<PAGE>
 
                                                                   Exhibit 10.17
                                                                   -------------


                            GRC INTERNATIONAL, INC.
                              EMPLOYMENT AGREEMENT
               (SENIOR VICE PRESIDENT & above - GARY L. DENMAN)

THIS EMPLOYMENT AGREEMENT is made in Vienna, Virginia as of December 8, 1995 by
and between Gary L. Denman (hereinafter referred to in the first person or as
"Employee") and GRC International, Inc., a corporation with its principal
offices at 1900 Gallows Road, Vienna, Virginia 22182 ("Company"). The term
"Company" shall also include any parent, subsidiary or affiliate of the Company.
As a condition to, and in consideration of, the Company's employment of
Employee, the parties mutually agree as follows:

1.     DUTIES.
       ------ 

(a)  I agree to work for the Company in the capacity set forth in Item 1(a) of
Exhibit A attached hereto. My duties will include all of those generally
associated with said position, subject to the direction and assignment of the
Company's Board of Directors. The duties assigned to me shall be performed at
the place of employment specified in Item 1(b) of Exhibit A or at such other
location as the Board of Directors may determine is in the best interest of the
Company. All of my working time and energies shall be devoted to the foregoing
duties. I will inform the Company, in writing, if I engage in any outside
business activity, and I will obtain the prior written approval of the Company,
if I engage in any outside business activity which (i) requires the use of
skills for which I was hired by the Company or the use of skills attained during
the course of my employment with the Company or (ii) would, in the opinion of
the Company, compete with or conflict with my employment with the Company. While
employed by the Company, absent the expressed, prior written authorization of
the Company's Board of Directors, I will not, directly or indirectly, engage in
any activity competitive with or adverse to the Company's business or welfare,
whether alone, as a partner of any partnership or joint venture or as an
officer, director, employee, or holder of 5% or more of any class of stock, of
any corporation.

(b)  I agree that for a period of one year immediately following termination
(voluntary or otherwise) of my employment with the Company, I will not interfere
with the business of the Company by inducing an employee to leave the Company's
employment, by inducing a consultant to sever the consultant's relationship with
the Company, or by inducing a customer to sever the customer's relationship with
the Company.

(c)  This Agreement cancels and replaces in their entirety any and all previous
employment agreements entered into between me and the Company or any of its
subsidiaries.

2.     INTELLECTUAL PROPERTY.
       --------------------- 

(a)  In this Agreement, (i) "Intellectual Property" means any patent, trademark,
copyright, semiconductor mask right, trade secret, invention, discovery, design,
idea or improvement (whether or not any of the foregoing are patentable,
protectable by copyright, or otherwise protectable), and (ii) the word "made",
when used with "Intellectual Property", means made, devised, developed,
conceived or reduced to practice. Exhibit B to this Agreement contains a
complete list of all Intellectual Property I consider proprietary to me, and,
during my employment with the Company, I agree to update Exhibit B from time to
time as may be necessary to keep it current. I will not incorporate or permit to
be incorporated into any work performed for or on behalf of the Company any
Intellectual Property proprietary to me or any third party.

(b)  I will disclose to the Company all Intellectual Property made by me, alone
or with others, during any period of employment with the Company. All such
disclosures shall be reviewed by the Company in confidence to determine any
issues which may arise.
<PAGE>
 
(c)  I will assign to the Company all right, title and interest in and to all
Intellectual Property made at any time by me alone or with others during or
after my employment with the Company, if such Intellectual Property was made
using Company equipment, supplies, facilities, or trade secret information, or
such Intellectual Property either (i) relates at the time of conception or
reduction to practice of the invention to the Company's business, or actual or
demonstrably anticipated research or development of the Company; or (ii) results
from any work performed by me for the Company. All Intellectual Property subject
to this paragraph shall remain Company property whether or not so disclosed or
assigned to the Company. I will cooperate fully with the Company during and
after employment in accomplishing the intent of this provision and execute such
instruments and documents reasonably requested by the Company, in order to more
fully vest in the Company all ownership rights in the Intellectual Property. In
addition, I irrevocably appoint the Company and each of its officers as my agent
and attorney-in-fact to act in my name and stead to execute and file any
documents and to do all other lawfully permitted actions to further the
prosecution, issuance and enforcement of patents, copyrights and other
proprietary rights with the same force and effect as if executed and delivered
by me.

(d)  The provisions of the foregoing Section 2(c) shall not apply to an
invention developed by me entirely on my own time without using Company
equipment, supplies, facilities, or trade secret information except for those
inventions that either (i) relate at the time of conception or reduction to
practice of the invention to the Company's business, or actual or demonstrably
anticipated research or development of the Company; or (ii) result from any work
performed by me for the Company.

3.     PROPRIETARY INFORMATION.  I understand that in the course of my
       -----------------------                                        
employment with the Company, I will be making use of, acquiring or adding to
proprietary and/or confidential information and materials of the Company or of
other parties ("Proprietary Information").  I will not disclose or use any
Proprietary Information either during or after my employment with the Company,
except to the extent expressly authorized in writing by an officer of the
Company.  The following are some examples of Proprietary Information, even if
not marked or identified as such:

(i)  Computer software of all kinds, source and object codes, algorithms, coding
sheets, compilers, assemblers, design concepts, routines and subroutines, and
all related documents and materials;

(ii) Business practices, marketing techniques, mailing lists, purchasing
information, price lists, pricing policies, quoting procedures, customer and
prospective customer lists and information, and all materials or information
relating to the manner in which the Company does business.

(iii)  Discoveries, concepts and ideas, whether or not patentable, protectable
by copyright, or otherwise protectable, trade secrets, "know-how," production
processes, research and development activities, and information on products or
programs;

(iv) Financial information, cost structure, bidding strategy, salary structure,
and such other information not in the public domain as may be helpful to
competitors or harmful to the Company, its customers or employees.

(v)  Any other information, materials or documents related to the business or
activities of the Company which are not generally known to others engaged
in similar businesses or activities; and

(vi) All ideas which are derived from my access to or knowledge of any of the
above.

4.     CONFLICTS OF INTEREST.  I have read and understood the Company's
       ---------------------                                           
Corporate Standards of Conduct, and while employed by the Company, I agree to
abide by said Standards of Conduct, as the same may be amended from time to
time, and to complete the Company's Ethics Questionnaire as required by the
Company from time to time.  Except as fully disclosed in a document attached to
this agreement, I am not a party to any agreement or understanding with any
other person or business, nor am 

                                      -2-
<PAGE>
 
I subject to any other legal restriction or obligation, which would in any way
prohibit, impede or hinder my employment with the Company or the performance of
my duties in the course of such employment.

       COMPENSATION.
       ------------ 

(a)  During the term of my employment hereunder, the Company shall pay me the
annual salary set forth in Exhibit A, Item 3(a) ("Gross Annual Salary").

(b)  In addition to the Gross Annual Salary, I shall be entitled to receive the
additional compensation, if any, specified in Exhibit A, Item 3(b) ("Additional
Compensation").

6.     DISABILITY.  If I am is unable to fulfill the duties of my position by
       ----------                                                            
reason of any illness, incapacity or disability, my salary shall be payable for
only 90 days following the onset of such illness, incapacity or disability,
provided, however, that if I (i) have applied for insurance benefits under the
Company's long-term disability policy during said 90 day period, and (ii) have
not yet begun to receive payments under said policy during said 90 day period,
then my salary shall continue to be payable for up to 180 days following the
onset of such illness, incapacity or disability until I begin to receive such
payments.  During the foregoing 90 day period (or 180 day period, if
applicable), my salary, to the extent not covered by the Company's short-term
disability benefits, shall be paid through the use of my sick leave, if any,
accumulated prior to January 1, 1994, but if such sick leave is or becomes
exhausted, my salary shall nevertheless be paid for the 90 day period (or 180
day period, if applicable).  If I shall return to full employment and full
discharge of my duties during the term of this Agreement, full compensation
shall be prospectively reinstated for any remaining term of this Agreement.

7.     TERMINATION AND SEVERANCE.
       ------------------------- 

(a)  Subject to Section 7(f) regarding a Change of Control, this Agreement may
be terminated by either party without cause on six (6) months written notice to
the other party. Subject to Section 7(f) regarding a Change of Control, this
Agreement may be terminated by the Company immediately for cause by written
notice to me. For purposes of this Section 7, cause for termination shall exist
in the event of my dishonesty, chronic absenteeism, conviction of a felony,
conviction of a misdemeanor involving moral turpitude, or material breach of
this Agreement.

(b)  To the maximum extent permitted by law, I hereby expressly authorize the
Company in advance upon my termination to deduct from my final paycheck(s) and
from my paid time off (PTO) check all amounts I owe the Company (including but
not limited to repayment of advances, loans or any other obligations).

(c)  Upon termination of employment, I will execute and comply with the Employee
Termination Certificate attached hereto as Exhibit C, and deliver to the Company
all notes, data, tapes, lists, reference materials, sketches, drawings,
memoranda, records and other documents which are in my possession or control
belonging to the Company or relating to its business.

(d)  Termination of this Agreement will not relieve me from my obligations under
Sections 1(b), 2 and 3 of this Agreement, which, by their respective terms,
continue beyond the termination of this Agreement.

(e)  In the event of my death, this Agreement will terminate and all accrued and
unpaid compensation and expenses, less all amounts I owe the Company (including
but not limited to repayment of advances, loans or any other obligations), will
be payable to my estate.

(f)  Notwithstanding any other provision of this Agreement to the contrary, at
any time during the twelve-month period following a Change of Control (as
hereinafter defined), (i) if the Company, with or without cause, terminates my
employment or gives me notice of termination, or (ii) if I terminate my
employment or give notice of termination by reason of a material breach by the
Company of the terms of 

                                      -3-
<PAGE>
 
this Agreement (including but not limited to the terms set forth on Exhibit A
hereto), then I shall receive, in addition to any other compensation provided
for in this Agreement, a lump-sum severance payment in an amount equal to the
Gross Annual Salary, less any income, excise, employment or other tax
withholdings which the Company is required by law to deduct therefrom.

(g)  For purposes of this Agreement, a Change in Control shall mean the
satisfaction of the conditions set forth in any one of the following paragraphs:

       (i) any person (as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") as modified and used in Sections
13(d) and 14(d) thereof, except that neither (A) the Company or any of its
                         ------                                           
subsidiaries, (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (C) an
underwriter temporarily holding securities pursuant to an offering of such
securities, nor (D) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company shall be included in such term) (a "Person")
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates) representing 25% or more
of the combined voting power of the Company's then outstanding securities; or

       (ii) during any period of up to two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board of Directors of the Company (the
"Board") and any new director (other than a director designated by a Person who
has entered into an agreement with the Company to effect a transaction described
in clause (i), (iii) or (iv) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

       (iii)  the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires more than 50% of the combined voting power of the Company's then
outstanding securities; or

       (iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.

8.     NOTICE.
       ------ 

(a)  Any notice to be given to me under this Agreement shall be in writing and
delivered by (i) registered or certified mail, return receipt requested; (ii)
express courier; or (iii) hand-delivery, at an address specified for me in this
Agreement or in any Exhibit hereto or at such other address of which written
notice has been given to the Company by me by any of the foregoing means.

(b)  Any notice to be given to the Company under this Agreement shall be in
writing and delivered by any of the means specified in subsection (a) above, to
the President, with a copy to the Senior Vice 

                                      -4-
<PAGE>
 
President, with a copy to the Senior Vice President, General Counsel &
Secretary, GRC International, Inc., 1900 Gallows Road, Vienna, Virginia 22182.

9.     DISPUTES.
       -------- 

(a)  This Agreement has been executed in and shall be governed by the laws of
the Commonwealth of Virginia.

(b)  Any controversy or claim arising out of or relating to Employee's
employment or this Agreement shall be resolved in the courts of Fairfax County,
Virginia, and Employee hereby submits to the jurisdiction of such courts, and
agrees to accept service of process from such courts.

(c)  I understand and agree that the Company will suffer irreparable harm if I
breach any of my obligations under this agreement and that monetary damages may
be inadequate to compensate for such breach. Accordingly, in the event of a
breach or threatened breach by me, the Company, in addition to and not in
limitation of any other rights, remedies or damages available to it at law or in
equity or otherwise, shall be entitled to a injunctive relief preventing any
such breach by myself or by my partners, agents, representatives, servants,
employers, employees and/or any and all persons directly or indirectly acting
for or with me.

10.    ASSIGNMENT.  My services are unique and personal.  Accordingly, I may not
       ----------                                                               
assign any rights or delegate any duties or obligations under this Agreement.
The rights and obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the
Company.

11.    ENTIRE AGREEMENT.  This agreement, together with all documents attached
       ----------------                                                       
to this agreement or specifically referred to in it, contains the entire
agreement and understandings by and between the Company and me with respect to
the covenants described in this agreement, and any representation, promise,
agreement or understanding, written or oral, not contained in this agreement
shall be of no force or effect.  No change or modification of this agreement
shall be valid or binding unless the change or modification is in writing and
signed by the parties to this agreement.  Any representation contrary to this
agreement, express or implied, written or oral, is hereby disclaimed.  Nothing
in this agreement shall obligate the Company to employ me for any length of
time.  No waiver of any provision of this agreement shall be valid unless it is
in writing and signed by the party against whom such waiver is sought to be
enforced, and no waiver of any provision shall be deemed a waiver of any other
provision or a waiver of the same provision at any other time.  This agreement
supersedes all previous agreements between the Company and me.

12.    SEVERABILITY. Any provision of this agreement which may be determined to
       ------------                                                            
be unenforceable, invalid or illegal shall be deemed stricken from this
agreement and all remaining provisions shall continue in full force and effect.

13.    REASONABLENESS OF RESTRICTIONS.  I have carefully read and considered the
       ------------------------------                                           
provisions of this agreement and, having done so, agree that the restrictions
set forth in this agreement are fair and reasonable and are reasonably required
for the Company's protection.  This agreement shall be construed fairly as to
all parties and not in favor of or against any party, regardless of which party
prepared this agreement.  In the event that, notwithstanding the foregoing, any
part of his agreement shall be held to be invalid or unenforceable, the
remaining parts of the agreement shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
in the agreement.  If any provision is held invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.

                                      -5-
<PAGE>
 
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first set forth above.

ATTEST:                                             GRC INTERNATIONAL, INC.

/s/ Thomas E. McCabe                                By: /s/ Jim Roth
-----------------------------------------------        -------------------------
Thomas E. McCabe                                        Jim Roth
Sr. Vice President, General Counsel & Secretary         President & Chief
Executive Officer

WITNESS                                             EMPLOYEE

 
[SIGNATURE APPEARS HERE]                               /s/ Gary L. Denman
-----------------------------------------------        -------------------------




APPROVED AND RATIFIED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF
GRC INTERNATIONAL, INC.


By: /s/ Leslie B. Disharoon
   -----------------------------------------------------------
   Leslie B. Disharoon, Committee Chairman

                                      -6-
<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------

                             DETAILS OF EMPLOYMENT
                             ---------------------

EMPLOYEE:  Gary L. Denman

ITEM 1(a)  Position:  Executive Vice President & Chief Operating Officer

ITEM 1(b)  Place of Employment:  1900 Gallows Road, Vienna,  Virginia 22182

ITEM 2     Effective Date of Employment Agreement:  December 8, 1995

           Effective Date of this Exhibit:  December 8, 1995

ITEM 3(a)  Gross Annual Salary:  One hundred eighty thousand dollars 
                                 ($180,000.00)

ITEM 3(b)  Additional Compensation (if any):  To be determined annually by the
                                              President and CEO of GRC
                                              International, Inc.



ITEM 4  Notice to Employee:

        8427 Blevins Way Court                   1900 Gallows Road
        -------------------------    and/        -------------------------
        Vienna, Virginia  22182       or         Vienna, Virginia  22182
        -------------------------                -------------------------

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



EMPLOYEE:                                        GRC INTERNATIONAL, INC.

/s/ Gary L. Denman                               By: /s/ Jim Roth
-------------------------                           -------------------------
                                                    Jim Roth 
                                                    President & Chief
                                                    Executive Officer



APPROVED AND RATIFIED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF
GRC INTERNATIONAL, INC.


By: /s/ Leslie B. Disharoon
   ----------------------------------------------------
   Leslie B. Disharoon, Committee Chairman

                                      -7-
<PAGE>
 
                                                                       EXHIBIT B
                                                                       ---------

                       SCHEDULE OF INTELLECTUAL PROPERTY
                       ---------------------------------

I developed or conceived prior to employment with the Company, and consider
proprietary to me, the following Intellectual Property, as that term is defined
in the Employment Agreement to which this Exhibit is attached:





                                    EMPLOYEE

                                    /s/ Gary L. Denman
                                    -------------------------

                                    -------------------------
                                    (Date)

 

                                      -8-
<PAGE>
 
                                                                       EXHIBIT C
                                                                       ---------
                             TERMINATION STATEMENT
                             ---------------------

                 (to be signed upon termination of employment)

1.  I, ___________________(employee's name), am cognizant of my legal
obligations, as stated in a certain EMPLOYMENT AGREEMENT dated ________________
_________________________________ between myself and GRC International, Inc.
(together with its subsidiaries, the "Company"), and I hereby specifically
reaffirm all of the terms stated in that agreement.

2.  I hereby certify that all materials related directly or indirectly to my
employment with the Company have been returned to the Company. I further certify
that no computer listings, programs, object codes, source codes, product
development guides, flowcharts, test equipment, drawings, blueprints or other
materials owned by the Company or provided to or used by me in connection with
my employment at the Company, whether in machine-readable form or otherwise,
have been retained by me or given to any other third person or entity in
anticipation of my employment termination or for any other reason, and I also
certify that none of those materials will be removed from the Company's premises
by me.

3.  I also certify that I have returned all company identification and credit
cards issued to me and all keys to Company and/or customer property that have
been in my possession.

4.  I am not aware of any action or situation involving any violation of the
Company's Corporate Standards of Conduct by any employee, director, consultant
or representative of the Company, except as follows:



5.  My forwarding addresses are as follows:

         HOME ADDRESS                                BUSINESS ADDRESS

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

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

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

 



                                    EMPLOYEE:

                                    -------------------------
                                    Gary L. Denman

                                    -------------------------
                                    (Date)

                                      -9-