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

     Form 10-K

(Mark One)

( X) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934  (Fee Required)
     For the fiscal year ended  March 31, 1997
(  ) Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 (Fee Required)

For the transition period from ________  to  _____________

Commission file Number        0-12712    1-8964


                  Halifax Corporation
(Exact name of registrant as specified in its charter)

         Virginia                          54-0829246
(State or other jurisdiction of incorporation of organization
     IRS Employer Identification No.)

        5250 Cherokee Avenue, Alexandria, VA  22312
         (Address of principal executive offices)

Registrant's telephone number, including area code   (703) 750-2202

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

     Title of each class         Name of each exchange on which registered

 Common Stock ($.24 par value)             American Stock Exchange


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


None
                        (Title of class)

                        (Title of class)

     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.
(X)Yes ( )No

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
(X)


The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of June 16, 1997 was $10,279,538 computed by the average
of high and low prices of such stock on said date.

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




           Class                        Outstanding at June 16, 1997

     Common Stock                                  2,003,632
     $.24 par value






              DOCUMENTS INCORPORATED BY REFERENCE

                             -None-























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<PAGE>
                                     
                                     
                                  PART I



Item 1.  General Development of Business


A TECHNOLOGY SERVICES & FACILITIES SERVICES  COMPANY

Halifax Corporation is a Technology Services and Facilities Services Company
for commercial and government activities.  Technology Services includes the
integration, systems engineering, installation, maintenance and training
for computer systems, communications systems, and simulation systems.
Facilities Services includes the management, operations and maintenance
support of military bases, prisons, waterways, major office complexes, and
communications sites. Revenues are generated in three primary markets:
commercial, federal government, and state/municipal governments; and the
Company regularly conducts offshore and overseas business activities within
these markets.  Key elements of the Company's business strategy are
privatization and outsourcing.

Services and associated products are developed and delivered by the parent
corporation and its three wholly-owned subsidiaries:  Halifax Technology
Services Company (HTSC) (formerly CMSA), Halifax Engineering, Inc. (HEI)
and Halifax Technical Services, Inc. (HTSI).  Computer and network
maintenance services and communication installation services for government
and commercial customers are largely conducted by the parent company.
Computer integration and systems engineering services are primarily
conducted by HTSC, especially in the commercial sector.  Communication
systems installation and logistics services are provided for the federal
government by HEI.  Facilities operation and support services are provided
by HTSI for federal, state, and municipal governments.



PRIMARY SERVICES PROVIDED


TECHNOLOGY CONSULTING SERVICES
A full range of consulting services geared to solving business problems
through technology.   Service lines include Strategy and Advanced
Technologies.

SYSTEMS INTEGRATION SERVICES
A full range of network integration services including consulting, design,
and implementation of LAN/WAN systems and related applications.

TELECOMMUNICATIONS SERVICES
Engineering, installation, maintenance, and logistics services for
telecommunication systems and networks worldwide.
INTERACTIVE TECHNOLOGIES
Interactive services including website design, development and marketing;
Internet/Intranet services; and multimedia sales and educational tools.

COMPUTER MAINTENANCE AND REPAIR
National computer and network maintenance including on-site, depot repair
and outsourcing support.

SIMULATION SYSTEMS SERVICES
Operation, integration, and maintenance of simulation systems for aircraft,
missiles, automobiles, and other applications.

FACILITIES MANAGEMENT AND OUTSOURCING SERVICES
Complete facilities and maintenance outsourcing capabilities for a wide
range of diverse organizations and applications.


<PAGE>


The  Company  was incorporated in Virginia in 1967 as Halifax  Engineering,
Inc., the successor to the business begun as a sole proprietorship in 1967.
On  April  1, 1970, Halifax acquired the Field Service Division  of  United
Industries. This expanded the business base in technical services and field
engineering.  In January 1981, the Company acquired all of the  outstanding
common  stock  of  ASSET Incorporated ("ASSET"), a marine  engineering  and
naval  architecture company, of Falls Church, Virginia.   Subsequently,  in
May,  1981, ASSET acquired all of the outstanding common stock of  Blyth  &
Son,  Inc.  ("Blyth  Marine"), a boat repair facility located  in  Suffolk,
Virginia.  On April 1, 1983, ASSET was merged into the Company.

As  of  October 1, 1984, the Company, under a plan adopted by the Board  of
Directors,  ceased operations at the boat repair facility  of  its  wholly-
owned  subsidiary, Blyth Marine, and placed the facility on the market  for
sale.   The  remaining  operations of Blyth Marine  were  merged  into  the
Company  on  February 1, 1985, and the facility was sold on  September  13,
1985.

On  October 18, 1984, the Company had a change of management and control as
the  result  of the founder, chairman and president of the Company  selling
his  stock  and  retiring  from all activities other  than  serving,  until
September 1993, as a member of the Board of Directors.

In February, 1990, the Company purchased the assets of the services business
of  Sidereal  Corporation, a division of TransTechnology Corporation.   The
Sidereal  Field Service Division had nationwide customers for  its  primary
service  of  maintaining  electronic  messaging  switches.   This  division
contributed to the expansion of Halifax's nationwide service offerings.

On  April  16, 1990, the Company purchased the assets of Del Net,  Inc.,  a
privately  owned  Beltsville, Maryland, computer  service  company  with  a
Washington/Baltimore  customer base which further  expanded  the  Company's
nationwide Electronics Services business.

On September 6, 1991, the Company changed its name from Halifax Engineering,
Inc.  to Halifax Corporation to reflect the expanded nature of its business
as  a national provider of Electronics Services and Facilities Support  for
government and industry.

On  December 31, 1991, the Company sold Halifax Security Services, Inc.,  a
wholly-owned  subsidiary which operated security services  for  the  parent
corporation.

On  June 30, 1993, the Company acquired the services division of Electronic
Associates,  Inc.   The  division expanded  the  Company's  field  services
business  and provided an additional service line for simulator operations,
maintenance and integration.

On  April 1, 1996, the Company completed the acquisition of privately  held
CMS   Automation,  Inc.  (CMSA),  a  Richmond,  Virginia  computer  systems
integration  company.  On April 23,1997, the name of CMSA  was  changed  to
Halifax Technology Services  Company ("HTSC").

On November 25, 1996, the Company through its wholly-owned subsidiary, CMSA,
acquired  the ongoing computer network integration business of Consolidated
Computer  Investors,  Inc. ("CCI") of Hanover, Maryland  through  an  asset
purchase.

The discontinuation of various service lines since October, 1984 has enabled
the Company to focus on Technology Services and Facilities Services.

The  Company  maintains its principal executive offices at  Halifax  Office
Park,  5250 Cherokee Avenue, Alexandria, Virginia 22312.  Telephone  number
(703) 750-2202.
<PAGE>


Federal Government Contracts


Many  of  the Company's revenues are derived from contracts or subcontracts
with  the  United States Government.  In fiscal years 1997, 1996 and  1995,
the  Company received revenues from 183, 491 and 740 Government  contracts,
which  accounted for approximately  47%, 73% and 83%, respectively, of  the
Company's total revenues.  However, the Company's trend is toward a balance
among   commercial,  state/municipal  government  and  federal   government
contracts.

The services of the Company are performed under cost reimbursable, time-and-
materials   and  fixed-price  contracts  and  subcontracts.    Under   cost
reimbursable  contracts  the  Government reimburses  the  Company  for  its
allowable costs permitted by Government regulations and pays the Company  a
negotiated  fixed  fee, incentive fee, award fee or  combination  of  fees.
Under  time-and-materials contracts, the Company receives  a  fixed  hourly
rate  intended to cover salary costs attributable to work performed on  the
contracts and related indirect expenses, as well as profit margin,  and  is
reimbursed  for  other  direct  costs.  Under  fixed-price  contracts,  the
Government pays the Company an agreed-upon price for services rendered.  In
addition,  under certain fixed price contracts, incentive fees are  allowed
if  established  performance goals are met or exceeded  and  penalties  are
imposed  if goals are not attained.  Under fixed-price contracts and  time-
and-materials  contracts,  the  Company bears  any  risk  of  increased  or
unexpected costs that may reduce its profits or cause it to sustain a loss.

The  Company's  Government  contracts  and  subcontracts  are  subject   to
termination,  reduction  or modification as a  result  of  changes  in  the
Government's  requirements or budgetary restrictions.  Moreover,  when  the
Company participates as a subcontractor, it is subject to the risk that the
primary contractor may fail or become unable to perform the prime contract.

All  Government contracts are subject to termination at the convenience  of
the  Government.  If a contract were to be terminated for convenience,  the
Company would be reimbursed for its allowable costs incurred up to the date
of  termination and would be paid a proportionate amount of the  stipulated
profits or fees attributable to the work actually performed.  To date,  the
Government  has  only  terminated  three contracts  with  the  Company  for
convenience.

Contracts with the Government are generally complex in nature, and  require
Halifax   to   comply   with   numerous   Federal   regulations   regarding
discrimination  in the hiring of personnel, fringe benefits for  employees,
safety,  safeguarding classified information, responsibility for Government
property,  fire  prevention,  equipment  maintenance,  record  keeping  and
accounting,  management qualifications, drug free work place  and  numerous
other matters.  The Company has not experienced any material difficulty  in
complying with applicable federal regulations.  Management does not believe
the proposed scaling down of the Federal defense establishment will have an
adverse  effect on its revenues since the Company is not R&D oriented,  and
Defense  Department  cutbacks  affecting the Company's  operation  are  not
considered  significant.   However, the Company's recent  acquisitions  and
reassignment  of marketing resources have been accomplished  which  should,
management believes, reduce dependency on defense contracting.

The  Company  is  sensitive to the present climate in the  Government  with
respect  to  fraud,  waste and abuse, and has adopted a  Code  of  Business
Ethics  and  Standards  of Conduct and associated Company  procedures.   In
addition,  all employees receive training in ethics and associated  Company
procedures  and a hot line has been established to encourage  reporting  of
potential ethical violations.

Under certain circumstances the Government can suspend or bar individuals or
firms  from  obtaining future contracts with the Government  for  specified
periods  of  time.  Any such suspension or debarment could have a  material
adverse effect upon the Company.  The books and records of the Company  are
subject to audit by the Defense Contract Audit Agency, which can result  in
adjustments  to contract costs and fees.  Audits by such Agency  have  been
completed for years through fiscal 1990.  While it is not possible to  know
the  outcome  of  future  audits,  it  is  the  opinion  of  the  Company's
management, that liabilities, if any, arising from such audits  should  not
have  a  material  adverse effect on the Company's  financial  position  or
results of operations.

<PAGE>

Commercial and State/Municipal Government Contracts

The   Company  continues  to  expand  its  commercial  and  state/municipal
government business.  Commercial revenues are expected to continue to  grow
through  the  targeting of non-federal opportunities and  from  outsourcing
opportunities.   Acquisition  strategy  and  the  in-house  development  of
computer  network  solutions,  integration  and  management  services  have
significantly increased this trend in commercial services.  State/municipal
government   contracts   are   expected  to   expand   from   privatization
opportunities.

The following table reflects the aforementioned distributions of revenues by
type of customer:

<TABLE>
<CAPTION>

                                 Years Ended  March 31,
<S>               <C>                   <C>             <C>
                          1997               1996            1995
                                                                       
Commercial               $   22,587,000    $ 6,004,000     $  4,348,000
                                                                       
State/Local                  17,580,000      6,730,000        3,405,000
                                                                       
Federal                      36,111,000     34,425,000       37,850,000
Government
                                                                       
Total                    $   76,278,000   $ 47,159,000    $  45,603,000

</TABLE>


Type of Contracts

The following table reflects by type of contract the amount of revenues from
continuing operations derived for the periods indicated:

<TABLE>
<CAPTION>

                                          Years Ended March 31,
<S>                     <C>                    <C>            <C>
                                 1997              1996            1995
                                                                            
Cost reimbursable                 $  7,195,000   $ 2,232,000    $  7,953,000
                                                                            
Time & materials                     8,576,000     7,333,000       7,270,000
                                                                            
Fixed-price                       $ 60,507,000    37,594,000      30,380,000
                                                                            
Total                             $ 76,278,000  $ 47,159,000    $ 45,603,000
</TABLE>



Accounts Receivable

Accounts receivable at March 31, 1997 and 1996 represented 54% and  47%  of
total  assets,  respectively. Accounts receivable are comprised  of  billed
receivables   and  unbilled  receivables.   Billed  receivables   represent
invoices presented to the Customer.  Unbilled receivables represent  future
payments  due  from  the Customer for which, for various reasons,  invoices
have  not  or  cannot be presented until a later period.  The reasons  that
invoices  for  payment obligations are not presented may be categorized  as
follows:  (1) fee and cost retainage rights of the Government; (2) lack  of
billable  documents;  (3) excess of actual direct and indirect  costs  over
amounts currently billable under cost reimbursement contracts to the extent
they  are  expected to be billed and collected; and (4) amounts arising  on
fixed-price contracts from recognition of revenues under the percentage  of
completion method.

The  financing of receivables requires bank borrowings and the  payment  of
associated  interest expense.  Interest expense is a business  expense  not
permitted as a reimbursable item of cost under Government contracts.

For  a listing of the amounts of retainages and unbilled receivables as  of
March  31,  1997  and  1996,  see Note 3 to the  accompanying  Consolidated
Financial Statements.


Backlog

The  Company's funded backlog for services as of March 31, 1997,  1996  and
1995   was    $34,000,000,  $24,000,000,   and  $17,000,000,  respectively.
"Funded"  backlog represents commercial orders and government contracts  to
the  extent  that funds have been appropriated by Congress and allotted  to
the  contract  by the procuring Government agency.  Some of  the  Company's
contracts orders provide for potential funding materially in excess of  the
monies  initially  provided  by  the  Government.   Additional  monies  are
subsequently and periodically authorized in the form of incremental funding
documents.   The  excess of potential future funding over funding  provided
represents  unfunded backlog.  A majority of the Company's customer  orders
or  contract  awards  and extensions for contracts previously  awarded  are
received or occur at random during the year and may have varying periods of
performance.

As  of March 31, 1997, based on total amounts bid on contracts awarded, the
Company's  five-year potential revenues for work remaining to be  performed
under  existing  contracts  are approximately $127,000,000.   The  unfunded
portion   is   $93,000,000  which  includes  $54,000,000  in  options   and
$39,000,000  in  undefinitized work.  The realization  of  these  potential
revenues  is dependent upon a variety of contract contingencies beyond  the
control  of the Company, such as complete funding and the exercise  of  all
existing  contract  options  by  the  Government  and  commercial  clients.
Accordingly, there can be no assurance that such revenues will be realized.

Commercial  contracts  do  not  typically  have  multi-year  options,   and
accordingly,  backlog  levels are not increasing  in  proportion  to  total
revenues.


Marketing

The  Company contracts with the Federal Government, State/Local Governments
and  commercial  activities,  each of which  requires  different  marketing
approaches.   The Federal Government maintains that it buys from  companies
rather  than having companies sell to it, and marketing is more related  to
keeping abreast of the Government's specified needs versus building markets
within  the  Government for the Company's services.  However,  the  Company
conducts  a  sizable  portion of its business  within  the  commercial  and
state/local government sectors, and consequently uses traditional marketing
approaches  to  determine  commercial customer  needs  and  to  assure  its
services will be considered for those needs.

In  February,  1997,  the Company formed the Federal Services  division  to
promote,  market  and  sell  all of Halifax's  information  technology  and
communications systems capabilities within the Federal Government.

The Company's ability to compete successfully for Government work is largely
dependent  on  recognizing Government requirements and  opportunities,  the
submission  of  responsive  and  cost-effective  proposals,  and  a   solid
reputation   for   the  successful  completion  of  government   contracts.
Recognition  of  Government  requirements  and  opportunities   come   from
inclusion   on   bidders  lists,  from  participation  in   activities   of
professional organizations and from literature published by the  government
and  other  organizations.  Associations with large corporations are  being
developed  to allow the Company to act as a subcontractor on some  contract
efforts.

Commercial marketing involves the determination of customer needs that match
the services offered by the Company, and this is accomplished through
individuals that conduct sales calls, attend trade shows, and build a
network of customer knowledge and confidence in the Company.  A field sales
program for computer services provides for direct <PAGE>
sales  by field personnel to commercial customers.  Those activities, along
with  the development of strategic alliances and the reputation the Company
has  built,  provide  the normal manner in which the  Company's  commercial
business is obtained.

Our April 1, 1996  and November 25, 1996 acquisitions, CMS Automation, Inc.,
and  Consolidated  Computer  Investors,  Inc.,  respectively,  are  network
integration and solutions companies which conduct their marketing and sales
activities largely through Account Managers.

The  Company's  President provides leadership in long-range  marketing  and
teaming  arrangements.  Operating Vice Presidents direct bid  and  proposal
efforts for their operating elements.


Competition

The Company has numerous competitors in all areas in which it does business.
Some  competitors are large diversified firms having substantially  greater
financial   resources  and  larger  technical  staffs  than  the   Company,
including, in some cases, the manufacturers of the systems being supported.
Government  in-house capabilities can also be deemed to be  competitors  of
the Company in that they perform certain services which might otherwise  be
performed  by  the Company.  It is not possible to predict  the  extent  of
competition  which  present  or  future  activities  of  the  Company  will
encounter   because   of   changing   competitive   conditions,    customer
requirements,  technological developments and other factors. The  principal
competitive  factors for the type of service business in which the  Company
is engaged are quality, responsiveness, ability to perform within estimated
time and expense limits and pricing.


Personnel

On March 31, 1997, the Company had 676 employees of which 80 were part time
employees.  Because of the nature of services provided, many employees  are
professional  or  technical  personnel with high  levels  of  training  and
skills,  including engineers, and skilled technicians and  mechanics.   The
Company believes its employee relations to be excellent.  Although many  of
the  Company's personnel are highly specialized and there is  a  nationwide
shortage  of  certain qualified technical personnel, the Company  does  not
normally  experience  any material difficulty obtaining  the  personnel  it
requires  to  perform under its contracts and generally  does  not  bid  on
contracts  where  difficulty may be encountered in hiring  personnel.   The
Company  interfaces  with  labor  unions  on   four  of  its   federal  and
state/local government contracts.  To date, relations with these units have
been excellent.  Management believes that the future growth and success  of
the  Company will depend, in part, upon its continued ability to retain and
attract highly qualified personnel.


Item 2. Properties

On July 18, 1991, the Company purchased a two building complex that includes
its  previously leased headquarters building.  The complex,  named  Halifax
Office  Park  and  located on Cherokee Avenue in Fairfax County,  Virginia,
contains 76,000 square feet of office space on three landscaped acres.

The  Company was able to take advantage of depressed real estate values and
acquire the complex for $3,750,000, a price substantially below replacement
cost  and  far  below  the price at which it sold in  1987.   The  cost  of
ownership  of the two buildings is less than the prior lease  cost  on  one
building alone.

The  Company  has been able to lease 100% of the building adjacent  to  the
Headquarters building on leases ranging from one to five years.  This space
was in excess of the Company's needs.

During 1997,  the Company placed its office complex up for sale and received
an  offer.   However, the offeror was unable to complete  the  transaction.
The  office complex remains for sale and another agreement to purchase  has
been received which, if it closes, would result in a transaction during the
Company's  1998 second fiscal quarter.

The  Company is obligated under approximately 39 small short-term  facility
leases connected with its nationwide maintenance service operations.

<PAGE>

Item 3. Legal Proceedings

Commercial Business Systems, Inc. v. Halifax Corporation, et al.

Plaintiff's claim, which has been the subject of judicial proceedings since
August of 1990 and was consolidated with a similar claim against BellSouth,
went  to  trial  on October 18, 1995, resulting in a jury  verdict  against
Halifax,  a  former employee and a non-employee, for wrongful  interference
with  a prospective business relationship.  The jury award for compensatory
damages  plus  interest was overturned by the judge in the case  and  final
judgment  entered  in  favor  of Halifax.  The plaintiff  appealed  to  the
Supreme  Court of Virginia which ruled in favor of the trial judge  thereby
confirming final judgment in favor of Halifax.


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

No  matters were submitted to a vote of the security holders in the  fourth
quarter of fiscal 1997.



                            PART II


Item  5.   Market  for  Registrant's Common Equity and Related  Stockholder
Matters

The Company's Common Stock, par value $0.24, has been traded on the American
Stock  Exchange since August 15, 1985.  From June 29, 1983  to  August  15,
1985,  the stock was listed on the NASDAQ National Market System.  At  June
16,  1997,  there were approximately 849 holders of record of the Company's
Common  Stock as reported by the Company's transfer agent.  American  Stock
Transfer  & Trust Co. became the Company's transfer agent and registrar  on
January 1, 1996.

The  following table sets forth the quarterly range of high and  low  sales
prices  on the American Stock Exchange.  All prices are adjusted to reflect
the December 27, 1996 three for two stock split.


                            Fiscal  Year   1997     Fiscal Year 1996

    Fiscal Quarter,           High    Low              High       Low

    April - June              8-1/8   4-5/8         4-7/8        4-1/8
    July - Sept.              7-7/8   6-5/8         4-5/8        4-1/8
    Oct. - Dec.               13-1/8  7-5/8         4-5/8        3-7/8
    Jan. - March              15     10-1/8         4-3/4        4-3/8


In fiscal 1997, the Company paid a cash dividend of $0.043 per share on June
10,  1996  to  shareholders of record on May 24, 1996,  cash  dividends  of
$0.047  per  share  on  September  10,  1996  and  December  10,  1996   to
shareholders  of  record   on  August  22,  1996  and  November  27,  1996,
respectively, and a cash dividend of $0.05 per share on March 10,  1997  to
shareholders of record  on February 21, 1997.

In fiscal 1996, the Company paid a cash dividend of $0.043 on June 10, 1995,
September 10, 1995, December 10, 1995 and March 10, 1996 to shareholders of
record on May 20, 1995, August 22, 1995, November 22, 1995 and February 23,
1996, respectively.

In fiscal 1995, the Company paid a cash dividend of $0.04 per share on June
10,  1994  to  shareholders of record May 25, 1994 and a cash  dividend  of
$0.043  on  September 10, 1994, December 10, 1994 and  March  10,  1995  to
shareholders of record  on August 22, 1994, November 23, 1994 and  February
17, 1995, respectively.

<PAGE>

Item 6.  Selected Financial Data


The following table includes certain selected financial data of the Company
for the fiscal years and periods indicated (amounts in thousands except per
share data):

<TABLE>
<CAPTION>

                          1997        1996      1995       1994      1993
<S>                    <C>         <C>       <C>       <C>        <C>
Revenue                   $76,278    $47,159   $45,603   $ 72,501 $ 58,380
Net Income                    954        763       858        853      674
   per common share  -        .47        .43       .48        .47      .38
primary
   per common share  -        .46        .43       .48        .47      .38
fully diluted
                                                                          
Long-term obligations                                                     
  including current                                                       
  maturities               17,174      3,869     7,230     10,031    6,465
                                                                          
Cash dividends per                                                        
  common share               .187       .173       .17        .16     .147
                                                                          
Total assets at                                                           
  year-end                 41,000     24,828    22,107     24,728   18,977
</TABLE>



Item  7.  Management's Discussion and Analysis of Financial Condition   and
    Results of Operations


The following discussion should be read in conjunction with the consolidated
financial  statements and notes thereto. All information is  based  on  the
Company's  fiscal year ended March 31.  (Tabular information:   dollars  in
thousands, except per share amounts).

<TABLE>
<CAPTION>


Results of Operations     1997      Change     1996       Change     1995
<S>                     <C>      <C>       <C>       <C>         <C>
Revenues                $76,278        62%  $ 47,159          3%  $ 45,603
                                                                          
Operating   cost    and  74,160        62%    45,687          4%    43,918
expenses:
  Percent of revenue        97%                  97%                   96%
                                                                          
Operating income          2,118        44%     1,472       (13%)     1,685
  Percent of revenue         3%                   3%                    4%
                                                                          
Net income                  954        25%       763       (11%)       858
                                                                          
Net income per share  -     .47         9%       .43       (10%)       .48
primary
Net income per share  -     .46         7%       .43       (10%)       .48
fully diluted
                                                                          
</TABLE>

<PAGE>
Revenues

1997 revenues increased 62% over 1996, 45% from the acquisitions of CMSA and
CCI and 17% from internal growth.

<TABLE>
<CAPTION>

Operating Costs and       1997      Change      1996     Change     1995
Expenses
<S>                    <C>       <C>       <C>        <C>       <C>
Cost of services        $69,530        67%   $ 41,675        2%  $ 40,708
  Percent of revenues       91%                   88%                 89%
                                                                         
Selling,   General   &    4,630        25%      3,692       15%     3,210
Administrative
  Percent of revenues        6%                    8%                  7%
                                                                         
Litigation expense            -                   320                   -
  Percent of revenues         -                  0.7%                   -
                                                                         

</TABLE>

The Company's 1997 cost of services increased primarily from acquisitions of
CMSA and CCI and in relative proportion to the increase in revenues.

Litigation expenses of $320,000 in the second fiscal quarter ended September
30,  1995,  include  legal  costs associated with  a  trial  of  a  lawsuit
described in Item 3.

The increase in selling, general and administrative (S,G&A) expenses is due
primarily  to  the  acquisition of CMSA and CCI.  The proportion  of  S,G&A
expense  decreased to 6% of Revenues compared with 8% of Revenues  in  1996
due  to  the  Company's ability to share S,G&A with CMSA  and  CCI.   S,G&A
expenses  increased in amount as a percent of revenues in 1996 as  compared
to 1995.  The Company achieved the objective of maintaining expenditures as
a percentage of revenue at 6-7% in 1997.


Operating Income

Operating  income  increased by $646,000 but remained  constant  at  3%  of
Revenues compared with 1996.  Operating income decreased $213,000  in  1996
when compared to 1995.

<TABLE>
<CAPTION>

Interest and Other     1997    Change     1996      Change      1995
Income or Expense
<S>                   <C>      <C>     <C>        <C>         <C>
Interest expense       $  950      66%      $ 573       (9%)      $ 627
Other (income)          (409)      13%      (362)       (3%)      (375)
                                                                       
</TABLE>


Interest expense significantly increased by $377,000 or 66% from 1996.  The
increase  came from increased debt levels to fund the acquisition  of  CMSA
and  CCI  and  their working capital requirements.  This increase  resulted
despite  a  decrease  in  the Company's average  interest  rate.   Interest
expense  decreased  in  1996 when compared to 1995,  because  of  decreased
capital requirements.

Other income, net of expenses, is sublease income from the Company's office
park  which  is currently 100% occupied.  The office park was purchased  in
1993 by the Company's wholly-owned subsidiary, HRI.

<TABLE>
<CAPTION>

Income Taxes          1997       Change      1996      Change    1995
<S>              <C>         <C>         <C>        <C>      <C>
Income taxes          $ 623         25%     $  498     (13%)  $    575
Effective   tax       39.5%                  39.5%               40.1%
rate
                                                                      
</TABLE>


These fluctuations were relatively proportional to changes in pretax income
and  the Company's effective tax rate remained relatively unchanged in 1997
compared  with the 1996 and 1995 rates.  The Company has adopted  Financial
Accounting Standard No. 109 "Accounting for Income Taxes" effective for all
periods presented.


Factors That May Affect Future Results

The  Company's  future operating results may be affected  by  a  number  of
factors  including uncertainties relative to national economic  conditions,
especially  as they affect interest rates, industry factors, the  Company's
ability  to  successfully  increase its  business  and  effectively  manage
expense margins.

The Company must continue to effectively manage expense margins in relation
to  revenues  by  directing new business development towards  markets  that
complement  or  improve  existing service lines.   The  Company  must  also
continue  to  emphasize  operating efficiencies  through  cost  containment
strategies, reengineering efforts and improved service delivery techniques.

The  Company  participates in the computer industry, providing  consulting,
integration,  networking,  maintenance  and  installation  services.   This
industry  has been characterized by rapid technological advances that  have
resulted in frequent introduction of new products, product enhancements and
aggressive  pricing  practices,  which  also  impacts  pricing  of  service
activities.  The Company's operating results could be adversely affected by
industry  wide  pricing pressures.  Also, the Company's  operating  results
could  be  adversely impacted should the Company be unable  to  effectively
achieve  the  revenue  growth  necessary to  provide  profitable  operating
margins  in  its  field maintenance operations.   The  Company's  plan  for
growth  includes  intensified marketing efforts,  an  expanding  commercial
sales  program,  strategic  alliances and, where appropriate,  acquisitions
that  expand  our  market share such as our CMSA and  CCI  acquisitions  in
fiscal  1997.   The  Company  intends  to  expand  upon  recent  alliances,
acquisitions and new contracts to provide the density necessary to maintain
profitability in the competitive information technology industry.

Because  of  the foregoing factors as well as  other factors affecting  the
Company's  profitability,  it  is difficult  to  project  future  operating
results.

<TABLE>
<CAPTION>


Liquidity   and    Capital      1997            1996           1995
Resources
<S>                        <C>             <C>             <C>
Cash                        $     268,000   $    2,743,000  $     18,000
                                                                        
Working capital                17,487,000        5,924,000     8,845,000
Cash  provided  (used)  by     (6,875,000)       7,110,000     3,519,000
operations
Cash  (used) in investment     (1,757,000)        (644,000)     (786,000)
activities
Cash  provided  (used)  by      6,157,000       (3,741,000)   (3,224,000)
financing activities
                                                                        

</TABLE>

At March 31, 1997, the Company's  working capital of $17,487,000 and current
ratio  of 2.28 indicate strength consistant with the prior years.  A  large
prepayment  on  a  hardware delivery order in the fourth  quarter  of  1996
resulted  in  working capital of $5,924,000 and a current ration  of  1.50.
The  current  ratio  adjusted for that transaction  would  have  been  2.4,
consistent with 1997 and 1995.

The  uses  of  cash  in  operations, $6,875,000 and investment  activities,
$1,757,000 reflect the effect of the acquisitions of CMSA and CCI  and  the
insertion  of  working  capital  into  the  two  companies  including   the
substitution  by the Company of approximately $7.3 million  of bank debt at
significantly reduced  interest rates for prior high-interest rate financing
from nonbank financers.  The increase in cash generated in 1996 as compared
with 1995 is primarily a result of the large prepayment previously mentioned.

The  Company leases approximately 39 field sites.  Disclosure of the future
minimum  lease  payment  is  in Note 9 to the  financial  statements.   The
Company  anticipates  capital  expenditures in  1997  to  approximate  1996
levels.  A wholly owned subsidiary of the Company operates the office  park
including leasing one of the two buildings.


The  Company  believes that its balances of cash and  cash  equivalents  in
conjunction  with  funds  generated from operations  and  from  short  term
borrowings should be sufficient to meet its operating cash requirements for
the foreseeable future.


Item 8.  Financial Statements and Supplementary Data

Financial  statements  and supplementary data of the Company  are  attached
hereto.


Item  9.  Changes in and Disagreements with Accountants on Accounting   and
Financial Disclosure


None.
                                     
                                     
                                 PART III


Item 10.  Directors and Executive Officers of the Registrant

The following paragraphs set forth the name and age of each executive
officer and the members of the Board of Directors of the Company, together
with their respective periods of service as officers and directors and
other positions with the Company.  All directors hold office for one (1)
year or until their successors are duly elected and qualified.


                           DIRECTORS


Howard C. Mills, age sixty-three, has since October 16, 1984, been
President, Chief Executive Officer and a Director of the Company.  Prior to
that time he served as Vice President and Executive Vice President of the
Company.  Mr. Mills joined Halifax in 1981 when it acquired ASSET
Incorporated of which Mr. Mills was President and Chief Executive Officer.
Mr. Mills has forty one years experience in the management, engineering and
technical services business, including twelve years as President of ASSET
Incorporated,  three years as President of Blyth Marine, five years as a
Division Vice President of the Stanwick Corporation, and eight years in
engineering management with the Newport News Shipbuilding and Dry Dock
Company.

Arch C. Scurlock, age seventy-seven, presently Chairman of the Board of
Directors, has been a Director of the Company since 1973.  He had served
from 1969 to 1992 as Chairman of the Board of TransTechnology Corporation,
a manufacturer of aerospace-defense and other industrial products.  Since
1968, he has been President and a Director and controlling shareholder of
Research Industries Incorporated, a private investment company.

John H. Grover, age sixty-nine, has been a Director of the Company since
1984.  He has served as Executive Vice President, Treasurer and Director of
Research Industries Incorporated, since 1968 and as a Director of
TransTechnology Corporation from 1969 to 1992.

Clifford M. Hardin, age eighty-one, elected Director of the Company on
March 25, 1985, is a Director of SRI, Inc. Lincoln, Nebraska.  Dr. Hardin
is also a Trustee of Winrock International,  the American Assembly and the
University of Nebraska Foundation.  Dr. Hardin's past positions have
included Chancellor of the University of Nebraska (1954-1969), Secretary,
United States Department of Agriculture (1969-1971), Vice Chairman of the
Board and Director of Corporate Research for Ralston Purina Company (1971-
1980) and Director of the Center for the Study of American Business at
Washington University (1980-1982).  Dr. Hardin also served as an economist
at Washington University until 1985.  From 1981 to 1987 Dr. Hardin served
as a Director of Stifel Financial Corporation, The parent corporation of
Stifel Nicolaus & Company, a St. Louis Securities brokerage firm registered
with the Securities and Exchange Commission.


Ernest L. Ruffner, age sixty-two, elected Director of the Company on March
25, 1985, is an attorney engaged in the private practice of law as a member
of the firm of Pompan, Ruffner & Werfel in Alexandria, Virginia.  He has
been an attorney for 33 years.  Mr. Ruffner is a graduate of the United
States Military Academy, served as a First Lieutenant in the United States
Army Corps of Engineers and has been a Director of Research Industries
Incorporated since 1983.  Mr. Ruffner has been Secretary of the Company
since 1985.  In January 1992, he was given the additional designation of
Counsel of the Company, and in September 1994, he was elected General
Counsel (See Item 13).

Alvin E. Nashman, age seventy, elected director of the Company on September
17, 1993, is a Board Member of Computer Sciences Corporation (CSC).  He
also serves on the Boards of NYMA Corporation and MILTOPE Corporation,
where he is Chairman.  Dr. Nashman headed the multi-division systems groups
of CSC for 27 years and served two terms as Chairman of the Board of the
Armed Forces Communications and Electronics Associates (AFCEA).

John Toups, age seventy-one, elected Director of Company on September 17,
1993, served as President and CEO of Planning Research Corporation (PRC)
from 1978 to 1987.  He also served as interim Chairman of Board and CEO of
the National Bank of Washington and Washington Bancorp and is currently a
Director of CACI International, NVR and Telepad Corporation.



                     OTHER EXECUTIVE OFFICERS


John D. D'Amore, age forty-seven, Vice President Finance and Accounting,
Controller and Treasurer,  joined Halifax on April 10, 1996. He previously
served as Vice President Finance for CTA International, Inc. and CTA Space
Systems, subsidiaries of CTA Incorporated. Prior to that he served in
various executive finance positions including five years as Vice President
Finance with Presearch Inc.  Mr. D'Amore is a Certified Public Accountant
and a member of the Virginia Bar.

James C. Dobrowolski, age thirty-four, joined Halifax as a result of the
Company acquiring EAI Services which he had managed for two years.  Mr.
Dobrowolski currently serves as the Vice President in charge of the
Simulation and Facilities Services Division.  Prior to joining EAI as
Director of Contracts in April 1988, he was with Engineering and
Professional Services Inc. where he served as Manager of Subcontract
Administration for two years.

Thomas L. Mountcastle, age forty-three is President of Halifax Technology
Services Company, a wholly owned subsidiary of Halifax and Vice President
of Halifax's Network Integration Services Division.  Mr. Mountcastle joined
Halifax as a result of the Company acquiring CMS Automation, Inc. on April
1, 1996 where he had served as President since 1990.  Prior to that he
served in various capacities in computer technology including two years as
President of Data Support Systems.

Thomas F. Nolan, age fifty-two, has been Vice President, Computer Services
Division since December, 1995.  Before joining the Company, Mr. Nolan
worked six years as an independent executive in Financial Services
Management.  Prior to that, he was Senior Vice President, Marketing for
Decision Data Services, Inc, a nation wide computer maintenance firm.  For
sixteen years Mr. Nolan held various executive positions with Bell Atlantic
Corporation's SORBUS Service Division.

Frank J. Ostronic, age sixty-seven, Vice President Federal Services
Division, joined Halifax on  May 24, 1996.  Mr. Ostronic has over thirty-
nine years experience in various executive positions including fourteen
years with Computer Science Corporation as Vice President of Program
Development.  A U.S. Naval Academy graduate,  Mr. Ostronic retired from the
U.S. Navy with the rank of Captain.
<PAGE>

Melvin L. Schuler, age fifty-three, is Vice President for Operations of the
Federal Services Division.  He is also Vice President for Operations of the
Company's wholly-owned subsidiary, Halifax Engineering, Inc.  Mr. Schuler
has been with Halifax since 1972, serving in various management positions
within this service line.

James L. Sherwood, IV, age fifty-five, is Vice President, Contracts and
Administration.  He previously served as Vice President of the Company's
Facilities Services Division.  In addition, he served as  Assistant Vice
President and Manager for various divisions of the Company and ASSET Inc.,
which he joined in 1978.  Prior to joining ASSET Inc., Mr. Sherwood held
various electrical engineering positions with Potomac Electric Power
Company and Newport News Shipbuilding and Dry Dock Company.  He is a
Registered Professional Engineer in several states including Virginia.


<PAGE>
Item 11.  Executive Compensation

The following table sets forth information on the Chief Executive Officer
and the only other officers whose compensation exceeded $100,000 serving at
the close of the fiscal year ended March 31, 1997 for services rendered in
all capacities during the fiscal years ended March 31, 1997, 1996, and
1995.

<TABLE>
<CAPTION>

                             SUMMARY COMPENSATION TABLE
                                                                                          
                            Annual Compensation            Long Term Compensation  
                      
      
                     
                                                            Awards      Payouts           
                                                   Other                                  
                                                   Annual   Restricted                    All Other
                               Salary     Bonus    Compen-  Stock       Options   LTIP    Compen-
                                                   sation   Awards      SARs      payout  sation
                                                                                  s
                     Year       ($)        ($)     ($) (1)    ($)       (#)         ($)    ($)
<S>                  <C>       <C>        <C>      <C>      <C>         <C>       <C>     <C>
Howard C. Mills(5)   1997      160,804    43,200   4,323    none          7,200   none     3,135(2)
CEO/President        1996      149,925    28,336   5,623    none          7,200   none     2,999(2)
                     1995      150,188    27,067   3,331    none         14,400   none     2,604(2)
                                                                                          
James L. Sherwood    1997      101,550    14,400   none     none          3,000   none     2,013(2)
IV
                     1996        96,785   13,970   none     none          1,800   none     5,284(3)
                     1995        96,962   21,886   none     none          5,400   none     1,939(2)
                                                                                          
James C.             1997      113,549     28,430  none     none          6,375   none     6,117(3)
Dobrowolski
                     1996        96,940    13,627  2,400    none          3,600   none    
                                                                                          599(2)
                     1995        95,099    23,672  none     none          5,400   none     5,855(3)
                                                                                          
Melvin L. Schuler    1997       97,786    57,670   none     none          4,500   none     1,956(2)
                     1996       89,733    19,712   none     none          1,500   none     1,794(2)
                     1995       89,902     8,999   none     none          3,000   none     1,798(2)
                                                                                          
Thomas L.            1997      127,497    none     none     none        13,500    none     1,200(2)
Mountcastle
                                                                                          
Thomas E. Nolan      1997      107,623    none     none     none          6,375   none    13,768(4)
                                                                                          
</TABLE>


(1)Value of Company furnished auto.

(2)Amounts contributed to officer under 401(k) plan.

(3)Amounts contributed to officer under 401(k) plan and paid vacation.

(4)Amounts contributed to officer under 401(k) plan and living expenses.

(5)The Company entered into an Executive Severance Agreement ("Agreement")
   with Mr. Mills in recognition of his position of high responsibility
   and the substantial contributions he has made to the Company over many
   years.  The Agreement provides benefits under certain circumstances
   including a change in control of the Company and is automatically
   renewed from year to year.  It confirms that employment is at will and
   provides for termination without additional compensation in the event
   of death, resignation, retirement or for cause.  Except in connection
   with a change of control, termination for any other reason results in
   compensation equal to eighteen (18) months salary.  In the event of
   termination within one (1) year  after a change in control or in the
   event Mr. Mills resigns or retires during the first ninety (90) days
   after a change in control, he would receive compensation equal to
   thirty-six (36) months salary subject to statutory limitations.


Director Compensation

During the year, Directors who are not officers of or otherwise compensated
by the Company receive an annual fee of $1,000 and also receive $2,000 and
reimbursement of expenses incurred for each meeting of the Board of
Directors which they attend.


Stock Option Plans

In 1984, the Company's shareholders approved the 1984 Incentive Stock
Option and Stock Appreciation Rights Plan (the 1984 "Plan").  The Company's
key employees, including officers, were eligible to participate.  Directors
who were not officers were not eligible.

At the 1988 Annual Meeting of Shareholders, the shareholders approved
amendments to the 1984 Plan which increased to 165,000 the number of shares
authorized for issuance pursuant to the 1984 Plan and brought the 1984 Plan
into conformity with the Tax Reform Act of 1986.

The 1984 Plan terminated May 15, 1994; however options continue to be
outstanding to officers and employees of the Company covering  12,349
shares of Common stock.  These options all expire prior to July 18, 1998.
(See note 7 to the consolidated financial statements.)

At the September 16, 1994 Annual Meeting, the shareholders approved the new
Key Employee Stock Option Plan ("1994 Plan").

The maximum number of shares subject to the 1994 Plan and approved for
issuance is 180,000 shares of the Company's Common Stock either authorized
and unissued or shares held in treasury.  This number is subject to
adjustment in the event of stock splits, stock dividends or other
recapitalization of the Company's Common Stock.  The Company is under no
obligation to register either the Option or the  Option Stock under either
Federal or State securities laws, however, the Committee has the power and
sole discretion to register the 1994 Plan.  If the 1994 Plan is not
registered, both the Option and the Option Stock will be "restricted
securities" as defined in Rule 144 of the General Rules and Regulations of
the Securities Act of 1933.

The 1994 Plan will be administered by a Committee selected by the Board and
comprised of not less than three members of the Board.  The Committee has
the sole and absolute discretion to establish from time-to-time the
criteria for participation in the 1994 Plan and to select the officers and
other key employees to whom Options may be granted, to determine all claims
for benefits under the  1994 Plan, to impose such conditions and
restrictions on Options as it determines appropriate, with the consent of
the recipient, to cancel Options and to substitute new Options for
previously awarded Options which, at the time of such substitution, have an
exercise price in excess of fair market value of the underlying shares of
Company Common Stock.

The Committee also has the sole and absolute discretion to grant options
entitling the Participants to purchase shares of Company Common Stock from
the Company in such number, at such price and on such terms and subject to
such conditions, not inconsistent with the terms of the 1994 Plan, as may
be established by the Committee.  The Company will receive no consideration
with regard to the granting of any Option granted under this 1994 Plan.
Due to the broad discretion of the Committee, it is not possible to
determine at this time the benefits or amounts that will be received by or
allocated to the participants, if any.

Except as otherwise expressly provided in the 1994 Plan, the Committee may
designate, at  the time of the grant of an Option, the Option as an
Incentive Stock Option under Section 422 of the Internal Revenue Code.  The
Purchase Price of each share of Company Common Stock which may be purchased
upon exercise of any Option granted under the 1994 Plan shall be
established by the Committee in its discretion, and in the case of
Incentive Stock Options, such Purchase Price shall not be less than 100% of
the Fair Market Value on the Date of Grant.




Each Option granted under the 1994 Plan shall be exercised by written
notice to the Company.  The Purchase Price of shares purchased upon
exercise of an Option granted under the 1994 Plan shall be paid in full.

No option may be exercised in whole or in part prior to six months from the
Date of Grant.

The Board has complete power and authority to amend the 1994 Plan at any
time as it deems necessary or appropriate and no approval by the
stockholders of the Company or by any other person, committee or entity of
any kind is required to make any amendment; provided, however, that the
Board shall not, without the affirmative approval of stockholders of the
Company, increase the number of shares of Company Common Stock available
for Option grants thereunder or make any other amendment which requires
stockholder approval under Rule 16b-3 of the Code.

In fiscal year 1995, options totaling 48,000 shares were offered to
employees at an exercise price of $4.67, the market price on date of
issuance.

In fiscal year 1996, options totaling 23,700 shares were offered to
employees at exercise prices ranging from $4.58 to $4.83, the market prices
on the dates of issuance.

In fiscal year 1997, options totaling 105,600 shares were offered to
employees at exercise prices ranging from $4.67 to $7.67, the market prices
on the dates of issuance.

All the above share and per share amounts are adjusted to reflect the
December 27, 1997 3 for 2 stock split.

<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of  June 16, 1997 (1) the number of
shares of the Company's Common Stock owned beneficially by each person who
owned of record, or was known by the Company to have owned beneficially,
more than 5% of such shares then outstanding, (2) the number of shares
owned beneficially by each director of the Company, and (3) the number of
shares owned beneficially by all officers and directors as a group.
Information as to the beneficial ownership is based upon statements
furnished to the Company by such persons.


  Name and Address of          Amount and Nature of
   Beneficial Owner            Beneficial Ownership              Percent

  Research Industries                615,000                       30.8
  Incorporated (1)(2)(3)
  123 North Pitt Street
  Alexandria, VA 22314

  Arch C. Scurlock (1)(5)            616,500                       30.8
  123 North Pitt Street
  Alexandria, VA 22314

  Howard C. Mills (4)                 68,367                        3.4
  5250 Cherokee Avenue
  Alexandria, VA 22312

  Alvin E. Nashman                    4,500                         0.2
  3170 Fairview Park Drive
  Falls Church, VA  22042

  John Toups                          4,500                         0.2
  1209 Stuart Robeson Dr.
  McLean, VA  22101

  John H. Grover (2)                  1,500                         0.1
  123 North Pitt Street
  Alexandria, VA 22314

  Clifford M. Hardin                  1,500                         0.1
  10 Roan Lane
  St. Louis, MO 63124

  Ernest L. Ruffner (3)                 150                           0
  209 North Patrick Street
  Alexandria, VA 22314

  All officers and directors         739,461                        36.9
  as a group, including
  the above
    (14 persons) (5)

<PAGE>

(1) Research Industries Incorporated is 95% owned by Arch C. Scurlock,
    Chairman of the Company's Board of Directors.  Dr. Scurlock is
    also President and a director of Research Industries Incorporated.

(2) Mr. Grover is also a 5% owner, a director and Executive Vice President
    and Treasurer of Research Industries Incorporated.

(3) Mr. Ruffner is a director of Research Industries Incorporated.

(4) Includes 450 shares held by Mr. Mills' wife.

(5) Includes 615,000 shares owned by Research Industries Incorporated.


Item 13.  Certain Relationships and Related Transactions

Ernest L. Ruffner, Secretary and General Counsel and a Director of the
Company, is a member of the law firm of Pompan, Ruffner & Werfel.  During
the fiscal year ended March 31, 1997, the Company paid $76,652 for legal
services to Mr. Ruffner and the law firm.


                               PART IV


Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K


(a)  The following documents are filed as part of this report:

        1.Consolidated Financial Statements

          o  Report of Independent Auditors
          o  Consolidated Statements of Earnings for the years
             ended March 31, 1997, 1996 and 1995
          o  Consolidated Balance Sheets as of March 31, 1997 and 1996
          o  Consolidated Statements of Cash Flows for the years
             ended March 31, 1997, 1996 and 1995
          o  Consolidated Statements of Changes in Stockholders' Equity 
             for the years ended March 31, 1997, 1996 and 1995
          o  Notes to Consolidated Financial Statements

     2. Financial Statement Schedules

          o  Schedule II, Valuation & Qualifying Accounts

All other schedules are omitted since they are not applicable, not required
or the required information is included in the consolidated financial
statements or notes thereto.

     3.  Exhibits

     3.1 Articles of Incorporation, as amended.  (Incorporated by reference
         to Exhibit 3.1 to Form 10-K for the year ended March 31, 1995.)

     3.2  By-laws, as amended.  (Incorporated by reference to
          Exhibit 3.2 to Form 10-K for the year ended March 31, 1995.)
<PAGE>

      4.1  Loan and Security Agreement dated January 30, 1989
     between the Company and Crestar Bank.  (Incorporated by reference to
     Exhibit 4.1 to Form 10-K for the year ended March 31, 1989.)

      4.2 First Amendment to Amended and Restated Loan and Security
     Agreement between the Company and Crestar Bank dated Dec. 11, 1992
     and Amended and restated revolving note.  (Incorporated by reference
     to Exhibit 4.2 to Form 10K for the Year ended March 31, 1993.)

     4.3  Loan agreement dated June 30, 1993 between the
     Company and Crestar Bank. (Incorporated by reference to Exhibit 4.3
     to Form 10-K for the year ended March 31, 1994.)

     4.4   Second Amendment to Amended and Restated Loan and
     Security Agreement between the Company and Crestar Bank dated
     November 14, 1994 and amended and restated revolving note.
     (Incorporated by reference to Exhibit 4.4 to Form 10-K for the year
     ended March 31, 1995.)

     10.1  1984 Incentive Stock Option and Stock Appreciation
     Rights Plan, as amended.  (Incorporated by reference to Exhibit 10.3
     to the 1989 10-K.)

     10.2   Agreement of purchase and sale with amendments dated
      June 7, 1992, between the Company and ReCap Inc. for  the Halifax
      Office Complex.  (Incorporated by reference to Exhibit 10.5 of the
      1992 10-K.)

     10.3   1994 Key Employee Stock Option Plan.  (Incorporated
      by reference to Exhibit 10.3 to Form 10-K for the year ended March
      31, 1995.)

    10.4    Howard C. Mills Executive Severance Agreement

    10.5    Thomas L. Mountcastle Employment Agreement

     22.    Subsidiaries of the registrant

    23.A    Consent of Ernst &Young LLP, Independent Auditors

(b)  Reports on Form 8-K - None


<PAGE>
                                   SIGNATURES
                                     
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

HALIFAX CORPORATION


By /s/Howard C. Mills
   Howard C. Mills
   President and Chief Executive Officer             Date: 6/30/97

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

     Signature                       Title                Date


/s/Howard C. Mills                 President and          6/30/97
Howard C. Mills                    Chief Executive
Principal Executive Officer        Officer, Director



/s/John D. D'Amore                 Vice President,        6/30/97
John D. D'Amore                    Treasurer and
Principal Financial and            Controller
Accounting Officer


                                                          Chairman of the
Arch C. Scurlock                   Board of Directors


/s/John H. Grover                  Director               6/30/97
John H. Grover


                                                          Director
Clifford M. Hardin


/s/Ernest L. Ruffner               Director               6/30/97
Ernest L. Ruffner


                                                          Director
Alvin E. Nashman


/s/John Toups                      Director                6/30/97
John Toups

<PAGE>
                                     
                       REPORT OF INDEPENDENT AUDITORS
                                     

Board of Directors and Stockholders
Halifax Corporation

We have audited the accompanying consolidated balance sheets of Halifax
Corporation and subsidiaries as of March 31, 1997 and 1996, and the related
consolidated statements of earnings, changes in stockholders' equity and
cash flows for each of the three years in the period ended March 31, 1997.
Our audits also included the financial statement schedule listed in the
index at item 14(a)2.  These financial statements and schedule are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Halifax
Corporation and subsidiaries at March 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of
the three years in the period ended March 31, 1997, in conformity with
generally accepted accounting principles.  Also, in our opinion, the
related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.



/s/Ernst & Young LLP

Washington , D.C.
June 13, 1997
                                     


<PAGE>
<TABLE>


HALIFAX CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED MARCH 31, 1997, 1996, AND 1995
<CAPTION>

                                  1997         1996         1995
<S>                            <C>          <C>         <C>
Revenues (Note 1)              $76,278,000  $47,159,000  $45,603,000
                                                                    
Operating costs and expenses:                                       
    Cost of services            69,530,000   41,675,000   40,708,000
    Litigation expense                   -      320,000            -
    Selling, general and                                            
administrative                   4,630,000    3,692,000    3,210,000
                                                                    
Total operating costs and                                           
expenses                        74,160,000   45,687,000   43,918,000
                                                                    
Operating income                 2,118,000    1,472,000    1,685,000
                                                                    
Interest expense                   950,000      573,000      627,000
Other income                                                        
                                 (409,000)    (362,000)    (375,000)
                                                                    
Income before income taxes       1,577,000    1,261,000    1,433,000
                                                                    
Income taxes (Note 8)              623,000      498,000      575,000
                                                                    
Net earnings                     $ 954,000    $ 763,000    $ 858,000
                                                                    
Net earnings  per common and                                        
common                           $     .47    $     .43    $     .48
 equivalent share - primary
                                                                    
Net earnings  per common and                                        
common                           $     .46    $     .43   $      .48
 equivalent share - fully
diluted
                                                                    
Weighted average number of                                          
common shares outstanding -      2,043,795    1,756,881    1,784,506
primary
                                                                    
Weighted average number of                                          
common shares outstanding -                                         
fully diluted                    2,059,682    1,756,881    1,784,506
                                                                    
</TABLE>

See notes to consolidated financial statements


<PAGE>
<TABLE>

HALIFAX CORPORATION
CONSOLIDATED BALANCE SHEETS
 MARCH 31, 1997 AND 1996
<CAPTION>

                                     
                                                            March 31
<S>                                           <C>          <C>
                                                  1997         1996
ASSETS                                                                 
                                                                       
CURRENT ASSETS                                                         
  Cash                                         $   268,000  $ 2,743,000
  Trade accounts receivable (Note 3)            21,951,000   11,639,000
  Other receivables                                 62,000       95,000
  Inventory                                      6,860,000    2,792,000
  Prepaid expenses and other current assets      1,300,000      207,000
  Income taxes receivable                           43,000            -
  Deferred income taxes (Notes 1 and 8)            659,000      512,000
TOTAL CURRENT ASSETS                            31,143,000   17,988,000
                                                                       
PROPERTY AND EQUIPMENT, at cost less                                   
accumulated                                      6,624,000    4,527,000
  depreciation and amortization (Notes 1 and
4)
                                                                       
COST IN EXCESS OF NET ASSETS ACQUIRED, net                             
of accumulated                                                         
 amortization (Notes 1 and 2)                    2,583,000    1,923,000
                                                                       
OTHER ASSETS                                                           
                                                   650,000      390,000
                                                                       
TOTAL  ASSETS                                  $41,000,000  $24,828,000
                                                                       
LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                                       
CURRENT LIABILITIES                                                    
  Accounts payable and accrued expenses         $8,382,000  $10,278,000
(Note 6)
  Deferred maintenance revenue                   2,265,000      293,000
  Bank overdrafts                                1,803,000      847,000
  Current portion of long-term debt &                                  
mortgage note payable (Note 5)                   1,206,000      556,000
  Income taxes payable                                   -       90,000
                                                                       
TOTAL CURRENT LIABILITIES                       13,656,000   12,064,000
                                                                       
LONG-TERM DEBT (Note 5)                         13,570,000      739,000
MORTGAGE NOTE PAYABLE (Note 5)                   2,398,000    2,574,000
DEFERRED INCOME TAXES (Notes 1 and 8)                                  
                                                   853,000      667,000
                                                                       
TOTAL LIABILITIES                               30,477,000   16,044,000
                                                                       
                                                                       
STOCKHOLDERS' EQUITY (Note 7)                                          
 Common stock, $.24 par value:                                         
 Authorized - 4,500,000 shares                                         
 Issued - 2,258,866 in 1997 and 2,220,022 in                           
1996
 Outstanding - 2,000,632 in 1997 and               542,000      518,000
1,752,343 in 1996
 Additional paid-in capital                      4,358,000    3,401,000
 Retained earnings                                                     
                                                 5,836,000    5,253,000
                                                10,736,000    9,172,000
Less treasury stock at cost - 258,234 in                               
1997 and 467,679 shares in 1996                    213,000      388,000
TOTAL STOCKHOLDERS' EQUITY                                             
                                                10,523,000    8,784,000
                                                                       
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $41,000,000  $24,828,000

See notes to  consolidated financial statements
</TABLE>

<TABLE>

HALIFAX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997, 1996, AND 1995
<CAPTION>
                                     
                                       1997          1996          1995
<S>                                <C>           <C>           <C>
Cash flows from operating                                                   
activities:
                                                                            
Net income                         $    954,000     $ 763,000     $  858,000
                                                                            
Adjustments to reconcile net                                                
income to net
  cash provided (used) by                                                   
operating activities:
                                                                            
  Depreciation and amortization       1,060,000       599,000        658,000
  (Gain) loss on sale of equipment      164,000             -        (2,000)
  (Increase) decrease in accounts   (5,355,000)     (562,000)      2,315,000
receivable
  (Increase) decrease in other           83,000         1,000       (15,000)
current receivables
  (Increase) decrease in inventory  (1,284,000)       688,000       (43,000)
  (Increase) decrease in other      (1,005,000)        77,000        189,000
current assets
  (Increase) decrease in other        (367,000)      (44,000)         55,000
assets
  (Increase) decrease in income       (184,000)     (111,000)       (40,000)
tax receivable
  Increase (decrease) in accounts                                           
payable and
   accrued expenses                 (1,036,000)     5,502,000      (583,000)
  Increase (decrease) in income        (91,000)        90,000      (154,000)
taxes payable
  Increase (decrease) in deferred                                           
income taxes                            186,000       107,000        281,000
   Total adjustment                                                         
                                    (7,829,000)     6,347,000      2,661,000
                                                                            
   Net cash provided (used) by      (6,875,000)     7,110,000      3,519,000
operating activities
                                                                            
Cash flows from investing                                                   
activities:
                                                                            
 Acquisition of property and                                                
equipment, net of                   (1,684,000)     (247,000)      (393,000)
purchased operations
 Proceeds from sale of property          41,000         3,000          7,000
and equipment
 Acquisitions                                                               
                                      (114,000)     (400,000)      (400,000)
                                                                            
 Net cash used in investing         (1,757,000)     (644,000)      (786,000)
activities
                                                                            
Cash flows from financing                                                   
activities:
                                                                            
 Proceeds from borrowing of long-    40,216,000    16,271,000     17,199,000
term debt
 Retirement of long-term debt      (33,866,000)  (19,632,000)   (20,000,000)
 Cash dividends paid                  (371,000)     (305,000)      (303,000)
 Proceeds from sale of stock upon                                           
exercise of
  stock options                         178,000             -              -
 (Purchase) issue of treasury                                               
stock                                         -      (75,000)      (120,000)
 Net cash provided (used) by                                                
financing activities                  6,157,000   (3,741,000)    (3,224,000)
                                                                            
Net (decrease) increase in cash     (2,475,000)     2,725,000      (491,000)
Cash at beginning of year                                                   
                                      2,743,000        18,000        509,000
Cash at end of year                 $   268,000  $  2,743,000   $     18,000
                                                                            
                                                                            
</TABLE>

See notes to consolidated financial statements



<TABLE>
<CAPTION>

                        Addi               
                Common  tion           Treasur
                Stock    al            y Stock
                                       Paid-In      Retained                                 
                 Shares   Par Value    Capital      Earnings     Shares        Cost        Total
                                                                                                   
<S>            <C>        <C>        <C>          <C>          <C>         <C>          <C>
Balance                                                                                            
March 31, 1994             $ 518,000  $3,401,000  $  4,240,000     423,879  $ (193,000)  $7,966,000
                2,220,022
                                                                                                   
Cash Dividends                                                                                     
($.170 per              -          -           -     (303,000)           -            -   (303,000)
share)
Net Income              -          -           -       858,000           -            -     858,000
 Purchase of                                                                                       
Treasury stock                                                                                     
                        -          -           -             -      25,650    (120,000)   (120,000)
                                                                                                   
Balance                                                                                            
March 31, 1995  2,220,022  $ 518,000  $3,401,000  $  4,795,000     449,529  $ (313,000) $ 8,401,000
                                                                                                   
Cash Dividends                                                                                     
($.173 per              -          -           -     (305,000)           -            -   (305,000)
share)
Net income              -          -           -       763,000           -            -     763,000
Purchase of                                                                                        
Treasury stock          -          -           -             -      18,150     (75,000)    (75,000)
                                                                                                   
Balance                                                                                            
March 31, 1996  2,220,022  $ 518,000  $3,401,000  $  5,253,000     467,679  $ (388,000)  $8,784,000
                                                                                                   
Cash Dividends                                                                                     
($.187 per              -          -           -     (371,000)           -            -   (371,000)
share)
Net income              -          -           -       954,000           -            -     954,000
                                                                                                   
Exercise of                                                                                        
Stock Options      38,611      9,000     169,000             -           -            -     178,000
                                                                                                   
Stock Split           233     15,000    (15,000)             -           -            -           -
                                                                                                   
CMSA                                                                                               
Acquisition             -          -     803,000             -   (209,445)      175,000     978,000
                                                                                                   
Balance                                                                                            
March 31, 1997  2,258,866  $ 542,000  $4,358,000  $  5,836,000     258,234  $ (213,000) $10,523,000
                                                                                                   
</TABLE>

See notes to consolidated financial statements.





HALIFAX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1996, 1995 AND 1994

1.  SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY

    Business   Activity  -  Halifax  Corporation,  (the  Company)  provides
    Technology   Services  and  Facilities  Services  for  commercial   and
    government   activities.   These  services  include  the   integration,
    systems   engineering,  installation,  maintenance  and  training   for
    computer  systems, communications systems, and simulation systems;  and
    the  management, operations and maintenance support of military  bases,
    prisons,  waterways, major office complexes, and communications  sites.
    Revenues  from  services rendered to the United States  Government  and
    the  relative  percentages of such revenues to total revenues  for  the
    years  ended  March  31,  1997, 1996 and 1995  are  $36,111,000  (47%),
    $34,425,000  (73%) and $37,850,000 (83%), respectively.  The  reduction
    in  United  States Government revenue in 1997 is primarily a result  of
    the  Company's acquisition activities, however the Company's  trend  is
    toward  a  balance  among  commercial, state/municipal  government  and
    federal government revenues.  For the years ended March 31, 1997,  1996
    and  1995,  the Company derived  0%, 0% and 15%, respectively,  of  its
    revenue  from  its MPS contract with the U.S. Marine  Corps.   The  MPS
    contract was completed in the first quarter of fiscal year 1995.

    Principles  of  Consolidation  - The Company's  consolidated  financial
    statements  include  the accounts of the Company and  its  wholly-owned
    subsidiaries.    All   significant   intercompany   transactions    are
    eliminated in consolidation.

    Revenue Recognition - On cost type contracts, revenues are recorded  as
    reimbursable  costs are incurred and related fixed and award  fees  are
    recorded  using  the  percentage of completion  method.   On  time  and
    materials contracts, revenues are recorded at the contractual rates  as
    labor  hours  and other direct expenses are incurred.  On  fixed  price
    contracts,  revenues  are recorded using the percentage  of  completion
    method.   Revenues  collected  in advance  for  commercial  maintenance
    contracts  are  deferred and recognized over the term  of  the  related
    agreements.   For all contracts, recognition is made of any anticipated
    losses  when  identified.  Disputes involving amounts owed the  Company
    by  customers  arise  in the normal course of the  Company's  business.
    These  disputes are primarily due to changes in contract specifications
    and  disagreements  over  the interpretation  of  contract  provisions.
    Such  disputes  are  recorded  at the lesser  of  their  estimated  net
    realizable value or actual costs incurred.  Claims against the  Company
    and  contract  losses  are  recognized  when  the  loss  is  considered
    probable  and reasonably  determinable in amount.  Deferred maintenance
    revenue is recognized notably over the performance period.

    Use  of  Estimates  -  The  preparation  of  financial  statements   in
    conformity  with  generally  accepted  accounting  principles  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.

    Property  and  Equipment - Property and equipment is  stated  at  cost.
    Depreciation  is  provided  using the  straight-line  method  over  the
    estimated useful lives of the related assets.

    Inventory  -  Inventory consists principally of  spare  computer  parts
    valued  at the lower of cost or market on the first-in first-out  basis
    and  is  displayed on the consolidated balance sheet net of  allowances
    for  inventory obsolescence of  $499,000 and $804,000 at March 31, 1997
    and 1996, respectively.



    Accounts  Receivable and Inventories - Receivables and inventories  are
    primarily  attributable to long-term contracts or programs in  progress
    for  which the related operating cycles are longer than one  year.   In
    accordance with industry practice, these items are included in  current
    assets.

    Income  Taxes - The Company has adopted the provisions of Statement  of
    Financial  Accounting  Standards Number  109,  "Accounting  for  Income
    Taxes" (SFAS 109).  Under SFAS 109, deferred taxes are provided on  all
    temporary differences measured using enacted tax rates expected  to  be
    in  effect  during  the  periods in which  the   temporary  differences
    reverse.

    Cost  in  Excess of Net Assets Acquired - Cost in excess of net  assets
    of  acquired companies, described in Note 2, are being amortized  using
    the  straight-line method over 25 years.  Accumulated amortization  was
    $219,000  and  $113,000  as of March 31, 1997 and  1996,  respectively.
    Management   regularly  reviews  the  valuation  and  amortization   to
    determine possible impairment of net intangible assets.  Based  on  its
    review,  the  Company  does not believe that an  impairment  exists  at
    March 31, 1997.

                                   Earnings   Per  Common  Share   -    The
     computation  of  primary earnings per share is based on  the  weighted
     average  number of shares outstanding during the period plus  dilutive
     common stock equivalents consisting of certain shares subject to stock
     options based on the average market price of the common stock.   Prior
     to any dilution calculation, the weighted average number of shares was
     1,985,612  in  1997, the only year in which there was  dilution.   The
     weighted  average  number of shares outstanding  resulting  from  this
     computation for fiscal 1997 was 2,043,795.

                                  The computation of fully-diluted earnings
     per   share  is  based  on  the  weighted  average  number  of  shares
     outstanding  during the period plus dilutive common stock  equivalents
     consisting  of certain shares subject to stock options  based  on  the
     ending  market  price  of the common stock  and contingently  issuable
     shares  based  on an earn-out provision related to the acquisition  of
     CMSA.   The  weighted  average number of shares outstanding  resulting
     from this computation for fiscal 1997 was 2,059,682.

All  share  and  per share presentations take into account the  3:2  common
stock   split  effective  December  27,   1996.(See  Note  7  for   further
discussion).

    New  Accounting  Pronouncements  - In fiscal  year  1997,  the  Company
    adopted  Statement of Financial Accounting Standards  (SFAS)  No.  121,
    "Accounting for the Impairment of Long-Lived Assets and for  Long-Lived
    Assets  to  Be Disposed Of."  SFAS No. 121 requires that certain  long-
    lived  assets  to be held and used be reviewed for impairment  whenever
    events  or changes in circumstances indicate that the carrying  amounts
    of  an  asset  may  not  be recoverable.  Additionally,  SFAS  No.  121
    requires  that certain long-lived assets to be disposed of be  reported
    at  the lower of carrying amount or fair value less cost to sell.   The
    impact  of  the  adoption  of this standard was  not  material  to  the
    Company's consolidated earnings or financial position.

    Also  in 1997, the Company adopted SFAS No. 123, "Accounting for Stock-
    Based  Compensation."  SFAS No. 123 allows  companies  to  continue  to
    measure  compensation cost for stock-based employee compensation  plans
    using  the  intrinsic  value  method of  accounting  as  prescribed  in
    Accounting  Principles  Board (APB) Opinion  No.  25,  "Accounting  for
    Stock  Issued to Employees," and related Interpretations.  The  Company
    elected  to  continue its APB Opinion No. 25 accounting  treatment  for
    stock-based  compensation, and has adopted the provisions of  SFAS  No.
    123  requiring disclosure of the pro forma effect on net  earnings  and
    earnings  per  share as if compensation cost had been recognized  based
    upon  the estimated fair value at the date of grant for options awarded
    (See Note 7 to financial statements).

<PAGE>

2.  ACQUISITIONS

     CMS Automation, Inc. (CMSA) and Consolidated Computer Investors, Inc.
     (CCI)

On  April 1, 1996, the Company completed the acquisition of CMS Automation,
Inc. (CMSA), a private Richmond, VA based computer network integration  and
solutions  company.    On  April  23,  1997,  CMSA  was  renamed    Halifax
Technology  Services Company  (HTSC).  Financial consideration was  in  the
Company's  stock with an assumption of debt.  There was an initial  payment
of  approximately  209,400  shares valued at  approximately  $978,000  from
Treasury Stock representing approximately 12% of Halifax outstanding shares
at  closing and there may be additional payments of common stock  over  the
next  three years based on the annual earnings of CMSA.  The Company  filed
reports  of the Acquisition Transaction with the SEC on Form 8-K  on  April
16, 1996 and on June 17, 1996.


The  acquisition  has been accounted for as a purchase  with  the  purchase
price allocated to the assets and liabilities based on their estimated fair
value at the date of acquisition.  The initial purchase price and costs  of
the transaction exceeded the fair value of net assets purchased by $391,000
which was capitalized as the purchase price in excess of the fair value  of
the net assets acquired.

On  November  25,  1996,  the Company through its wholly-owned  subsidiary,
CMSA,  acquired  the  ongoing  computer  network  integration  business  of
Consolidated Computer Investors, Inc. ("CCI") of Hanover, Maryland  through
an  asset purchase.  The Company paid $114,210 in cash and assumed  secured
debt  totaling  $1,679,713.  The cash paid was equal to the  estimated  net
assets   purchased.   The  Company  filed  a  report  of  the   acquisition
transaction with the SEC on Form 8-K dated November 25, 1996.

The  acquisition  has been accounted for as a purchase  with  the  purchase
price allocated to the assets and liabilities based on their estimated fair
value.   The  initial purchase price and costs of the transaction  exceeded
the fair value of net assets purchased by $375,000 which was capitalized as
the purchase price in excess of the fair value of the net assets acquired.

The  Company's  fiscal  1997 results include CMSA's and  CCI's  results  of
operations beginning April 1, 1996 and November 1, 1996, respectively.  The
proforma  impact  of the CCI acquisition on fiscal 1997 is immaterial.  The
following  fiscal 1996 proforma information is unaudited and reflects  both
of  the acquisitions as if the purchase transactions had occurred on  April
1, 1995.


<TABLE>
<CAPTION>



                       For the Year Ended
                        March 31      Dec. 31,   Profor               Dec. 31,  Profor        
                          1996          1995       ma     Proforma      1995      ma      Proforma
                        Halifax         CMSA     Adjust   Combined       CCI    Adjust    Combined
                                                  ments                         ments
                                                  & Tax                         & Tax
                                                 Effect                         Effect
                       ($ In thousands, except per share data)
                                     
                      
<S>                  <C>             <C>         <C>     <C>          <C>       <C>     <C>
Revenues                  $  47,159    $ 21,249    $   -   $  68,408   $ 13,526 $    -        $81,934
                                                                                                     
Net Income (Loss)         $     763     $ (109)    $ 137   $     791   $  (140) $  313        $   964
                                                                                                     
Earning per share         $     .43         N/A            $     .40         NA               $   .49
                                                                                                     
Weighted Average                                                                           #1,966,326
Number of Common
Shares Outstanding
</TABLE>





Electronics Associates, Inc. (EAI)


On   June  30, 1993, the Company purchased substantially all of the  assets
and  liabilities  of the Field Services Division of Electronic  Associates,
Inc.  (EAI)  which was primarily engaged in the maintenance  of  electronic
equipment and software for an initial purchase price of approximately  $2.4
million.  Additional payments of $1,000,000 were paid over the next 3 years
as  certain  revenue objectives were achieved.  The Company  paid  $200,000
relating to this requirement in 1994 and $400,000 in both 1995 and 1996.


3.   ACCOUNTS RECEIVABLE

     Accounts receivable consist of:
<TABLE>
<CAPTION>

                                                      March 31,
                                                  1997            1996
     <S>                                   <C>            <C>
     Amounts billed                          $ 19,708,000     $ 10,886,000
                                                                          
     Amounts unbilled:                                                    
      Amounts currently billable                1,800,000          511,000
      Retainages and amounts awaiting                                     
     audit                                        677,000          430,000
     Total                                     22,185,000       11,827,000
     Allowance for doubtful accounts                                      
                                                (234,000)        (188,000)
     Total                                  $  21,951,000   $   11,639,000
                                                                          

</TABLE>

     Retainages are generally billable upon acceptance  of work by customers
     or completion of contract  audits  by the Government.  It is anticipated
     that  the  accounts  receivable balance  at March 31, 1997 will be 
     substantially collected within one year.


4.   PROPERTY AND EQUIPMENT

     Property and equipment consists of:

<TABLE>
<CAPTION>

                                           March 31,                 
                                                                Estimated
                                      1997           1996      Useful Lives
     <S>                         <C>            <C>            <C>
     Automotive equipment           $   375,000     $  336,000 4 years
     Machinery and equipment          6,260,000      2,605,000 3 - 10 years
     Furniture and fixtures           1,323,000        576,000 5 - 10 years
     Building and improvements        3,955,000      3,834,000 32 years
     Land                               648,000        648,000 
     Total                           12,561,000      7,999,000 
                                                               
     Accumulated depreciation                                  
     and amortization                 5,937,000      3,472,000
     Total                          $ 6,624,000    $ 4,527,000 
                                                               
</TABLE>

<PAGE>


5.   LONG-TERM DEBT AND MORTGAGE NOTE PAYABLE


<TABLE>
<CAPTION>

                                                     March 31,
 <S>                                         <C>            <C>
                                                 1997          1996
                                                                       
 Long-term debt consists of:                                           
                                                                       
 Revolving credit agreement amended                                    
 effective February 4, 1997, with a maximum                            
 credit line of $12,800,000.  Amounts                                  
 available under this agreement are                                    
 determined by applying stated percentages                             
 to the Company's eligible billed                                      
 receivables and inventory.  Interest                                  
 accrues on borrowings equal to or less                                
 than eligible billed receivables and                                  
 inventory at either the prime rate or the                             
 LIBOR rate plus 1.6%  to 1.9% depending                               
 upon a leverage ratio.  At March 31, 1997                             
 the interest rate was 7.34%.  This                                    
 agreement expires July 31, 1998, at which                             
 time all borrowings will become due.        $  11,046,000   $        -
                                                                       
 Other notes payable and capital lease                                 
 obligations with interest rates ranging                               
 from 1/2% over the prime rate to 15%, due                             
 in monthly installments and maturing at                               
 dates through 1997.  The prime rate was                               
 8.5% at March 31, 1997.                       $    20,000    $  20,000
                                                                       
 Mortgage note modified and extended                                   
 February 7, 1997 payable in monthly                                   
 installments of $10,257 plus interest at                              
 prime plus 1/4% through August 31, 2001.                              
 At March 31, 1997, the interest rate was                              
 8.75%.  The note is collateralized by                                 
 buildings and land.                           $ 2,531,000  $ 2,640,000
                                                                       
 EAI acquisition term loan facility dated                              
 June 30, 1993.  Note is payable in 60                                 
 equal monthly installments of $41,666 plus                            
 interest.  The note may be apportioned                                
 between prime rate and LIBOR rate options.                            
 Interest accrues at either the prime rate                             
 plus 1/2% or the LIBOR rate plus 2.5%.  At                            
 March 31, 1997, the prime rate and LIBOR                              
 options were at 9% and 8.01%.               $     645,000  $ 1,209,000
                                                                       
 CMSA acquisition term loan facility dated                             
 June 14, 1996.  Note is payable in 24                                 
 equal monthly installments of $29,762 plus                            
 interest and a final installment of                                   
 $1,785,712 due on June 30, 1998 plus                                  
 interest.  Interest accrues at the LIBOR                              
 rate plus 1.9%.  At March 31, 1997, the                               
 interest rate was at 7.34%.                 $   2,202,000  $         -
                                                                       
 CCI acquisition term loan facility dated                              
 November 26, 1996.  Note is payable in 48                             
 equal monthly installments of $16,979 plus                            
 interest.  Interest accrues at the prime                              
 rate plus 1/4%.  At March 31, 1997, the                               
 interest rate was 8.75%.                     $    730,000  $         -
                                                                       
                                             $  17,174,000  $ 3,869,000
 Less current maturities                                               
                                                 1,206,000      556,000
 Total                                       $  15,968,000  $ 3,313,000
                                                                       
</TABLE>




     Advances under the revolving credit agreement and term loan 
     facilities are collateralized by a first priority security 
     interest in  all of the accounts receivable of the Company, the
     inventory of Halifax Corporation  and all of the Company's assets
     except for land and building.  Additionally, advances under the 
     term loan facilities are secured by the acquired assets.

     The revolving credit agreement also contains convenants which 
     require the Company to maintain certain net worth and financial 
     statement ratios.

     The aggregate annual maturities of long-term debt are:
<TABLE>

                                                                           
         <S>          <C>
             1998   - $    1,206,000
             1999   -     11,874,000
             2000   -        684,000
             2001   -        599,000
             2002   -        480,000
           Thereafter      2,331,000
                    -
            Total   -   $ 17,174,000
</TABLE>


6.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

          Accounts payable and accrued expenses consist of:
<TABLE>
<CAPTION>

                                                March 31,
                                          1997               1996
     <S>                           <C>                 <C>
     Accrued expenses                  $    1,381,000     $   1,151,000
     Accounts payable                       5,328,000         7,915,000
     Accrued payroll                          563,000           346,000
     Accrued vacation                         859,000           646,000
     Payroll taxes accrued and                251,000           220,000
     withheld
                                        $   8,382,000     $  10,278,000
                                                                       

</TABLE>

7.   COMMON STOCK

          Stock Split - On November 15, 1996, the Board of Directors
     authorized a three-for-two stock split which was distributed on
     December 27, 1996, to stockholders of record at December 10, 1996.
     All references in the consolidated financial sttements to numbers of
     shares, per share amounts and market prices of the Company's common
     stock have been retroactively restated to reflect the increased number
     of common shares outstanding.

          Stock Options - Under the Company's 1984 Stock Option and Stock
     Appreciation Rights Plan (as amended), options to purchase shares of
     the Company's common stock have been granted to officers and key
     employees at a price not less than the fair market value of the stock
     at the date of grant.  Any grants of options or stock appreciation
     rights under the plan are limited to a maximum of 165,000 shares of
     the Company's common stock.  Options and/or stock appreciation rights
     expire five years after the date of grant.  The 1984 plan terminated
     May 15, 1994.  On September 16, 1994 the shareholders approved the new
     Key Employee Stock Option Plan ("1994 Plan").  The maximum number  of
     shares subject to the 1994 Plan and approved for issuance is 180,000
     shares of the Company's common stock either authorized and unissued or
     shares held in treasury.  This number is subject to adjustment in the
     event of stock splits, stock dividends or other recapitalization of
     the Company's common stock.


          A summary of options activity is as follows:

<TABLE>
<CAPTION>

                                                               Weighted
                       Optioned   Option Price                 Average
                        Shares     Per Share      Total     Exercise price
 <S>                   <C>       <C>            <C>         <C>
 1984 Plan                                                                
 Balance March 31,        63,150   $4.59 - 5.67   $301,000       $    4.77
 1994
                                                                          
 Options forfeited                                                        
 upon retirement/
   termination of        (4,500)    4.59 - 5.00   (21,000)            4.67
 employees
 Balance March 31,        58,650   $4.59 - 5.67   $280,000       $    4.77
 1995
                                                                          
 Options forfeited                                                        
 upon retirement/
   termination of        (6,000)    4.59 - 5.00   (28,140)            4.69
 employees
 Balance March 31,        52,650  $ 4.59 - 5.00  $ 251,860        $   4.78
 1996
                                                                          
 Options exercised      (38,611)    4.59 - 5.00  (178,795)            4.63
 Options forfeited                                                        
 upon retirement/
   termination of        (1,688)           5.00    (8,440)            5.00
 employees
 Balance March 31,        12,351  $ 5.00 - 5.67  $  64,625        $   5.23
 1997
                                                                          
 Options exercisable                                                      
 at
 March 31, 1997           10,013   $5.00 - 5.67  $  52,075        $   5.20
                                                                          
 1994 Plan                                                                
 Balance March 31,             -  $           -  $       -        $      -
 1994
 Options granted          48,000           4.67    224,000            4.67
 Balance March 31,        48,000   $       4.67  $ 224,000        $   4.67
 1995
                                                                          
 Options Granted          23,700    4.58 - 4.83    114,175            4.82
 Options forfeited                                                        
 upon retirement/
   termination of        (4,500)    4.58 - 4.83   (21,250)            4.72
 employees
 Balance March 31,        67,200  $ 4.58 - 4.83  $ 316,925        $   4.72
 1996
                                                                          
 Options Granted         105,600    4.67 - 7.67    680,800            6.45
 Options forfeited                                                        
 upon retirement/
   termination of       (24,000)    4.67 - 7.33  (137,810)            5.74
 employees
 Balance March 31,       148,800  $ 4.58 - 7.67  $ 859,915        $   5.78
 1997
                                                                          
 Options exercisable                                                      
 at
 March 31, 1997                -  $           -  $       -               -
                                                                          
</TABLE>


All  stock-based incentive awards granted in 1997 and 1996 under the  Plans
were stock options which have 5 year terms and vest at the end of the third
and  fourth  years.  Exercise prices of options awarded in all  years  were
equal  to  the  market price of the stock on the date of  grant.   Proforma
information  regarding net earnings and earnings per share as  required  by
SFAS  No.  123 has been determined as if the Corporation had accounted  for
its employee stock options under the fair value method.  The fair value for
these  options  was  estimated at the date of grant using  a  Black-Scholes
option  pricing  model with the following weighted-average assumptions  for
both  1997 and 1996: risk-free interest rate of  6.16%, dividend  yield  of
3.1%,   volatility  factor  related to the expected  market  price  of  the
Corporation's  common stock of  .262, and weighted-average expected  option
life  of  three years.  The weighted average fair values of options granted
during 1997 and 1996 were $6.46 and $4.81, respectively.


 For  purposes of proforma disclosures, the options' estimated fair  values
 are amortized to expense over the options' vesting  periods.  Therefore, 
 the proforma results presented below include up  to 33% of the total 
 proforma expense for options awarded in that  year depending  upon the 
 date of grant.  The Corporation's proforma information for the years 
 ended March 31, is as follows:


<TABLE>
<CAPTION>

     (In thousands, except per share data)     1997            1996
     
     <S>                                  <C>              <C>
     Proforma net earnings                 $     930      $     759
     Proforma earnings per                                     
     common share:
       Assuming no dilution                      .46            .43
       Assuming full dilution                    .45            .43
                                                               
</TABLE>


          Employee Plans - During fiscal 1985, the Company adopted a 401(k)
   retirement  plan  covering  substantially all non-union  employees  with
   more  than 3 months of service.  The plan provides that the Company will
   contribute an amount equal to 50% of a participants contribution  up  to
   4%  of salary, and at the Company's discretion, additional amounts based
   upon  the  profitability  of the Company.  The  Company's  contributions
   were  $191,000   in 1997, $157,000 in 1996 and $163,000  in  1995.   The
   Company  has  an Employee Stock Purchase Plan under which all  employees
   of  the Company are eligible to contribute funds for the purchase of the
   Company's  common stock on the open market at market value.   Under  the
   Plan,  the  Company  agrees to pay all brokerage commissions  associated
   with such purchases.


8.       INCOME TAXES

         Deferred tax assets and liabilities on the balance sheets reflect
   the net tax effect of temporary differences between carrying amounts of
   assets and liabilities for financial statement purposes and the amounts
   used for income tax purposes.  The deferred tax assets and liabilities
   are classified on the balance sheets as current or non current based on
   the classification of the related assets and liabilities.

         The components of income tax expense are as follows for the years
   ended March 31:

<TABLE>
<CAPTION>

                            1997                1996              1995
  <S>                 <C>                <C>                <C>
  Current:                                                                   
    Federal                  $  494,000          $  355,000       $   250,000
    State                       101,000              75,000            43,000
  Total current:                595,000             430,000           293,000
    Deferred                     28,000              68,000           282,000
  Total                      $  623,000          $  498,000       $   575,000
</TABLE>

<PAGE>

         The components of the Company's deferred tax assets and
   liabilities consist of the following at March 31:

<TABLE>
<CAPTION>

                                                 1997             1996
 <S>                                      <C>                <C>
 Deferred tax assets - current                                              
                                                                            
 Accounts receivable                               $ 102,000       $  71,000
 Inventory                                           234,000         214,000
 Accrued compensation/vacation                       323,000         227,000
 Net operating loss carry forwards -                  51,000               -
 CMSA
 AMT credit carry forward - CMSA                      15,000               -
 Less: valuation allowance                                                 -
                                                    (66,000)
                                                  $  659,000       $ 512,000
                                                                            
 Deferred tax liability- noncurrent                                         
                                                                            
 Depreciation/amortization                         $ 785,000       $ 606,000
 Sublease rental income                               33,000          21,000
 Other                                                                      
                                                      35,000          40,000
                                                   $ 853,000       $ 667,000

</TABLE>

         The sources and tax effects of temporary differences resulting in
   deferred tax expense (benefit) are as follows for the year ended March
   31:

<TABLE>
<CAPTION>

                                   1997            1996        1995
 <S>                          <C>              <C>          <C>
 Depreciation/amortization       $    166,000     $  77,000  $  471,000
 Allowance and reserves for                                            
 accounts     receivable             (31,000)      (18,000)     147,000
 Income from contracts                (5,000)     (201,000)      28,000
 Vacation expense                    (91,000)         8,000       3,000
 Inventory costs capitalized                                           
 for tax        purposes             (19,000)       187,000   (270,000)
 Sublease rental income                13,000             -       2,000
 Deferred contract costs                    -             -    (90,000)
 Deferred compensation                                                 
 expense                              (5,000)        15,000     (9,000)
 Total                        $        28,000  $     68,000  $  282,000
                                                                       

</TABLE>

         The differences between the provision for income taxes at the
   expected statutory rate and those shown in the consolidated statements
   of earnings are as follows for the years ended March 31:

<TABLE>
<CAPTION>

                                         1997      1996       1995
 <S>                                  <C>        <C>        <C>
 Provision for income taxes                                         
  at statutory rate                        34.0%     34.0%     34.0%
 State taxes, net of federal benefit         4.4       4.3       3.6
 Permanent differences                       1.1       1.4       2.0
 Other                                                              
                                               -      (.2)        .5
 Total                                                              
                                           39.5%     39.5%     40.1%

</TABLE>

9.       LEASING ACTIVITY

         The Company is obligated under operating leases for  office space
   and certain equipment.  The following is a schedule of the future
   minimum lease payments under operating leases as of March 31, 1997.

<TABLE>
<CAPTION>

     Year ending March 31,                    
     <S>                      <C>
     1998                     $        638,000
     1999                              398,000
     2000                               56,000
     2001                                    -
     2002                                     
                                             -
                                              
     Total minimum lease      $      1,092,000
     payments
</TABLE>

         Total rental expense under operating leases was $411,000,
   $201,000 and $376,000 for the years ended March 31, 1997, 1996, and
   1995, respectively.


10.RELATED PARTY TRANSACTIONS

         During the years ended March 31, 1997, 1996, and 1995, the
   Company paid  $77,000, $9,000 and $14,000, respectively, for legal
   services to a Company Board member or a law firm in which a Company
   Board member is a partner.


11.COMMITMENTS AND CONTINGENCIES

         The Company's contracts with the U.S. Government are subject to
   cost audit by Government authorities.   Such audits have been completed
   through March 31, 1990.  It is not possible to predict the outcome of
   future audits but it is the opinion of the Company's management that
   liabilities, if any, arising from such audits would not have a material
   adverse effect on the Company's consolidated financial position or
   results of operations.

         Upon the death of a Company officer or a certain former officer
   and at the option of their estates, the Company is committed to
   repurchase their shares (79,267) at current book value.  At March 31,
   1997, the aggregate book value of such shares was approximately
   $417,000.

         The Company is defendant or co-defendant in various lawsuits.  In
   the opinion of management, none of these lawsuits could materially
   affect the consolidated financial position or results of operations of
   the Company.


12.SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         The Company paid the following amounts for interest and income
   taxes during the years ended March 31:

<TABLE>
<CAPTION>

                              1997           1996           1995
     <S>                  <C>            <C>            <C>
     Interest             $     950,000  $     573,000   $   627,000
                                                                    
     Income taxes         $     722,000  $     457,000  $    487,000
                                                                    

</TABLE>


13.QUARTERLY FINANCIAL DATA (unaudited)

         (In thousands, except on a per share basis)

<TABLE>
<CAPTION>

                              1st       2nd         3rd       4th
                            Quarter   Quarter     Quarter   Quarter
     1997                                                           
     <S>                   <C>       <C>         <C>       <C>
     Revenues                $15,640    $20,531    $21,913   $18,194
     Income before income        435        536        594        12
     taxes
     Net income                  269        319        359         7
     Per share                                                      
       Earnings per share        .14        .16        .18       .00
     - primary
       Earnings per share        .14        .15        .17       .00
     - fully diluted
       Dividends per            .043       .047       .047       .05
     share
     Market price                                                   
     High                      8-1/8      7-7/8     13-1/8        15
     Low                       4-5/8      6-5/8      7-5/8    10-1/8
                                                                    
</TABLE>


         Primary EPS totals to $.48 versus $.47 for the year due to
   rounding during computation at fiscal quarters.

<TABLE>
<CAPTION>

                              1st        2nd      3rd      4th
                            Quarter    Quarter  Quarter  Quarter
     1996                                                        
     <S>                   <C>        <C>       <C>      <C>
     Revenues                 $8,894     $9,076  $11,217  $17,920
     Income before income        309         47      314      591
     taxes
     Net income                  188         27      191      357
     Per share                                                   
       Earnings per share        .11        .01      .11      .20
     - primary
       Earnings per share        .11        .01      .11      .20
     - fully diluted
       Dividends per            .043       .043     .043     .043
     share
     Market price                                                
     High                      4-7/8      4-5/8    4-5/8    4-3/4
     Low                       4-1/8      4-1/8    3-7/8    4-3/8
</TABLE>

<PAGE>


                            Halifax Corporation
                                     
              Schedule II, Valuation and Qualifying Accounts
                                     
                              March 31, 1997
                                     
<TABLE>
<CAPTION>
                                     
                    Balance at      Additions                   Balance at
                    beginning      charged to                     end of
                     of year     cost & expense    Deductions      year
<S>                <C>           <C>              <C>          <C>
Year Ended March                                                           
31, 1997:
                                                                           
Allowance for                                                              
doubtful
  accounts          $   188,000      $   158,000     $ 112,000   $  234,000
                                                       
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence     $    804,000      $   809,000     $1,114,000   $  499,000
                                                     
                                                                           
                                                                           
                                                                           
Year Ended March                                                           
31, 1996:
                                                                           
Allowance for                                                              
doubtful
  accounts         $    170,000       $   20,000     $   2,000   $  188,000
                                                         
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence      $   611,000      $ 1,195,000     $1,002,000   $  804,000
                                                     
                                                                           
                                                                           
                                                                           
Year Ended March                                                           
31, 1995:
                                                                           
Allowance for                                                              
doubtful
  accounts          $   242,000       $   39,000      $ 111,000   $  170,000
                                                       
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence     $    539,000      $   575,000      $ 503,000   $  611,000
                                                       
                                                                           
</TABLE>
<PAGE>
                             INDEX TO EXHIBITS
               (Exhibit Numbers correspond to Exhibit Table
                         Regulation S-K, Item 601)
                                     


      Exhibit
      Number
                                                                      Page

       10.4   Howard C. Mills Executive Severance Agreement            42

       10.5   Thomas L. Mountcastle Employment Agreement               46

       23.A   Consent of Ernst & Young LLP, Independent Auditors       50

<PAGE>
                                                  Exhibit 10.4

                 EXECUTIVE SEVERANCE AGREEMENT


     AGREEMENT, dated as of       July 24        , 1995, between Halifax
Corporation, a Virginia corporation ("Company"), and Howard C. Mills
("Executive").

               WITNESSETH:

     WHEREAS,  Executive has been a long-time employee of the Company in
positions of high responsibility and authority and is presently its chief
executive officer, and

     WHEREAS, in recognition of the Executive's contribution to the company
it is in the best interest of the parties hereto that orderly and equitable
provisions be made in the event of termination of the Executive.

     NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.   The Company and the Executive agree that the Executive is employed on
     an at-will basis.  Unless otherwise specifically provided in a written
     agreement signed by both the Company and the Executive, the parties
     understand that the Executive is employed for no fixed term or period,
     that either the Company or the Executive may terminate the Executive's
     employment with the Company at any time with or without a reason, and
     that this Agreement creates no contract of employment between the
     Company and the Executive.

2.   The term of this Agreement shall be for one (1) year beginning
     August 1,  1995, and shall automatically renew itself for an
     additional one (1) year term on  August 1 from year-to-year
     thereafter, unless the Company provides to the Executive written
     notice of the Company's decision not to renew in which event this
     Agreement shall expire by its terms at the end of the full term year
     that begins on the January 1 next following the date such notice is
     received by the Executive.

3.   The Company shall have the right to terminate the Executive's
     employment without payment of severance as provided below in the event
     of the Executive's death, or on thirty (30) days written notice in the
     event that the Executive shall be unable, or shall fail, to perform
     all of the services required of his position with the Company as a
     result of any mental or physical incapacitating disability, to the
     extent that such inability or failure to perform required duties shall
     exist for any consecutive ninety (90) day period.  The Company's right
     to terminate the Executive's employment without payment of severance
     under this Paragraph shall not limit or reduce in any way the
     Executive's right to receive benefits under any disability insurance
     or plan maintained by the Company for the benefit of the Executive.
4.   The Executive shall have the right to terminate his employment with
     the Company at any time on written notice to the Company indicating
     the Executive's desire to retire or to resign from the Company's
     employment;

5.   Except as provided in Paragraph 3 and 4, the Executive's employment
     with the Company may be terminated without payment of severance as
     provided below only in the event of a termination for cause as defined
     in this Paragraph.  For the purposes of this Agreement, "Cause" shall
     be defined as gross negligence, willful misconduct, fraud, willful
     disregard of the Board of Directors' direction or breach of published
     Company policy.  The Executive may be terminated for Cause only in
     accordance with a resolution duly adopted by an absolute majority of
     the Company's Board of Directors finding that, in the good faith
     opinion of the Board of Directors, the Executive engaged in conduct
     justifying a termination for Cause as that term is defined above and
     specifying the particulars of the conduct motivating the Board's
     decision to terminate the Executive.  Such resolution may be adopted
     by the Board of Directors only after the Board has provided to the
     Executive (1) five (5) days advance written notice of a meeting of the
     Board called for the purpose of determining Cause for termination of
     the Executive, (2) a statement setting forth the alleged grounds for
     termination, and (3) an opportunity for the Executive and, if the
     Executive so desires, the Executive's counsel to be heard before the
     Board.

6.   Except in connection with a Change of Control Disposition as defined
     in Paragraph 12, if the Executive's employment with the Company is
     terminated for any reason other than those set forth in Paragraphs 3,
     4 or 5 above, then the Company shall pay to the Executive an amount
     equal to eighteen (18) months salary based upon the current salary of
     the Executive at the time of termination.

7.   If following a Change of Control Disposition (herein "Change of
     Control Disposition" shall be as defined below in Paragraph 12) of the
     Company, the Executive's employment is terminated within one (1) year
     of the "Change of Control Disposition Date" (as herein defined below
     in Paragraph 12) for any reason other than the reasons set forth in
     Paragraphs 3, 4 or 5 above, then the Company shall pay to the
     Executive an amount equal to two (2) times the amount that the Company
     would have been required to pay the Executive under Paragraph 6 above
     if the Executive's employment had been terminated in the absence of a
     Change of Control Disposition.  In the event Executive retires or
     resigns pursuant to Paragraph 4 above within ninety (90) days
     following the Change of Control Disposition Date, the Company shall
     pay to the Executive an amount equal to two (2) times the amount that
     the Company would have been required to pay the Executive under
     Paragraph 6 above if the Executive's employment had been terminated in
     the absence of a Change of Control Disposition.  Notwithstanding the
     foregoing, maximum compensation payable to the Executive pursuant to
     this Paragraph is limited to no more than 299% of the "base amount" of
     Executive's compensation as defined in the Tax Reform Act of 1984
     (Section 280G and applicable regulations thereunder and any amendments
     thereto).

 8.  At the time of termination of the Executive's employment for any
     reason the Executive shall be paid all other compensation and benefits
     due to the Executive at the time of termination.

 9.  The Executive may elect to receive the compensation payable in
     accordance with this Agreement in a lump sum or in equal payments at
     intervals no more often than semimonthly, over a period of the
     Executive's choice not to exceed the number of months of compensation
     due him pursuant to this Agreement.

10.  The Executive shall not disclose, publish, or use for any purpose not
     directly related to the performance of the Executive's duties for the
     Company, or permit anyone else to disclose, publish, or use any
     proprietary or confidential information or trade secrets of the
     Company at any time during or after his employment with the Company.
     This obligation shall continue so long as such information remains
     legally protectable as to persons receiving it in a confidential
     relationship.  Executive agrees to return to the Company all
     proprietary material which he possesses on the date of termination of
     the Executive's active employment with the Company.

11.  For a period of six (6) months following termination of Executive's
     employment with the Company for any reason other than "Cause," as
     defined in Paragraph 5 above, the Executive shall not (1) directly or
     indirectly, sell, market, or otherwise provide any client or
     previously identified prospective client of the Company, products or
     services similar to or in competition with those sold or distributed
     by the Company, in any geographic area in which the Company offers any
     such products or services, or (2) participate directly or indirectly
     in the hiring or soliciting for employment of any person employed by
     the Company.

12.  By reason of the special and unique nature of the obligations
hereunder, it is agreed that neither party hereto may assign any interests,
rights or duties which the party may have in this Agreement without the
prior written consent of the other party, except that upon any "Change of
Control Disposition" of the Company through purchase, merger,
consolidation, liquidation, change in control by reason of any single
entity (individual or group) other than Research Industries Incorporated,
the Company or a Company Employee Stock Ownership Plan and Trust, acquiring
twenty-five percent (25%) or more of the voting power of the Company's
stock, or sale of all or substantially all of the assets of the Company to
another party whether or not the Company is the surviving corporation, this
Agreement shall inure to the benefit of and be binding upon the Executive
and the purchasing, surviving or resulting entity, company or corporation
in the same manner and to the same extent as though such entity, company or
corporation were the Company.  The "Change of Control Disposition Date"
shall be that calendar date on which the Change of Control Disposition
event was consummated and legally binding upon the parties.

13.  Any controversy or claim arising out of, or relating to this
     Agreement, or its breach, or otherwise arising out of or relating to
     the Executive's employment (including without limitation to any claim
     of discrimination whether based on race, color, religion, national
     origin, gender, age, sexual preference, disability, status as a
     disabled or Vietnam-era veteran, or any other legally protected
     status, and whether based on federal or State law, or otherwise) by
     the Company shall be resolved by arbitration.  This arbitration shall
     be held in Fairfax County, Virginia in accordance with the model
     employment arbitration procedures of the American Arbitration
     Association.  Judgment upon award rendered by the arbitrator shall be
     binding upon both parties and may be entered and enforced in any court
     of competent jurisdiction.

14.  In consideration of any payment made to the Executive pursuant to this
     Agreement, the Executive, for himself, his heirs and legal
     representatives, releases and forever discharges the Company, its
     predecessors, successors or anyone, and all of the past, present or
     future officers, directors, agents and employees of the Company from
     any and all claims, demands, or courses of action, whether known or
     unknown, exactly at the time of payment or arising subsequently
     thereto, arising out of or related to the Executive's employment by
     the Company.

15.  This Agreement shall be construed and enforced in accordance with the
laws of the Commonwealth of Virginia.
16.  This Agreement constitutes the entire understanding and agreement
     between the Company and the Executive with regard to all matters
     herein.  This Agreement may be amended only in writing, signed by both
     parties hereto.

In witness whereof the parties have executed this Agreement to be effective
the day and year first above written.

                                   HALIFAX CORPORATION



                                   By:/s/Arch C. Scurlock
                                      Chairman of the Board


                                   EXECUTIVE



                                   /s/Howard C. Mills
                                   Howard C. Mills




<PAGE>
                                                    Exhibit 10.5

                      EMPLOYMENT AGREEMENT


     THIS AGREEMENT made the  1st  day of    April , 1996, by and among
HALIFAX CORPORATION, a Virginia Corporation ("Parent"), CMSA ACQUISITION
CORPORATION, a Virginia corporation ("Sub") and Thomas L. Mountcastle
("Employee").

     WHEREAS, Sub wishes to employ Employee as the President of Sub, which
shall consist of Sub and such other businesses, units, divisions,
subsidiaries or other entities of Parent as Parent shall determine in its
sole discretion from time to time, with such other duties and respon-
sibilities as Sub may reasonably assign to Employee consistent with the
nature and character of such employment (the "Position"), and Parent wishes
to elect Employee as a Vice President of Parent, and Employee wishes to
accept such employment and election subject to the terms and conditions of
this Agreement; and

     WHEREAS, Parent provides services for computers, communication
systems, simulation systems and facilities and markets such services in the
United States and in various foreign countries and has accumulated valuable
and confidential information including trade secrets and know-how relating
to technology, procedures, formulas, machines, marketing plans, sources of
supply, business strategies, and other business records; and

     WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee in the Position and Employee
acknowledges that the execution of this Agreement and the entering into of
these covenants is an express condition of his employment in the Position
and that said covenants are given in consideration for such employment and
other benefits conferred upon him by this Agreement.

     NOW, THEREFORE, in consideration of such employment and other valuable
consideration, receipt of which is hereby acknowledged, Parent, Sub and
Employee agree as follows:

1.  Employment and Compensation.

     1.1  Base Salary.  Sub agrees to employ Employee in the Position,
reporting to the President of Parent, at a minimum compensation of $130,000
per year ("Annual Base Salary").  Employee shall be eligible to receive
increases in Employee's Annual Base Salary pursuant to periodic salary
reviews consistent with Parent's corporate policies, it being understood
such increases are not guaranteed, but subject to Employee's job
performance.

     1.2  Bonus.  Employee shall receive an annual profit sharing bonus
equal to 25% of his Annual Base Salary provided the profit goals of Sub are
met.  Bonus rates payable for performance above and below profit goals will
be in accordance with the chart attached hereto and made a part hereof as
Exhibit A.

     1.3  Stock Options.  Employee shall be granted an option to purchase
5,000 shares of Parent common stock priced at market value on the Effective
Time as defined in the Agreement and Plan of Reorganization entered into by
the parties.


                                                  Exhibit D
2.  Term and Severance Pay.

     2.1  Term.  The term of this Agreement (the "Term") shall be through
March 31, 1999, beginning with the date on which the Effective Time occurs
(the "Start Date").

     2.2  Termination by Employee.

     (a) Employee shall have the right to terminate his employment with Sub
at any time for any reason ("Voluntary Termination") on thirty (30) days
prior written notice to an officer of Sub.

     (b) Employee shall have the further right to terminate his Employment
with Sub ("Termination for Good Reason") if (i) Sub attempts to assign to
Employee duties or responsibilities which are materially inconsistent with
the nature and character of the Position; provided however, Employee must
first provide Sub with written notice specifying the duties or
responsibilities which have been assigned to Employee and which are
materially inconsistent with the responsibilities and duties of the
Position, and Sub shall have  fifteen days in which to readjust such duties
and responsibilities so that they are materially consistent with the duties
and responsibilities of the Position or (ii) if Employee is required by Sub
to relocate outside the Richmond, Virginia metropolitan area.  In the event
of a termination pursuant to this Subsection 2.2(b), Employee shall be
entitled to severance payments calculated pursuant to Subsection 2.4 and
shall be bound by the covenants contained in Sections 6 and 8.

     2.3  Termination By Sub.

     (a) Sub shall have the right to discharge Employee ("Termination for
Cause") at any time (i) upon 30 days' notice, during which 30 day period
Employee shall have an opportunity to cure, in the event of any willful and
continued failure by the Employee to substantially perform his duties
hereunder (other than resulting from the Employee's sickness, accident or
disability) or any violation of Section 4 of this Agreement, or (ii)
without notice in the event of the willful engaging by the Employee in
criminal misconduct that is materially injurious to Sub or its affiliates;
and

     (b) Sub shall have the right to discharge Employee at any time in the
event of continued and repeated failure to discharge assigned duties for
any reason whatsoever (including without limitation, because of sickness,
accident or disability), which failure shall continue for at least 30 days
following Sub's delivery to Employee of written notice specifying the
duties which have been assigned and which Employee has failed to discharge.
Sub's discharge of Employee under this Section 2.3(b) shall not constitute
a Termination for Cause.

     (c)  Sub shall have the further right to discharge Employee at any
time, without cause.

     2.4  Payments Upon Termination.

     (a) If Employee's employment is terminated for any reason, Sub shall
pay the Employee his full salary through the date of termination at the
rate in effect at the time of termination plus accrued vacation and other
vested benefits, payable within the period required by law.  In the event
of a Voluntary Termination or a Termination for Cause, such payments shall
be the only payments due Employee under this Agreement.

     (b)  If Employee's employment is terminated during the Term, other
than by a Voluntary Termination or a Termination for Cause, then in
addition to the amounts due under Section 2.4(a), Sub shall pay to the
Employee a lump sum payment within thirty days of the effective date of
termination (other than payments made pursuant to the proviso in
subparagraph (ii) hereof) equal to the sum of:

                                  (I)50% of the total salary that would
             have been paid to Employee during the remaining Term at the
             salary rate in effect at the time of termination, plus

                (ii)              one year's salary at the rate in effect
             at the time of termination.

3.  Insurance and Other Benefits.  As further consideration for the
covenants contained herein, Sub will provide Employee with such insurance,
welfare, sick leave, and other benefits as may be established by Sub from
time to time with respect to its employees in accordance with Sub's
established procedures and to reimburse Employee for authorized business
expenses incurred in accordance with policies established by Sub from time
to time.  Employee shall be entitled to    4   weeks vacation until such
time as the length of the Employee's service with Sub entitles Employee to
a longer period of vacation.  Employee shall be entitled to Director's and
Officer's indemnification insurance coverage to the same extent as Parent
shall provide from time to time to persons employed as officers of Parent.

4.  Employee Obligation.  Employee agrees to devote such of his time and
attention as may be required to perform the duties that may be reasonably
assigned to him from time to time consistent with the Position to the
exclusion of any other employment or activity which would materially
interfere with or compete with the efforts devoted on behalf of Sub, unless
Employee first obtains Sub's written consent to such other employment or
activity, which consent may be withdrawn by Sub at any time upon 30 days
notice.

5.  Company Policies.  Employee agrees to abide by the policies, rules,
regulations or usages applicable to Employee as established by Sub from
time to time and provided to Employee in writing, to perform the duties
assigned to him faithfully and loyally.

6.  Access to Confidential Information; Noncompete.  Employee agrees,
effective as of the date hereof, to sign and be bound by the obligations of
the Agreement Not to Compete (the "Noncompete Agreement") attached hereto
as Exhibit B.  The obligations under the Noncompete Agreement shall survive
termination or expiration of this Agreement.

7.  Board of Directors.  During the Term of employment, Employee shall also
be a member of the Board of Directors of Sub.


8.  Release.  In the event Employee becomes entitled to payments pursuant
to Section 2.4(b) hereof, Employee shall, as a condition to such payments
being made, execute and deliver to Sub and to Parent a general release in
such form as is reasonably satisfactory to Sub and to Parent.

9.  Entire Agreement.  This Agreement represents the entire agreement of
the parties with respect to Employee's employment with Sub and supersedes
all prior agreements, written or oral, with respect thereof.  This
Agreement may be modified or amended only by a written agreement executed
by both parties to this Agreement.

10.  Miscellaneous.  Nothing in this Agreement shall be construed as
creating a joint venture or partnership between Employee and Parent or Sub.
Parent shall cause Sub to honor all of Sub's obligations arising out of
this Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed on the date first set forth above.

                                   EMPLOYEE


                                   By:/s/Thomas L. Mountcastle
                                      Thomas L. Mountcastle


                                   HALIFAX CORPORATION


                                   By:/s/Howard C. Mills
                                      Howard C. Mills, President


                                   CMSA ACQUISITION CORPORATION


                                   By:/s/Howard C. Mills
                                      Howard C. Mills, President


<PAGE>
                                                  Exhibit 23.A




CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


We consent to the incorporation by reference in the Registration Statement
(Form S-3 No. 333-24221) of Halifax Corporation and in the related
Prospectus of our report dated June 13, 1997, with respect to the
consolidated financial statements and schedule of Halifax Corporation
included in the Annual Report (Form 10-K) for the year ended March 31,
1997.



/S/ERNST & YOUNG LLP

Washington, D.C.
June 27, 1997

<PAGE>