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



                                  FORM 10-Q



              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934


  For the Quarter Ended June 30, 2009       Commission File Number:  0-3676



                              VSE CORPORATION
           (Exact Name of Registrant as Specified in its Charter)



            DELAWARE                                       54-0649263
 (State or Other Jurisdiction of                       (I.R.S. Employer
  Incorporation or Organization)                      Identification No.)

     2550 Huntington Avenue
      Alexandria, Virginia                  22303-1499   www.vsecorp.com
(Address of Principal Executive Offices)    (Zip Code)      (Webpage)

Registrant's Telephone Number, Including Area Code:  (703) 960-4600

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

                                                 Name of each exchange
          Title of each class                     on which registered
          -------------------                    ---------------------
 Common Stock, par value $.05 per share       The NASDAQ Global Select Market

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


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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T(section
232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes [ ]    No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
(Check one):

        Large accelerated filer [ ]         Accelerated filer [x]
          Non-accelerated filer [ ]         Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes [ ]    No [x]


                    APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

Number of shares of Common Stock outstanding as of July 30, 2009: 5,131,869.


                              TABLE OF CONTENTS


	            						        Page
                                                                        ----
PART I

ITEM 1.	 Financial Statements(unaudited)

	 Consolidated Balance Sheets as of June 30, 2009 and
	 December 31, 2008  . . . . . . . . . . . . . . . . . . . . .     5

	 Consolidated Statements of Income for the three and
	 six months ended June 30, 2009 and 2008  . . . . . . . . . .     6

	 Consolidated Statements of Cash Flows for the six
	 months ended June 30, 2009 and 2008  . . . . . . . . . . . .     7

	 Notes to Unaudited Consolidated Financial Statements . . . .     8

ITEM 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations  . . . . . . . . . . . .     14

ITEM 3.  Quantitative and Qualitative Disclosures About
         Market Risks . . . . . . . . . . . . . . . . . . . . . . . .     26

ITEM 4.  Controls and Procedures  . . . . . . . . . . . . . . . . . .     26


PART II

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds      26

ITEM 4.  Submission of Matters to a Vote of Security Holders  . . . .     26

ITEM 6.  Exhibits, Financial Statements and Schedules . . . . . . . .     27

Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     28

Exhibits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29-32


























                                       3

VSE Corporation and Subsidiaries


Forward Looking Statements

This report contains statements which, to the extent they are not recitations
of historical fact, constitute "forward looking statements" under federal
securities laws. All such statements are intended to be subject to the safe
harbor protection provided by applicable securities laws. For discussions
identifying some important factors that could cause actual VSE Corporation
("VSE," the "Company," "us," "our," or "we") results to differ materially from
those anticipated in the forward looking statements contained in this report,
see VSE's discussions captioned "Business," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Notes to Consolidated Financial Statements" contained in VSE's Annual Report
on Form 10-K for the fiscal year ended December 31, 2008 filed with the
Securities and Exchange Commission (the "SEC") on March 3, 2009.

Readers are cautioned not to place undue reliance on these statements, which
reflect management's analysis only as of the date hereof.  The Company
undertakes no obligation to revise publicly these forward looking statements to
reflect events or circumstances that arise after the date hereof.  Readers
should carefully review the risk factors described in the reports and other
documents the Company files from time to time with the SEC, including this and
other Quarterly Reports on Form 10-Q to be filed by the Company subsequent to
its Annual Report on Form 10-K and any Current Reports on Form 8-K filed by the
Company.






































                                       4

                       PART I.  Financial Information

Item 1.    Financial Statements

VSE Corporation and Subsidiaries
Consolidated Financial Statements
<TABLE>
Consolidated Balance Sheets
-----------------------------------------------------------------------------
(in thousands except share and per share amounts)
<CAPTION>
                                                    (Unaudited)
                                                     June 30,    December 31,
                                                       2009          2008
                                                       ----          ----
<S>                                                   <C>           <C>
Assets
Current assets:
  Cash and cash equivalents  . . . . . . . . . . .  $    183      $    638
  Receivables, principally
    U.S. Government, net . . . . . . . . . . . . .   147,172       206,717
  Deferred tax assets  . . . . . . . . . . . . . .     2,816         2,297
  Other current assets . . . . . . . . . . . . . .     9,539        10,945
                                                    --------      --------
    Total current assets . . . . . . . . . . . . .   159,710       220,597

Property and equipment, net  . . . . . . . . . . .    23,864        21,484
Intangibles, net . . . . . . . . . . . . . . . . .    10,256        11,176
Goodwill . . . . . . . . . . . . . . . . . . . . .    19,051        17,439
Other assets . . . . . . . . . . . . . . . . . . .     5,188         5,270
                                                    --------      --------
    Total assets . . . . . . . . . . . . . . . . .  $218,069      $275,966
                                                    ========      ========
Liabilities and Stockholders' Equity
Current liabilities:
  Bank notes payable . . . . . . . . . . . . . . .  $  2,646      $  6,676
  Accounts payable . . . . . . . . . . . . . . . .    95,196       158,015
  Accrued expenses   . . . . . . . . . . . . . . .    27,722        31,498
  Dividends payable  . . . . . . . . . . . . . . .       257           229
                                                    --------      --------
    Total current liabilities  . . . . . . . . . .   125,821       196,418

Deferred compensation  . . . . . . . . . . . . . .     3,311         2,059
Deferred income taxes  . . . . . . . . . . . . . .       510           404
Other liabilities  . . . . . . . . . . . . . . . .     1,041           962
                                                    --------      --------
    Total liabilities  . . . . . . . . . . . . . .   130,683       199,843
                                                    --------      --------
Commitments and contingencies

Stockholders' equity:
  Common stock, par value $.05 per share,
    authorized 15,000,000 shares; issued and
    outstanding 5,131,869 and 5,098,542,
    respectively . . . . . . . . . . . . . . . . .       256           255
  Additional paid-in capital . . . . . . . . . . .    14,225        13,557
  Retained earnings  . . . . . . . . . . . . . . .    72,905        62,311
                                                    --------      --------
    Total stockholders' equity . . . . . . . . . .    87,386        76,123
                                                    --------      --------
    Total liabilities and stockholders' equity . .  $218,069      $275,966
                                                    ========      ========
</TABLE>













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

                                       5

VSE Corporation and Subsidiaries
Consolidated Financial Statements
<TABLE>
Consolidated Statements of Income (Unaudited)
------------------------------------------------------------------------------------
(in thousands except share and per share amounts)
<CAPTION>
                                      For the three months      For the six months
                                        ended June 30,            ended June 30,
                                       2009        2008          2009        2008
                                       ----        ----          ----        ----
<S>                                 <C>        <C>            <C>         <C>
Revenues  . . . . . . . . . .      $ 255,109   $ 251,688     $ 495,564   $ 440,411

Contract costs  . . . . . . .        244,440     243,639       477,249     426,455
                                   ---------   ---------     ---------   ---------
Gross profit. . . . . . . . .         10,669       8,049        18,315      13,956

Selling, general and
  administrative expenses . .            180         220           382         383

Interest (income) expense,
  net . . . . . . . . . . . .            (60)         34          (119)       (113)
                                   ---------   ---------     ---------   ---------
Income before income taxes. .         10,549       7,795        18,052      13,686

Provision for income taxes. .          4,107       3,026         6,970       5,319
                                   ---------   ---------     ---------   ---------

Net income. . . . . . . . . .      $   6,442   $   4,769     $  11,082   $   8,367
                                   =========   =========     =========   =========


Basic earnings per share  . .      $    1.26   $    0.94     $    2.16   $    1.65
                                   =========   =========     =========   =========
Basic weighted average shares
  outstanding                      5,130,372   5,065,799     5,121,414   5,062,292
                                   =========   =========     =========   =========
Diluted earnings per share. .      $    1.25   $    0.94     $    2.16   $    1.64
                                   =========   =========     =========   =========
Diluted weighted average
  shares outstanding               5,142,799   5,094,615     5,134,759   5,090,643
                                   =========   =========     =========   =========

Dividends declared per share       $   0.050   $   0.045     $   0.095   $   0.085
                                   =========   =========     =========   =========

</TABLE>

























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

                                       6

VSE Corporation and Subsidiaries
Consolidated Financial Statements
<TABLE>
Consolidated Statements of Cash Flows (Unaudited)
----------------------------------------------------------------------------
(in thousands)
<CAPTION>

                                                          For the six months
                                                             ended June 30,
                                                              2009     2008
                                                              ----     ----
<S>                                                         <C>      <C>
Cash flows from operating activities:
Net income  . . . . . . . . . . . . . . . . . . . . . . .   $11,082  $ 8,367
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization . . . . . . . . . . . .     3,518    2,299
    Gain on sale of property and equipment  . . . . . . .      (130)      (1)
    Deferred taxes  . . . . . . . . . . . . . . . . . . .      (413)      43
    Stock-based compensation  . . . . . . . . . . . . . .       625      509
Changes in operating assets and liabilities,
  net of impact of acquisition:
    Receivables, net  . . . . . . . . . . . . . . . . . .    59,545  (33,644)
    Other current assets and noncurrent assets  . . . . .     1,381   (4,437)
    Accounts payable and deferred compensation  . . . . .   (61,567)  28,912
    Accrued expenses  . . . . . . . . . . . . . . . . . .    (3,776)    (407)
    Other liabilities . . . . . . . . . . . . . . . . . .        79      166
                                                            -------  -------
      Net cash provided by operating activities              10,344    1,807
                                                            -------  -------
Cash flows from investing activities:
  Purchases of property and equipment . . . . . . . . . .    (4,891)  (3,685)
  Proceeds on the sale of property and equipment  . . . .       150        -
  Cash paid for acquired business, net of cash acquired .    (1,612) (17,129)
                                                            -------  -------
      Net cash used in investing activities                  (6,353) (20,814)
                                                            -------  -------

Cash flows from financing activities:
  Borrowings on loan arrangement  . . . . . . . . . . . .   112,860   87,478
  Repayments on loan arrangement  . . . . . . . . . . . .  (116,890) (66,650)
  Dividends paid  . . . . . . . . . . . . . . . . . . . .      (460)    (405)
  Excess tax benefits from share-based
    payment arrangements  . . . . . . . . . . . . . . . .        13        7
  Proceeds from the exercise of options of common stock .        31       13
                                                            -------  -------
      Net cash (used in) provided by financing activities    (4,446)  20,443
                                                            -------  -------

Net (decrease) increase in cash and cash equivalents  . .      (455)   1,436
Cash and cash equivalents at beginning of period  . . . .       638      109
                                                            -------  -------
Cash and cash equivalents at end of period  . . . . . . .   $   183  $ 1,545
                                                            =======  =======
</TABLE>



















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

                                       7

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009



(1) Nature of Business and Basis of Presentation

Our business operations consist primarily of diversified engineering,
logistics, management, and technical services performed on a contract basis.
Substantially all of our contracts are with agencies of the United States
Government (the "Government") and other Government prime contractors. Our
customers also include nongovernment organizations and commercial entities.

Our active divisions include GLOBAL Division ("GLOBAL"), formerly known as
"BAV Division" or "BAV", Communications and Engineering Division ("CED"),
Engineering and Logistics Division ("ELD"), Field Support Services Division
("FSS"), Fleet Maintenance Division ("FMD"), and Systems Engineering Division
("SED"). Energetics Incorporated ("Energetics"), Integrated Concepts and
Research Corporation ("ICRC"), and G&B Solutions, Inc. ("G&B"), acquired in
April 2008, are our currently active subsidiaries.  In 2009, our inactive
divisions include Coast Guard Division ("VCG"), and Management Sciences
Division ("MSD").

Our accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include
all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements.  In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three- and six-months ended June 30, 2009 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2009.  For further information refer to the consolidated
financial statements and footnotes thereto included in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2008.  Further, in connection
with preparation of the condensed consolidated financial statements and in
accordance with the recently issued Statement of Financial Standards No. 165
"Subsequent Events," we evaluated subsequent events after the balance sheet
date of June 30, 2009 through the time of filing this Form 10-Q with the SEC
on July 30, 2009.

Reclassifications

Certain amounts from the prior year were reclassified to conform to the
current year presentation. For the three- and six-month periods ended June 30,
2008, we reclassified amortization expense for contract-related intangible
assets from "Selling, general and administrative expenses" to "Contract costs"
in the "Consolidated Statements of Income."

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Estimates affecting the financial statements include accruals for contract
disallowance reserves, self insured health claims and estimated cost to
complete on firm fixed-price contracts.



                                      8

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009



(2) Bank Notes Payable

We have a loan agreement with a bank that provides us with revolving loans and
letters  of  credit.  The amount of credit available to us as of June 30, 2009
was $35 million and the maturity date of the loan agreement is May 21, 2010.
From  time  to  time  we  may request changes in the amount, maturity date, or
other terms and the bank may amend the loan to accommodate our request. The
amount of credit available to us under the loan agreement is subject to
certain conditions, including a borrowing formula based on our billed
receivables. Under the terms of the loan agreement, we may borrow against the
revolving loan at any time and can repay the borrowings at any time without
premium or penalty. We pay a commitment fee, interest on any revolving loan
borrowings at a prime-based rate or an optional LIBOR-based rate, and fees on
any letters of credit that are issued.

The loan agreement contains collateral requirements that secure our assets,
restrictive covenants, a limit on annual dividends, and other affirmative and
negative covenants. We were in compliance with the covenants at June 30, 2009.

As of June 30, 2009 and December 31, 2008, revolving loan amounts outstanding
were approximately $2.6 million and approximately $6.7 million, respectively.
Interest expense incurred on the loan was approximately $19 thousand and
approximately $73 thousand for the three- and six-month periods ended June 30,
2009, respectively, and approximately $88 thousand for the three- and six-
month periods ended June 30, 2008. There was one letter of credit outstanding
for approximately $1.4 million as of June 30, 2009 and December 31, 2008.


(3) Stock-based Compensation


Restricted Stock

On January 2, 2009, we awarded 6,300 shares of restricted stock to our non-
employee Directors under the 2006 Restricted Stock Plan.  The grant-date fair
value of these restricted stock grants was $39.81 per share. The shares issued
vested immediately and cannot be sold, transferred, pledged or assigned before
the second anniversary of the grant date. Compensation expense related to
these grants was approximately $250 thousand for the six months ended June 30,
2009.

On January 2, 2008, we awarded 3,500 shares of restricted stock to our non-
employee Directors under the 2006 Restricted Stock Plan.  The grant-date fair
value of these restricted stock grants was $47.92 per share. The shares issued
vested immediately and cannot be sold, transferred, pledged or assigned before
the second anniversary of the grant date. Compensation expense related to
these grants was approximately $168 thousand for the six months ended June 30,
2008.

On January 2, 2009, January 3, 2008 and January 2, 2007, we notified certain
employees that they are eligible to receive awards under the 2006 Restricted
Stock Plan based on financial performance for the fiscal years 2009 (the "2009
Awards"), 2008 (the "2008 Awards"), and 2007 (the "2007 Awards"),
respectively.  Vesting of each award occurs one-third on the date of award and
one-third on each of the next two anniversaries of such date of award. The
date of award determination is expected to be in March 2010 for the 2009
Awards.    The date of award determination for the 2008 Awards and 2007 Awards
was March 3, 2009 and March 3, 2008, respectively.   On each vesting date,
100% of the vested award is paid in our shares.   The number of shares issued
is based on the fair market value of our common stock on the vesting date.
The earned amount is expensed ratably over the vesting period of approximately

                                       9

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009



three years. On March 2, 2009, the employees eligible for the 2008 Awards and
2007 Awards received 23,538 shares of common stock.  The grant-date fair value
of these awards was $21.17 per share.

The compensation expense related to all restricted stock awards included in
contract costs was approximately $346 thousand and approximately $881 thousand
for the three- and six-month periods ended June 30, 2009, respectively, and
approximately $330 thousand and approximately $652 thousand for the three- and
six-month periods ended June 30, 2008, respectively.

The stock-based compensation amount of approximately $625 thousand and
approximately $509 thousand shown on the statements of cash flows for the six-
month periods ended June 30, 2009 and 2008, respectively, is based on the
compensation expense included in contract costs reduced by the tax withholding
associated with the awards issued during the six-month periods ended June 30,
2009 and 2008, respectively.

On April 28, 2009, M. A. Gauthier received 989 shares of common stock based on
the vesting schedule of the award issued on April 22, 2008.  The fair value of
this award was $34.30 per share at the time of the award.

(4) Earnings Per Share

Basic earnings per share ("EPS") have been computed by dividing net income by
the weighted average number of shares of common stock outstanding during each
period. Shares issued during the period are weighted for the portion of the
period that they were outstanding.

Diluted EPS has been computed in a manner consistent with that of basic
earnings per share while giving effect to all potentially dilutive common
shares that were outstanding during each period.  Potentially dilutive common
shares represent incremental common shares issuable upon exercise of stock
options. There were no common shares issuable upon the exercise of stock
options that could potentially dilute EPS in the future that were not included
in the computation of diluted EPS because to do so would have been anti-
dilutive for the three- and six-month periods ended June 30, 2009 and 2008.


                                      Three Months            Six Months
                                     Ended June 30,         Ended June 30,
                                    2009        2008       2009        2008
                                    ----        ----       ----        ----
   Basic weighted average
     shares outstanding           5,130,372   5,065,799  5,121,414   5,062,292
   Dilutive effect of options        12,427      28,816     13,345      28,351
                                  ---------   ---------  ---------   ---------
   Diluted weighted average
     shares outstanding           5,142,799   5,094,615  5,134,759   5,090,643
                                  =========   =========  =========   =========

During the three-month period ended June 30, 2009, 2,500 stock options were
exercised and such exercises resulted in an increase to additional paid-in
capital of approximately $45 thousand, including related income tax benefits.
No stock options were exercised during the three-month period ended March 31,
2009.

During the three-month period ended March 31, 2008, 1,000 stock options were
exercised and such exercises resulted in an increase to additional paid-in
capital of approximately $19 thousand, including related income tax benefits.
No stock options were exercised during the three months ended June 30, 2008.

                                       10

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009



(5) Commitments and Contingencies

We have, in the normal course of business, certain claims against us and
against other parties.  In our opinion, the resolution of these claims will
not have a material adverse effect on our results of operations or financial
position. However, the results of any legal proceedings cannot be predicted
with certainty.


(6) Segment Information

Management of our business operations is conducted under four reportable
operating segments: the Federal Group, the International Group, the IT, Energy
and Management Consulting Group, and the Infrastructure Group. These segments
operate  under separate management teams and discrete financial information is
produced for each segment.  The various divisions within the Federal Group and
the International Group and the two subsidiaries within the IT, Energy and
Management Consulting Group are operating segments as defined by SFAS No. 131"
Disclosures about Segments of an Enterprise and Related Information," ("SFAS
No. 131"), and meet the aggregation of operating segments criteria of SFAS No.
131.  We evaluate segment performance based on consolidated revenues and
profits or losses from operations before income taxes.


       	Federal Group - The Federal Group provides engineering, technical,
management, integrated logistics support and information technology services to
all U.S. military branches and other Government agencies. The Federal Group
consists of five divisions: CED, ELD, FSS, SED and MSD, which became inactive
in 2009.

       	International Group - Our International Group provides engineering,
industrial, logistics and foreign military sales services to the U.S. military
and other Government agencies. It consists of three divisions: GLOBAL, FMD and
VCG, which became inactive in 2009.

       IT, Energy and Management Consulting Group - The IT, Energy and
Management Consulting Group provides technical and consulting services primarily
to various civilian Government agencies. This group consists of Energetics and,
upon acquisition in April 2008, G&B.

       Infrastructure Group - The Infrastructure Group is engaged principally
in providing diversified technical and management services to the Government,
including transportation infrastructure services and aerospace services.  This
group consists of ICRC.


Our segment information for the three- and six-month periods ended June 30,
2009 and 2008 is as follows (in thousands):

                                          Three Months         Six Months
                                         ended June 30,      ended June 30,
                                         2009      2008       2009     2008
                                         ----      ----       ----     ----
Revenues:
  Federal Group                       $151,302  $164,145   $304,259  $286,466
  International Group                   73,267    52,079    137,423   100,885
  IT, Energy and Management
    Consulting Group                    18,620    13,834     35,325    17,913
  Infrastructure Group                  11,920    21,618     18,557    35,138
  Corporate                                  -        12          -         9
                                      --------  --------   --------  --------
    Total revenues                    $255,109  $251,688   $495,564  $440,411
                                      ========  ========   ========  ========

                                       11

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009




                                          Three Months         Six Months
                                         ended June 30,      ended June 30,
                                         2009      2008       2009     2008
                                         ----      ----       ----     ----
Income before income taxes:
  Federal Group                       $  6,445  $  4,847   $ 11,003  $  8,319
  International Group                    1,644     1,443      3,379     3,075
  IT, Energy and Management
    Consulting Group                     2,237     1,314      3,418     1,759
  Infrastructure Group                     306       758        348     1,358
  Corporate/unallocated expenses           (83)     (567)       (96)     (825)
                                      --------  --------   --------  --------
    Income before income taxes        $ 10,549  $  7,795   $ 18,052  $ 13,686
                                      ========  ========   ========  ========

Customer Information

Our revenue by customer is as follows (in thousands):

                                          Three Months         Six Months
                                         ended June 30,      ended June 30,
Source of Revenues                       2009      2008       2009     2008
------------------                       ----      ----       ----     ----
Army/Army Reserve                      $144,459  $153,573   $288,943  $269,964
Navy                                     63,799    47,980    123,023    86,867
Department of Treasury                   11,506    13,388     21,046    28,952
Department of Transportation             10,275    17,559     15,228    25,050
Other                                    25,070    19,188     47,324    29,578
                                       --------  --------   --------  --------
  Total Revenues                       $255,109  $251,688   $495,564  $440,411
                                       ========  ========   ========  ========

(7) Acquisitions

G&B Solutions, Inc.

On April 14, 2008, we acquired all of the capital stock of G&B.  Cash paid at
closing for G&B was approximately $19.5 million, which includes approximately
$650 thousand of prepaid retention bonuses that will be expensed in the post-
acquisition period as the affected employees provide services, less
approximately $600 thousand for certain closing adjustments.  We also incurred
approximately $200 thousand of direct acquisition costs consisting of legal,
accounting and other fees.

Under the terms of the acquisition, we will be required to make additional
payments of up to $4.2 million over a three-year post closing period if G&B
achieves certain financial performance targets.  The first earn-out payment
period was from April 14, 2008 to March 31, 2009.  Based on G&B's performance
from April 14, 2008 to March 31, 2009, $1.4 million was earned by the seller
and was paid in the second quarter and recorded as goodwill. The subsequent
earn-out payment periods are: April 1, 2009 to March 31, 2010 and April 1,
2010 to March 31, 2011.  If earned and paid, such additional purchase price
consideration will be  recorded  as  goodwill  on the consolidated balance
sheet.  Additionally, $212 thousand was paid and recorded as goodwill during
the second quarter of 2009 for taxes related to the Section 338(h)(10)
election. The results of G&B's operations are included in the accompanying
unaudited consolidated financial statements beginning as of April 14, 2008.





                                       12

                      VSE CORPORATION AND SUBSIDIARIES
            NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2009



(8) Fair Value Measurements

On January 1, 2008, we adopted SFAS No. 157, "Fair Value Measurements," ("SFAS
No. 157"), which defines fair value, establishes a market-based hierarchy for
measuring fair value and expands disclosures about fair value measurements.
SFAS 157 is applicable whenever another accounting pronouncement requires or
permits assets and liabilities to be measured at fair value, but does not
require any new fair value measurements.

The fair-value hierarchy established in SFAS 157 prioritizes the inputs used
in valuation techniques into three levels as follows:

Level 1 - Observable inputs - quoted prices in active markets for identical
assets and liabilities;

Level 2 - Observable inputs other than the quoted prices in active markets for
identical assets and liabilities - includes quoted prices for similar
instruments, quoted prices for identical or similar instruments in inactive
markets, and amounts derived from valuation models where all significant
inputs are observable in active markets; and

Level 3 - Unobservable inputs - includes amounts derived from valuation models
where one or more significant inputs are unobservable and require us to
develop relevant assumptions.

Included in other current assets and other assets as of June 30, 2009 is
approximately $4.2 million of investments we hold in a trust related to a non-
qualified benefit plan.  We determined the fair value of these assets using
the Level 1 methodology.  We have an offsetting deferred compensation
liability for this plan.  As such, we do not have income statement volatility
as a result of fluctuations in the value of the plan's investments.

In the first quarter of 2009, we adopted SFAS No. 157 as it relates to non-
financial assets and liabilities that are recorded at fair value on a non-
recurring basis.  The impact of its adoption was not material.


(9) Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles-a
replacement of FASB Statement No. 162" ("SFAS No. 168"). The FASB Accounting
Standards Codification ("the Codification") will become the source of
authoritative U.S. generally accepted accounting principles ("U.S. GAAP"). The
Codification, which changes the referencing of financial standards, is
effective for interim or annual financial periods ending after September 15,
2009. The Codification is not intended to change or alter existing U.S. GAAP.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events," which
establishes general standards of accounting and disclosure for events that
occur after the balance sheet date but before the financial statements are
issued. This new standard was effective beginning with our second quarter
financial reporting and did not have a material impact on our results of
operations, financial position, or cash flow.




                                       13


ITEM 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations


Executive Overview

Organization

Our business operations consist primarily of diversified program management,
logistics, engineering, IT, construction program and consulting services
performed on a contract basis.  Substantially all of our contracts are with
United States Government ("Government")agencies and other Government prime
contractors.

Our business operations are managed under groups that consist of one or more
divisions or wholly owned subsidiaries. Our Federal Group operations are
conducted by our Communications and Engineering Division ("CED"), Engineering
and Logistics Division ("ELD"), Field Support Services Division ("FSS"), and
Systems Engineering Division ("SED"). Our International Group operations are
conducted by our GLOBAL Division ("GLOBAL", formerly our BAV Division), and
Fleet Maintenance Division ("FMD"). Our IT, Energy and Management Consulting
Group operations are conducted by our wholly owned subsidiaries Energetics
Incorporated ("Energetics") and G&B Solutions, Inc. ("G&B"). Our
Infrastructure Group operations are conducted by our wholly owned subsidiary
Integrated Concepts and Research Corporation ("ICRC"). Our Management Sciences
Division ("MSD") formerly conducted operations in our Federal Group, but is
currently inactive. Our Coast Guard Division ("VCG") formerly conducted
operations in our International Group, but is currently inactive.

Customers and Services

We provide program management, logistics, engineering, IT, construction
program, and consulting services to the Government, other Government prime
contractors, and commercial entities. Our largest customer is the U.S.
Department of Defense ("DoD"), including agencies of the U.S. Navy, Army and
Air Force. We also provide services to various civilian Government customers.

	Segments

Our operations are conducted within four reportable segments aligned with our
management groups: 1) Federal; 2) International; 3) IT, Energy and Management
Consulting; and 4) Infrastructure.

Federal Group - Our Federal Group provides engineering, technical, management
and integrated logistics support services to U.S. military branches and other
Government agencies. The divisions in this group include CED, ELD, FSS, SED
and MSD, which became inactive in 2009.

CED - CED is dedicated to supporting the Army's Communications and Electronics
Command ("CECOM") in the management and execution of the Rapid Response ("R2")
Program, which supports clients across DoD and the United States Government
("Government"). CED manages execution of tasks involving research and
development, technology insertion, systems integration and engineering,
hardware/software fabrication and installation, testing and evaluation,
studies and analysis, technical data management, logistics support, training
and acquisition support. A large portion of our current work on this program
is related to the U.S. military involvement in Iraq and Afghanistan. The
contract supporting the R2 Program is scheduled to expire in January 2011.

       	CED Army Equipment Support Program - Our CED division had a program on
its R2 support contract to provide maintenance and logistics services in
support of U.S. Army equipment in Iraq and Afghanistan. Our revenues on this
program were approximately $52 million and approximately $151 million for the
six months ended June 30, 2009 and 2008, respectively. Work on this program
expired in February 2009.

                                       14


       	CED Assured Mobility Systems Program - Our CED division has a program on
its R2 support contract to provide technical support services in support of
U.S. Army PM Assured Mobility Systems and U.S. Army Tank-automotive and
Armaments Command ("TACOM"). Our revenues on this program were approximately
$66 million and approximately $37 million for the six months ended June 30,
2009 and 2008, respectively. In January 2009, we were awarded a $389 million
follow-on task order on this program for work that will run through January
2011.

       RCV Modernization Program - We were awarded a task order on our R2
support contract for a program to provide maintenance work on U.S. Army Route
Clearance Vehicles in Kuwait (the "RCV Modernization Program") in September
2008. We expect the initial phase of this program to run for two years under
contractual coverage of approximately $194 million. Revenues on this program
for the six months ended June 30, 2009 were approximately $37 million.

ELD - ELD provides full life cycle engineering, logistics, maintenance and
refurbishment services to extend and enhance the life of existing equipment.
ELD principally supports the U.S. Army, Army Reserve and Army National Guard
with core competencies in combat and combat service support system
conversions, technical research, sustainment and re-engineering, system
integration and configuration management.

FSS - FSS provides worldwide field maintenance and logistics support services
for a wide variety of military vehicles and equipment, including performance
of organizational, intermediate and specialized depot-level maintenance. FSS
principally supports the U.S. Army and Marine Corps by providing specialized
Field Service Representatives ("FSR") and Field Support Teams ("FST") in areas
of combat operations and austere environments.

MSD - Past activities of MSD focused on services for product and process
improvement, supporting a variety of Government and commercial clients. These
service offerings have been transferred to our G&B operations and MSD does not
currently conduct operating activities.

SED - SED provides comprehensive systems and software engineering, logistics,
and prototyping services to the DoD. SED principally supports the U.S. Army,
Air Force, and Marine Corps combat and combat support systems. SED's core
competencies include: systems technical support, configuration management and
life cycle support for wheeled and tracked vehicles and ground support
equipment; obsolescence management, service life extension, and technology
insertion programs; and technical documentation and data packages.

International Group - Our International Group provides engineering,
industrial, logistics and foreign military sales services to the U.S. military
and other Government agencies. The divisions in this Group include GLOBAL, FMD
and VCG, which became inactive in 2009.

GLOBAL - Through GLOBAL, we provide assistance to the U.S. Navy in executing
its Foreign Military Sales ("FMS") Program for surface ships sold, leased or
granted to foreign countries by providing program management, engineering,
technical support, logistics services for ship reactivations and transfers and
follow-on support. Our expertise includes: ship reactivation/transfer,
overhaul and maintenance, follow-on technical support, FMS integrated
logistics support, engineering and industrial services, training and spare and
repair parts support. The level of revenues and associated profits resulting
from fee income generated by this program varies depending on a number of
factors, including the timing of ship transfers and associated support
services ordered by foreign governments and economic conditions of potential
customers worldwide. Changes in the level of activity associated with the
Navy's ship transfer program have historically caused quarterly and annual
revenue fluctuations.

FMD - FMD provides field engineering, logistics, maintenance and information
technology services to the U.S. Navy and Air Force, including fleet-wide ship
and aircraft support programs. FMD's expertise includes ship repair and
modernization, ship systems installations, ordnance engineering and logistics,

                                       15


facility operations, war reserve materials management, aircraft sustainment
and maintenance automation and IT systems integration.

       	Treasury Seized Asset Program - FMD also provides management,
maintenance, storage and disposal support for the U.S. Department of
Treasury's seized and forfeited general property program. Our contract with
the Department of Treasury to support this program is a cost plus incentive
fee contract that contains certain conditions under which the incentive fee
revenue is earned. The amount of incentive fee earned depends on our costs
incurred on the contract compared to certain target cost levels specified in
the contract. Per the contract, an assessment of actual costs compared to
target costs is made once annually. The target cost levels in this contract
may be subject to negotiation and change if the customer's work requirements
vary from the scope of work originally contained in the contract. We recognize
incentive fee when the amount is fixed or determinable and collectability is
reasonably assured. Due to the conditions under which the incentive fee for
this contract is awarded, and to the potential for changes in the cost targets
as work requirements vary, the full amount of incentive fee for the work we
perform in any one period may not be fixed or determinable and the
collectability may not be reasonably assured until a subsequent period. We are
currently in discussions with our customer regarding potential target cost
adjustments for the years 2007, 2008 and 2009. A favorable resolution from
these discussions could potentially result in additional fee income for us in
a future period for work previously performed. Revenues on this program for
the six months ended June 30, 2009 were approximately $21 million.

       	Contract Field Teams Program - In July 2008, our FMD division was
awarded one of several prime contracts to support the United States Air Force
Contract Field Teams ("CFT") Program. The CFT Program awards have a maximum
ceiling of approximately $10.12 billion. Under the program, we are providing
rapid deployment and long-term support services for a variety of Air Force
requirements to maintain, repair and modernize equipment and systems. While
our revenues under the contract cannot be predicted with certainty, the award
provides us with the opportunity to compete for and expand our work performed
for the Air Force.  Revenues on this program for the six months ended June 30,
2009 were approximately $7 million.

VCG - VCG has provided the U.S. Coast Guard with FMS support and life cycle
support for vessels transferred to foreign governments. The work performed by
VCG for the U.S. Coast Guard has decreased and we have decided to make this
division inactive beginning in 2009.

IT, Energy and Management Consulting Group - The IT, Energy and Management
Consulting Group provides technical and consulting services primarily to
various civilian Government agencies. This group includes Energetics and, as of
April 2008, G&B.

Energetics - Energetics provides technical and management support in areas of
nuclear energy, technology research, development, demonstration, and
consulting services in the field of energy and environmental management.
Energetics' expertise lies in state-of-the-art and advanced technology
assessment, technical and economic feasibility analysis, technology transfer,
R&D program planning, engineering studies, market assessment, strategic
resource management, regulatory analysis, environmental compliance and risk
management. Customers include the U.S. Department of Energy, including the
Office of Nuclear Energy, Science and Technology; the U.S. Department of
Homeland Security; and other Government agencies and commercial clients.

G&B - G&B is an established information technology provider to many Government
agencies, including the Departments of Homeland Security, Interior, Labor,
Agriculture, Housing and Urban Development, the Social Security
Administration, the Pension Benefit Guaranty Corporation, and the National
Institutes of Health. G&B's core expertise lies in enterprise architecture
development, information assurance/business continuity, program and portfolio
management, network IT services and systems design and integration.

                                       16


Infrastructure Group - This group consists of our ICRC subsidiary. ICRC is
engaged principally in providing engineering and transportation infrastructure
services.

       	Port of Anchorage Intermodal Expansion Project ("PIEP") - A significant
amount of ICRC's revenues and income comes from services performed on the Port
of Anchorage Intermodal Expansion Project in Alaska (the "PIEP") under a
contract with the U.S. Department of Transportation Maritime Administration.
This contract requires ICRC to provide program management services, including
project management, procurement, permitting, design, and construction to the
Government to expand the size of the port's facilities to accommodate larger
ships, more dock space, improved cargo flow, improved traffic flow at the
port, more environmentally friendly port operations and other modernization
enhancements. Some of the infrastructure improvements under the PIEP typically
cannot be performed during the winter months due to subarctic conditions. The
seasonal nature of this work will cause fluctuations in our revenues on this
contract, with revenue levels typically higher in summer months and lower in
winter months. The PIEP contract has an estimated ceiling amount of $704
million, a three-year base period of performance, and four one-year option
periods.

                          Concentration of Revenues
                                (in thousands)
                       For the six months ended June 30,
                       ---------------------------------
                                         2009                2008
    Source of Revenue                  Revenues     %      Revenues      %
    -----------------                  --------     -      --------      -
    CED Army Equipment Support         $ 52,229     11     $151,350      34
    CED Assured Mobility Systems         65,783     13       37,079       8
    RCV Modernization                    37,256      8            0       0
    CED Other                            83,147     17       60,973      14
                                       --------    ---     --------     ---
	  Total CED                     238,415     49      249,402      56

    GLOBAL Egypt                         28,195      6       23,952       6
    GLOBAL Other                         17,437      4       10,500       2
                                       --------    ---     --------     ---
	  Total GLOBAL                   45,632     10       34,452       8

    Treasury Seized Asset Program        20,655      4       28,183       6

    PIEP Contract                        15,224      3       24,902       6

    Other                               175,638     34      103,472      24
                                       --------    ---     --------     ---
	  Total Revenues               $495,564    100     $440,411     100
                                       ========    ===     ========     ===

Management Outlook


Our work in the DoD market increased significantly in the recent past and
several efforts within that market remain strong. Our ELD division has
expanded its workforce, facilities, capacity to provide services, contractual
coverage and funding since its inception, resulting in further increases in
revenues from these services in the first two quarters of 2009. Our investment
in facilities and personnel to support this work leaves us well positioned to
serve DoD's growing need for our equipment refurbishment and sustainment
services. We expect further increases in this division's work going forward.
Based on indications from new requests for FMS assets and on congressional
approval of certain ship transfers, we expect increases in our GLOBAL division
ship transfer revenues in the near term. Our CED Assured Mobility Systems
Program is expected to continue to contribute significant revenues through its
scheduled expiration in January 2011.

                                       17


In addition to the growth in some of our ongoing DoD programs, we expect
recent new awards to contribute to our revenues and profits going forward. The
award of the RCV Maintenance Program gives us a significant new source of work
in 2009 and 2010 and a key presence in Kuwait that presents us with the
potential for additional work in the future. The award of the CFT Program
contract gives us the opportunity to increase our sustainment and legacy
services performed for the Air Force. Both of these new programs have
contributed to our revenue growth in 2009. In the first quarter of 2009, we
were awarded a General Services Administration ("GSA") Logistics Worldwide
("LOGWORLD") contract. This new contract is available to all Government
agencies and represents potential revenues of approximately $50 million for
the five-year base period, with options to extend the period of performance
for up to 10 additional years.

We also have three other multiyear, multiple award, indefinite delivery,
indefinite quantity ("omnibus") contracts that have large nominal ceiling
amounts with no funding committed at the time of award. These are the Field
and Installation Readiness Support Team ("FIRST") contract with the U.S. Army,
the SeaPort Enhanced contract with the U.S. Navy, and the U.S. Army PEO CS &
CSS Omnibus III contract. We are one of several awardees on each contract.
While our future revenues from these contracts cannot be predicted with
certainty, these contracts, along with our CFT Program contract, allow us to
pursue task order awards for new work or follow-on work from the R2 contract.
We are currently bidding on multiple opportunities on our FIRST contract with
potentially significant dollar amounts.

The expansion of current work in our ELD and GLOBAL divisions and the new work
arising from the RCV Maintenance and CFT Programs, along with the bidding
opportunities on our FIRST contract, are expected to assist us in replacing
certain work efforts that have supported our growth in recent years and have
either expired or are due to expire. In November 2008, we successfully
completed a four-year, $96 million program to provide a protection system, the
Tanker Ballistic Protection System ("TBPS"), for vehicles deployed by the U.S.
Army in Iraq. The CED Army Equipment Support Program expired in February 2009,
as scheduled.

The U.S. Army informed us in January 2009 that they would not consider our
proposal for a new contract to succeed our current R2 Program contract. We
have filed a protest of this decision with the General Accounting Office and
are awaiting the outcome of the protest. Concurrently, we have begun the
process of moving some of the work that has been performed through our R2
contract to our other previously mentioned omnibus contracts that can
accommodate work performed by both our employees and our subcontractors. We
are progressing with this effort by seeking new task order awards on our other
omnibus contracts for the continuation of this work as the R2 task orders
expire. We expect to continue our work on existing task orders on our current
R2 contract through the scheduled contract expiration in January 2011. A
substantial portion of the revenues earned on our R2 contract are from
subcontracted work that has a lower profit margin. Our efforts to replace the
subcontracted work with revenues generated by work performed by our employees
would be expected to improve profit margins.

We are augmenting our core base of DoD work by emphasizing growth in our non-
DoD services. These efforts have included: 1) an emphasis on marketing our
Energetics services that has shown favorable results, including some major
recent contract awards that will be worked over the next three to five years,
2) work on the Treasury Seized Property Management program, and 3) the
acquisitions of ICRC in 2007 and G&B in 2008. We expect these efforts that are
directed toward the growth of our work in the Federal Civil marketplace to
contribute to overall future revenue growth and financial performance.

Our growth prospects are further evidenced by a continuing increase in our
workforce. As of June 30, 2009, our employee count was 2,410, which represents
an increase of 490 employees, or approximately 26% since December 31, 2008.

We also know there are other risks and uncertainties related to our business.
We recognize that 2009 is a Government transition year and Government spending

                                       18


priorities may change significantly. There are indications of a shift in
Government spending to more energy, IT-related infrastructure, health care IT,
and DoD legacy systems services. We feel that our current capabilities have us
well prepared to pursue these opportunities. However, the Government
transition can also affect the timing of contract awards and the funding
process.  Accordingly, the potential exists for delays in proposal decisions
which will impact funding of new and ongoing contract efforts.

To summarize our outlook, we believe our business prospects are both bright
and challenging. We are confident that we are well positioned to meet the
challenges of expiring work with 1) the expansion of our equipment
refurbishment and sustainment services performed by ELD and the ship transfer
services performed by GLOBAL; 2) our new work on the RCV Maintenance and CFT
Programs; 3) our position as a prime contractor on our FIRST contract that
presents us with some significant bidding opportunities and award prospects;
4) our growing level of work in the Federal Civil marketplace; 5) our
increased emphasis on bolstering our marketing efforts in both our DoD and
Federal Civilian markets; and 6) our continued commitment to grow through
strategic acquisitions.

Funded Backlog

Revenues in our industry depend on contract funding ("bookings") and funded
contract backlog is an indicator of potential future revenues. A summary of
our bookings and revenues for the six-month periods ended June 30, 2009 and
2008, and funded contract backlog as of June 30, 2009 and 2008 is as follows:

                                                       (in millions)
                                                      2009        2008
                                                      ----        ----
        Bookings                                      $464        $695
        Revenue                                       $496        $440
        Funded backlog                                $536        $674


Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles-a
replacement of FASB Statement No. 162" ("SFAS No. 168"). The FASB Accounting
Standards Codification ("the Codification") will become the source of
authoritative U.S. generally accepted accounting principles ("U.S. GAAP"). The
Codification, which changes the referencing of financial standards, is
effective for interim or annual financial periods ending after September 15,
2009. The Codification is not intended to change or alter existing U.S. GAAP.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events," which
establishes general standards of accounting and disclosure for events that
occur after the balance sheet date but before the financial statements are
issued. This new standard was effective beginning with our second quarter
financial reporting and did not have a material impact on our results of
operations, financial position, or cash flow.


Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States, which require
us to make estimates and assumptions. There have been no changes in our
critical accounting policies since December 31, 2008.  Please refer to our
Annual Report on Form 10-K for the year ended December 31, 2008 filed with the
SEC on March 3, 2009 for a full discussion of our critical accounting policies.



                                       19


Revenue by Contract Type

Our revenues by contract type were as follows (in thousands):

                                               Six Months
                                              Ended June 30,
Contract Type                             2009     %       2008    %
-------------                             ----     -       ----    -
Cost-type . . . . . . . . . . . . . .  $ 94,833   19   $ 97,538   22
Time and materials  . . . . . . . . .   382,265   77    325,251   74
Fixed price . . . . . . . . . . . . .    18,466    4     17,622    4
                                       --------  ---   --------  ---
                                       $495,564  100   $440,411  100
                                       ========  ===   ========  ===

A significant portion of our time and materials revenues are from the CED Army
Equipment Support Program, the CED Assured Mobility Systems Program and other
CED R2 Program task orders under which revenues result primarily from the pass
through of subcontractor support services. These revenues have a lower profit
margin than revenues generated by work performed by our employees.


Results of Operations

The results of operations are as follows (in thousands):

                         Three Months          Six Months         Change
                        Ended June 30,       Ended June 30,   Three     Six
Description             2009      2008       2009      2008   Months    Months
-----------             ----      ----       ----      ----   ------    ------
Revenues             $255,109  $251,688   $495,564  $440,411  $ 3,421  $55,153
Contract costs        244,440   243,639    477,249   426,455      801   50,794
                     --------  --------   --------  --------  -------  -------
Gross Profit           10,669     8,049     18,315    13,956    2,620    4,359
Selling, general and
  Administrative
  Expenses                180       220        382       383      (40)      (1)
Interest expense
(income), net             (60)       34       (119)     (113)     (94)      (6)
                     --------  --------   --------  --------  -------  -------
Income before income
  taxes                10,549     7,795     18,052    13,686    2,754    4,366
Provision for income
  taxes                 4,107     3,026      6,970     5,319    1,081    1,651
                     --------  --------   --------  --------  -------  -------
Net Income           $  6,442  $  4,769   $ 11,082  $  8,367  $ 1,673  $ 2,715
                     ========  ========   ========  ========  =======  =======

Our revenues increased approximately $3.4 million, or 1%, for the three months
ended June 30, 2009, as compared to the same period of 2008. Revenues
increased approximately $55.0 million, or 13%, for the six months ended June
30, 2009, as compared to the same period of 2008. Although there was not a
significant change in revenues for the three-month period, there was some
fluctuation within our operating segments. Our International Group and our IT,
Energy, and Management Consulting Group had increases that offset decreased
revenues in our Federal and Infrastructure Groups. The six-month revenue
increase resulted from increases in our Federal Group, International Group,
and IT, Energy, and Management Consulting Group revenues, which were partially
offset by decreased revenues for our Infrastructure Group.

Our gross profits increased approximately $2.6 million, or approximately 33%
for the three months ended June 30, 2009, as compared to the same period of
2008. Gross profits increased approximately $4.4 million, or approximately 31%
for the six months ended June 30, 2009, as compared to the same period of
2008. The three- and six-month revenue increases are primarily attributable to
increased profits in our Federal Group and our IT, Energy, and Management
Consulting Group. Our International Group profits increased slightly and our
Infrastructure profits declined.

Changes in revenues and income are further discussed in the summaries of our
group results that follow.

                                       20

Selling, general and administrative expenses consist primarily of costs and
expenses that are not chargeable or reimbursable on our operating unit
contracts. Changes in these expenses for the three- and six-months ended June
30, 2009 as compared to the same periods of 2008 are not significant.

Federal Group Results

The results of operations for our Federal Group are as follows (in thousands):

                        Three Months         Six Months             Change
                       ended June 30,      ended June 30,     Three     Six
Description            2009     2008       2009      2008     Months    Months
-----------            ----     ----       ----      ----     ------    ------
Revenues           $151,302  $164,145   $304,259  $286,466  $(12,843) $ 17,793
                   ========  ========   ========  ========  ========  ========
Income before
  income taxes     $  6,445  $  4,847   $ 11,003  $  8,319  $  1,598  $  2,684
                   ========  ========   ========  ========  ========  ========
Profit percentage      4.3%      3.0%       3.6%      2.9%

Revenues for our Federal Group decreased approximately $12.8 million or 8% for
the three-month period ended June 30, 2009, as compared to the same period for
the prior year. Revenues for this group increased approximately $17.8 million
or 6% for the six-month period ended June 30, 2009, as compared to the same
period for the prior year.

The change in revenues for the three-month period resulted primarily from a
decrease in revenues associated with the expiration of the CED Army Equipment
Support Program of approximately $67.7 million, from increases in revenues
from work on the RCV Modernization program of approximately $18.7 million, an
increase in the CED Assured Mobility Systems Program revenues of approximately
$15.5 million, and growth in the equipment refurbishment services provided by
our ELD division of approximately $11.4 million.

The change in revenues for the six-month period resulted primarily from
increases in revenues from work on the RCV Modernization program of
approximately $37.3 million, an increase in the CED Assured Mobility Systems
Program revenues of approximately $28.7 million, growth in the equipment
refurbishment services provided by our ELD division of approximately $20
million, and from a decrease in revenues associated with the expiration of the
CED Army Equipment Support Program of approximately $99.1 million.

Income before income taxes for our Federal Group increased approximately $1.6
million, or 33% for the three-month period ended June 30, 2009 as compared to
the same period for the prior year. Income before income taxes for this group
increased approximately $2.7 million, or 32% for the six-month period ended
June 30, 2009 as compared to the same period for the prior year.

The three-month period increase is primarily due to an increase in profits on
our ELD equipment refurbishment services of approximately $2.4 million
resulting from the increase in ELD revenues and an improvement in the profit
margins and an increase in profits of approximately $1.2 million on the RCV
Modernization Program. These increases helped to replace a decrease in profits
of approximately $1.0 million due to the completion of the TBPS program in
2008 and the resulting absence of this program from our operating results in
2009, and a decrease in profits of approximately $0.8 million associated with
the expiration of the CED Army Equipment Support Program in February 2009.


The six-month period increase is primarily due to an increase in profits on
our ELD equipment refurbishment services of approximately $3.9 million
resulting from the increase in ELD revenues and an improvement in the profit
margins and an increase in profits of approximately $1.2 million on the RCV
Modernization Program. These increases helped to replace a decrease in profits
of approximately $2.4 million due to the completion of the TBPS program in
2008 and the resulting absence of this program from our operating results in
2009, and a decrease in profits of approximately $1.0 million associated with
the expiration of the CED Army Equipment Support Program in February 2009.

                                       21


International Group Results

The results of operations for our International Group are as follows (in
thousands):

                        Three Months         Six Months           Change
                       ended June 30,      ended June 30,     Three     Six
Description            2009     2008       2009      2008     Months    Months
-----------            ----     ----       ----      ----     ------    ------
Revenues            $73,267  $52,079   $137,423  $100,885   $ 21,188  $ 36,538
                    =======  =======   ========  ========   ========  ========
Income before
  income taxes      $ 1,644  $ 1,443   $  3,379  $  3,075   $    201  $    304
                    =======  =======   ========  ========   ========  ========
Profit percentage      2.2%     2.8%       2.5%      3.0%

Revenues for our International Group increased approximately $21.2 million or
41% for the three-month period ended June 30, 2009, as compared to the same
period for the prior year. Revenues for this group increased approximately
$36.5 million or 36% for the six-month period ended June 30, 2009, as compared
to the same period for the prior year.

The increase in revenues for the three-month period resulted primarily from an
increase of approximately $9.7 million in the level of FMD services provided
on engineering and technical services task orders, an increase of
approximately $6.5 million in the level of GLOBAL services due in part to a
delivery order to provide support services to the government of Romania, and
to  revenues  on  the CFT Program in 2009  of approximately $4.2 million.  The
revenue increases for this period were partly offset by a decrease in revenues
on the Treasury Seized Asset Program of approximately $1.6 million.

The increase in revenues for the six-month period resulted primarily from an
increase of approximately $26.4 million in the level of FMD services provided
on engineering and technical services task orders, an increase of
approximately $11.2 million in the level of GLOBAL services due in part to a
delivery order to provide support services to the government of Romania, and
to revenues on the CFT Program in 2009 of approximately $6.7 million. The
revenue increases for this period were partly offset by a decrease in revenues
on the Treasury Seized Asset Program of approximately $7.5 million.

Income before income taxes for our International Group did not change
significantly for the three- and six-month periods ended June 30, 2009 as
compared to the same periods for the prior year. The profit as a percentage of
revenues decreased due to lower profit margins in our FMD division. FMD had an
increased amount of low margin subcontractor pass-through work during these
periods in 2009 and profits on FMD's U.S. Department of Treasury seized and
forfeited general property program were lower due to certain contract
limitations.


IT, Energy and Management Consulting Group Results

The results of operations for our IT, Energy and Management Consulting Group
are as follows (in thousands):

                        Three Months         Six Months           Change
                       ended June 30,      ended June 30,     Three     Six
Description            2009     2008       2009      2008     Months    Months
-----------            ----     ----       ----      ----     ------    ------
Revenues            $18,620  $13,834    $35,325   $17,913    $ 4,786   $17,412
                    =======  =======    =======   =======    =======   =======
Income before
  income taxes      $ 2,237  $ 1,314    $ 3,418   $ 1,759    $   923   $ 1,659
                    =======  =======    =======   =======    =======   =======
Profit percent        12.0%     9.5%       9.7%      9.8%

                                       22

Revenues for our IT, Energy and Management Consulting Group increased
approximately $4.8 million or 35%, and approximately $17.4 million or 97%, for
the three- and six-month periods ended June 30, 2009 as compared to the same
periods for the prior year. Income before income taxes for this segment
increased approximately $923 thousand or 70%, and approximately $1.7 million
or 94% for the three- and six-month periods ended June 30, 2009 as compared to
the same periods for the prior year. Upon our acquisition of G&B in April
2008, G&B became part of this segment, and the inclusion of G&B in this
segment's operating results was the primary reason for the increases in 2009.
G&B had revenues of approximately $13.1 million and $24.8 million, and pretax
income net of acquisition related amortization expense of approximately $1.9
million and $2.9 million, respectively, for the three- and six-month periods
ended June 30, 2009, as compared to revenues of approximately $8.9 million and
pretax income of approximately $831 thousand for both the three- and six-month
periods ended June 30, 2008. Increases in Energetics' revenues of
approximately $542 thousand and $1.3 million for the three- and six-month
periods also contributed to the increases in this segment in 2009.


Infrastructure Group Results

The results of operations for our Infrastructure Group are as follows (in
thousands):
                        Three Months         Six Months           Change
                       ended June 30,      ended June 30,     Three     Six
Description            2009     2008       2009      2008     Months    Months
-----------            ----     ----       ----      ----     ------    ------
Revenues            $11,920  $21,618    $18,557   $35,138    $(9,698) $(16,581)
                    =======  =======    =======   =======    =======  ========
Income before
  income taxes      $   306   $  758    $   348   $ 1,358    $  (452) $ (1,010)
                    =======  =======    =======   =======    =======  ========
Profit percentage      2.6%     3.5%       1.9%      3.9%


This segment consists of our ICRC subsidiary. Revenues for the three- and six-
month periods ended June 30, 2009 decreased by approximately $9.7 million or
45%, and $16.6 million or 47%, as compared to the same periods of 2008. Income
before income taxes for the three- and six-month periods ended June 30, 2009
decreased by approximately $452 thousand or 60%, and $1 million or 74%, as
compared to the same periods of 2008.

Certain environmental and technical issues near the site that ICRC conducts
its PIEP work have caused temporary delays in the work schedule in 2009. These
delays have had a negative impact on 2009 revenues and profits, with revenues
from the PIEP work decreasing by approximately $7.2 million and $9.7 million
and profits from the PIEP work decreasing by approximately $359 thousand and
$501 thousand for the three- and six-month periods ended June 30, 2009 as
compared to the same periods of 2008. The environmental and technical issues
are not caused by the work conducted by ICRC, but ICRC must comply with recent
changes and delays from environmental restrictions, recently issued permits,
and the study, review, and approval of certain technical issues by the client
prior to moving the work forward.

We have transferred certain types of work previously performed by ICRC to our
other groups to better align the work or the customers served with our longer
term corporate level strategies. Specifically, information technology services
work has been transferred to our IT, Energy and Management Consulting Group
and certain U. S. Army vehicle work has been transferred to our Federal Group.
The decreases in the Infrastructure Group's revenues and pretax income for the
three- and six-month periods that are not attributable to the decrease in PIEP
work are primarily the result of transferring work to our other groups.


Financial Condition

Our financial condition did not change materially in the first six months of
2009. Changes to asset and liability accounts were due primarily to our
earnings, our level of business activity, contract delivery schedules,
subcontractor and vendor payments required to perform our work, and the timing
of associated billings to and collections from our customers.

                                       23

Liquidity and Capital Resources

Cash Flows

Cash and cash equivalents decreased approximately $455 thousand during the
first six month of 2009.

Cash provided by operating activities was approximately $10.3 million during
the first six months of 2009 as compared to cash provided by operating
activities of approximately $1.8 million in the first six months of 2008. This
increase in cash from operations of approximately $8.5 million resulted from
an increase of approximately $2.7 million in cash provided by net income, an
increase of approximately $750 thousand from an increase in depreciation and
amortization and other non-cash operating activities, and an increase of
approximately $5.1 million in cash provided by operating activities due to
changes in the levels of working capital components. Of these working capital
components, our largest assets are our accounts receivable and our largest
liabilities are our accounts payable. A significant portion of our accounts
receivable and accounts payable result from the use of subcontractors to
perform work on our contracts and from the purchase of materials to fulfill
our contract requirements. Accordingly, our levels of accounts receivable and
accounts payable may fluctuate significantly depending on the timing of
Government services ordered, the timing of billings received from
subcontractors and materials vendors to fulfill these services, and the timing
of payments received from Government customers in payment of these services.
Such timing differences may cause significant increases and decreases in our
accounts receivable and accounts payable in short time periods.

Cash used in investing activities decreased approximately $14.5 million in the
first six months of 2009 as compared to the same period of 2008. This was
primarily due to the acquisition of G&B for $17.1 million in 2008.

Cash of approximately $4.4 million was used for financing activities in the
first six months of 2009 as compared to cash provided by financing activities
of approximately $20.4 million for the same period of 2008. This difference
was primarily due to an decrease in net borrowings on our bank loan in 2009 as
compared to 2008 when we financed our acquisition of G&B.

We paid quarterly cash dividends of $0.045 per share in each of the first two
quarters of 2009. Pursuant to our bank loan agreement, our payment of cash
dividends is subject to annual rate restrictions. We have paid cash dividends
each year since 1973.

Liquidity

Our internal sources of liquidity are primarily from operating activities,
specifically from changes in the level of revenues and associated accounts
receivable and accounts payable, and from profitability. Significant increases
or decreases in revenues and accounts receivable and accounts payable can
cause significant increases or decreases in internal liquidity. Our accounts
receivable and accounts payable levels can be affected by changes in the level
of the work we perform and by the timing of large materials purchases and
subcontractor efforts used in our contracts.

From time to time, we may also invest in the acquisition of other companies.
Our acquisitions of ICRC in 2007 and G&B in 2008 required a significant use of
our cash. While there are no plans for any specific additional acquisitions at
this time, we continue to seek opportunities for growth through strategic
acquisitions. We may also invest in expansion, improvement, and maintenance of
our operational and administrative facilities.

Our external liquidity consists of a loan agreement with a bank that provides
us with revolving loans and letters of credit. The amount of credit available

                                       24

to us as of June 30, 2009 was $35 million and the maturity date of the loan
agreement is May 21, 2010. From time to time we may request changes in the
amount, maturity date, or other terms and the bank may amend the loan to
accommodate our request. The amount of credit available to us under the loan
agreement is subject to certain conditions, including a borrowing formula
based on our billed receivables. Under the terms of the loan agreement, we may
borrow against the revolving loan at any time and can repay the borrowings at
any time without premium or penalty. We pay a commitment fee, interest on any
revolving loan borrowings at a prime-based rate or an optional LIBOR-based
rate, and fees on any letters of credit that are issued.

We were using approximately $4.0 million of the loan agreement availability,
consisting of approximately $2.6 million in revolving loans and approximately
$1.4 million in letters of credit as of June 30, 2009. Average revolving loan
amounts outstanding during the first two quarters of 2009 were approximately
$4.4 million per day. The highest outstanding amount was $23.4 million and the
lowest was $0. The timing of certain payments made and collections received
associated with our subcontractor and materials requirements and other
operating expenses can cause temporary peaks in our outstanding revolving loan
amounts.

The loan agreement contains collateral requirements that secure our assets,
restrictive covenants, a limit on annual dividends, and other affirmative and
negative covenants. Restrictive covenants include a maximum Leverage Ratio
(Total Funded Debt/EBITDA) and a minimum Fixed Charge Coverage Ratio that we
were in compliance with at June 30, 2009.


                                Maximum Ratio    Actual Ratio at June 30, 2009
                                -------------    -----------------------------
Leverage Ratio                    3.00 to 1                0.09 to 1

                                Minimum Ratio    Actual Ratio at June 30, 2009
                                -------------    -----------------------------
Fixed Charge Coverage Ratio       1.25 to 1                2.84 to 1


Our bank continues to maintain investment grade credit ratings from the
ratings services and we believe that we are well positioned to obtain
financing from other banks if the need should arise. Accordingly, we do not
believe that the current turbulence in the financial markets will have a
material adverse impact on our ability to finance our business, financial
condition, or results of operations. We currently do not use public debt
security financing.


Inflation and Pricing

Most of our contracts provide for estimates of future labor costs to be
escalated for any option periods, while the non-labor costs in our contracts
are normally considered reimbursable at cost. Our property and equipment
consists principally of computer systems equipment, furniture and fixtures,
shop equipment, and land and improvements. We do not expect the overall impact
of inflation on replacement costs of our property and equipment to be material
to our future results of operations or financial condition.


Disclosures About Market Risk

Interest Rates

Our bank loan provides available borrowing to us at variable interest rates.
The amount borrowed is not large with respect to our cash flows and we believe
that we will be able to pay down any bank loan borrowings in a relatively
short time frame. Because of this, we do not believe that any adverse movement
in interest rates would have a material impact on future earnings or cash
flows. If we were to significantly increase our borrowings, future interest
rate changes could potentially have a material impact on us.

                                       25

                      VSE CORPORATION AND SUBSIDIARIES

Item 3.    Quantitative and Qualitative Disclosures About Market Risks

See "Disclosures About Market Risk" in Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations.


Item 4.    Controls and Procedures

As of the end of the period covered by this report, based on management's
evaluation, with the participation of our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the disclosure controls and
procedures (as defined in Rules 13a-15(e) or 15d - 15(e) under the Securities
Exchange Act of 1934, as amended) our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures
are effective in ensuring that information required to be disclosed by us in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms, and that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act
is accumulated and communicated to our management, including our principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.

There was no change in our internal control over financial reporting during
our second quarter of fiscal 2009 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

                        PART II.   Other Information

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

VSE did not purchase any of its equity securities during the period covered by
this report.

Under the Registrant's bank loan agreement dividends may be paid in an annual
aggregate amount of $.60 per share, provided there is no default under the
loan agreement.


Item 4.    Submission of Matters to a Vote of Security Holders

The 2009 annual meeting of the Company's stockholders was held on May 5, 2009,
for the following purposes:

1.  to elect nine directors to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified; and

2.  to ratify the appointment of Ernst & Young LLP as VSE's independent
registered public accounting firm for the fiscal year ending December 31,
2009.










                                       26

All of the Company's nine nominees were elected as directors, and the
appointment of Ernst & Young LLP as VSE's independent registered public
accounting firm for the year ending December 31, 2009, was ratified. Voting
results were as follows:



                                                  Shares Voted
                                --------------------------------------------
                                                       Withhold/    Broker
                                   For        Against	Abstain	   Non-Votes
	                        --------------------------------------------
1.  Nominee

    Ralph E. Eberhart         	4,245,486	--	139,205       0
    Donald M. Ervine   	        4,233,645	--	151,046	      0
    Maurice A. Gauthier         4,246,583       --      138,108	      0
    Clifford M. Kendall         4,120,710	--	263,981	      0
    Calvin S. Koonce           	4,093,595	--	291,096	      0
    James F. Lafond           	4,235,777	--	148,914	      0
    David M. Osnos           	3,240,177	--    1,144,514	      0
    Jimmy D. Ross           	4,233,789	--      150,902	      0
    Bonnie K. Wachtel           4,106,131	--      278,560	      0

2.  Ernst & Young LLP
    appointment                 4,371,455     10,047	  3,189	      0



Item 6.    Exhibits

           (a)  Exhibits.

 Exhibit No.
 -----------
    31.1   Section 302 CEO Certification

    31.2   Section 302 CFO and PAO Certification

    32.1   Section 906 CEO Certification

    32.2   Section 906 CFO and PAO Certification


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has omitted all other items contained in "Part II. Other
Information" because such other items are not applicable or are not required
if the answer is negative or because the information required to be reported
therein has been previously reported.


















                                       27

                      VSE CORPORATION AND SUBSIDIARIES


                                 SIGNATURES


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.

                               VSE CORPORATION




Date:  July 30, 2009                  /s/ M. A. Gauthier
                                      __________________________________
                                      M. A. Gauthier
                                      Director, Chief Executive Officer,
                                      President and Chief Operating
                                      Officer



 Date:  July 30, 2009                 /s/ T. R. Loftus
                                      __________________________________
                                      T. R. Loftus
                                      Executive Vice President and
                                      Chief Financial Officer
                                      (Principal Accounting Officer)






























                                      28