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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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                                    FORM 10-Q

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

                 For the quarterly period ended March 31, 2000

             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF T
                       HE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from ________________________

                         Commission File Number: 0-29292


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                               HAGLER BAILLY, INC.
             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------


                              Delaware                            54-1759180
                    (State or other jurisdiction                I.R.S. Employer
                  of incorporation or organization)       Identification Number

              1530 Wilson Boulevard, Suite 400, Arlington, VA 22209
               (Address of principal executive offices) (Zip Code)


                                  703-351-0300
              (Registrant's telephone number, including area code)

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

As of April 27, 2000, the  Registrant had 17,927,812  shares of its common stock
outstanding.



<PAGE>


                                TABLE OF CONTENTS

                                     PART I


ITEM 1. FINANCIAL STATEMENTS................................................1
   CONSOLIDATED BALANCE SHEETS (RESTATED UNAUDITED).........................1
   CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)........................2
   CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)........................3
   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...............................4



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS...............................................................7



                                     PART II


ITEM 1. LEGAL PROCEEDINGS....................................................11


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................11


SIGNATURES...................................................................18









<PAGE>




                                     PART I
Item 1.  Financial Statements

                               Hagler Bailly, Inc.
                           Consolidated Balance Sheets
                                 (in thousands)
<TABLE>
<S>                                                                                       <C>                      <C>
                                                                                              March 31,         December 31,
                                                                                                2000                1999
                                                                                         ----------------------------------------
                                                                                             (unaudited)
Assets
Current assets:
       Cash and cash equivalents                                                                    $  7,918             $ 9,656
       Accounts receivable, net of allowance for doubtful accounts of $5,503 and
         $5,604 as of March 31, 2000 and December 31, 1999, respectively                              58,949              63,034
       Current portion of notes receivable                                                                23                  80
       Prepaid expenses                                                                                2,642               2,173
       Prepaid taxes                                                                                   1,552               5,915
       Deferred income taxes                                                                           1,701               1,701
       Other current assets                                                                            1,249                 960
                                                                                         ----------------------------------------
Total current assets                                                                                  74,034              83,519
Property and equipment, net                                                                            8,252               8,271
Intangible assets, net                                                                                22,059              22,449
Other assets                                                                                             843               1,475
Note receivable, net of current portion                                                                  495                    495

                                                                                         ----------------------------------------
Total assets                                                                                       $ 105,683           $ 116,209
                                                                                         ========================================

Liabilities and stockholders' equity
Current liabilities:
       Accounts payable and accrued expenses                                                         $ 9,584            $ 13,948
       Accrued compensation and benefits                                                              12,787              19,072
       Billings in excess of cost                                                                      5,174               5,812
       Current portion of long-term debt                                                                 333                 333
                                                                                         ----------------------------------------
Total current liabilities                                                                             27,878              39,165
Deferred income taxes                                                                                  2,383               2,383
Minority interest                                                                                          9                   8
Deferred rent and other deferred liabilities                                                           2,056               2,028
Long-term debt, net of current portion                                                                   333                 333
                                                                                         ----------------------------------------
Total liabilities                                                                                     32,659              43,917

Stockholders' equity:
       Common stock, $0.01 par value, 50,000 shares authorized,
         17,911 and 17,911 issued and outstanding at March 31, 2000 and
         December 31, 1999, respectively                                                                 179                 179
       Additional capital                                                                             80,996              80,996
       Accumulated deficit                                                                           (8,000)             (8,718)
       Foreign currency translation                                                                    (151)               (165)
                                                                                         ----------------------------------------
Total stockholders' equity                                                                            73,024              72,292
                                                                                         ----------------------------------------
Total liabilities and stockholders' equity                                                         $ 105,683            $116,209
                                                                                         ========================================
</TABLE>


                                                  See accompanying notes.
<PAGE>
                               Hagler Bailly, Inc.
                      Consolidated Statements of Operations
                                   (Unaudited)
                      (in thousands, except per share data)

<TABLE>

           <S>                                                          <C>                    <C>
                                                                                Three months ended
                                                                                     March 31,
                                                                            2000                  1999
                                                                       ----------------      ----------------
          Revenues
           Commercial revenues                                                $ 30,196              $ 29,857
           Government revenues                                                  11,375                 9,830
           Other revenues                                                          347                   543
                                                                       ----------------      ----------------
         Total revenues                                                         41,918                40,230
         Cost of services                                                       32,577                30,623
                                                                       ----------------      ----------------
         Gross profit                                                            9,341                 9,607
         Selling, general and administrative expenses                            7,847                 7,583
                                                                       --------------------------------------
         Income from operations                                                  1,494                 2,024
         Other (expense) income, net                                              (13)                    87
                                                                       ----------------      ----------------
         Income before income tax expense and income/(loss) from
           equity investment in joint venture                                    1,481                 2,111
         Income tax expense                                                        810                   786
                                                                       ----------------      ----------------
         Income before income/(loss) from equity investment in joint
           venture                                                                 671                 1,325
         Income/(loss) from equity investment in joint venture                      47                 (143)
                                                                       ----------------      ----------------
         Net income                                                             $  718              $  1,182
                                                                       ================      ================

         Net income per share:
           Basic                                                                 $0.04                 $0.07
           Diluted                                                               $0.04                 $0.07
         Weighted average shares outstanding:
           Basic                                                                17,911                16,552
                                                                       ================      ================

           Diluted                                                              17,913                17,171
                                                                       ================      ================
</TABLE>
                             See accompanying notes.

<PAGE>


                               Hagler Bailly, Inc.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<S>                                                                             <C>                 <C>
                                                                                     Three months ended
                                                                                         March 31,
                                                                                  2000                1999
                                                                           -------------------  ------------------
Operating activities
Net income                                                                              $ 718              $1,182
Adjustments to reconcile net income to net cash used in
  Operating activities:
             Depreciation and amortization expense                                      1,222               1,317
             Provision for accounts receivable allowance                                 (96)                 313
             (Gain)/loss on equity investment in joint venture                           (47)                 143
             Minority interest                                                              1                  46
             Changes in operating assets and liabilities
                         Accounts receivable                                            4,181             (1,090)
                         Note receivable                                                   57                 382
                         Prepaid expenses                                               (469)             (1,361)
                         Other current assets                                           (289)                (88)
                         Other assets                                                     703                (89)
                         Accounts payable and accrued expenses                        (4,364)                 389
                         Accrued compensation and benefits                            (6,285)               (409)
                         Billings in excess of cost                                     (638)               (256)
                         Deferred rent and other deferred liabilities                      28                  21
                         Income taxes payable (receivable)                              4,363             (1,753)
                                                                           -------------------  ------------------
Net cash used in operating activities                                                   (915)             (1,253)

Investing activities
Acquisition of property and equipment                                                   (823)               (444)
                                                                           -------------------  ------------------
Net cash used in investing activities                                                   (823)               (444)

Financing activities
Issuance of common stock                                                                    -                 106
Purchase of treasury stock                                                                  -             (2,217)
Payments on long-term debt                                                                  -                (23)
                                                                           -------------------  ------------------
Net cash used in financing activities                                                       -             (2,134)

Net decrease in cash and cash equivalents                                             (1,738)             (3,831)
Cash and cash equivalents, beginning of period                                          9,656              16,165
                                                                           -------------------  ------------------
Cash and cash equivalents, end of period                                               $7,918             $12,334
                                                                           ===================  ==================

</TABLE>
                             See accompanying notes.


<PAGE>


                               HAGLER BAILLY, INC.
                   NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Basis of Presentation

         The accompanying unaudited interim consolidated financial statements of
Hagler Bailly,  Inc. (the "Company") have been prepared pursuant to the rules of
the Securities  and Exchange  Commission  ("SEC") for quarterly  reports on Form
10-Q and do not include all of the information and note disclosures  required by
generally  accepted  accounting  principles.  The information  furnished  herein
reflects  all  adjustments,  of a normal  recurring  nature,  which are,  in the
opinion of management,  necessary for a fair  presentation  of results for these
interim periods.

         The interim results of operations are not necessarily indicative of the
results to be expected for the entire fiscal year ending December 31, 2000.


Note 2. Earnings per Share

         Basic  earnings  per share is computed  based on the  weighted  average
number of shares of common  stock  outstanding  during the  respective  periods.
Diluted  earnings per share is inclusive of the dilutive  effect of  unexercised
stock options using the treasury stock method.

<TABLE>
            <S>                                                  <C>                      <C>
                                                                        For the three months ended
                                                                                  March 31,
                                                                               (in thousands)
                                                                       2000                      1999
                                                                       ----                      ----

         Net income                                                         $ 718                  $ 1,182
                                                              ====================      ==================

         Weighted average shares of common stock
           outstanding during the period                                   17,911                   16,552

         Effect of dilutive securities:
              Stock options                                                     2                      619
                                                              --------------------      ------------------

         Weighted average shares of common stock
           and dilutive securities                                         17,913                   17,171
                                                              ====================      ==================
</TABLE>
Note 3. Stock Repurchase Plan

         On March 22, 1999 the  Company  announced  that its Board of  Directors
authorized the  repurchase of up to 1.5 million  shares of the Company's  common
stock  from  time  to  time  in  the  open  market  or in  privately  negotiated
transactions.  To date the Company has repurchased  559,700 shares.  The Company
did not repurchase any shares during the quarter ended March 31, 2000.

Note 4. Components of Comprehensive Income

Comprehensive  income includes the Company's net earnings  adjusted for changes,
net of tax, of cumulative translation adjustments.  Comprehensive income for the
three months ended March 31, 2000 and 1999 is as follows:


<TABLE>
<S>                                                                            <C>               <C>
                                                                                  Three Months Ended
                                                                                       March 31,
                                                                                    (in thousands)
                                                                                2000             1999
                                                                                ----             ----
Comprehensive income:
     Net income                                                               $     718          $ 1,182
     Foreign translation adjustment, net                                              8              (29)
                                                                              ---------          -------
Total comprehensive income:                                                   $     726          $ 1,153
                                                                              =========          =======

</TABLE>
Note 5. Employee  Incentive and Non-Qualified  Stock Option and Restricted Stock
Plan

On February 2, 2000, the Board  approved an amendment to the Employee  Incentive
and Non-Qualified  Stock Option and Restricted Stock Plan ("the Plan"),  subject
to  shareholder  approval,  to  increase  the  number of shares of common  stock
authorized to be issued under the Plan from five million to eight million.

Note 6. Segment Information

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards  No. 131  Disclosures  about  Segments of an
Enterprise  and Related  Information  ("FAS  131").  FAS 131  supercedes  FAS 14
Financial  Reporting  for  Segments  of a  Business  Enterprise,  replacing  the
industry  segment  approach  with  the  management   approach,   which  requires
segmentation based upon the Company's internal organizational  structure that is
used by management for making operating  decisions and assessing  performance as
the source of the Company's reportable segments.

         The Company  began  organizing,  reporting and managing its business as
two segments in 1999.  Accordingly,  the Company adopted FAS 131 in 1999 and all
prior  periods  have been  restated  to  conform  to the  requirements  of this
statement.  The segments, which are based on differences in the Company's client
base, are Commercial Consulting and Government Consulting. Commercial Consulting
consists  primarily of providing  strategic advice and analysis to businesses in
developed    countries    on   issues    such   as    energy,    transportation,
telecommunications,  the environment,  litigation and other matters.  Government
Consulting  consists  primarily of providing  advisory and technical services to
government sector clients worldwide in the energy and network industries (mainly
in water and transportation) and the environment.

         The Company has  subsidiaries  in 11 countries  outside  North  America
which,  in aggregate,  represent  11.0% of  consolidated  revenues.  There is no
single foreign  country that exceeds 10.0% of  consolidated  revenues.  Revenues
based  on  work  performed  for  the  United  States  Agency  for  International
Development  (USAID)  represent  67.9% of the  Government  Consulting  segment's
consolidated revenues and 18.4% of the Company's consolidated revenues. The loss
of this client could have a material  adverse effect on the Company's  business,
financial condition and results of operations.

         The following table presents  revenue and income (loss) from operations
data by segment:
<TABLE>
     <S>                                    <C>                     <C>
                                                 For the three months ended,
                                                        (in thousands)
    -------------------------------------- -----------------------------------------
                                             March 31, 2000         March 31, 1999
             Segment Information
    -------------------------------------- -------------------- -- -----------------
    Revenues
        Commercial consulting                          $30,196              $29,857
        Government consulting                           11,375                9,830
        Other                                              347                  543
                                           --------------------    -----------------
    Total                                              $41,918              $40,230
                                           ====================    =================

    Income (loss) from operations
        Commercial consulting                           $1,855               $2,438
        Government consulting                            (117)                (322)
                                           --------------------    -----------------
        Segment Total                                    1,738                2,116
        Other                                            (244)                 (92)
                                           --------------------    -----------------
    Total                                               $1,494               $2,024
                                           ====================    =================

</TABLE>


Note 7. Subsequent Events


On May 3, 2000, the Company entered into an Employment  Separation Agreement and
General  Release  ("the  Agreement")  with  William E.  Dickenson,  who held the
position of president  and chief  executive  officer.  Mr.  Dickenson was also a
member of the  Company's  Board of  Directors.  Pursuant to the  Agreement,  the
Company paid Mr.  Dickenson a lump-sum amount of $2.376 million on May 11, 2000.
In addition, the Board of Directors of the Company elected Geoffrey W. Bobsin to
serve  as  interim  president  and  chief  executive  officer.  The  Company  is
undertaking  a search for a permanent  successor.  Mr.  Bobsin will  continue to
serve as the Company's chief financial officer.

The Company has employment  agreements with Henri-Claude A. Bailly,  Chairman of
the Board of  Directors,  and  Howard  W.  Pifer  III,  a member of the Board of
Directors and Chairman of the Board of Directors of the  Company's  wholly owned
subsidiary  PHB Hagler Bailly,  Inc.  Pursuant to the  agreements,  each has the
right to terminate their respective agreement upon the occurrence of a change in
control. Mr. Dickenson's  resignation constitutes a change in control as defined
in the agreements. Should these two executives exercise their rights under their
agreements,  the Company will be  obligated  to pay Mr.  Bailly and Mr. Pifer an
aggregate amount of up to $5.7 million.

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

Overview

      Statements  included in Management's  Discussion and Analysis of Financial
Condition and Results of  Operations  which are not  historical  in nature,  are
intended to be, and are hereby identified as,  "forward-looking  statements" for
purposes of the safe harbor  provided by Section 21E of the Securities  Exchange
Act of 1934, as amended by Public Law 104-67.  Forward-looking statements may be
identified by words including "anticipate,"  "believe," "estimate," "expect" and
similar   expressions.   The  Company  cautions  readers  that   forward-looking
statements, including without limitation, those relating to the Company's future
business  prospects,  revenues,  working  capital,  liquidity,  and income,  are
subject to certain risks and  uncertainties  that would cause actual  results to
differ materially from those indicated in the forward-looking statements, due to
several important factors,  such as concentration of the Company's revenues from
a relatively limited number of public and private clients involved in the energy
and network  industries;  the  Company's  ability to attract,  retain and manage
professional and administrative staff;  fluctuations in quarterly results; risks
related to acquisitions; and the fact that historical operations and performance
are not  necessarily  indicative of future  operations  and  performance,  among
others;  and  other  risks  and  factors  identified  from  time  to time in the
Company's reports filed with the SEC,  including the risk factors  identified in
the  Company's  Registration  Statement  (No.  333-22207)  on  Form  S-1 and the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.

      The  Company,  together  with its wholly  owned  subsidiaries,  PHB Hagler
Bailly,  Inc., Hagler Bailly Services,  Inc., and its other domestic and foreign
wholly  owned  subsidiaries,  is  a  leading  worldwide  provider  of  strategy,
economics  and  operations  consulting  services  to  clients  in the energy and
network industries,  including electric power,  natural gas and water utilities,
fuel  providers,   aviation   transportation,   telecommunications,   commercial
litigation and the  environment.  As of March 31, 2000,  the Company  employed a
staff  of  710,  of  which  over   two-thirds   were  consulting  and  technical
professionals.  The  Company's  common  stock is quoted on the  NASDAQ  National
Market under the symbol, "HBIX".

      The  Company's  revenues  consist  of  commercial   consulting   revenues,
government  consulting  revenues  and  other  revenues.   Commercial  consulting
revenues represent  revenues billed at commercial rates for professional  staff,
subcontractors and independent  consultants,  and client reimbursable  expenses.
Commercial  revenues  are  associated  with the  Company's  primary  business of
providing  strategic advice and analysis to businesses in developed countries on
issues  involving   energy,   transportation,   telecommunications,   commercial
litigation,  the environment and other matters.  Government  consulting revenues
represent   revenues  billed  at  government  rates  for   professional   staff,
subcontractors and independent  consultants,  and client reimbursable  expenses.
Government  revenues  are  associated  with  providing  advisory  and  technical
services  to  government  sector  clients  worldwide  in the energy and  network
industries, particularly in water and transportation, and the environment. Other
revenues  include  those derived from  information-based  products and services,
financial advisory services, and publication of newsletters,  reference manuals,
and data series for the energy and transportation  industries services.  Revenue
from commercial  consulting is typically  characterized  by higher gross margins
than government  consulting,  yet generally  requires a higher relative level of
infrastructure  support.  Consequently,  the Company's operating  performance is
affected by its  commercial  consulting / government  consulting  business  mix.
Through  strategic  acquisitions and internal growth,  the Company has increased
its  commercial  consulting  client  base,  and will  continue  to  pursue  such
opportunities in the future.

      On September 27, 1999,  the Company  announced that its Board of Directors
retained  Banc of  America  Securities  LLC to assist the  Company in  exploring
strategic and financial  alternatives to maximize  shareholder value,  including
the potential sale or merger of the Company.

     The payment of $2.376 million to Mr.  Dickenson and the possible payment of
up to $5.7  million to Mssrs.  Bailly and Pifer if they  exercise  their  rights
under their  employment  agreements  (See Note 7 to the  Consolidated  Financial
Statements) will be charged to earnings during the current fiscal year.




<PAGE>


Results of Operations


         The following  table presents for the periods  indicated the percentage
of revenues  represented by certain income and expense items, and the percentage
period-to-period increase (decrease) in such items:
<TABLE>
<S>                                          <C>          <C>                    <C>
                                                                            % Period-to-Period
                                          Percentage of Revenues            Increase (Decrease)
                                                                           ----------------------
                                          -------------------------
                                                                               Three months
                                                                                ended March
                                                                                 31, 2000
                                             Three months ended                 compared to
                                                 March 31,                     three months
                                                                                ended March
                                                                                 31, 1999
                                          -------------------------        ----------------------


                                             2000         1999
Revenues:
  Commercial revenue                           72.0%       74.2%                   1.1%
  Government revenue                           27.1        24.4                   15.7
  Other revenue                                 0.8         1.4                  (36.4)
    Total revenues                            100.0       100.0                    4.2
Cost of services                               77.7        76.1                    6.4
Selling, general, and administrative
   expenses                                    18.7        18.8                    3.5

Income from operations                          3.6         5.1                  (26.2)
  Other (expenses) income, net                 (0.1)        0.2                 (114.6)
Income  before  income tax  expense  and
  income  (loss) from equity  investment
  in joint venture                              3.5         5.3                  (29.8)
Income tax expense                              1.9         2.0                    3.1
Net income  before  income  (loss)  from
  equity investment in joint venture            1.6         3.3                  (49.4)
Income (loss) from joint venture                0.1        (0.4)                (132.9)
Net income                                      1.7         2.9                  (39.3)

</TABLE>

Three months ended March 31,  2000,  compared  with three months ended March 31,
1999

         Revenues  for the three  months  ended  March 31, 2000  increased  $1.7
million,  or 4.2%,  to $41.9 million as compared to the three months ended March
31, 1999. Revenues from the Company's  commercial  consulting  operating segment
increased  $0.3  million,  or 1.1%,  to $30.2 million for the three months ended
March 31, 2000. The increase in commercial  consulting revenues was attributable
to approximately $5.5 million of revenues of acquired companies, primarily GKMG,
Inc. and an increased ownership in Hagler Bailly Risk Advisors,  Inc. which were
not included in the quarter ended March 31, 1999.  This increase was offset by a
decrease of $1.2 million in revenues  due to the  divestiture  of the  Company's
wholly owned subsidiary Izsak,  Grapin et Associes,  a decrease of approximately
$0.8 million from the Company's other international operations and a decrease of
approximately  $3.2 million primarily due to a reduction in staff and the number
of overall contracts in the Company's  commercial  energy sector.  Revenues from
the Company's government consulting operating segment increased $1.5 million, or
15.7%, to $11.4 million for the three months ended March 31, 2000. This increase
was primarily attributable to $1.4 million of pass-thru equipment sales.

         Cost of services for the three  months  ended March 31, 2000  increased
$2.0  million,  or 6.4%,  to $32.6 million as compared to the three months ended
March 31, 1999. This increase was a result of acquired  companies which were not
included  in the  March  31,  1999  results,  costs  associated  with  pass-thru
equipment  sales of $1.4 million and  retention  bonuses paid to key  consulting
employees as a part of the repositioning plan of $0.5 million, and was partially
offset by reduced costs resulting from divestitures.

         Selling,  general and  administrative  expenses  ("SG&A") for the three
months ended March 31, 2000  increased  $0.3  million,  or 3.5%, to $7.8 million
from the three months ended March 31, 1999,  primarily  due to costs  associated
with the Company's recent acquisitions.

         Other (expense) income, net includes interest income, interest expense,
minority interest and other income and expense items. For the three months ended
March 31, 2000, other (expense) income, net decreased approximately $100,000, to
an expense of approximately  $13,000 from income of $87,000 for the three months
ended March 31, 1999,  primarily due to increased interest expense and decreased
interest income as a result of lower cash and investment balances.

         The  Company's  effective  tax rate  increased  to 54.7%  for the three
months ended March 31, 2000 from 37.2% in the three months ended March 31, 1999.
The higher effective income tax rate in the three months ended March 31, 2000 is
due to non-deductible non-U.S.  losses, and the amortization of goodwill arising
from recent acquisitions.

     Net  income  for  the  three   months   ended  March  31,  2000   decreased
approximately  $464,000,  or 39.3%,  to  approximately  $718,000  from the three
months ended March 31, 1999, for the reasons discussed above.

Liquidity and Capital Resources

     As of March 31, 2000, working capital increased to $46.2 million from $44.4
million at December 31, 1999 because of lower accounts payable, accrued expenses
and the payment of bonuses.

         Net cash of approximately $0.9 million was used by operating activities
during the three  months  ended March 31,  2000.  The primary  uses of cash from
operating  activities were the reduction of accounts  payable and the payment of
bonuses.  This was  offset by cash  provided  by a  reduction  in both  accounts
receivable and prepaid income taxes.

     Investment  activities  used  approximately  $0.8 million  during the three
months ending March 31, 2000, due to the purchase of property and equipment.

         There were no financing activities for the three months ended March 31,
2000.

     The Company's  primary  source of liquidity for the past 12 months was cash
generated  from  operations,  periodically  supplemented  by borrowings  under a
revolving  credit  facility with Bank of America,  N.A.  (formerly  NationsBank,
N.A.) The maximum  available  balance  under the $50.0 million line of credit is
based on certain  financial  formulas.  Based on these  formulas  the  available
balance at March 31, 2000 was $11.3 million.  The Company was in  non-compliance
with certain covenants that were subsequently  waived by Bank of America for the
quarter ended March 31, 2000. The Company is currently  re-negotiating the terms
of the credit  facility to reflect  current  business  strategies.  Based on the
Company's  current  projected  cash  flow  and  the  expected   availability  of
financing,  including borrowings under the Company's credit facility, management
of  the  Company  believes  it  will  be  able  to  meet  its  anticipated  cash
requirements for the next 12 months and for the foreseeable  future,  to include
the payment of $2.376  million to Mr Dickenson in the second quarter of 2000 and
the possible payment of up to $5.7 million to Messrs. Baily and Pifer in 2000 if
they exercise their rights under their employment agreements.  If the Company is
unable to renegotiate its credit  facility,  it will be required to obtain other
sources of financing. There can be no assurance that the Company will be able to
renegotiate  its credit  facility  or that it will be able to obtain  such other
sources of financing.  Failure to renegotiate its credit facility or to meet its
liquitity  needs through other financing  sources could have a material  adverse
effect on the Company's business, results of operations and financial condition.

Year 2000

         The company  experienced no significant system or application  problems
resulting  from the Year 2000  roll-over  or from the Year 2000  "leap  year" on
February 29, 2000.  The Company will continue to maintain Year 2000  contingency
plans with regard to its computer programs and systems and those of its clients,
suppliers and vendors.



                                     PART II

Item 1.  Legal Proceedings

         The  Company  and its  subsidiaries  are from time to time  parties  to
litigation  arising in the ordinary course of business.  Neither the Company nor
any of its  subsidiaries is a party to any pending  material  litigation nor are
any of them aware of any  pending  or  threatened  litigation  that would have a
material adverse effect on the Company or its business.

Item 6. Exhibits and Reports on Form 8-K.

 (a)            Exhibits

Exhibit No.                              Description

2.1  Sale  Agreement  between  RCG   International,   Inc.,  and  Hagler  Bailly
     Consulting, Inc. (1)

2.2  Agreement  and  Plan of  Merger  by and  among  Hagler  Bailly,  Inc.,  PHB
     Acquisition  Corp. and Putnam,  Hayes and Bartlett,  Inc., dated as of June
     11, 1998. (5)

2.3  Share  Exchange  Agreement  dated as of August 12, 1999 by and among Hagler
     Bailly, Inc., GKMG, Inc. and certain former shareholders of GKMG, Inc. (11)

3.1  By-Laws of the Company, as amended. (6)

3.2  Amended Restated Certificate of Incorporation of the Company. (7)

4    Specimen Stock Certificates. (1)

4.1  Registration Rights Agreement dated November 18, 1997 by and between Hagler
     Bailly, Inc. and Richard R. Mudge, acting as Stockholders'  Representative.
     (3)

4.2  Form of Escrow Agreement by and among the Company,  PHB Acquisition  Corp.,
     William E. Dickenson as Stockholders'  Representative and State Street Bank
     and Trust Company, as Escrow Agent. (5)

4.3  Registration Rights Agreement dated February 23, 1998 by and between Hagler
     Bailly,  Inc. and Michael J. Beck, acting as Stockholders'  Representative.
     (9)

4.4  Registration Rights Agreement dated November 17, 1998 by and between Hagler
     Bailly, Inc. and the stockholders of Fieldston  Publications,  Inc. and The
     Fieldston Company. (9)

4.5  Registration  Rights  Agreement  dated as of August 12, 1999 by and between
     Hagler  Bailly,   Inc.  and  James  F.  Miller,   acting  as  Stockholders'
     Representative. (11)

10.2 Form of Non-Compete,  Confidentiality  and  Registration  Rights  Agreement
     between the Company and each stockholder. (1)

10.3 Lease by and between Wilson Boulevard Venture and RCG/Hagler  Bailly,  Inc.
     dated October 25, 1991. (1)

10.4 First  Amendment  to Lease by and  between  Wilson  Boulevard  Venture  and
     RCG/Hagler Bailly, Inc., dated February 26, 1993. (1)

10.5 Second  Amendment  to Lease by and  between  Wilson  Boulevard  Venture and
     RCG/Hagler Bailly, Inc. dated December 12, 1994. (1)

10.6 Lease by and between  Bresta  Futura V.B.V.  and Hagler Bailly  Consulting,
     Inc. dated May 8, 1996. (1)

10.7 Lease by and between L.C.  Fulenwider,  Inc., and RCG/Hagler  Bailly,  Inc.
     dated December 14, 1994. (1)

10.8 Lease by and between  University  of Research  Park  Facilities  Corp.  and
     RCG/Hagler Bailly, Inc., dated April 1, 1995. (1)

10.9 Credit  Agreement by and between Hagler Bailly  Consulting,  Inc. and State
     Street Bank and Trust Company, dated May 17, 1995. (1)

10.10Amendment to Credit  Agreement  by and between  Hagler  Bailly  Consulting,
     Inc. and State Street Bank and Trust Company, dated as of June 20,1996. (1)

10.11  Extension  Agreement by and between  Hagler Bailly  Consulting,  Inc. and
State Street Bank and Trust Company, dated as of August 1, 1996. (1)

10.12Amendment to Credit  Agreement  by and between  Hagler  Bailly  Consulting,
     Inc.  and State  Street Bank and Trust  Company,  dated as of November  12,
     1996. (1)

10.13Term Note by and between Hagler Bailly  Consulting,  Inc., and State Street
     Bank and Trust Company, dated May 26, 1995. (1)

10.14Revolving  Credit Note by and between  Hagler Bailly  Consulting,  Inc. and
     State Street Bank and Trust Company dated May 26, 1995. (1)

10.15Amendment to Credit  Agreement  by and between  Hagler  Bailly  Consulting,
     Inc., and State Street Bank and Trust  Company,  dated as of June 12, 1997.
     (1)

10.16Credit  Agreement  by and among  Hagler  Bailly  Consulting,  Inc.,  Hagler
     Bailly Services,  Inc. and State Street Bank and Trust Company, dated as of
     September 30, 1997. (2)

10.17Promissory  Note by  Hagler  Bailly  Consulting,  Inc.  and  Hagler  Bailly
     Services,  Inc. to State Street Bank and Trust Company, dated September 30,
     1997. (2)

10.18Security Agreement by and between Hagler Bailly Consulting,  Inc. and State
     Street Bank and Trust Company, dated as of September 30, 1997. (2)

10.19Security  Agreement by and between Hagler Bailly  Services,  Inc. and State
     Street Bank and Trust Company, dated as of September 30, 1997. (2)

10.20Guaranties by Hagler  Bailly,  Inc. to State Street Bank and Trust Company,
     dated September 30, 1997. (2)

10.21Guaranties  by HB  Capital,  Inc. to State  Street Bank and Trust  Company,
     dated September 30, 1997. (2)

10.22Subordination  Agreement and Negative Pledge/Sale  Agreement by and between
     Hagler  Bailly,  Inc.  and State  Street Bank and Trust  Company for Hagler
     Bailly Consulting, Inc., dated September 30, 1997. (2)

10.23Subordination  Agreement and Negative Pledge/Sale  Agreement by and between
     Hagler  Bailly,  Inc.  and State  Street Bank and Trust  Company for Hagler
     Bailly Services, Inc., dated September 30, 1997. (2)

10.24Guaranty of Monetary  Obligations to Bresta Futura V.B.V. by Hagler Bailly,
     Inc., dated July 23, 1997. (2)

10.25Amendment to Credit  Agreement  by and between  Hagler  Bailly  Consulting,
     Inc. and State Street Bank and Trust Company dated May 18, 1998. (6)

10.26Sublease  Agreement by and between  Coopers and Lybrand  L.L.P.  and Hagler
     Bailly, Inc. dated December 5, 1997. (6)

10.27Employment  Agreement between the Company and Henri-Claude A. Bailly, dated
     August 27, 1998. (7)

10.28Employment  Agreement  between the Company and William E. Dickenson,  dated
     August 27, 1998. (7)

10.29Employment  Agreement  between the  Company and Howard W. Pifer III,  dated
     June 10, 1998. (7)

10.30Amended  and  Restated   Hagler  Bailly,   Inc.   Employee   Incentive  and
     Non-Qualified Stock Option and Restricted Stock Plan. (10)

10.31Credit  Agreement by and between Hagler  Bailly,  Inc. and The Lenders From
     Time to Time a Party  thereto,  as Lenders  and  NationsBank,  N.A.,  dated
     November 20, 1998. (8)

10.32Revolving Note by and between Hagler Bailly,  Inc. and  NationsBank,  N.A.,
     dated November 20, 1998. (8)

10.33Swing Line Note by and between Hagler Bailly,  Inc. and NationsBank,  N.A.,
     dated November 20, 1998. (8)

10.34    Subsidiary Guarantee by and among Hagler Bailly Services,  Inc., Hagler
         Bailly Consulting,  Inc., HB Capital,  Inc., Putnam,  Hayes & Bartlett,
         Inc.,  TB&A Group,  Inc.,  Theodore  Barry & Associates,  Private Label
         Energy Services,  Inc., Fieldston  Publications,  Inc. and NationsBank,
         N.A., dated November 20, 1998. (8)

10.35Form  of  Security  Agreement  by  and  between  Hagler  Bailly,  Inc.  and
     NationsBank, N.A., dated November 20, 1998. (8)

10.36Security  Agreement  by and between  Hagler  Bailly  Consulting,  Inc.  and
     NationsBank, N.A., dated November 20, 1998. (8)

10.37Security  Agreement  by  and  between  Hagler  Bailly  Services,  Inc.  and
     NationsBank, N.A., dated November 20, 1998. (8)

10.38Security Agreement by and between HB Capital,  Inc. and Nations Bank, N.A.,
     dated November 20, 1998. (8)

10.39Security  Agreement  by and  between  Putnam,  Hayes & Bartlett,  Inc.  and
     NationsBank, N.A., dated November 20, 1998. (8)

10.40Security  Agreement by and between TB&A Group, Inc. and Nations Bank, N.A.,
     dated November 20, 1998. (8)

10.41Security   Agreement  by  and  between  Theodore  Barry  &  Associates  and
     NationsBank, N.A., dated November 20, 1998. (8)

10.42Security Agreement by and between PHB Hagler Bailly,  Inc. and NationsBank,
     N.A., dated February 22, 1999. (8)

10.43Security  Agreement by and between Private Label Energy Services,  Inc. and
     NationsBank, N.A., dated November 20, 1998. (8)

10.44Security   Agreement   by  between   Fieldston   Publications,   Inc.   and
     NationsBank, N.A., dated November 20, 1998. (8)

10.45Lease by and between One Memorial  Drive  Limited  Partnership  and Putnam,
     Hayes & Bartlett, Inc. dated January 1, 1998. (8)

10.46Lease by and between  George H.  Beuchert,  Jr.,  Trustee,  Thomas J. Egan,
     Trustee,  Oliver T. Carr, Jr., Trustee,  William Joseph H. Smith,  Trustee,
     and the Kiplinger Washington Editors, Inc., Trustee, acting collectively as
     trustee  on  behalf of the  beneficial  owner,  The  Greystone  Square  127
     Associates, and Putnam, Hayes & Bartlett, Inc. dated March 31, 1997. (8)

10.47First  Amendment  to Lease by and  between  Greystone  Square  127  Limited
     Liability Company,  as successor in interest  collectively to The Greystone
     Square  127  Associates,  and George H.  Beuchert,  Jr.,  Trustee,  and The
     Kiplinger Washington Editors,  Inc., Trustee, the owners of record who held
     legal title to the Building as trustees on behalf of the  Greystone  Square
     127 Associates,  the former beneficial owners of the Building,  and Putnam,
     Hayes & Bartlett, Inc. dated February 10, 1998. (8)

10.48Employment agreement between Hagler Bailly Consulting,  Inc. and Jasjeet S.
     Cheema dated February 2, 1998. (9)

10.49First amendment to revolving credit agreement  between Hagler Bailly,  Inc,
     the lenders from time to time a party thereto, as lenders, and NationsBank,
     N.A., dated as of March 22, 1999. (9)

10.50Lease by and between  TrizecHahn,  1550 Wilson Blvd.  Management and Hagler
     Bailly Services, Inc. dated August 29, 1999. (12)

10.51    Second amendment to revolving  credit agreement  between Hagler Bailly,
         Inc.,  the lenders from time to time a party thereto,  as lenders,  and
         NationsBank, N.A., dated as of August 11, 1999. (12)

10.52Security  Agreement by and between GKMG, Inc. and NationsBank,  N.A., dated
     August 11, 1999. (12)

10.53Security  Agreement  by and between  GKMG  Consulting  Services,  Inc.  and
     NationsBank, N.A., dated August 11, 1999. (12)

10.54Employment  Agreement  between Putnam,  Hayes & Bartlett,  Inc. and John C.
     Butler, dated August 28, 1999. (13)

10.55Employment Agreement between Putnam, Hayes & Bartlett,  Inc. and William H.
     Hieronymus, dated August 28, 1999. (13)

10.56Employment Agreement between Putnam,  Hayes & Bartlett,  Inc. and Walter H.
     A. Vandaele, dated August 28, 1999. (13)

10.57Employment  Separation Agreement and General Release between Hagler Bailly,
     Inc. and William E. Dickenson, dated as of May 3, 2000.

21       Subsidiaries of the Registrant.  (13)

22       Consent of Independent Auditors dated March 29, 2000. (13)

22       Powers of Attorney (included on Signature Pages). (1)

27.1     Financial Data Schedule (13)

--------------------------------------------------------------------------------

(1)  Included in the Company's  Registration Statement on Form S-1 filed on July
     1, 1997 (No. 33-22207) and incorporated herein by reference thereto.

(2)  Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended  September  30,  1997,  filed on November  14, 1997 and  incorporated
     herein by reference thereto.

(3)  Included in the Company's  Current Report on Form 8-K filed on December 16,
     1997 and incorporated herein by reference thereto.

(4)  Included  in the  Company's  Annual  Report on Form 10-K for the year ended
     December  31,  1997,  filed on March 31,  1998 and  incorporated  herein by
     reference thereto.

(5)  Included  in  the  Company's   Proxy   Statement  for  Special  Meeting  of
     Stockholders  dated July 24, 1998 on Form DEFS 14A and incorporated  herein
     by reference thereto.

(6)  Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended June 30, 1998,  filed on August 14, 1998 and  incorporated  herein by
     reference thereto.

(7)  Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended  September  30,  1998,  filed on November  13, 1998 and  incorporated
     herein by reference thereto.

(8)  Included  in the  Company's  Annual  Report on Form 10-K for the year ended
     December  31,  1998,  filed on March 31,  1998 and  incorporated  herein by
     reference thereto.

(9)  Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended March 31, 1999, and incorporated herein by reference thereto.

(10) Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended June 30, 1999, and incorporated herein by reference thereto.

(11) Included in the  Company's  Current  Report on Form 8-K filed on August 26,
     1999 and incorporated herein by reference thereto.

(12) Included  in the  Company's  Quarterly  Report on Form 10-Q for the quarter
     ended September 30, 1999 and incorporated herein by reference thereto.

(13) Included  in the  Company's  Annual  Report on Form 10-K for the year ended
     December  31,  1999,  filed  March  27,  2000 and  incorporated  herein  by
     reference thereto.




(b)  Reports on Form 8-K

Hagler  Bailly,  Inc.  did not file any  Reports on Form 8-K during the  quarter
ended March 31, 2000.




<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<TABLE>   <S>                                                    <C>
                                                             /s/ Geoffrey W. Bobsin
                                                             ---------------------------------------------------------
Date: May 12, 2000                                           Geoffrey W. Bobsin
                                                             President, Chief Executive Officer, Chief Financial
                                                             Officer, Treasurer and Secretary
                                                             ---------------------------------------------------------

</TABLE>












<PAGE>






EXHIBIT 10.57




                         EMPLOYMENT SEPARATION AGREEMENT
                               AND GENERAL RELEASE

                  This Employment  Separation Agreement and General Release (the
"Agreement")  is being entered as of May 3, 2000, by and between  Hagler Bailly,
Inc.  ("Hagler  Bailly"  or  the  "Company")  and  William  E.  Dickenson  ("Mr.
Dickenson"),  effective as of the date this Agreement is fully executed. For and
in consideration of the mutual promises contained herein, and for other good and
sufficient consideration, receipt of which is hereby acknowledged, Hagler Bailly
and Mr. Dickenson  (sometimes  hereafter  referred to as the "parties") agree as
follows:

1.                    Termination and Payment.
(a) Mr. Dickenson will perform his regular duties with Hagler Bailly through May
11, 2000 ("the  Resignation  Date"),  on which date he will step down and resign
all of the offices and positions he then holds with Hagler Bailly and any of its
affiliates,  including  without  limitation  the position of President and Chief
Executive  Officer of Hagler Bailly and his position as a member of the Board of
Directors of Hagler Bailly (the "Board").  Mr.  Dickenson  agrees to execute and
deliver to the Company such documents  concerning  such  resignations  as may be
reasonably  requested by the Company. Mr. Dickenson agrees that he shall have no
further right to employment with the Company after the Resignation Date.

                  (b) On or before May 11, 2000,  Hagler Bailly shall pay to Mr.
Dickenson by direct deposit (i) a lump-sum payment of $850,000,  (ii) a lump-sum
payment  of  $1,526,304,  which is an  amount  equal to four (4)  times his Base
Salary as of May 11,  2000 and (iii) all  accrued  and  unpaid  Base  Salary and
accrued leave,  if any,  through the  Resignation  Date. The payments  hereunder
shall be reduced by the Company to account for standard income tax withholdings.
At Mr.  Dickenson's  written  request,  the Company  shall  promptly  remove the
restrictive legends on Mr. Dickenson's stock certificates (or issue certificates
without restrictive legends) as permitted by law.

                  (c)  The  Company  shall  offer  Mr.  Dickenson,   within  the
applicable deadline under the Consolidated Omnibus Budget  Reconciliation Act of
1985  ("COBRA"),  the  opportunity  to elect  continued  group health  insurance
coverage in accordance with the terms of COBRA.  (d) Mr.  Dickenson  agrees that
once all of the  payments  and  actions  referred to in  paragraph  1(b) of this
Agreement have been made he shall have been paid all  compensation due and owing
to him under this Agreement and any  employment  contract he has or may have had
with the Company  (including but not limited to the Employment  Agreement  dated
August 27,  1998  between  Hagler  Bailly  and Mr.  Dickenson  (the  "Employment
Agreement"))  or from any other  source of  entitlement,  including  all  wages,
salary,  commissions,   bonuses,  incentive  payments,  expense  reimbursements,
severance pay or other benefits,  other than any amounts or benefits  payable to
Mr.  Dickenson under the terms of Hagler  Bailly's 401(k) plan. Mr.  Dickenson's
rights  to such  benefits  shall be  governed  by the  terms of any such plan or
program as in effect on the Resignation Date.

2.  Release by Mr.  Dickenson.  With  respect to matters  relating to the period
prior to the date of this Agreement, Mr. Dickenson, on behalf of himself and his
agents,  heirs,  executors,  administrators,   successors  and  assigns,  hereby
releases  and  forever  discharges  Hagler  Bailly,  and any  and all of  Hagler
Bailly's affiliates, successors and assigns, and any and all of their respective
officers,  directors,  employees,  agents,  and  attorneys,  from  any  and  all
complaints,  claims, demands, damages,  lawsuits,  actions, and causes of action
(whether known or unknown,  occurred or contingent,  liquidated or unliquidated)
which he now has or may  have  against  any one or more of them  for any  reason
whatsoever in law or in equity,  under federal,  state or other law, whether the
same be upon statutory claim,  contract,  tort or other basis, including without
any  limitation  on the general  nature of the  foregoing  release,  any and all
claims  arising from or relating to his  employment  or the  termination  of his
employment  and any and all claims  relating  to any  employment  contract,  any
employment  statute  or  regulation,   or  any  employment  discrimination  law,
including but not limited to the Age  Discrimination  in Employment Act of 1967,
as amended,  Title VII of the Civil  Rights Act of 1964,  as amended,  the Civil
Rights  Act of 1866,  as  amended,  all state and local  laws,  regulations  and
ordinances  prohibiting   discrimination  in  employment,  and  other  laws  and
regulations  relating to  employment,  including but not limited to the Employee
Retirement Income Security Act of 1974, as amended; provided, however, that this
release  shall not apply to any claims for  payments or  benefits  due or rights
under this Agreement or the terms of Hagler Bailly's 401(k) plan. Mr.  Dickenson
agrees,  without  limiting the generality of the above release,  not to file any
claim or lawsuit  seeking  monetary  recovery and  asserting any claims that are
released  in this  paragraph.  Mr.  Dickenson  further  hereby  irrevocably  and
unconditionally  waives  any and all rights to  recover  any relief and  damages
concerning  the  claims  that are  released  in this  paragraph.  Mr.  Dickenson
represents and warrants that he has not  previously  filed or joined in any such
claims against Hagler Bailly or any of its affiliates, and that he has not given
or sold any portion of any claims  released  herein to anyone else,  and that he
will indemnify and hold harmless the persons and entities  released  herein from
all  liabilities,  claims,  demands,  costs,  expenses  and/or  attorneys'  fees
incurred as a result of any such assignment or transfer.

3. Release by the Company.  With respect to matters relating to the period prior
to the date of this Agreement,  Hagler Bailly and its  affiliates,  on behalf of
themselves and their successors and assigns,  and any and all of their officers,
directors,  employees,  agents,  and  attorneys,  hereby  release and  discharge
forever all complaints,  claims, demands, damages,  lawsuits, actions and causes
of action  (whether  known or  unknown,  accrued or  contingent,  liquidated  or
unliquidated)  which they now have or may have  against  Mr.  Dickenson  and his
heirs,  personal  representatives,   successors  and  assigns,  for  any  reason
whatsoever in law or in equity,  under federal,  state or other law, whether the
same be upon statutory claim,  contract,  tort or other basis, including without
any  limitation  on the general  nature of the  foregoing  release,  any and all
claims relating to Mr. Dickenson's employment relationship with Hagler Bailly or
any of its  affiliates  or  service  as a member of the  Board or any  committee
thereof. Hagler Bailly and its affiliates agree, without limiting the generality
of the above release, not to file any claim or lawsuit seeking monetary recovery
and asserting any claims that are released in this paragraph.  Hagler Bailly and
its affiliates further hereby irrevocably and unconditionally  waive any and all
rights to recover any relief and damages concerning the claims that are released
in this paragraph.  Hagler Bailly and its affiliates  represent and warrant that
they  have  not  previously  filed or  joined  in any such  claims  against  Mr.
Dickenson,  and that  they  have not  given or sold any  portion  of any  claims
released  herein to anyone else,  and that they will indemnify and hold harmless
Mr. Dickenson and the persons and entities released herein from all liabilities,
claims,  demands, costs, expenses and/or attorneys' fees incurred as a result of
any such assignment or transfer.

4.  Indemnification.  Hagler Bailly agrees to indemnify Mr.  Dickenson under the
terms  and  conditions  provided  for  the  indemnification  of  the  directors,
officers,  employees and agents of the Company in Article VIII,  paragraphs 8.1,
8.2, 8.3, 8.4 and 8.5 of the  Company's  bylaws and Paragraph 8 of the Company's
Amended and Restated Certificate of Incorporation.  Hagler Bailly agrees that it
will  treat  any and all  requests  by Mr.  Dickenson  for  indemnification  and
advancement of fees and expenses  consistent with Hagler  Bailly's  treatment of
similar  requests by other Hagler Bailly  directors and officers.  Hagler Bailly
agrees  to  continue  and  maintain,  without  interruption,  a  directors'  and
officers'  liability  insurance policy covering Mr.  Dickenson,  provided such a
policy is available  to Hagler  Bailly,  until such time as actions  against Mr.
Dickenson are no longer permitted by law.

5.  Non-Disclosure  of This Agreement.  Mr. Dickenson agrees that from and after
the  date  of his  execution  of  this  Agreement,  he  will  not,  directly  or
indirectly,  provide to any person or entity any  information  that  concerns or
relates to the negotiation of or circumstances  leading to the execution of this
Agreement or to the terms and  conditions  hereof  except (a) to the extent that
such  disclosure  is  specifically  required  by  law  or  legal  process  or as
authorized  in  writing  by Hagler  Bailly;  (b) to his tax  advisors  as may be
necessary for the  preparation of tax returns or other reports  required by law;
(c) to his  attorneys  as may be  necessary  to secure  advice  concerning  this
Agreement;  or (d) to members of his immediate family. Mr. Dickenson agrees that
prior  to  disclosing  such  information  under  parts  (b),  (c) or (d) of this
paragraph,  he will inform the recipients that they are bound by the limitations
of this paragraph. Hagler Bailly agrees not to provide to any third party (other
than the Board,  executive officers and professional advisors) the terms of this
Agreement  or  information  that  concerns or relates to the  negotiation  of or
circumstances  leading to the execution of this  Agreement  unless Hagler Bailly
determines in good faith that it is specifically required to do so by law, rule,
regulation,  legal process or a compelling business reason, provided that Hagler
Bailly  agrees that prior to  disclosing  the terms of this  Agreement  or other
information,  it  will  inform  the  recipients  that  they  are  bound  by  the
limitations of this paragraph and, to the extent such disclosure is not required
by law or legal  process,  Hagler Bailly shall ensure that any such recipient is
otherwise bound by a confidentiality agreement.

6. Confidential Information/Trading of Securities. Mr. Dickenson agrees that any
sensitive,  proprietary or  confidential  information or data relating to Hagler
Bailly or any of its affiliated entities,  including,  without limitation, trade
secrets,  customer lists,  customer  contacts,  customer  relationships,  Hagler
Bailly or its affiliated  entities'  financial  data,  long range or short range
plans, and other data and information of a competition-sensitive  nature, or any
confidential  or proprietary  information of others licensed to Hagler Bailly or
any of its  affiliates  that he acquired while an employee or director of Hagler
Bailly shall not be disclosed or used in a manner  detrimental  to the interests
of Hagler  Bailly or any of its  affiliates.  Mr.  Dickenson  agrees  and hereby
reaffirms his existing obligations under any and all confidentiality  agreements
that he may have signed with Hagler Bailly or its affiliates.  Nothing contained
herein shall restrict Mr.  Dickenson from divulging or using for his own benefit
or for any other purpose  information  that is readily  available to the general
public,  so long as such  information  did not become  available  to the general
public  as a  direct  or  indirect  result  of Mr.  Dickenson's  breach  of this
paragraph 6. Nothing contained herein shall restrict Mr. Dickenson's  ability to
make any disclosures as may be required by law. Mr. Dickenson  acknowledges that
in the course of his  employment  with Hagler  Bailly or its  affiliates  he has
acquired  material,   non-public  information  concerning  the  Company  or  its
affiliates or possible transactions involving the Company, and he agrees that he
shall at all  times  continue  to  abide  by all  applicable  laws  relating  to
purchasing  or selling  securities  in reliance  upon such  information  or from
communicating such information to any other person or entity under circumstances
in which it is  reasonably  foreseeable  that such person or entity is likely to
purchase or sell such securities in reliance upon such information.

7. Return of  Information/Cooperation.  Mr. Dickenson agrees to return to Hagler
Bailly the originals and all copies of all files, materials,  documents or other
property  relating  to the  business  of Hagler  Bailly or its  affiliates.  Mr.
Dickenson  may retain only  personal  correspondence  relating to the duties and
responsibilities of his employment.  Mr. Dickenson also agrees to cooperate with
Hagler  Bailly,  as may be reasonably  requested from time to time with five (5)
business  days written or oral notice,  with respect to matters  relating to the
business of Hagler Bailly or its affiliates, provided that such cooperation does
not materially interfere or conflict with Mr. Dickenson's  obligations or duties
to an employer or other business relationship.  Mr. Dickenson will be reimbursed
for all  reasonable,  customary,  and  documented  expenses  incurred  by him in
connection   with   such   cooperation,    consistent   with   Hagler   Bailly's
then-applicable policy governing business expenses;  provided, however, that Mr.
Dickenson  shall not be  reimbursed  any wages or  compensation  for his time in
connection  herewith.  In addition to and not in contravention of the foregoing,
Mr. Dickenson's  agreement to cooperate  hereunder does not include an agreement
to travel or to spend more than 8 hours per business week on matters relating to
the business of Hagler Bailly or its affiliates.  In the event a majority of the
members  of the Board  (excluding  for this  purpose  any member  whose  initial
assumption  of office  occurs as a result  of an actual or  threatened  election
contest  with respect to the election or removal of directors or other actual or
threatened  solicitation  of  proxies  or  consents  by  or  on  behalf  of  any
individual,  entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities  Exchange Act of 1934, as amended))  publicly  recommends that
the stockholders of Hagler Bailly approve a transaction  which would be a Change
of Control (as defined in the Employment  Agreement)  during the one hundred and
twenty (120) day period following the Resignation  Date (the "Support  Period"),
Mr.  Dickenson  agrees,  if  requested by Hagler  Bailly,  to vote any shares of
Hagler Bailly common stock that Mr.  Dickenson has voting  control of in support
of and otherwise support such Change of Control transaction. For a period of one
hundred and twenty (120) days  following the  Resignation  Date,  Mr.  Dickenson
further  agrees that he will not,  directly  or  indirectly,  (a) make,  effect,
initiate, cause or participate in any Change of Control transaction with respect
to the Company,  or (b) act, alone or in concert with others, to seek to control
or influence the management, Board or policies of the Company.

8.  References;  No Adverse  Comment.  Mr.  Dickenson  agrees to coordinate with
Hagler  Bailly's  General  Counsel any requests for employment  references  from
Hagler  Bailly,  who  shall  in  response  to  any  such  requests  confirm  Mr.
Dickenson's  dates of  employment,  last  position  held,  and last salary.  Mr.
Dickenson and Hagler Bailly's  General Counsel shall  coordinate with respect to
the  issuance  of a press  release,  a copy  of  which  is  attached  hereto  as
Attachment A, announcing Mr. Dickenson's resignation.  Mr. Dickenson agrees that
he will not make any  disparaging  public  statements  regarding  Hagler Bailly,
Hagler  Bailly's  affiliates,  Hagler  Bailly's  business,  or  Hagler  Bailly's
employees, agents, officers or directors. Hagler Bailly, its executive officers,
and  members of the Board will not make any  disparaging  public  statements  or
publicly release any disparaging information regarding Mr. Dickenson. Nothing in
this Paragraph 8 shall prohibit any person from making truthful  statements when
required by order of a court or other legal body have jurisdiction.


9.  Non-Solicitation.  For the period through and including August 28, 2001, Mr.
Dickenson shall not do any of the following, directly or indirectly, without the
prior  written  consent of the Board (which  consent  shall not be  unreasonably
withheld):
     (a) solicit or call on,  either  directly or  indirectly,  any  customer or
supplier  with  whom  the  Company  or  any  of its  current  subsidiaries  (the
"Restricted  Entities")  dealt with or otherwise had commercial  arrangements or
relationships  with during the period beginning on August 28, 1996 and ending on
the date hereof;
     (b) influence or attempt to influence  any supplier,  customer or potential
customer of any of the Restricted Entities to terminate or modify any written or
oral agreement or course of dealing with the Restricted Entities; or
     (c) influence or attempt to influence any person either (i) to terminate or
modify  his or her  employment,  consulting,  agency,  distributorship  or other
arrangement with any of the Restricted Entities, or (ii) to employ or retain, or
arrange to have any other person or entity employ or retain,  any person who has
been  employed  or retained by any of the  Restricted  Entities as an  employee,
consultant,  agent or  distributor  at any time during the period  beginning  on
August 28, 1997 and ending on the date hereof.

10. Breach or Violation.  Each of Hagler Bailly and Mr.  Dickenson agree that in
the event of violation of the provisions of this  Agreement,  in addition to any
damages allowed by law, Mr.  Dickenson and Hagler Bailly or its  affiliates,  as
applicable,  shall be entitled to injunctive  relief. In the event of a judicial
determination that any restriction  contained in this Agreement is unreasonable,
Mr. Dickenson and Hagler Bailly agree that the court may modify such restriction
to make it reasonable prior to granting any injunctive relief.

11. Certain  Representations.  Each of the parties  represents and  acknowledges
that in  executing  this  Agreement  such party does not rely and has not relied
upon any  representation  or  statement  made by the  other  party or the  other
party's agents,  representatives or attorneys with regard to the subject matter,
basis or effect of this Agreement or otherwise.  Notwithstanding  the foregoing,
Hagler  Bailly  represents  and warrants to Mr.  Dickenson  that the  execution,
delivery and performance of this Agreement have been duly and validly authorized
on behalf of Hagler Bailly by its Board and that all corporate  action  required
to be taken by Hagler Bailly for the execution, delivery and performance of this
Agreement has been duly and effectively  taken,  and Hagler Bailly  acknowledges
that Mr.  Dickenson has relied upon such  representations  in entering into this
Agreement. 12. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective  representatives,  successors
and permitted assigns.

13. Other  Agreements.  The parties  expressly  agree that,  except as set forth
herein,  this  Agreement  supersedes  the  Employment  Agreement  and any  other
employment  contract Mr. Dickenson has or may have had with Hagler Bailly or its
affiliates.

14. Entire Agreement.  This Agreement  contains the entire agreement between the
parties relating to the subject matter of this Agreement, and may not be altered
or amended except by an instrument in writing signed by both parties hereto.

15. No  Admission.  The parties agree that nothing  contained in this  Agreement
shall  constitute  or be treated as an admission of liability or  wrongdoing  by
either of them.  16.  Governing  Law. This  Agreement  shall be governed by, and
construed  in  accordance  with,  the  laws  of  the  Commonwealth  of  Virginia
(excluding the choice of law rules  thereof).  The language of all parts of this
Agreement  shall in all cases be  construed  as a whole,  according  to its fair
meaning, and not strictly for or against any of the parties.

17.  Waiver.  Neither the waiver by either party of a breach of or default under
any of the provisions of the Agreement, nor the failure of such party, on one or
more occasions, to enforce any of the provisions of the Agreement or to exercise
any right or privilege  hereunder  shall  thereafter be construed as a waiver of
any  subsequent  breach or  default of a similar  nature,  or as a waiver of any
provisions, rights or privileges hereunder.

18.  Further  Assurances.  The  parties  agree to take or cause to be taken such
further  actions as may be necessary or as may be reasonably  requested in order
to fully effectuate the purposes, terms, and conditions of this Agreement.

19.  Assignment.  Mr.  Dickenson's  rights and obligations  hereunder may not be
assigned by him without the prior written consent of the Company.

20. Notice. All notices, demands, requests, or other communications which may be
or are  required to be given,  served or sent by either party to the other party
pursuant  to this  Agreement  shall be in  writing  and shall be  hand-delivered
(including  delivery  by  courier)  or mailed  by  first-class,  registered,  or
certified mail (return receipt requested, postage prepaid) to:
                  The Company:
     Stephen V.R. Whitman, Esquire
     Hagler Bailly, Inc.
     1776 Eye Street N.W.
     Washington, D.C. 20006-3700

     with a copy to (which shall not constitute notice):

                  Richard T. Horan, Jr. Esq.
                  Hogan & Hartson LLP
                  8300 Greensboro Drive, Suite 1100
                  McLean, VA 22102


                  Mr. Dickenson:
                  5140 Rockwood Parkway, N.W.
                  Washington, D.C. 20016

                  with a copy to (which shall not constitute notice):
                  Martin Lipton, Esq.
                  Wachtell, Lipton Rosen & Katz
                  51 West 52nd Street
                  New York, NY 10019


21.  Either party may  designate by notice in writing a new address to which any
notice, demand, request, or communication may thereafter be so given, served, or
sent. Each notice,  demand,  request,  or  communication  which shall be mailed,
delivered,  or  transmitted  in the  manner  described  above  shall  be  deemed
sufficiently given,  served, sent, and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery receipt,
or the affidavit of messenger being deemed conclusive evidence of such delivery)
or at such time as delivery is refused by the addressee upon presentation.

22.  Acknowledgment.  With respect to the general release in paragraph 2 hereof,
Mr.  Dickenson  agrees and  understands  that he is  specifically  releasing all
claims under the Age Discrimination in Employment Act, as amended, 29 U.S.C. ss.
621 et seq. Mr.  Dickenson  acknowledges  that he has read and  understands  the
foregoing  Agreement  and  executes it  voluntarily  and without  coercion.  Mr.
Dickenson  further  acknowledges  that he is being advised in writing  herein to
consult with an attorney and that he has consulted  with an attorney who had the
opportunity to review this Agreement and advise Mr.  Dickenson  concerning  this
Agreement prior to Mr.  Dickenson's  execution of this Agreement.  Mr. Dickenson
further  acknowledges that he has been given a period of 21 days within which to
consider and execute this  Agreement,  unless he voluntarily  chooses to execute
this Agreement before the end of the 21-day period.  Mr.  Dickenson  understands
that he has seven days following his execution of this Agreement to revoke it in
writing,  and that this  Agreement is not effective or  enforceable  until after
this  seven-day  period.  For such  revocation to be  effective,  notice must be
received by Richard T. Horan, Jr., Esq., Hogan & Hartson L.L.P., 8300 Greensboro
Drive,  Suite  1100,  McLean,  Virginia  22102,  no later than 5:00 p.m.  on the
seventh  calendar  day after the date by which Mr.  Dickenson  has  signed  this
Agreement.  Mr.  Dickenson  expressly  agrees that, in the event he revokes this
Agreement,  the  Agreement  shall be null and void and have no legal or  binding
effect whatsoever.  The parties hereto recognize that Mr. Dickenson may elect to
sign this Agreement prior to the expiration of the 21-day  consideration  period
specified  herein,  and Mr. Dickenson agrees that if he elects to do so he shall
manifest such election by signing the attachment hereto.

23.  Attorneys'  Fees and Expenses.  The parties  acknowledge  that each of them
shall be responsible for the payment of his or their own attorneys' fees, costs,
and expenses  incurred in connection  with the negotiation and execution of this
Agreement.

24. No Offset/Mitigation. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its  obligations  hereunder shall
not be  affected  by any  set-off,  counterclaim,  recoupment,  defense or other
claim,  right or action  which the Company may have  against  Mr.  Dickenson  or
others. The foregoing shall not effect, impair or in any way limit the Company's
right to recover for breach or violation  of the  provisions  of this  Agreement
pursuant to Paragraph 9 above.  In no event shall Mr.  Dickenson be obligated to
seek  other  employment  or take any other  action by way of  mitigation  of the
amounts  payable to Mr.  Dickenson under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Mr.
Dickenson obtains other employment.
         IN WITNESS  HEREOF,  the parties  hereto  have  caused this  Employment
Separation  Agreement and General Release to be executed and delivered as of the
date written below.


WILLIAM E. DICKENSON

By: /s/ William E. Dickenson
Date:  May 3, 2000
/s/ Betsy Trimber
Witness


HAGLER BAILLY, INC.

By: /s/ Stephen V. R. Whitman

Date: May 3, 2000
/s/ Betsy Trimber
Witness










                     ELECTION TO EXECUTE PRIOR TO EXPIRATION
                     OF TWENTY-ONE DAY CONSIDERATION PERIOD

                  I, William E. Dickenson, understand that I have 21 days within
which to consider  and execute the above  Employment  Separation  Agreement  and
General Release.  However,  after having an opportunity to consult counsel,  and
after consulting  counsel, I have freely and voluntarily  elected to execute the
Employment  Separation  Agreement and General  Release before such 21-day period
has expired.

May 3, 2000                                          /s/William E. Dickenson
-----------------                                    -----------------------
Date                                                 William E. Dickenson