,887                       |      |      |   | 90,327    |     
|                     |                   |   |                              |      |      |   |           |     
|                     |                   |   | 5,333,446                    |      |      |   | 5,382,392 |     
|                     | Per share amounts |   | $                            | 0.47 |      |   | $         | 0.35 | 
|                     |                   |   |                              |      |      |   |           |     

- 6 -



---



##### Table of Contents



Note D  Accounting for Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance
with the intrinsic value method described in Accounting Principles Board
Opinion No. 25 (APB 25) and related interpretations. Had compensation
expense for these plans been determined in accordance with the fair value
method described in Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS 123), the Companys net
income and net income per share would have been reduced to the pro forma
amounts in the following table.

|            |                                                                                             |  |                              |           |      |  |   |           |  
|----------- | ------------------------------------------------------------------------------------------- |  | ---------------------------- | --------- | ---- |  | - | --------- | -
|            |                                                                                             |  | Three months ended March 31,
|            |                                                                                             |  |                             
|            |                                                                                             |  | 2003                         |           | 2002
|            |                                                                                             |  |                              |           |     
|Net income  |                                                                                             |  |                              |           |      |  |   |          
|            | As reported                                                                                 |  | $                            | 2,513,000 |      |  | $ | 2,048,000 |  
|            | Add after-tax stock-based
compensation expense
included in determining
net income           |  |                              | 184,000   |      |  |   | 76,000    |  
|            | Deduct after-tax stock-based
compensation expense as
if the fair value method had
been used |  |                              | (479,000  | )    |  |   | (285,000  | )
|            |                                                                                             |  |                              |           |      |  |   |          
|            | Pro forma net income                                                                        |  | $                            | 2,218,000 |      |  | $ | 1,839,000 |  
|            |                                                                                             |  |                              |           |      |  |   |          
|Basic EPS   |                                                                                             |  |                              |           |      |  |   |          
|            | As reported                                                                                 |  | $                            | 0.51      |      |  | $ | 0.38      |  
|            | Pro forma                                                                                   |  |                              | 0.45      |      |  |   | 0.37      |  
|Diluted EPS |                                                                                             |  |                              |           |      |  |   |          
|            | As reported                                                                                 |  |                              | 0.47      |      |  |   | 0.35      |  
|            | Pro forma                                                                                   |  |                              | 0.42      |      |  |   | 0.34      |  

Note E  Treasury Stock

Treasury stock is shown at cost, and consisted of 1,078,816 shares and
923,949 shares of common stock at March 31, 2003 and December 31, 2002,
respectively. Repurchase of outstanding stock by the Company in exercise of
its right of repurchase upon termination of employment (as defined) are made at
estimated fair value. The stock price is calculated quarterly by the Company
using a formula approved by the Board of Directors (which the Company believes
estimates fair value), and is evaluated annually by an independent valuation
firm.

Note F  New Accounting Standards

The Company adopted the following Statements of Financial Accounting
Standards (SFAS) as of January 1, 2002: SFAS 141, which addresses accounting
for acquired business using the purchase method of accounting; SFAS 142, which
addressees accounting for acquired goodwill and other intangible assets; SFAS
143, which addresses accounting for obligations associated with the retirement
of tangible long-lived assets and the associated retirement costs; and SFAS
144, which addresses the impairment or disposal of long-lived assets. Adoption
of these standards did not have a material effect on the Companys financial
position or results of operations.

During December 2002, the Financial Accounting Standards Board (FASB)
issued SFAS 148, which provides alternative transition methods for companies
adopting a voluntary change to the fair

- 7 -



---



##### Table of Contents



value method of accounting for
stock-based compensation. SFAS 148 also requires enhanced disclosure regarding
the method of accounting and the effect of the method used on reported results
of operations. SFAS is effective for fiscal years ending after December 15,
2002 and interim periods beginning after December 15, 2002. The Company
adopted the disclosure provisions of SFAS 148 in December 2002, and has elected
to continue to account for its stock-based compensation under the intrinsic
value method.

In
January 2003, the Company adopted FASB Interpretation (FIN) 45, which
requires disclosures about obligations under certain guarantees issued by the
Company, and which requires recognition of a liability for the fair value of
the obligation undertaken in issuing the guarantee. The liability recognition
provisions of FIN 45 are applicable to guarantees issued or modified after
December 31, 2002, and the disclosure provisions are effective for interim or
annual fiscal periods ending after December 15, 2002. Adoption
of this standard did not have a material effect on the Companys financial position or results of
operations.

In January 2003, the Company adopted SFAS 146, which addresses accounting
for costs associated with exit or disposal activities. In addition, the FASB
issued FIN 46, which requires that certain variable interest entities be
consolidated by the primary beneficiary of the entity if the equity investors
in the entity do not have a controlling financial interest or do not have
sufficient equity at risk. FIN 46 is effective immediately for all variable
interest entities created after January 31, 2003. For all such entities
created prior to February 1, 2003, FIN 46 is effective for interim or annual
fiscal periods ending after June 15, 2003. Adoption of these
statements did not have a material effect on the Companys
financial position or results of operations

In April 2003, the Company adopted SFAS 149, which amends and clarifies
accounting guidance on derivative instruments and hedging activities. The
Company does not expect the adoption of this statement to have a material
effect on the Companys financial position or results of operations

- 8 -



---



##### Table of Contents






Item 2   Managements Discussion and Analysis of Financial Condition and Results
of Operations

Results of Operations

The following tables present certain key operating data for the periods
indicated:

|                                                        |                                   |   |                                            |    |      |   |        |    |  
|------------------------------------------------------- | --------------------------------- | - | ------------------------------------------ | -- | ---- | - | ------ | -- | -
|                                                        |                                   |   | Operating Results                         
|                                                        |                                   |   |                                           
|                                                        |                                   |   | (amounts in thousands, except percentages)
|                                                        |                                   |   |                                           
|                                                        |                                   |   | Three months ended March 31,              
|                                                        |                                   |   |                                           
|                                                        |                                   |   | 2003                                       |    | 2002
|                                                        |                                   |   |                                            |    |     
|Sales                                                   |                                   | $ | 47,147                                     |    |      | $ | 35,928 |   
|Sales by business area, as a
percentage of total sales: |                                   |   |                                            |    |      |   |        |   
|                                                        | Ballistic Missile Defense (BMD) |   |                                            | 45 | %    |   |        | 41 | %
|                                                        | Non BMD Dept of Defense (DoD)   |   |                                            | 51 | %    |   |        | 49 | %
|                                                        | Non-DoD                           |   |                                            | 4  | %    |   |        | 10 | %
|Gross profit (1)                                        |                                   | $ | 4,338                                      |    |      | $ | 3,513  |   
|Gross profit as a % of costs (1)                        |                                   |   | 10.1                                       | %  |      |   | 10.8   | % 
|Income from operations                                  |                                   | $ | 4,190                                      |    |      | $ | 3,389  |   
|Net income                                              |                                   | $ | 2,513                                      |    |      | $ | 2,048  |   



|(1) |  | The Company defines gross profit as sales less all costs that are
allowable for and allocable to contracts under government procurement
regulations. As such, gross profit excludes certain unallowable
expenses. Management considers gross profit, and gross profit as a
percentage of costs, to be key measures of the Companys contract
performance. It should also be considered in conjunction with income
from operations, net income, and other measures of financial
performance. The following presents a reconciliation of gross profit
to income from operations (amounts in thousands) :
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                          |  |                              |       |      |  |   |       |  
|------------------------- |  | ---------------------------- | ----- | ---- |  | - | ----- | -
|                          |  | Three months ended March 31,
|                          |  |                             
|                          |  | 2003                         |       | 2002
|                          |  |                              |       |     
|Gross profit              |  | $                            | 4,338 |      |  | $ | 3,513 |  
|Less unallowable expenses |  |                              | (148  | )    |  |   | (124  | )
|                          |  |                              |       |      |  |   |       |  
|Income from Operations    |  | $                            | 4,190 |      |  | $ | 3,389 |  
|                          |  |                              |       |      |  |   |       |  

The Companys contract revenues for the three-month period ended March 31, 2003
increased 31%, from $35.9 million for the first quarter of 2002 to $47.2
million for the first quarter of 2003. BMD revenues increased 44%, from $14.7
million for the three-month period ended March 31, 2002 to $21.2 million for
the corresponding period in 2003. In addition to continuing its work on BMD
systems engineering and technical analysis, the Company has generated growth in
its BMD business base through penetration of other BMD program elements.
Revenue on other DoD programs increased 37%, from $17.6 million during the
first quarter of 2002 to $24.1 million for the first quarter of 2003, primarily
due to increased revenue on programs for a variety of intelligence agencies as
a result of the governments increased focus on intelligence in response
to the terrorist attacks of September 11. Non-DoD sales decreased 48% during
the first quarter, from $3.6 million as of March 2002 to $1.9 million as of
March 2003, due to the completion in July 2002 of a contract to provide a
variety of engineering and other range support services to the NASA Dryden
Flight Research Center.

The Company defines gross profit as sales less all costs that are
allowable for and allocable to contracts under government procurement
regulations. As such, gross profit excludes certain unallowable expenses, as
well as interest income and interest expense. Management considers gross
profit, and the gross profit rate (gross profit as a percentage of contract
costs), to be key measures of the Companys

- 9 -



---



##### Table of Contents



contract performance. It should
also be considered in conjunction with income from operations, net income, and
other measures of financial performance.

The gross profit rate (gross profit as a percentage of contract costs)
decreased from 10.8% in the first quarter of 2002 to 10.1% in first quarter of
2003. The decline in the gross profit rate is primarily attributable to
contract mix. Revenue on BMD programs increased from 41% of total first
quarter sales in 2002 to 45% in 2003. The gross profit rate on many of the
Companys BMD programs tends to be lower than on other programs, and
subcontractor costs (on which the Company typically receives lower fees)
comprise a significant portion of the work effort on many BMD programs. In
addition, the Company generally earns a higher profit rate on firm fixed price
composite production contracts, due to the greater risk associated with such
contracts. However, due to faster growth rates in other business areas, such
contracts comprised a lower percentage of total year-to-date revenue as of
March 2003, falling from 4.9% of total revenue in 2002 to 3.1% in 2003.

As a percentage of total revenue, labor and benefits costs decreased from
57.3% at the end of the first quarter of 2002 to 51.8% at of the end of the
first quarter of 2003, while during this same period, subcontractor costs
increased from 23.2% to 30.9% of total revenue. As noted in the preceding
paragraph, subcontractors comprise a significant portion of the work effort on
many BMD programs. Because revenues on BMD programs comprised a higher
percentage of total revenues in the first quarter of 2003 than in the
corresponding period in 2002, the percentage of revenues derived from
subcontractor costs increased as well. Facility costs decreased from 7.2% to
5.2% of total revenue, primarily because of the noted increase in subcontractor
costs.

The Company incurred net interest expense during the first quarter of
2003, compared with net interest income during the first quarter of 2002,
primarily due to the timing of cash receipts. During the first quarter of
2003, the Company had cash receipts totaling $46.0 million, an increase of
$12.0 million over the corresponding period in 2002. However, during 2003, a
higher proportion of the total quarterly receipts was received in March, and
therefore was not invested in interest-bearing instruments for much of the
quarter. Both the Companys investments in cash equivalents and short term
investments and the Companys long-term debt are floating rate. Accordingly,
the reduction in average interest rates from 2002 to 2003 had a minimal effect
on net interest.

The Companys effective income tax rate was 40% during the first quarter
of 2003 and 2002.

Backlog

Although the Companys backlog has historically been indicative of its
future revenues, there can be no assurance that this will continue. The
Companys backlog is typically subject to
variations from year to year as contracts are completed, major existing
contracts are renewed, or major new contracts are awarded. Additionally, all
U.S. Government contracts included in backlog, whether or not funded, may be
terminated at the convenience of the U.S. Government. Moreover, U.S.
Government contracts are conditioned upon the continuing availability of
congressional appropriations. New presidential administrations, changes in the
composition of Congress, and disagreement or significant delay between Congress
and the Administration in reaching a defense budget accord can all
significantly affect the timing of funding on the Companys contract backlog.
Delays in contract funding resulting from these factors may have a significant
adverse effect on the Companys financial position and results of operations.

- 10 -



---



##### Table of Contents



The following table compares the Companys 12-month contract backlog as of
the dates indicated:

|                  |                        |   |                           |         |              |   |           |         |  |   |        |         | 
|----------------- | ---------------------- | - | ------------------------- | ------- | ------------ | - | --------- | ------- |  | - | ------ | ------- | 
|                  |                        |   | 12-Month Contract Backlog
|                  |                        |   |                          
|                  |                        |   | (amounts in thousands)   
|                  |                        |   |                          
|                  |                        |   | March 31,                 |         | December 31, |   | March 31,
|                  |                        |   |                           |         |              |   |          
|                  |                        |   | 2003                      |         | 2002         |   | 2002     
|                  |                        |   |                           |         |              |   |          
|Funded            |                        | $ | 84,500                    |         |              | $ | 60,500    |         |  | $ | 55,600 |        
|Unfunded          |                        |   | 95,700                    |         |              |   | 114,100   |         |  |   | 95,700 |        
|                  |                        |   |                           |         |              |   |           |         |  |   |        |        
|                  | Total contract backlog |   | $                         | 180,200 |              |   | $         | 174,600 |  |   | $      | 151,300 | 
|                  |                        |   |                           |         |              |   |           |         |  |   |        |        
|By business area: |                        |   |                           |         |              |   |           |         |  |   |        |        
|                  | BMD                    |   | $                         | 86,200  |              |   | $         | 78,600  |  |   | $      | 65,100  | 
|                  | Other DoD              |   |                           | 87,600  |              |   |           | 89,000  |  |   |        | 74,100  | 
|                  | Non-DoD                |   |                           | 6,400   |              |   |           | 7,000   |  |   |        | 12,100  | 
|                  |                        |   |                           |         |              |   |           |         |  |   |        |        
|                  | Total contract backlog |   | $                         | 180,200 |              |   | $         | 174,600 |  |   | $      | 151,300 | 
|                  |                        |   |                           |         |              |   |           |         |  |   |        |        

The 12-month contract backlog, representing expected sales over the next
twelve months on existing contracts and certain proposals, increased from
$174.6 million at the end of 2002 to $180.2 million as of March 31, 2003, an
increase of 3%. BMD contract backlog increased $7.6 million, or 10%, during
the first three months of 2003, as the Company has continued to generate growth
in its BMD business base, both through increased level-of-effort in certain of
the Companys existing BMD program areas, and through penetration of other BMD
program elements. Other DoD and non-DoD contract backlog decreased $1.4
million and $0.6 million during the first three months of 2003, decreases of 2%
and 9%, respectively.

During the first quarter of 2003, the Company had five significant
competitive contract/task-order wins and one competitive contract loss. The
Composite Products Operation (CPO) was notified by the Lockheed-Martin Joint
Venture, that the United Kingdom, New Zealand and Australia have decided to
purchase the Javelin missile. This is expected to result in additional Javelin
orders for CPO totaling approximately $8 million over one year. As a
subcontractor to Mayflower Vehicle Systems, PLC, CPO also won an award from
Ford Motor Co. for composite parts for its limited edition GT vehicle. The
value of this subcontract is $7.5 million over three years.

As a subcontractor to Computer Sciences Corporation, the Advanced Systems
Technology Operation (ASTO) won a competitive award from the Missile Defense
Agency Program Integration Directorate. SPARTAs portion is expected to total
approximately $5.9 million over four years. The Technical and Acquisition
Support Operation (TASO) won the Targeting Range Hardware and Service Support
contract from the Army Training and Doctrine Command. This is a task-order
contract with an $83 million ceiling. TASO expects to generate $6.5 million of
sales per year over a five-year period.

The Information System Security Operation (ISSO), as a subcontractor to
Northrop Grumman, won the Department of Defense Information Technology
Certification and Accreditation Process program. The value of this subcontract
is estimated at approximately $1.9 million over two years. Finally, ISSO, as a
subcontractor to Northrop Grumman, lost the Information Assurance Mission
Attainment Contract. This contract had a value to SPARTA of $20 million over
five years.

During 2002, one of the Companys competitors protested an award to the
Company of a $37 million, five-year contract. As a result of the protest, the
contracting agency placed a stop work order on the award, pending a U.S.
General Accounting Office (GAO) decision on the protest. Subsequently, the

- 11 -



---



##### Table of Contents



GAO
sustained the protest based on the inappropriate treatment of uncompensated
overtime in the protestors bid and lack of documented analysis on the
cost/technical trade-off, and remanded the solicitation to the contracting
agency for re-evaluation of source selection criteria. During the first
quarter of 2003, the contracting agency decided to cancel the procurement. As
the Company had not commenced work on this contract, the cancellation of the
procurement is not expected to have a material adverse effect on the Companys
financial condition or results of operations.

Liquidity and Capital Resources

The following tables sets forth, for the periods indicated, selected
financial information:

|                                                           |  |            |            |              |  |           |            |  |  |   |            | 
|---------------------------------------------------------- |  | ---------- | ---------- | ------------ |  | --------- | ---------- |  |  | - | ---------- | 
|                                                           |  | Balance at
|                                                           |  |           
|                                                           |  | March 31,  |            | December 31, |  | March 31,
|                                                           |  | 2003       |            | 2002         |  | 2002     
|                                                           |  |            |            |              |  |          
|Stockholders equity                                       |  | $          | 29,121,000 |              |  | $         | 25,002,000 |  |  | $ | 21,789,000 | 
|Subordinated notes payable                                 |  | $          | 9,970,000  |              |  | $         | 10,353,000 |  |  | $ | 11,993,000 | 
|Borrowings under line of credit                            |  |            |           |              |  |           |           |  |  |   |           | 
|Number of days sales in
receivables
(year-to-date average) |  |            | 69         |              |  |           | 64         |  |  |   | 73         | 
|Current ratio                                              |  |            | 2.6        |              |  |           | 2.0        |  |  |   | 2.5        | 

Overview

The Companys principal sources of capital for funding its operations are
funds generated by ongoing business activities and proceeds from exercise of
stock options and the issuance of common stock. These sources are augmented,
as necessary, by borrowings under the Companys bank line of credit. The
principal uses of capital are for the repurchase of preferred and common stock,
repayments of amounts borrowed under the bank line of credit, principal
payments on subordinated promissory notes, and capital expenditures.

U.S. Government contracts are conditioned upon the continuing availability
of congressional appropriations. Congress usually appropriates funds on a
fiscal year basis, even though contract performance may take several years.
Consequently, at the outset of a major program, the contract is usually
partially funded and additional monies are normally committed to the contract
by the procuring agency only as Congress makes appropriations for future years.
These appropriations are therefore subject to changes as a result of increases
or decreases in the overall budget. New presidential administrations, change
in the composition of Congress, and disagreement or significant delay between
Congress and the Administration in reaching a defense budget accord can all
significantly affect the timing of funding on the Companys contract backlog.
Delays in contract funding resulting from these factors may have a significant
adverse effect on the Companys liquidity and days sales outstanding (DSO).

The Companys bank line of credit provides for borrowings of up to $6.0
million, and matures July 1, 2004. Borrowings under the line of credit
agreement are secured by accounts receivable and certain equipment and
improvements, and bear interest at the prime rate. The line
of credit agreement prohibits the payment of dividends by the Company without
the banks prior consent and requires the Company to maintain certain financial
ratios. The Company was in compliance with such requirements at March 30,
2003. The Company believes that, as in the past, it will be able to renew its
banking agreement under similar terms. There were no amounts outstanding under
the bank line of credit at March 30, 2003

- 12 -



---



##### Table of Contents



Generally, the Company limits its stockholders to current employees and
directors of the Company. Accordingly, the Companys Amended and Restated
Certificate of Incorporation place restrictions on the transferability of the
Companys common stock and grant the Company the right to repurchase the shares
held by any stockholder whose association with the Company terminates.
Generally, the Companys policy is to repurchase the stockholdings of all
individuals terminating their association with the Company, so as to retain all
stockholdings among active employees and directors. However, during 1993 and
1994, the 40% reduction in the Companys staff level resulted in the
termination of employees who held, in the aggregate, approximately 30% of the
Companys total common stock then outstanding. Consequently, in April 1994,
the Company temporarily suspended the policy of repurchasing all of the stock
held by terminating employees so as not to deplete stockholders equity. As of
March 30, 2003, the percentage of the Companys outstanding common stock held
by former employees totaled approximately 3.6%.

The policy of repurchasing all stockholdings of terminated employees was
reinstated in 1997. In support of this policy the Board of Directors
authorized the Companys Chief Executive Officer to issue, at his discretion,
promissory notes to repurchase stock held by certain terminating employees.
Such promissory notes are subordinated to borrowings under the bank line of
credit. In addition to repurchasing the stockholdings of terminated employees,
the Company has established and maintains a program that periodically permits
the Companys stockholders to offer shares for sale to the Company. The
Companys repurchase program, which is conducted on a quarterly basis, is a
voluntary program on the part of the Company, and the Companys stockholders
therefore have no right to compel the Company to repurchase any of the
stockholders shares. There can be no assurance that the Company will continue
its voluntary repurchase program. Moreover, the number of shares that the
Company may repurchase is subject to legal restrictions imposed by applicable
corporate law affecting the ability of corporations generally to repurchase
shares of their capital stock. In addition, the number of shares which the
Company may repurchase is subject to a self-imposed quarterly repurchase
limitation which is designed to ensure that the Companys repurchase of its
shares does not materially impair the Companys liquidity or financial
condition. The Board of Directors may approve waivers to the self-imposed
quarterly repurchase limitation.

Cash Flow Information

During the first quarter of 2003 the Companys cash balances declined $5.6
million compared with the prior year end.

Operating activities consumed $2.5 million in cash during the first
quarter of 2003. The Company generated $2.5 million in net income during the
quarter. Non-cash expenses totaled $2.8 million, of which $2.3 million related
to the Companys practice of issuing shares of common stock in connection with
certain compensation and benefit plans. The Company expects to continue to
follow this practice for the foreseeable future. In addition, the income tax
benefit relating to stock compensation plans provided $0.7 million in cash
flow. However, offsetting these increases to cash flow, the Company used $8.5
million in cash for working capital during the first quarter of 2003,
principally to reduce accrued compensation and accounts payable.

Although first quarter sales increased 31% in comparison with the
corresponding period in 2002, accounts receivable increased only 2% from $31.9
million at December 31, 2002 to $32.6 million at March 30, 2003. This
favorable aspect of working capital performance (relative to sales growth) is
primarily a result of the reduction in average DSO from 73 days as of March
2002 to 69 days as of March 2003. The Company continues to emphasize rapid
billing and collection of its receivables, however, there can be no assurance
that the Company will be able to further reduce, or maintain, its average DSO.

- 13 -



---



##### Table of Contents



During the first quarter of 2003, the Company invested $1 million in
short-term investments, and capital expenditures totaled approximately $0.2
million. The Company currently does not expect a significant change in its
level of capital expenditures.

In connection with the aforementioned stock repurchase policies, the
Company repurchased a total of 154,867 common shares totaling approximately
$3.3 million. Of this total, $0.2 million was repurchased in exchange for
promissory notes. Year-to-date principal payments on promissory notes as of
the end of the first quarter of 2003 totaled $0.6 million. Proceeds from the
issuance of common stock, primarily as the result of exercises of stock
options, totaled $1.8 million.

The Company anticipates that its existing capital resources and access to
its line of credit will be sufficient to fund planned operations for the next
year and for the foreseeable future.

Effects of Federal Funding for Defense Programs

The Company continues to derive over 90% of its revenues from contracts
with U.S. Government agencies. The Companys government contracts may be
terminated, in whole or in part, at the convenience of the customer (as well as
in the event of default). In the event of a termination for convenience, the
customer is generally obligated to pay the costs incurred by the Company under
the contract plus a fee based upon work completed. There were no contracts
terminated in the first quarter of 2003. The Company does not anticipate any
termination of programs and contracts in 2003. However, no assurances can be
given that such events will not occur.

In addition to the right of the U.S. government to terminate contracts for
convenience, U.S. government contracts are conditioned upon the continuing
availability of congressional appropriations. These appropriations are
therefore subject to changes as a result of increases or decreases in the
overall budget. New presidential administrations, change in the composition of
Congress, and disagreement or significant delay between Congress and the
Administration in reaching a defense budget accord can all significantly affect
the timing of funding on the Companys contract backlog. Delays in contract
funding resulting from these factors may have a significant adverse effect on
the Companys revenue recognition, liquidity, and DSO.

Forward-Looking Statements

All statements in this report that do not directly and exclusively relate
to historical facts constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements
represent the Companys intentions, plans, expectations and beliefs, and are
subject to risks, uncertainties and other factors, many of which are outside
the Companys control. These factors could cause our actual results,
performance, achievements or industry results to differ materially from the
results, performance or achievements expressed or implied by such
forward-looking statements. These factors are described in more detail in the
Companys Annual Report on Form 10-K for the fiscal year ended December 29,
2002, and such other filings that the Company makes with the SEC from time to
time. Due to such uncertainties and risks, readers are cautioned not to place
undue reliance on such forward-looking statements, which speak only as of the
date hereof.




Item 3      Quantitative and Qualitative Disclosures about Market Risk

Refer to item 7A in the Companys Annual Report on Form 10-K for the year ended
December 29, 2002.

- 14 -



---



##### Table of Contents






Item 4      Controls and Procedures



|(a) |  | Evaluation of Disclosure Controls and Procedures
|--- |  | ------------------------------------------------

Management has evaluated the Companys disclosure controls and procedures
as of May 12, 2003 (a date within 90 days of the filing of this Quarterly
Report on Form 10-Q). Based on the results of this evaluation, management
believes that such controls and procedures are operating effectively.



|(b) |  | Changes in Internal Controls
|--- |  | ----------------------------

There were no significant changes in the Companys internal controls or in
other factors that could significantly affect the aforementioned controls and
procedures subsequent to May 12, 2003 (the date of their evaluation).




Part II      OTHER INFORMATION




Item 1      Legal Proceedings

The Company has no investigations, claims, or lawsuits arising out of its
business, nor any known to be pending.




Item 2      Changes in Securities and Use of Proceeds









| |  | Not Applicable
| |  | --------------

Item 3      Defaults Upon Senior Securities



| |  | Not Applicable
| |  | --------------

Item 4      Submission of Matters to a Vote of Security Holders

The Companys Annual Meeting will be held on June 6, 2003 at which time
proxies and shareholders present will vote on the election of Directors and on
the continuation of
PricewaterhouseCoopers LLP as the Companys independent accountants for the
year ending December 31, 2003.




Item 5      Other Information



| |  | Not Applicable
| |  | --------------

- 15 -



---



##### Table of Contents






Item 6      Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------

|             |  |                                                                                                                       
|------------ |  | ----------------------------------------------------------------------------------------------------------------------
|Exhibit 99.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|             |  |                                                                                                                       
|Exhibit 99.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



|(b) |  | Reports on Form 8-K                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------
|   
|    |  | The Company did not file any Reports on Form 8-K during the fiscal quarter
for which this report is filed.

- 16 -



---



##### Table of Contents






Signature

Pursuant to the requirements 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.

|                   |  |     |  |                        
|------------------ |  | --- |  | -----------------------
|                   |  |     |  | SPARTA, INC.           
|                   |  |     |  | (Registrant)           
|                   |  |     |  |                        
|Date: May 13, 2003 |  | By: |  | /s/ David E. Schreiman 
|                   |  |     |  | David E. Schreiman     
|                   |  |     |  | Vice President and     
|                   |  |     |  | Chief Financial Officer

-17-



---



##### Table of Contents






Certification

I, Robert C. Sepucha, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SPARTA, Inc.;                                                                                                                                                                                                                                                           
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

May 12, 2003

/s/ Robert C. Sepucha
Robert C. Sepucha
Chief Executive Officer

- 18 -



---



##### Table of Contents



Certification

I, David E. Schreiman, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of SPARTA, Inc.;                                                                                                                                                                                                                                                           
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

May 12, 2003

/s/ David E. Schreiman
David E. Schreiman
Chief Financial Officer

- 19 -



---



##### Table of Contents






Exhibit Index

|             |  |                                                                                                                       
|------------ |  | ----------------------------------------------------------------------------------------------------------------------
|Exhibit 99.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|             |  |                                                                                                                       
|Exhibit 99.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002