SCHEDULE 14A
                                 (Rule 14A-101)

                     Information Required in Proxy Statement
                            Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No.   )
                                              --

Filed by the Registrant [X]

Filed by a Party other than the Registrant [  ]

Check the appropriate box:

         [X] Preliminary Proxy Statement
         [ ] Definitive Proxy Statement
         [ ] Definitive Additional Materials
         [ ] Soliciting  Material  Pursuant  to  ss.   240.14a-11(c)  or  ss.
             240.14a-12
         [ ] Confidential,  For Use of the  Commission  Only (as Permitted by
             Rule 14a-6(e)(2))

                             GRC INTERNATIONAL, INC.
                             -----------------------
                (Name of Registrant as Specified in its Charter)


                              ----------------------
      (Name of Person(s) Filing Proxy Statement, if Other Than Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]   No fee required.
[ ]   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)   Title of each class of securities to which transaction applies:

      --------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

(3)    Per unit price or other underlying value of transaction computed pursuant
       to  Exchange  Act Rule 0-11 (set forth the amount on which the filing fee
       is calculated and state how it was determined):

       -------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

       -------------------------------------------------------------------------
(5) Total fee paid:

       -------------------------------------------------------------------------
[ ]    Fee paid previously with preliminary materials:

       -------------------------------------------------------------------------
[ ]    Check box if any part of the fee is offset as provided by Exchange  Act
       Rule  0-11(a)(2) and identify the filing for which the offsetting fee was
       paid previously.  Identify the previous filing by registration  statement
       number, or the Form or Schedule and the date of its filing.

         1.     Amount Previously Paid:
                                       -----------------------------------------
         2.     Form, Schedule or Registration Statement No.:
                                                             -------------------
         3.     Filing Party:
                             ---------------------------------------------------
         4.     Date Filed:
                           -----------------------------------------------------

<PAGE>


                                [GRAPHIC OMITTED]

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                                  to be held on

                           ________, November __, 1999

The Annual Meeting of  Shareholders of GRC  International,  Inc. will be held at
the offices of the Company located at 1900 Gallows Road, Vienna, Virginia 22182,
on  ________,  November  __,  1999,  at 1:30 p.m.  local time for the  following
purposes:

1.     To elect 2 directors  for a 3-year  term  ending in 2002,  or until their
       successors are elected and qualify.

2.     To ratify  the  selection  of  Deloitte  & Touche as  independent  public
       accountants for the fiscal year ending June 30, 2000.

3.     To  consider  and  act  upon a  shareholder  proposal  to  terminate  the
       Shareholder Rights Plan.

4.     To consider and act upon any other matters which may properly come before
       the meeting, or any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on September 17, 1999, as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting, or any adjournment or postponement thereof.


                       By Order of the Board of Directors



                       THOMAS E. McCABE
                       Senior Vice President, Director of Corporate Development,
                         General Counsel & Secretary

October __, 1999
1900 Gallows Road
Vienna, Virginia  22182

<PAGE>
<TABLE>
<CAPTION>

                                                          TABLE OF CONTENTS

                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                              <C>

ELECTION OF DIRECTORS                                                                                             3

RATIFICATION OF ACCOUNTANTS                                                                                       8

OTHER INFORMATION                                                                                                 9

     Operation of Board and Committees                                                                            9

     Executive Officers                                                                                          10

     Summary Compensation Table                                                                                  11

     Option Grants in Last Fiscal Year                                                                           12

     Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values                                    13

     Employment Contracts and Termination of Employment and
         Change-in-Control Arrangements                                                                          14

     Compensation Committee Report on Executive Compensation                                                     15

     Performance Graph                                                                                           18

     Compensation of Directors                                                                                   19

     Certain Relationships and Related Transactions                                                              20

     Compensation Committee Interlocks and Insider Participation                                                 21

     Section 16(a) Beneficial Ownership Reporting Compliance                                                     21

     Security Ownership of Principal Shareholders and Management                                                 22

SHAREHOLDER PROPOSAL TO TERMINATE THE SHAREHOLDER RIGHTS PLAN                                                    24

DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS                                                                        27

APPENDIX A                                                                                                       28
</TABLE>

<PAGE>


                                 PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies
by  the  Board  of  Directors   ("Board")  of  GRC  International,   Inc.  ("GRC
International",   "GRCI"  or  "Company")  for  use  at  the  Annual  Meeting  of
Shareholders  at the  Company's  offices,  1900 Gallows Road,  Vienna,  Virginia
22182,  on ________,  November __, 1999, at 1:30 p.m.,  and any  adjournment  or
postponement  thereof.  GRCI's Annual Report to Shareholders  for the year ended
June 30, 1999, this proxy statement and the  accompanying  proxy are first being
sent or given to shareholders on or about October __, 1999.

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

                              PROXY CONTEST WARNING

You may receive proxy  soliciting  materials from Cilluffo  Associates,  L.P. on
behalf of its own nominees to the Company's  Board of Directors.  These nominees
have NOT been endorsed by your Board.

Your Board of Directors  urges you to vote FOR the Company's  nominees,  Gary L.
Denman  (President  and Chief  Executive  Officer)  and  Joseph R.  Wright,  Jr.
(Chairman of the Board of Directors).

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

Only the  holders  of record of the  Company's  $0.10  par  value  Common  Stock
("Stock")  at the close of business on September  17, 1999,  will be entitled to
vote at the  meeting.  On that date the Company had  12,323,626  shares of Stock
outstanding.  Holders  of the  Stock are  entitled  to one vote per share on all
business of the meeting  other than the  election of  directors.  In the case of
election  of  directors,  each  shareholder  has the  right to vote  his  shares
cumulatively.  Cumulative voting permits a shareholder to cast a number of votes
equal to the  number of  directors  to be  elected  multiplied  by the number of
shares registered in that shareholder's name on the record date, and to cast all
such votes for one nominee,  or to distribute  those votes among the nominees in
accordance with that shareholder's  choice. The presence, in person or by proxy,
of a majority of the  outstanding  shares of Stock will  constitute a quorum for
the meeting.

The two  nominees  for  director  receiving  the most  votes  will be elected as
directors,  and other  matters  will be  approved  if a  majority  of the shares
present at the meeting in person or by proxy and entitled to vote on the subject
matter  are  voted  in  favor of  approval  of such  item.  In the  election  of
directors,  votes may be cast in favor or withheld; votes that are withheld will
be excluded  entirely from the vote and will have no effect.  Abstentions may be
specified on any item other than the  election of directors  and will be counted
as  present  for  purposes  of the  matter  for which the  abstention  is noted.
Accordingly,  an abstention will operate to prevent  approval of any such matter
to the same extent as a vote against approval of such matter.

Under the rules of the New York Stock Exchange ("NYSE"), brokers who hold shares
in street name for  customers  have the  authority to vote on certain items when
they  have  not  received  instructions  from  beneficial  owners,  but  are not
permitted to vote on certain  other matters  (including a contested  election of
directors) in the absence of such  instructions.  The withholding of a vote on a
matter by a broker who has not received such  instructions  and is not otherwise
permitted to vote on such matter is known as a "broker non-vote." A "broker non-

<PAGE>

vote"  with  respect  to any matter to be  considered  at the Annual  Meeting of
Shareholders will have no effect on the outcome of the vote on such matter.

Unless revoked prior to exercise, all WHITE proxies representing shares entitled
to vote which are delivered  pursuant to this  solicitation will be voted at the
meeting.  Where the shareholder's  choice has been specified on the WHITE proxy,
the proxy will be voted  accordingly.  If a choice is not  indicated,  the WHITE
proxy will be voted in the manner  recommended  by the Board and, in particular,
FOR the election of the  Company's  nominees for  directors  named in this proxy
statement. If a proxy is executed and returned (whether such proxy was solicited
by the Company or by Cilluffo Associates), it may nevertheless be revoked at any
time prior to the voting thereof (i) by filing with the Secretary of the Company
a written notice of revocation  thereof or a duly executed proxy bearing a later
date, (ii) by giving written notice to the Company of death or incapacity of the
shareholder,  or  (iii)  as to  any  matter  presented  at the  meeting,  by the
shareholder's  voting in person upon such matter.  The execution of the enclosed
WHITE  proxy  will not  affect a  shareholder's  right to vote in  person at the
meeting  should the  shareholder  later find it convenient to attend the meeting
and desire to vote in person.

Management  does not intend to present to the meeting any matter not referred to
above,  and, with the exception of the shareholder  proposal  described later in
this  document,  does not presently know of any matters that may be presented to
the meeting by others.  If other matters  properly come before the meeting,  the
management  proxy  holders  intend to vote the proxy in  accordance  with  their
judgment. Proxies will be solicited for use at the meeting primarily by mail and
in person.  Proxies may also be solicited  by telephone by regular  employees of
the Company, who will receive no additional compensation therefor.

The Company has engaged the proxy  solicitation  firm of  Georgeson & Company to
assist in the  solicitation  of proxies  at an  estimated  cost of $25,000  plus
expenses. Georgeson & Company will employ approximately 35 people to solicit the
Company's shareholders. The Company will reimburse the brokers and other persons
holding the Company's shares registered in their names, or in the names of their
nominees,  for  their  expenses  incurred  in  sending  proxy  materials  to and
obtaining  proxies from the  beneficial  owners of such shares.  All expenses in
connection with the solicitation of proxies will be borne by the Company.

Expenses  related  to the  solicitation  of  shareholders,  in  excess  of those
normally spent for an annual  meeting,  are expected to aggregate  approximately
$500,000, of which approximately $100,000 has been spent to date.

Appendix A sets forth certain information  relating to the Company's  directors,
executive  officers  and  employees  who may  solicit  proxies on the  Company's
behalf.

YOUR VOTE IS IMPORTANT!  Please sign and date the enclosed  WHITE proxy card and
return it promptly in the enclosed postage-paid  envelope.  The prompt return of
your proxy will ensure  that your vote is  counted.  In the event you attend the
meeting,  the WHITE proxy will not be used if you revoke it or vote in person on
a given item. If you have already given a proxy to Cilluffo Associates on behalf
of its nominees, you may revoke that proxy by signing,  dating and returning the
enclosed WHITE proxy.

                                       2
<PAGE>

                              ELECTION OF DIRECTORS

The Board presently  consists of 3 classes,  with 3 directors in each class. The
class of directors whose terms expire at the 1999 Annual Meeting of Shareholders
is the first  class.  The  current  members  of the first  class are H.  Furlong
Baldwin,  Gary L. Denman and Joseph R. Wright, Jr. H. Furlong Baldwin,  however,
has decided not to run for re-election,  and therefore the Board has reduced the
size of the first  class from 3 to 2  directors  and has reduced the size of the
Board from 9 to 8 directors,  all effective at the  conclusion of Mr.  Baldwin's
current term at the 1999 Annual Meeting of Shareholders.  The Company's nominees
for election to the first class are Gary L. Denman and Joseph R. Wright, Jr. The
Company's  nominees and the continuing  directors are listed in the table on the
following  page. The terms of office of the nominees will commence upon election
and will continue until the end of their 3-year terms or until their  successors
are elected and qualify.

Members of the second and third  classes will be elected for 3-year terms at the
2000 and 2001  annual  meetings,  respectively.  Any  vacancy  or newly  created
directorships  in any  class may be filled by the  Board,  and any  director  so
elected  will serve for the  remainder  of the term of the class to which he has
been elected by the Board.

In the election of directors,  each shareholder has the right to vote his shares
cumulatively.  Cumulative voting permits a shareholder to cast a number of votes
equal to the  number of  directors  to be  elected  multiplied  by the number of
shares registered in that shareholder's name on the record date, and to cast all
such votes for one  nominee,  or  distribute  such votes  among the  nominees in
accordance with his choice. A shareholder wishing to designate the allocation of
his vote among the nominees may do so by indication on the enclosed  WHITE proxy
card or by personal vote at the Annual Meeting. Unless otherwise directed on the
WHITE  proxy  card,  management  proxy  holders  will be  authorized,  in  their
discretion,  to cumulate votes, so that, for example,  they may vote proxies for
the largest number of the nominees  proposed by management  which can be elected
by cumulative vote.

Management  has no reason to believe  that any nominee  will not be available to
serve.  If,  however,  any nominee  should  become  unable to serve,  the shares
represented  by  management  proxies may be voted  instead  for the  election of
another person recommended by the Board.

The table that follows sets forth (i) the name, age and principal  occupation of
each nominee and continuing  director,  (ii) the year in which each nominee's or
continuing  director's  term of office will expire,  and (iii) the year in which
each  nominee or director  was first  elected or  appointed  to the Board of the
Company.  Unless  otherwise  noted,  service  on  the  Board  has  been  without
interruption.  Following the table, additional information is provided regarding
all Company nominees and directors.

                                       3
<PAGE>
<TABLE>
<CAPTION>

     COMPANY NOMINEES, CONTINUING                                                                             TERM           FIRST
  DIRECTORS AND PRINCIPAL OCCUPATIONS                                                         AGE            EXPIRES         ELECTED
  -----------------------------------                                                         ---            -------         -------

  COMPANY NOMINEES:
<S> ..............................................................................             <C>             <C>             <C>

  GARY L. DENMAN
   President & CEO, GRC International, Inc. ......................................            60                2002            1998

  JOSEPH R. WRIGHT, Jr
   Chairman, GRC International, Inc. .............................................
   Chairman & CEO, AmTec, Inc. ...................................................            61                2002            1994

  DIRECTORS WITH CONTINUING TERMS:

  PETER A. COHEN
   Principal, Ramius Capital Group ...............................................            53                2000            1997

  CHARLES H.P. DUELL
   President, Middleton Place Foundation
    and Middleton Inn Company ....................................................            61                2000            1993

  GERALD R. McNICHOLS
   Sr. Vice President & Gen. Manager, MCR Div'n, GRCI ............................            56                2000            1999
    President & CEO, MCR Federal, Inc. ...........................................

  FRANK J.A. CILLUFFO
   Managing General Partner, Cilluffo Associates, L.P. ...........................            56                2001            1996

  LESLIE B. DISHAROON
   Corporate Director ............................................................            67                2001            1992

  LEON E. SALOMON
   Corporate Director ............................................................            62                2001            1999
</TABLE>

                                       4
<PAGE>

                        MEMBERS OF THE BOARD OF DIRECTORS

H.  FURLONG  BALDWIN,  67,  has  been  Chief  Executive  Officer  of  Mercantile
Bankshares Corporation since 1976, and Chairman since 1984. He has been Chairman
and Chief  Executive  Officer of  Mercantile-Safe  Deposit & Trust Company since
1976. He is a director of  Mercantile-Safe  Deposit & Trust Company;  Mercantile
Bankshares  Corporation;  Constellation  Energy Group,  Inc.;  CSX  Corporation;
Offitbank;  Wills Group;  and The St. Paul  Companies.  He is a Trustee and Past
Chairman of Johns  Hopkins  Hospital  and Johns  Hopkins  Health  System,  and a
Trustee  of  Johns  Hopkins  University.  He  is  a  Governor  of  the  National
Association of Securities Dealers, Inc.

FRANK J.A. CILLUFFO,  56, is a managing general partner of Cilluffo  Associates,
L.P., a firm that principally invests in securities for its own account.

PETER A.  COHEN,  53, is a  principal  of Ramius  Capital  Group  ("Ramius"),  a
privately-held,  specialized  investment  firm.  He became Vice  Chairman of GRC
International in 1997. From 1971 to 1990 he held various positions with Shearson
Lehman Brothers and its  predecessors,  culminating as Chairman of the Board and
Chief  Executive  Officer from 1987 to 1990.  Subsequent to his  departure  from
Shearson Lehman, he became Chairman of Republic New York Securities Corporation.
He was also Vice Chairman of Republic New York  Corporation  and a member of its
Management  Executive   Committee.   He  is  a  Director  of  Presidential  Life
Corporation,  Telecom  Italia Sp.A. and Andover Togs Inc. He is a Trustee of Mt.
Sinai Hospital and a board member of The Ohio State  University  Foundation.  He
has  served as a  Director  of the New York  Stock  Exchange,  American  Express
Company, Republic New York Corporation, Societe General de Belgique S.A., Cofide
and Cerus S.A., The New York Federal Reserve Bank International  Capital Markets
Advisory  Committee,  The Depository Trust Company,  The New York City Opera and
the Museum of Jewish Heritage.

GARY L. DENMAN, 60, has been President and Chief Executive Officer since July 1,
1998. He was President and Chief Operating Officer from March 1998 to June 1998.
From 1995 to 1998, he was Executive Vice President and Chief Operating  Officer.
He joined the Company in 1995 as Senior Vice  President for Strategic  Planning.
From  1992 to 1995,  he was  Director  of the  Department  of  Defense  Advanced
Research Projects Agency ("DARPA"), the premier Federal research and development
agency.  He was Deputy  Director  of DARPA  from 1990 to 1992.  Prior to joining
DARPA he was Deputy  Director of the U.S.  Air Force's  Wright  Laboratories  at
Wright  Patterson  Air Force Base from 1988 to 1990.  From 1982 to 1988,  he was
Director of the Air Force  Materials  Laboratory  and  Director of the Air Force
Manufacturing Technology Program. He is also a director of the Southern Research
Institute.

LESLIE B. DISHAROON, 67, was Chairman,  President and Chief Executive Officer of
Monumental  Corporation from 1979 until his retirement in 1988. He is a director
of Aegon USA and Travelers  Property Casualty Co. He is Chairman of MSD&T Funds,
Inc. and Chairman of the Board of the Johns Hopkins Health System Endowment.

CHARLES H.P. DUELL,  61, has been President of Middleton Place  Foundation since
1974. Middleton Place Foundation is a non-profit educational trust that owns and
interprets the Middleton Place National Historic  Landmark in Charleston,  South
Carolina.  He has also been  President of the  Middleton Inn Company since 1991.
His responsibilities  include historic  preservation,  tourism,  timber and land
management,  and real  estate  development.  He is also a director  of  Alliance
Capital Reserves; Alliance Government Reserves; and Alliance Tax-Exempt

                                       5
<PAGE>

Reserves (and associated  funds). He is a Trustee Emeritus of the National Trust
for Historic Preservation,  and is Chairman of the Board of Architectural Review
for the City of Charleston.

GERALD R.  McNICHOLS,  56, was  elected to GRC's  Board of  Directors  and named
Senior Vice  President & General  Manager of GRC's new MCR Division on September
23, 1999. He was President and CEO of Management Consulting & Research, Inc. and
its  subsidiaries  ("MCR")  for  22  years  until  GRC's  acquisition  of MCR in
September  1999.  He continues to serve as President  and CEO of MCR Federal,  a
subsidiary  of GRC. He has more than 30 years  experience  leading and  managing
complex  management  consulting  tasks. As President & CEO of MCR, Dr. McNichols
led his company in performing studies for government and industry clients. Prior
to starting  MCR in 1977,  Dr.  McNichols  was Vice  President of J. Watson Noah
Associates, Inc. (cost analysis consultants) and Vice President of GENTECH, Inc.
(information  systems  consultants).  During nine years of  previous  government
service he was Special  Assistant to the Deputy  Assistant  Secretary of Defense
(Resource  Analysis).  He was  commissioned  by the Air Force in 1965, and spent
four  years on the Air Staff  before  joining  the  Office of the  Secretary  of
Defense.  He has been an adjunct  professor at George Mason  University  and The
George Washington University.  He is a Certified Cost Estimator/Analyst  (CCEA).
He is co-author of the textbook  Operations  Research in Decision Making (1975);
author of "Software  Development  Cost Models,"  Chapter 12 of the book Software
Reliability  (1986);  author of "The  Economics  of  Computing  Methods  of Cost
Assessment," Part 4 of the book Software System Design Methods (1986); author of
"Uncertainties   of  LCC   Predictions,"   a  chapter  in   Electronic   Systems
Effectiveness  and Life  Cycle  Costing  (1983);  and a  frequent  presenter  at
professional conferences on Y2K, Risk Analysis, and Cost Analysis.

LEON E. SALOMON,  63, recently  retired from Rubbermaid as Senior Vice President
for  Procurement.  He joined  Rubbermaid in 1996 serving as the  Corporate  Vice
President,  Purchasing and Logistics for approximately two years. He served with
the  United  States  Army for 37  years,  achieving  the rank of  General.  From
February  1994 until his  retirement  in May 1996,  he commanded  the U.S.  Army
Materiel  Command where he oversaw daily  operations for an organization of more
the 70,000  people and 255  worldwide  facilities.  He had numerous  command and
staff positions leading to his final  assignment.  From 1992 to 1994, he was the
Deputy Chief of Staff for Logistics,  Department of the Army.  Prior to that, he
served in a wide variety of logistical,  managerial,  and policy and programming
positions with increasing scope and levels of responsibility throughout the U.S.
Army.  He was  promoted  to  brigadier  general  in 1984 and served as a general
officer for 12 years.  He has been a member of the Board of  Directors of Primex
Technologies  Inc. since 1996. He is a member of the Board of Directors of Armed
Forces Benefit Association Financial Services Company. He is a Senior Fellow for
the  Association  of the United  States Army and is a member of the Army Science
Board.

JOSEPH R.  WRIGHT,  Jr., 61, was named  Chairman of the Company in 1997.  He has
also been Chairman and Chief Executive  Officer of AmTec, Inc. since 1995. AmTec
is a public company that provides voice,  data and Internet  telephony  services
worldwide  and has telecom  interests  in China.  He is  co-Chairman  of Baker &
Taylor Holdings Inc., an international book and video distribution Company. From
1989 to 1994, he served as Executive Vice President,  Vice Chairman and director
of W.R.  Grace & Co.,  an  international  specialty  chemicals  and health  care
company.  From  1988 to 1989,  he was a member  of the  President's  Cabinet  as
Director of the White House  Office of  Management  and Budget  ("OMB").  He was
Deputy Director of OMB from 1982 to 1988, Deputy Secretary of Commerce from 1981
to 1982, President of Citicorp Retail Services and Retail Consumer Services from
1976 to 1981, and a partner/Vice President at Booz, Allen and Hamilton Inc. from
1966 to 1971. He is also a director of AmTec, Baker & Taylor, PanAmSat, RealMed,
Fusion Telecommunications International, Inc. and Barington Capital Corporation.

                                       6
<PAGE>

                        CILLUFFO ASSOCIATES' SOLICITATION

Cilluffo Associates,  L.P. ("Cilluffo Associates") has nominated individuals for
election to the Board of Directors in opposition of the Company's nominees.

The Board urges you to vote on the  enclosed  WHITE proxy card "FOR" the Company
nominees. Do not vote on any proxy card furnished by Cilluffo Associates.
             ---

Cilluffo   Associates  has  had  at  least  one   representative  on  the  Board
continuously  since 1992,  and two  representatives  from 1996 to 1998.  Through
Frank Cilluffo's  current membership on the Board, which will continue until the
2001 annual meeting of shareholders,  Cilluffo  Associates holds a percentage of
the Board seats that closely  corresponds  with its percentage  ownership of the
Company's stock. Despite its longtime Board representation,  Cilluffo Associates
is seeking a voice that is  disproportionately  larger than both its  percentage
share ownership and the Board  representation  of Dr.  McNichols,  the Company's
largest shareholder.

The  Board  believes  the  shareholders'  interests  are far  better  served  by
re-electing  Chairman  Joseph  Wright and  President  and CEO Gary Denman to the
Board than by an  expansion  of Cilluffo  Associates'  existing  representation.
Under the  leadership  of Messrs.  Wright and Denman,  the Company has delivered
vastly   improved   results  since   implementing   an  aggressive   growth  and
profitability  strategy.  Since 1998,  annual  revenues  have  increased 26% and
annual  operating  income has grown 71%.  Operating  margins have increased very
substantially,  from 4.1% for fiscal 1998 to 5.6% for fiscal  1999.  Shareholder
equity  increased  46%,  from $27.4  million at the end of fiscal  1998 to $40.1
million at the end of fiscal  1999.  Messrs.  Wright and Denman are  executing a
strategy  of  growth  in  key  federal  markets  through   aggressive   business
development   founded  on  the  Company's   excellent   reputation  of  customer
satisfaction.  Failure to elect these two top leaders could seriously impair the
continued   successful   execution  of  their  strategy  to  aggressively  build
shareholder value.

Because  shareholders  may  cumulate  votes  in the  election  of  directors,  a
shareholder with shares representing more than one-third of the total votes cast
at the Annual  Meeting would have the power to elect one of the two directors to
be elected.  Cilluffo  Associates has reported that it beneficially owned, as of
September  1, 1999,  1,708,000  shares  (representing  13.9% of the  outstanding
shares as of the record date) and that it will vote those shares in favor of its
nominees  for  election  to the Board.  As of  September  3, 1999,  the  current
directors,   excluding  Mr.   Cilluffo,   owned  a  total  of  2,150,430  shares
(representing  17.4% of the outstanding  shares) (excluding shares issuable upon
exercise of  options)  and have  advised  the Company  that they will vote those
shares in favor of the Company's  nominees for election to the Board.  If either
of the Company's nominees is not elected to the Board at the Annual Meeting, the
Board may, and it reserves the right to, appoint that nominee to the Board after
the  meeting if it  determines  such action to be in the best  interests  of the
Company and its shareholders.

The Board  urges you to vote "FOR" the  Company's  nominees - Gary L. Denman and
Joseph R. Wright, Jr. on the enclosed white proxy card.

VOTE REQUIRED
-------------

The nominees  elected as directors  will be the two nominees  receiving the most
votes of the  shares  present  in person or  represented  by proxy at the Annual
Meeting and entitled to vote on the election of directors.

                                       7
<PAGE>

                           RATIFICATION OF ACCOUNTANTS

The Board has selected  Deloitte & Touche to serve as the Company's  independent
public  accountants for the fiscal year ending June 30, 2000.  Deloitte & Touche
has offices near or convenient to most of the Company's operations. The Board is
satisfied as to the  professional  competence and standing of Deloitte & Touche.
Representatives  of  Deloitte & Touche are  expected to be present at the Annual
Meeting and will have an  opportunity  to make a statement  if they desire to do
so, as well as being available to respond to appropriate questions.

VOTE REQUIRED
-------------

The vote required for  ratification of the selection of Deloitte & Touche is the
affirmative vote of a majority of the shares present in person or represented by
proxy at the Annual Meeting and entitled to vote on the subject matter.

The Board  recommends  a vote  "FOR" the  proposal  to ratify the  selection  of
Deloitte & Touche as independent public accountants.

                                       8
<PAGE>

                                OTHER INFORMATION

                        OPERATION OF BOARD AND COMMITTEES

The Board has standing Audit, Compensation,  Administrative/Ethics and Executive
& Nominating Committees.

The Audit  Committee  reviews  the  results  of,  and  suggestions  provided  in
connection  with,  the  Company's   annual  audit  by  its  independent   public
accountants;  reviews  accounting  procedures  established  by  management;  and
considers  matters  relating to  non-audit  services by the  independent  public
accountants.  During fiscal 1999, the Committee held 3 meetings.  The members of
the Committee are Mr. Baldwin (Chairman), Mr. Disharoon and Mr. Cilluffo.

The  Compensation  Committee  represents  the full Board in matters of executive
compensation,  and from time to time  recommends  to the full Board  appropriate
methods and amounts of executive and director compensation.  It also administers
the Company's employee and executive stock option plans. During fiscal 1999, the
Committee  held 5  meetings.  The  members of the  Committee  are Mr.  Disharoon
(Chairman), Mr. Cohen and Mr. Duell.

The  Administrative/Ethics  Committee monitors the Company's retirement plan and
ethical compliance within the Company.  During fiscal 1999, the Committee held 3
meetings.  The members of the Committee are Mr. Duell  (Chairman),  Mr. Cilluffo
and Gen. Salomon.

The  Executive & Nominating  Committee  has the authority to exercise all of the
powers of the Board in the management of the business and affairs of the Company
between the meetings of the Board, except to the extent prohibited by applicable
law or regulation.  It also reviews and makes  recommendations  in regard to the
election of officers and  directors  for the Company.  During  fiscal 1999,  the
Committee  held 4  meetings.  Currently,  all  members  of the  Board are on the
Executive & Nominating Committee.

The  Company's  Bylaws  provide that the Chairman of the Board is an  ex-officio
member of all the standing  committees upon which he does not serve as a regular
standing member, and that the President is an ex-officio member of the Executive
& Nominating Committee.

The Executive & Nominating Committee will consider recommendations  submitted by
shareholders  for  nominees  for  director.  Such  recommendations  should be in
writing and delivered or mailed to the Company c/o Thomas E. McCabe, Senior Vice
President, Director of Corporate Development,  General Counsel & Secretary, 1900
Gallows Road, Vienna, Virginia 22182. In addition,  nominations for the election
of directors may be made by shareholders in accordance with procedures set forth
in the Company's Certificate of Incorporation.  Copies of such procedures may be
obtained without charge by contacting Mr. McCabe at the above address.

The Board held 6 meetings  during  fiscal 1999. No Board member  attended  fewer
than 75% of the  meetings  of the  Board  and  Board  Committees  on which  that
director served,  except for General Salomon,  who attended 1 of his 2 Board and
Committee  meetings  since his  appointment  to the Board in April 1999, and Mr.
Cilluffo, who attended only 9 of his 14 Board and Committee meetings.

                                       9
<PAGE>

                               EXECUTIVE OFFICERS

In addition to Dr. Denman,  the following persons are executive  officers of the
Company as of August 31, 1999:

MICHAEL G.  STOLARIK,  48, has been Executive Vice  President,  Chief  Operating
Officer and Acting  Director of Information  Systems  Division (ISD) since April
1999. He was Senior Vice President,  Strategic Planning from 1998 to April 1999.
He was also Acting  Director of the  Company's  Decision  Technologies  Division
(DTD) from July 1998 to January 1999,  and Acting  Director of the Company's SWL
Division  from  January  1999 to  February  1999.  He was  President  and  Chief
Executive  Officer for Space  Applications  Corporation  from 1995 to 1997. From
1975 to 1995, he was at BDM  International.  He served as BDM's  Corporate  Vice
President from 1989 to 1995,  with  responsibility  for the company's  operating
group performing information technology and systems integration projects. He was
Vice  President  and General  Manager of BDM's  Communications  and Data Systems
Division from 1987 to 1989, and Vice President of Information  Systems from 1985
to 1987. He also served as BDM's Chief Information Officer in 1994 and 1995.

THOMAS  E.  McCABE,  44,  is  Senior  Vice  President,   Director  of  Corporate
Development,  General  Counsel  and  Secretary.  He joined  the  Company as Vice
President-Legal  and  Secretary  in 1992,  and was  promoted  to the  additional
offices of General Counsel in 1993,  Senior Vice President in 1995, and Director
of Corporate  Development  in 1998. He was a founding  partner of the Washington
law firm of McCarthy & Burke from 1988 through  1991,  and an attorney  with its
predecessor  McCarthy  & Durrette  from 1985 to 1988.  He was an  attorney  with
Venable  Baetjer & Howard from 1984 to 1985,  and Reavis & McGrath  from 1982 to
1984. He was law clerk to Judge Charles  Richey in the U.S.  District  Court for
D.C. from 1981 to 1982.

JAMES P. ALLEN, 50, has been Senior Vice President,  Chief Financial Officer and
Treasurer  since January 1999. He was Executive  Vice  President and CFO of CACI
International  from 1996 to 1998.  He was Vice  President  of Finance for I-Net,
Inc. in 1995. He was Executive Vice President of Finance and  Administration for
RJO  Enterprises,  Inc.  from 1992 to 1995.  From 1979 to 1989,  he held various
positions   with  Fairchild   Industries   culminating  as  Vice  President  and
Controller,  and from  1989 to  1992,  he was  Vice  President-Finance,  CFO and
Treasurer for its spin-off, Fairchild Space and Defense Corp.

                                       10
<PAGE>
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE
                                        A N N U A L  C O M P E N S A T I O N      LONG TERM COMPENSATION
                                        -----------------------------------       ----------------------
              Name and                                          Other Annual               AWARDS                      All Other
         Principal Position      Year   Salary 1/    Bonus 1/   Compensation 1,2/ Securities Underlying Options 1,3  Compensation 4/
         ------------------      ----   --------     -------    -------------     -----------------------------      -------------
<S> .............................<C>        <C>           <C>        <C>                 <C>                                <C>
Gary L. Denman ..................1999   $297,411 5/   $125,560 5/   $60,682               32,200 5/                      $15,272
President and CEO ...............1998   $187,308 5/   $125,560 5/   $12,173              268,724 5/                      $12,639
                                 1997   $180,000 5/     - 0 -       $ 5,569               29,196 5/                      $12,850

Michael G. Stolarik .............1999   $172,856 6/   $ 95,000 6/   $36,529               80,000                         $ 9,901
Executive VP and COO ............1998   $ 43,750 6/   $ 17,000 6/   $ 6,125               10,000                         N/A
 .................................1997   N/A           N/A           N/A                   N/A                            N/A

Thomas E. McCabe ................1999   $195,190      $ 50,000      N/A                   20,000                         $10,495
Senior VP, Dir. of Corp. Dev't, .1998   $181,569      $ 57,300      N/A                   25,000                         $11,033
General Counsel & Secretary .....1997   $148,698 7/     - 0 -       $ 5,876               27,173 7/                      $11.015

James L. Selsor .................1999   $158,904 8/   $ 40,000      $ 1,459               20,000                         $12,736
Senior VP, Director ISD .........1998   $140,616 8/   $101,960      $ 1,758               10,000                         $11,182
 .................................1997   $130,693 8/   $ 61,418 8/   $   491                6,789 8/                      $11,553

James P. Allen ..................1999   $ 70,857 9/   - 0 9/        $24,755               81,821 9/                      $   713
Senior VP, Chief Financial ......1998   N/A           N/A           N/A                   N/A                            N/A
Officer & Treasurer .............1997   N/A           N/A           N/A                   N/A                            N/A

</TABLE>

1/     Under the Cash  Compensation  Replacement  Plan  ("CCRP"),  officers  may
       exchange up to 25% of salary and 100% of bonus in  exchange  for stock or
       options at a  discount.  The CCRP is designed  to  encourage  officers to
       forego cash  compensation  in exchange for equity (stock or options).  In
       the table above,  salary and bonus replaced with options are not included
       in the "Salary" and "Bonus"  columns,  but salary and bonus replaced with
       shares of stock are  included  in those  columns.  CCRP  stock and option
       discounts are included in the "Other Annual  Compensation"  column.  CCRP
       options are also included in the "Securities  Underlying Options" column.
       The discount  formulas  are  described in Note 2 to the Table on the next
       page entitled "Option Grants in Last Fiscal Year".

2/     Represents discounts on purchase of stock or options under the CCRP.

3/     Options in this column were  awarded  under  conventional  option  plans,
       unless notes  indicate that the executive has given up salary or bonus in
       exchange for options (at a discount) under the CCRP.

4/     Company contributions to defined contribution retirement plan.

5/     Under the CCRP,  Dr.  Denman  gave up $32,589 of salary and  $125,560  of
       bonus for 32,200 options in 1999,  $20,812 of salary and $57,300 of bonus
       for 18,724  options in 1998,  and $20,000 of salary for 4,196  options in
       1997.

6/     Under the CCRP,  Mr.  Stolarik  gave up $34,117 of salary and  $95,000 of
       bonus for  15,136  shares  of stock in 1999,  and  $7,500  of salary  and
       $17,000 of bonus for 4,182 shares of stock in 1998. He joined the Company
       on March 16, 1998.

7/     Under the CCRP,  Mr.  McCabe gave up $20,053 of salary for 2,133  options
       and $21,876 of salary for 5,140 shares of stock in 1997.

8/     Under the CCRP,  Mr.  Selsor gave up $5,834 of salary for 1,116 shares of
       stock in 1999, $7,031 of salary for 1,326 shares of stock in 1998, $1,758
       of salary for 423  shares of stock in 1997,  and $3,119 of salary for 334
       options in 1997.

9/     Under the CCRP,  Mr. Allen gave up $17,813 of salary and $40,000 of bonus
       for 11,821  options in 1999.  Mr. Allen joined the Company on January 13,
       1999.

                                       11
<PAGE>
<TABLE>
<CAPTION>

                        OPTION GRANTS IN LAST FISCAL YEAR

                                INDIVIDUAL GRANTS

                               Number of        % of Total
                               Securities         Options         Exercise       Market
                               Underlying       Granted to         or Base      Price at                        Grant
                                Options          Employees          Price        Date of      Expiration        Date
           Name                Granted(#)     in Fiscal Year       ($/Sh)         Grant          Date           Value 3/
           ----                ----------     --------------       ------         -----          ----           -----
          <S>                      <C>             <C>                <C>           <C>         <C>            <C>
      Gary L. Denman             1,831 2/           0.3%            $1.77 2/      $4.44           2/           $ 5,878
                                 2,266 2/           0.4%            $1.52 2/      $6.78           2/          $ 12,848
                                 2,098 2/           0.4%            $1.64 2/      $6.69           2/          $ 11,539
                                 1,816 2/           0.3%            $1.90 2/      $8.38           2/          $ 12,712
                                24,189 2/           4.4%            $2.16 2/      $8.84           2/          $175,854

    Michael G. Stolarik         20,000 1/           3.6%            $4.84         $4.84        9/17/08        $ 43,200
                                60,000 1/          10.8%            $6.69         $6.69         4/5/09        $178,800

     Thomas E. McCabe           20,000 1/           3.6%            $4.84         $4.84        9/17/08        $ 43,200

      James L. Selsor           20,000 1/           3.6%            $4.84         $4.84        9/17/08        $ 43,200

      James P. Allen            70,000 1/          12.6%            $7.16         $7.16        1/13/09        $223,300
                                 1,507 2/           0.3%            $1.64 2/      $6.69           2/           $ 8,289
                                 2,608 2/           0.4%            $1.90 2/      $8.38           2/          $ 18,256
                                 7,706 2/           1.4%            $2.16 2/      $8.84           2/          $  56,02

</TABLE>
----------------------------------------
1/     Options granted under  conventional  stock option plans.  The options are
       50% exercisable 2 years after grant, 25% exercisable 3 years after grant,
       and 25% exercisable 4 years after grant, and expire 10 years after grant.

2/     Options under the Cash Compensation Replacement Plan ("CCRP") are granted
       at the end of each  calendar  quarter  to  officers  who have  elected to
       forego cash compensation in exchange for options under the plan. Officers
       may  forego up to 25% of  salary  and 100% of bonus in  exchange  for the
       options. The exercise price of the options is equal to 25% of the average
       fair  market  value of the Stock  during  the  quarter  in which the cash
       compensation  would have been received.  The number of options granted is
       determined  by dividing  the foregone  compensation  by 80% of the option
       "spread" at grant,  which is the difference  between (i) the average fair
       market value of the Stock during the quarter and (ii) the exercise  price
       of the option.  This formula  gives the officer a 20%  discount  from the
       "spread".  This "spread" is less than the "grant date value" shown in the
       table above, which is based on a different valuation method (described in
       note 3). The options are 80% exercisable upon grant, 90% exercisable in 2
       years,  95% exercisable in 3 years,  and 100% exercisable in 4 years. The
       options expire 3 years after employment terminates.  (As explained in the
       Summary  Compensation Table on the preceding page and in the Compensation
       Committee Report on Executive  Compensation  below, the CCRP also permits
       officers to purchase  Stock at a similar  discount.  The number of shares
       awarded is determined by dividing the foregone compensation by 80% of the
       average fair market  value of the Stock during the quarter.  This formula
       gives the  officer a 20%  discount  from the average  fair  market  value
       during the quarter.)

3/     Grant date values were calculated using the Black-Scholes  option pricing
       model,  assuming  (i) 5-year term for  options;  (ii) 6% annual  interest
       rate; (iii) 40% volatility; and (iv) no dividends. The ultimate values of
       options,  if any,  will depend on the future  market  price of the Stock,
       which cannot be predicted.


                                       12
<PAGE>


<TABLE>
<CAPTION>

                                          AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                                                     FISCAL YEAR-END OPTION VALUES

                                                                 Number of Securities                     Value of
                                                                      Underlying                        Unexercised
                               Shares                            Unexercised Options                In-the-Money Options
                              Acquired                          at Fiscal Year-End(#)                at Fiscal Year-End 1/
                                 on             Value           --------------------                 ------------------
          Name               Exercise(#)     Realized($)      Exercisable/Unexercisable          Exercisable/Unexercisable
          ----               ----------      ----------       -------------------------          -------------------------
          <S>                      <C>            <C>            <C>             <C>                <C>              <C>

     Gary L. Denman             - 0 -           - 0 -          195,617          173,422          $237,242          $251,735

   Michael G. Stolarik          - 0 -           - 0 -           - 0 -            90,000           - 0 -            $209,960

    Thomas E. McCabe            - 0 -           - 0 -           33,488           62,910          $ 2,120           $149,492

     James L. Selsor            - 0 -           - 0 -           53,238           - 0 -           $106,129           - 0 -

     James P. Allen             - 0 -           - 0 -            3,292           74,115          $ 22,044          $ 99,591
</TABLE>
----------------------------------
1/    Option values  calculated  by  subtracting  (i) the exercise  price of the
      named executives'  options from (ii) $8.50, which was the closing price of
      the Stock on June 30, 1999, then  multiplying such amount by the aggregate
      number of shares underlying the named executive's options.



                                       13
<PAGE>



               EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
                       AND CHANGE-IN-CONTROL ARRANGEMENTS

The Company has an employment  agreement  with Dr. Denman which  provides for an
annual salary of $330,000,  and an annual bonus equal to 2% of the Company's net
income, without regard to extraordinary items. The agreement is for a three-year
term expiring June 30, 2001,  but is terminable  immediately  by the Company for
cause.  During  the 30 months  following  a change in  control,  if the  Company
terminated his employment  without cause or took certain other adverse  actions,
he would receive a lump-sum severance payment equal to 2 times his annual salary
and 2 times his target bonus (2% of the Company's budgeted net income),  and his
employee  benefits  would  continue  until  the  earlier  of (A) such time as he
obtains new  benefits  coverage by reason of new  employment,  or (B) the 2 year
anniversary of his termination of employment.  The agreement  provides an annual
financial and estate planning  allowance of up to $10,000.  It also provides Dr.
Denman and his wife with lifetime dental and vision insurance.

The Company has employment  agreements with Messrs.  Stolarik,  McCabe and Allen
which  provide for annual  salaries,  effective  October 1, 1999,  of  $228,804,
$206,964  and  $195,708,   respectively.   The   agreements  may  be  terminated
immediately  by the Company for cause,  or by either  party  without  cause on 6
months  notice.  During  the 30 months  following  a change in  control,  if the
Company  terminated  employment  without  cause or took  certain  other  adverse
actions,  the executive  would receive a lump-sum  severance  payment equal to 2
times his annual  salary,  and his employee  benefits  would  continue until the
earlier of (A) such time as he obtains  new  benefits  coverage by reason of new
employment,  or (B) the 2 year anniversary of his termination of employment.  In
addition,  the Company  must  reimburse  him for any legal fees and  expenses he
incurs in successfully enforcing these rights.

The Company had an employment  agreement  with Mr. Selsor which  provided for an
annual  salary of $165,000.  The  agreement was  terminable  immediately  by the
Company for cause,  or by either party without cause on 6 months notice.  During
the 30 months  following a change in  control,  if the  Company  terminated  his
employment  without cause or took certain other adverse  actions,  he would have
received a lump-sum  severance payment equal to 1.5 times his annual salary, and
his employee benefits would have continued until the earlier of (A) such time as
he obtains new  benefits  coverage by reason of new  employment,  or (B) the 1.5
year  anniversary of his  termination of  employment.  In addition,  the Company
would have had to  reimburse  him for any legal fees and expenses he incurred in
successfully  enforcing these rights.  Mr. Selsor and the Company entered into a
Separation  and Release  Agreement  dated April 20,  1999,  with  respect to Mr.
Selsor's  resignation  as an  officer,  whereby  his  salary and  benefits  were
continued through September 22, 1999 and his options were accelerated.

The Company also offered "stay-put" bonuses to Messrs. Roth, Denman,  McCabe and
Selsor  during  fiscal 1998.  These bonuses would have been payable to the named
executives  in the event of a change in control.  The maximum  "stay-put"  bonus
offered to each of the named executives was as follows: Mr. Roth, $313,254;  Dr.
Denman,  $165,770;  Mr. McCabe,  $121,307;  Mr. Selsor,  $63,076. The "stay-put"
arrangements expired September 30, 1998, and no "stay-put" payments were made.

All of the arrangements  described on this page were approved by at least one of
the managing general partners of Cilluffo Associates,  L.P., Frank J.A. Cilluffo
and Edward C. Meyer, in their capacity as directors of the Company.



                                       14
<PAGE>



                          COMPENSATION COMMITTEE REPORT
                            ON EXECUTIVE COMPENSATION

This  report  describes  the  philosophy  underlying  the cash and  equity-based
components of GRCI's  executive pay program.  It also  describes each element of
the program,  as well as the  rationale  for  compensation  paid to GRCI's Chief
Executive Officer. So that the Company's executive  compensation program will be
administered  objectively,  this Committee is comprised  entirely of independent
directors.  Further,  Committee members have no "interlocking"  relationships as
defined  by the SEC.  The  Committee  represents  the full  Board in  matters of
executive  compensation,  and  recommends to the Board  appropriate  methods and
amounts of executive  compensation.  It also  administers  the  Company's  stock
option plans.

Compensation Policy and Overall Objectives.
------------------------------------------

GRCI's executive  compensation program is designed to link a significant part of
executive  pay  to  Company   performance,   and  to  the  interests  of  GRCI's
shareholders.  In  determining  or  approving  the  amount  and  composition  of
executive  compensation,  the  Committee's  goal is to  provide  a  compensation
package that will enable the Company to attract and retain talented  executives,
reward  outstanding  performance,  and encourage GRCI executives to focus on the
interests  of   shareholders.   The  Committee's   overall  focus  is  on  total
compensation, although it also examines the individual elements of compensation.
The primary  components  of the  Company's  executive  compensation  package are
salary, bonus, and stock options.

The Committee  periodically  reviews  independent  third party surveys to ensure
that the compensation of the Company's  executives is at appropriate levels. The
companies contained in these surveys are not the same as either of the groups of
companies  comprising the "Russell 2000 Index" or the "S&P Technology  Index" in
the stock price performance graph shown below,  because many of the companies in
the indices are in different  industries or are  significantly  larger than GRC.
Thus,  compensation  comparisons  between  those  companies  and  GRC  would  be
inappropriate.  Based on its review of the surveys,  the Committee believes that
GRC's executive compensation,  overall, is roughly at the 75th percentile of the
market,  without  assigning  any specific  weighting to the various  elements of
compensation.  The Committee also believes that GRC's executive  compensation is
at appropriate levels.

Salaries.
--------

The  Committee's  review of each  executive  officer's  base  salary  takes into
consideration the duties of the position, the competitive market, the experience
and  qualifications  of the executive,  the  performance  of the executive,  and
equity  issues  relating  to pay for  other  Company  executives.  In  making or
approving salary decisions,  the Committee exercises its discretion and judgment
based on these factors.  No specific  formula is applied to determine the weight
of each factor.

Bonuses.
-------

Under the Company's Incentive  Compensation Plan, executives may receive bonuses
based on performance.  With the exception of the CEO's bonus, which is discussed
below,  bonuses are  discretionary,  and not targeted to a fixed  percentage  of
salary;  rather,  they are based on several performance  factors,  including the
performance  of the  Company as a whole or the  performance  of the  executive's
division,  improvement of business base, quality of service and product, control
of costs, quality of personnel selection and training, and conformity to general



                                       15
<PAGE>



Company  policies and  directives.  No specific  weighting  has been assigned to
these  performance  measures.  Bonuses are typically  determined  and paid after
fiscal year end, in conjunction  with a review of the Company's  performance for
the year in question.

Stock Options.
-------------

GRCI has two  types of  employee  stock  option  plans.  The  first  type is the
conventional  option plan,  under which options are granted at fair market value
to key  employees  who are expected to  contribute  materially  to the Company's
success.  The Committee  intends to continue  using stock options as the primary
long-term  incentive,  because they provide  rewards to  executives  only to the
extent the Stock price  increases  after the options are granted.  This helps to
focus executives on increasing shareholder value over the long term.

The Company also has a Cash  Compensation  Replacement  Plan ("CCRP"),  which is
designed to encourage  officers to voluntarily  forego cash  compensation (up to
25% of salary and 100% of bonus) in exchange for equity  (Stock or options) at a
20% discount. The discount formulas are described in Note 2 to the Table on page
12 entitled "Option Grants in Last Fiscal Year". The Committee believes that the
CCRP is an appropriate  means to encourage  equity  ownership among officers and
more closely align their  interests with those of  shareholders,  while reducing
the Company's cash outlays for executive compensation.

Compensation of the Chief Executive Officer.
-------------------------------------------

Upon President  Denman's  promotion to CEO on July 1, 1998, the Committee raised
the CEO's salary to $330,000.  This amount was determined by the Committee to be
a reasonable  increase in the CEO's salary which had been at the $300,000  level
since July 1, 1994.  The  Committee  believes  the salary is roughly at the 75th
percentile of market levels based on the surveys mentioned above.

To encourage the CEO to do his utmost to increase the  Company's  profitability,
his bonus is strictly based on a formula tied to net income.  Specifically,  the
CEO receives 2% of the Company's  consolidated net income, without regard to any
extraordinary  items of income or loss.  The  Committee  believes  this  formula
provides the opportunity for payoffs  commensurate with the Company's  earnings.
Under this formula, the CEO received no bonus for fiscal 1996 and 1997.

For fiscal 1999,  the Committee  approved an  adjustment  to President  Denman's
bonus,  because the bonus had been  negotiated on the assumption that all of the
Company's  remaining  tax loss  carryforwards  would flow through the  Company's
income  statement.  Instead,  upon further  consultation  and analysis  with the
Company's  auditors,  Deloitte  & Touche,  it was  agreed  that the  appropriate
accounting treatment was to credit $3.425 million of the tax benefit directly to
equity. This accounting  treatment resulted in (a) a reduction of $3.425 million
to the  Company's  fiscal  1999 net income,  and (b) a  reduction  of $68,500 to
President  Denman's  bonus.  The  Committee  concluded  that, in the interest of
fairness and equity,  this deficit should be paid to President Denman as part of
his fiscal 1999 bonus, for a total fiscal 1999 bonus of $251,120.

The Committee also periodically  grants conventional stock options to the CEO in
amounts  determined by the Committee as  appropriate  to align his  compensation
package  with  shareholder  interests  and  believed  by  the  Committee  to  be
consistent with competitive market practice.



                                       16
<PAGE>



Deductibility of Compensation Under Section 162(m) of the Internal Revenue Code.
-------------------------------------------------------------------------------

Because the salary and bonus  levels of the  Company's  CEO and other  executive
officers are well below the $1 million cap on deductible executive  compensation
under Section 162(m) of the Internal Revenue Code, the Committee  believes there
is no current need to qualify these salary and bonus components of the Company's
executive  compensation  program under that Section. The Committee has, however,
sought to ensure  that  compensation  that may in the  future be  recognized  by
executives  under the Company's stock option  programs will be fully  deductible
under Section 162(m).  Nevertheless,  the Committee  reserves the right to award
future  compensation  which would not (or potentially  would not) comply,  if it
determines this to be in the Company's best interest.



Leslie B. Disharoon, Chairman, Compensation Committee
Peter A. Cohen
Charles H.P. Duell



                                       17
<PAGE>



                                                          [GRAPH OMITTED]
<TABLE>
<CAPTION>

                                                CUMULATIVE TOTAL SHAREHOLDER RETURN 1/
                                                           PERFORMANCE CHART

                                                            INDEXED RETURNS

                                         Base                                  Years
                                         Period                                Ending
                                         ------                                ------
                Company/Index             1994        1995         1996        1997       1998        1999
                -------------             ----        ----         ----        ----       ----        ----
<S>                                      <C>           <C>          <C>         <C>        <C>        <C>
        GRC International                  100         131         320          46         85          71
        S&P Technology Index               100         163         194         295        396          653
        S&P 500 Index                      100         126         159         214        279          342
        Russell 2000 Index                 100         118         144         165        190          190

                                                       ANNUAL RETURN PERCENTAGES

                                                                              Years
                                                                              Ending
                                                                              ------
                Company/Index                         1995         1996        1997        1998        1999
                -------------                         ----         ----        ----        ----        ----

        GRC International                              31          144         (86)         86         (17)
        S&P Technology Index                           63           19          52          34          65
        S&P 500 Index                                  26           26          35          30          23
        Russell 2000 Index                             18           22          14          15           0
</TABLE>

1/ Graph and tables show  cumulative  total return through June 30, 1999 of $100
investment  made on June 30, 1994, with dividends  reinvested.  The Russell 2000
Index has been added to the Cumulative Total Shareholder Return chart because it
is the most commonly  referenced  indicator of small-cap stock performance.  The
S&P Technology  Index will be eliminated  from the chart next year because it is
composed primarily of large-cap companies and electronic hardware manufacturers.



                                       18
<PAGE>



                            COMPENSATION OF DIRECTORS

Basic Arrangements.
------------------

Non-employee  directors are paid an annual retainer of $15,000 and an additional
$1,000 for each Board meeting they attend,  and $500 for each Committee  meeting
they attend.  Committee  Chairmen are paid $800 for each Committee  meeting they
attend.  The Company also provides  each director a $50,000 term life  insurance
policy. Directors also receive 3,000 stock options annually at the market price.

Alternative Arrangements Available.
----------------------------------

Non-employee  directors may elect to forego their cash  compensation in exchange
for Stock or stock options. The exercise price of the options is equal to 25% of
the average  fair market value of the Stock during the quarter in which the cash
compensation  would  have been  received.  The  number  of  options  granted  is
determined  by dividing  the  foregone  compensation  by the option  "spread" at
grant,  which is the difference between (i) the average fair market value of the
Stock  during the  quarter,  and (ii) the  exercise  price of the  option.  This
"spread"  is  less  than  the  "grant  date  value"  of  the  option  under  the
Black-Scholes  option pricing model.  The options are  immediately  exercisable.
They expire 3 years after a director  leaves the Board,  and  otherwise  have no
fixed expiration date.

Chairman's Compensation.
-----------------------

For his service as Chairman, Mr. Wright receives a Chairman's fee of $25,000 per
quarter in lieu of Board or Committee meeting fees.

In  addition,  for fiscal 1999,  in order to provide a further  incentive to the
Chairman  along lines that benefit  shareholders,  the Company agreed to pay Mr.
Wright a bonus, to be paid only to the extent the Company  exceeded its budgeted
earnings  before taxes (EBT).  A 10% increase in EBT would have rendered a bonus
of $30,000,  and a 20% increase in EBT would have  rendered a bonus of $100,000.
Intervening  percentage  increases  were to be  pro-rated.  Since the  Company's
actual EBT exceeded the ceiling in the bonus plan,  the full  $100,000 was paid.
Under the terms of the  arrangement,  Mr.  Wright  received no cash,  but rather
received the bonus in the form of options under the  Directors  Fee  Replacement
Plan.

For fiscal 2000, the Company  continued this arrangement  with Mr. Wright,  with
the  numbers  being based on the  Company's  revised  fiscal  2000 budget  which
includes earnings anticipated from the MCR acquisition.

Termination of Directors Retirement Plan.
----------------------------------------

The Company previously had a retirement plan for non-employee directors, but the
plan was terminated effective May 1, 1999. In connection with the termination of
the plan,  directors  received the  actuarial  value of their plan  interests in
deferred stock units at the market price,  payable in stock upon their departure
from the Board.



                                       19
<PAGE>



                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company  previously loaned its former President and CEO Jim Roth $230,000 in
connection  with his  relocation  in 1992 from  California  to  Virginia  at the
Company's request.  The loan was secured by a second deed of trust on Mr. Roth's
Virginia residence, and, until July 1, 1998, bore interest at the rate of 6% per
year. From 1993 through 1998, Mr. Roth made annual interest payments as required
under the loan.  Effective July 1, 1998,  one-half of the outstanding  principal
amount  of the loan was  forgiven,  and the loan  ceased to bear  interest.  The
second half of the loan was forgiven  effective June 30, 1999. To strengthen its
marketing to certain classified government customers, the Company entered into a
consulting  agreement  with Mr. Roth at a rate of $1,600 per day plus  expenses,
with a guaranteed  minimum of 10 days per month through  November 5, 1998. Under
this  agreement,  Mr. Roth  received  $59,727 for his  consulting  services  and
expenses.  Effective  November 6, 1998, the Company renewed the agreement at the
same rate but with the  guaranteed  minimum  reduced  to 7 days per  month.  The
second agreement has a three-year term and a cost ceiling of $403,200 but may be
terminated  by  either  party  on 30  days  written  notice.  Under  the  second
agreement,  Mr. Roth  received  $132,057 for his  services  and expenses  during
fiscal 1999.

Mercantile-Safe Deposit and Trust Company  ("Mercantile"),  of which Mr. Baldwin
is Chairman of the Board and CEO, has a revolving credit and term loan agreement
with the Company.  The highest level of borrowings  under this agreement  during
fiscal  1999 was  $23.7  million.  Borrowings  as of June 30,  1999  were  $12.6
million.  In addition,  in 1996, the Company  financed a $7.5 million  equipment
lease with  Mercantile,  and repaid the final $1.0 million of that amount during
fiscal 1999.

On September 2, 1999, GRC International,  Inc. ("GRC") completed its acquisition
of Management  Consulting & Research,  Inc. ("MCR"),  of which Dr. McNichols was
President,  CEO  and  principal  shareholder.   The  gross  purchase  price  was
approximately $27 million, consisting of 2,000,000 shares of Stock of GRC issued
to Dr.  McNichols,  valued at approximately  $16 million,  and approximately $11
million in cash. The net cash payment was approximately $7 million,  and the net
purchase price was  approximately  $23 million,  as a result of approximately $4
million of MCR cash being used to pay a portion  of the  acquisition  price.  In
addition  to  the 2  million  shares  of  Stock,  Dr.  McNichols  also  received
$5,892,795  in cash  from GRC,  from  which  sum  $1,433,398  was paid to MCR in
repayment of a loan, and $217,168 was paid to MCR to release MCR's interest in a
split-dollar  life insurance policy in which family members of McNichols are the
intended beneficiaries,  and the balance of $4,242,229 was paid to McNichols. In
connection with the acquisition,  Dr. McNichols  indemnified GRC for breaches of
the acquisition agreement, subject to certain limitations, and GRC agreed to pay
Dr. McNichols $300,000 on the second and third  anniversaries of the acquisition
in exchange for an agreement not to compete with GRC or MCR for three years. Dr.
McNichols currently serves as Senior Vice President and General Manager of GRC's
MCR Division and  President & CEO of MCR Federal,  Inc., a subsidiary of GRC, at
an annual salary of $147,680.

Effective  May  24,  1999,  the  Company  and  General  Salomon  entered  into a
consulting  agreement,  which expires on May 30, 2000, unless extended by mutual
agreement.  The  agreement  contains a cost  ceiling of $20,000  for the current
period of performance.  Under the agreement, he provides consulting services, as
requested by GRCI, to assist in forming strategic  alliances and partnerships in
support of GRCI's  pursuit of business  opportunities  related to the  GCSS-Army
program and in support of GRCI's strategic  business goals. As a consultant,  he
is  compensated  at the  rate of  $2,000  per day  plus  actual  and  reasonable
expenses. During fiscal 1999, he received $4,102 for his consulting services and
expenses.

                                       20
<PAGE>

                        COMPENSATION COMMITTEE INTERLOCKS
                            AND INSIDER PARTICIPATION

There is no "interlock" or "insider  participation"  (as those terms are defined
by the SEC) in the Compensation Committee of the Board.


             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on a review of SEC Forms 3, 4 and 5 and  amendments  thereto  furnished to
the  Company  with  respect  to fiscal  1999,  all of such forms were filed on a
timely basis with respect to fiscal 1999.



                                       21
<PAGE>



                         SECURITY OWNERSHIP OF PRINCIPAL
                           SHAREHOLDERS AND MANAGEMENT
<TABLE>
<CAPTION>

The following table sets forth the shares and percentages of Stock  beneficially
owned by the Company's principal shareholders, directors, nominees, highest paid
executive  officers,  and by all directors and executive officers as a group, as
of  September  3, 1999,  unless  another  date is  indicated.  Unless  otherwise
indicated,  each person shown as the beneficial  owner of shares  possesses sole
voting and dispositive power with respect to such shares.  The percentage of the
class owned is based on the 12,323,626 shares outstanding on the record date.

                                                                           Number of Shares         % of Class
                                                                           ----------------         ----------
          <S>                                                                   <C>                      <C>
        Gerald R. McNichols                                                  2,001,700                 16.3%
        Frank J.A. Cilluffo                                                  1,748,787    (1)          14.2%
        Cilluffo Associates, L.P.                                            1,708,000    (2)          13.9%
        Gary L. Denman                                                         230,869    (3)           1.9%
        Joseph R. Wright, Jr.                                                  213,809    (4)           1.7%
        Peter A. Cohen                                                         139,937    (5)           1.1%
        Thomas E. McCabe                                                        64,106    (6)           0.5%
        James L. Selsor                                                         32,421    (7)           0.3%
        James P. Allen                                                          23,291    (8)           0.2%
        Leslie B. Disharoon                                                     22,846    (9)           0.2%
        H. Furlong Baldwin                                                      19,417   (10)           0.2%
        Charles H.P. Duell                                                      17,882   (11)           0.1%
        Michael G. Stolarik                                                     15,786                  0.1%
        Leon E. Salomon                                                            288   (12)           0.0%
        All Directors & Executive Officers (13 persons)                      4,531,139                 36.8%
</TABLE>

(1)      Includes  1,708,000 shares reflected as beneficially  owned by Cilluffo
         Associates,  L.P.  as of  September  1,  1999  in a  preliminary  proxy
         statement filed by Cilluffo Associates,  L.P. with the SEC on September
         15, 1999 (the "Cilluffo Proxy Statement").  Mr. Cilluffo, a director of
         the Company, is a managing general partner of Cilluffo Associates, L.P.
         and may be deemed to beneficially own (within the meaning of Rule 13d-3
         under the Securities Exchange Act of 1934, as amended) the shares owned
         by Cilluffo  Associates.  Also includes  12,787 shares  reported in the
         Cilluffo  Proxy  Statement  as held  individually  by Mr.  Cilluffo and
         28,000  shares  reported in such proxy  statement  as held by Four Seas
         Partners,  a partnership  of which Mr.  Cilluffo is a general  partner.
         Excludes 1,618 Deferred Stock Units to be settled in common stock after
         Mr. Cilluffo's termination as a director.

(2)      Reflected in the Cilluffo Proxy Statement as beneficially  owned, as of
         September 1, 1999, by Cilluffo Associates, L.P., of which Mr. Cilluffo,
         a director of the Company, is a managing general partner.  The Cilluffo
         Proxy Statement also identifies  Edward C. Meyer as a managing  general
         partner of Cilluffo  Associates,  L.P. As a managing general partner of
         Cilluffo  Associates,  Gen. Meyer may be deemed to beneficially own the
         shares owned by Cilluffo Associates.  The Cilluffo Proxy Statement also
         reports  that Gen.  Meyer owns  options to  purchase  26,966  shares of
         common stock.

(3)      Includes 195,617 shares subject to options  exercisable within 60 days,
         7,498 shares in the  Company's  Employee  Stock  Purchase  Plan and 174
         units in the GRCI  Stock  Fund held in the  Company's  Deferred  Income
         Plan.

                                       22
<PAGE>

(4)      Includes 183,807 shares subject to options  exercisable  within 60 days
         and 1,000  shares  owned by Mr.  Wright's  wife.  Also  includes  4,002
         Deferred Stock Units to be settled in common stock after termination of
         his service as a director.

(5)      Includes 75,000 shares subject to options  exercisable  within 60 days.
         Also includes  39,000 shares held by family  members not in Mr. Cohen's
         household,  for which shares Mr. Cohen has investment discretion.  Also
         includes 706  Deferred  Stock Units to be settled in common stock after
         termination of his service as a director.

(6)      Includes  18,191  units in the GRCI  Stock  Fund held in the  Company's
         Deferred  Income Plan.  Also includes  43,488 shares subject to options
         exercisable  within 60 days and 1 share in the Company's Employee Stock
         Purchase Plan. Includes 2,578 shares with shared voting and dispositive
         power.

(7)      Includes 23,238 shares subject to options  exercisable  within 60 days.
         Also includes 254 shares in the Company's  Deferred Income Plan and 196
         shares in the Company's Employee Stock Purchase Plan.

(8)      Includes  20,000 shares with shared voting and dispositive  power,  and
         3,292 shares subject to options exercisable within 60 days.

(9)      Includes 7,846 Deferred Stock Units to be settled in common stock after
         termination of his service as a director.

(10)     Includes  13,417  Deferred  Stock  Units to be settled in common  stock
         after termination of his service as a director.

(11)     Includes  3,000  shares  owned  by a  general  partnership.  Mr.  Duell
         disclaims  beneficial  ownership of such shares except to the extent of
         his pecuniary  interest  therein.  Also includes  5,058  Deferred Stock
         Units to be settled in common stock after termination of his service as
         a director.

(12) Gen. Salomon shares voting and dispositive power as to these shares.

                                       23
<PAGE>

      SHAREHOLDER PROPOSAL REGARDING TERMINATION OF SHAREHOLDER RIGHTS PLAN

David and Joyce  Corcoran,  shareholders  of the  Company,  have  submitted  the
following  proposal  and  supporting  statement  for  inclusion  in  this  Proxy
Statement and stated their  intention to present the same at the Annual Meeting.
In  accordance  with  applicable  regulations,  the  Company  will  provide  the
proponents'  address and number of securities  held upon written or oral request
to any shareholder.

                                    Proposal

RESOLVED,  that the Board of Directors of the Company  terminate the Shareholder
Rights Plan  adopted by it in 1985 and refrain  from  adopting  any similar plan
unless the plan is approved by the affirmative vote of a majority of outstanding
shares  entitled  to vote at a meeting of  shareholders  that is held as soon as
practicable.

                              Supporting Statement

 This is the same proposal we submitted and GRC's shareholders  approved at last
year's   Annual   Meeting.   We  submit  the  proposal   again  because  of  our
dissatisfaction with management's response.

Our proposal is intended to help restore to shareholders  the opportunity to act
on  unsolicited  tender offers that may provide the  shareholders  a substantial
premium over the current market value of the Company's  common stock. We believe
that the  Company's  Shareholder  Rights Plan  deprives  the  shareholders  from
realizing  such a premium by limiting  their  ability to accept or even consider
the merits of an  unsolicited  tender offer to which the Board or  management is
opposed. We also believe such defenses depress the market value of the Company's
common stock and serve to entrench management.

The Securities and Exchange Commission  recognized the benefits of tender offers
in 1986 release,  stating:  'Tender offers can benefit  shareholders by offering
them an  opportunity  to sell their shares at a premium and by guarding  against
management  entrenchment.  However,  because  poison pills are intended to deter
non-negotiated  tender  offers,  and  because  they have this  potential  effect
without  shareholder   consent,   poison  pill  plans  can  effectively  prevent
shareholders  from even  considering the merits of a takeover that is opposed by
the board.' SEC Release No. 34-23486 (July 21, 1986).

The Company's  Shareholder  Rights Plan is a type of 'poison pill' because it is
designed to make it  prohibitively  expensive  to acquire  the Company  where an
unsolicited tender offer is not approved by the Board of Directors.

GRC's shareholders  voted  overwhelmingly for our proposal at last year's Annual
Meeting.  In response to our  proposal,  the Board of GRC finally  decided on or
about May 20, 1999, to accelerate the expiration of the Shareholder  Rights Plan
to August 31, 2000,  from December 31, 2005.  The Board,  however,  reserved the
right to implement a new shareholder rights plan in the future.

We believe  that the  Board's  action  fails to  implement  GRC's  shareholders'
mandate given by their overwhelming,  two-third's  majority approval of our 1998
Proposal.  First,  the  termination  of the  Shareholder  Rights  Plan should be
immediate,  and second,  reinstitution  of any similar  plan should  require the
affirmative vote of a majority of GRC's shareholders. We strongly believe

                                       24
<PAGE>

that any poison pill insulates Company management from direct  accountability to
shareholders, particularly when the Company has been performing poorly, and that
management  should ask  shareholders  their opinion  before seeking to 'protect'
shareholders from an opportunity to sell their shares in a tender offer.

For these reasons, we are urging GRC shareholders to vote 'For' our proposal.

                             RESPONSE OF YOUR BOARD

Your Board recommends a vote 'AGAINST' the Proponents' resolution.

The Board of Directors just  terminated the Shareholder  Rights Plan,  effective
August 31, 2000, more than five years sooner than the scheduled expiration date.
The Board  provided  for this  orderly  expiration  in  response  to last year's
shareholder  vote. At the same time,  the Board believes that keeping the Rights
Plan in place for this short  additional time, while also reserving the right to
terminate it prior to August 2000, or to adopt a new rights plan thereafter,  is
in the best interests of all the Company's shareholders.

The Board of  Directors  over the last few years has  considered a wide range of
strategic options for the Company,  with the advice of investment  bankers,  and
has considered  shareholders' views carefully. The Board believes, based on this
evaluation,  that keeping the Rights Plan in place for a short  period  provides
the  opportunity  to  continue  to allow the  Company to improve  its  financial
performance,  while,  if necessary,  using the Rights Plan to either deter short
term  speculators  as the  Company  continues  to show  improvement,  and/or  to
negotiate a higher  offer price  should the Company  receive a fair  acquisition
proposal.

In adopting the Rights Plan originally,  and in deciding to keep it in place for
a short  additional  time,  the Board  considered  carefully the Plan's  limited
purposes.  The Rights Plan is intended to protect the  interests  of the Company
and all  shareholders.  The Rights Plan is not intended to prevent a bidder from
making a tender offer or other takeover-type transaction, nor will it impede any
effort to replace  the Board or propose  and elect  alternate  nominees  for the
class of  directors  to be elected  each year.  The Rights Plan is,  however,  a
fundamental  negotiating  tool that inhibits  abusive conduct and is designed to
protect against practices that do not treat all shareholders equally. The Rights
Plan  strengthens  your Company's  negotiating  power and positions the Board to
negotiate the best price for shareholders when the sale of the Company is in the
best interests of the  shareholders.  The Rights Plan creates an incentive for a
potential  acquiror to  negotiate in good faith with the Board.  Of course,  the
Board can redeem the rights and, in deciding whether to do so in connection with
any unsolicited  offer, the Board will be bound by its fiduciary  obligations to
act in the best interests of the Company and its shareholders.

The  benefits of  shareholder  rights  plans have been  validated  by a study by
Georgeson & Company Inc., in November  1997.  The study found that: (i) premiums
paid to companies with  shareholder  rights plans were on average 8% higher than
premiums paid to purchase target companies that did not have shareholder  rights
plans;  (ii) the  presence of a  shareholder  rights plan did not  increase  the
likelihood that a hostile  takeover bid would be defeated or that a friendly bid
would be  withdrawn;  and (iii) a  shareholder  rights  plan did not  reduce the
likelihood  that a company would become a takeover target (the takeover rate was
similar  for  companies  with  and  without   shareholder  rights  plans).  This
conclusion has been supported by Patrick McGurn,  director of corporate programs
for Institutional  Shareholder Services,  who was recently quoted as saying that
"companies with poison pills tend to get higher premiums paid on

                                       25
<PAGE>

average than companies that don't have pills." (Wall Street Journal, January 29,
1999.) By comparison,  the 1986 study relied upon by the proponent in support of
the Proponents' Proposal is over 13 years old.

Also,  the Rights Plan,  by  providing  the Board with an  additional  degree of
control  in a  takeover  situation,  enables  the  Board to  calmly  evaluate  a
potential  buyer from the vantage  point of the Company's  government  customers
many of whom may be  sensitive  to the  effect of a change in  ownership  on the
successful  performance of the Company's  current  contracts,  national security
issues, and similar concerns.  The Rights Plan also allows the Board to consider
the impact of a takeover  proposal on its professional and technical  employees,
many of whom are  critical  to the  performance  of  contracts  with  government
customers.  A material  decline in the Company's  government  contract  revenue,
either as a result of  government  action  or the loss of key  employees,  could
adversely affect shareholder value.

The  Board  also  believes,  for  these  reasons,  that  it  should  retain  the
flexibility  to adopt a new rights plan in the future.  Under  Delaware law, the
Board has the  responsibility  to manage and direct the  Company's  business and
affairs.  In order to adopt a rights  plan and use it in the face of a  takeover
proposal,  the Board must  determine,  in the exercise of its fiduciary  duties,
that the plan is in the best  interests of the Company.  Thus, any commitment by
the Board to seek  shareholder  approval  to adopt and  implement  a rights plan
would remove the Board's  flexibility to respond to market  conditions and would
remove the  incentive  for a potential  acquiror to negotiate  with the Board so
that stockholders are treated fairly.

Particularly  in light of the Board's  action to terminate the Rights Plan,  the
Board   believes   that  the   proponents'   actions  -  which  consist  of  the
reintroduction of last year's resolution and commencement of litigation  against
the  Company to seek to  invalidate  the  Rights  Plan - has  required  and will
require the Company to spend precious financial resources and time that could be
more effectively devoted to more productive endeavors.

THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  "AGAINST"  THE  ADOPTION  OF THE
SHAREHOLDER PROPOSAL TO TERMINATE THE RIGHTS PLAN.

Approval  of  this  shareholder  proposal  requires  the  affirmative  vote of a
majority of the shares  present in person or by proxy at the Annual  Meeting and
entitled to vote on the subject matter.  Unless otherwise directed,  the persons
named in the  enclosed  proxy  will vote the stock  represented  by all  proxies
received prior to the Annual Meeting, and not properly revoked, excluding broker
non-votes, against this shareholder proposal.

                                       26
<PAGE>

                    DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS

To be considered at the 2000 Annual  Meeting of  Shareholders,  any  shareholder
proposal,  whether submitted under Rule 14a-8 or otherwise,  must be received by
the Secretary, GRC International, Inc., 1900 Gallows Road, Vienna, Virginia
22182, on or before June __, 2000.

                        By Order of the Board of Directors


                        THOMAS E. McCABE
                        Senior Vice President, Director of Corporate Development
                          General Counsel & Secretary

Dated:  October __, 1999

                                       27
<PAGE>

                                   APPENDIX A

       DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES WHO MAY SOLICIT PROXIES

The  following  table  sets  forth  the name,  business  address  and  principal
occupation  of the  directors,  executive  officers and employees of the Company
("Participants")  who may also solicit proxies from shareholders of the Company.
Unless otherwise  indicated,  the principal  occupation  refers to such person's
position with the Company and the business address is GRC  International,  Inc.,
1900 Gallows Road, Vienna, Virginia 22182.

Directors
---------
<TABLE>
<CAPTION>

The principal occupations of the Company's directors who are deemed Participants
in the solicitation are set forth on pages 4 through 6 of this proxy statement.
Their names and business addresses are as follows:

Name                                                         Business Address
----                                                         ----------------
<S>                                                            <C>

H. Furlong Baldwin                                           Mercantile Bankshares Corporation
                                                             Two Hopkins Plaza
                                                             Baltimore, Maryland  21201

Peter A. Cohen                                               Ramius Capital Group
                                                             757 Third Avenue, 27th Floor
                                                             New York, New York  10017

Gary L. Denman                                               GRC International, Inc.
                                                             1900 Gallows Road
                                                             Vienna, Virginia  22182

Leslie B. Disharoon                                          Caves Valley Club
                                                             2910 Blendon Road
                                                             Owings Mills, Maryland  21117

Charles H.P. Duell                                           Middleton Place
                                                             Ashley River Road
                                                             Charleston, South Carolina 29414

Gerald R. McNichols                                          GRC International, MCR Division
                                                             2000 Corporate Ridge, Suite 400
                                                             McLean, Virginia  22102

Leon E. Salomon                                              c/o GRC International, Inc.
                                                             1900 Gallows Road
                                                             Vienna, Virginia  22182

Joseph R. Wright, Jr.                                        AmTec, Inc.
                                                             599 Lexington Avenue, 44th Floor
                                                             New York, New York 10022

                                       28
<PAGE>

Executive Officers and Employees
--------------------------------

Name                                                         Principal Occupation
----                                                         --------------------

Gary L. Denman                                               President and Chief Executive Officer

Michael G. Stolarik                                          Executive Vice President,  Chief  Operating  Officer and
                                                             Acting Director of Information Systems Division

Thomas E. McCabe                                             Senior   Vice    President,    Director   of   Corporate
                                                             Development, General Counsel and Secretary

James P. Allen                                               Senior  Vice  President,  Chief  Financial  Officer  and
                                                             Treasurer

Wayne Jackson                                                Director of Corporate Communications
</TABLE>

              OWNERSHIP OF THE COMPANY'S SECURITIES BY PARTICIPANTS

Company   securities  owned  of  record  by  each  participant  are  also  owned
beneficially  by such  Participant.  The  number of shares of Stock held by each
Participant  (other than Mr.  Jackson) is set forth on pages 22-23 of this proxy
statement. Mr. Jackson beneficially owns 288 shares.

            TRANSACTIONS IN THE COMPANY'S SECURITIES BY PARTICIPANTS
<TABLE>
<CAPTION>

The following table sets forth  purchases and sales of the Company's  securities
by the  Participants  listed below during the past two years.  Unless  otherwise
indicated, all transactions are in the public market.
                                                                 Number of Shares
                                                                  of Common Stock
Name                                        Date                Purchased or (Sold)                 Footnote
----                                        ----                ------------------                  --------
<S>                                          <C>                           <C>                       <C>

James P. Allen                              3/1/99                     3,000
                                            3/2/99                     1,000
                                            3/11/99                    2,000
                                            3/17/99                    2,500
                                            3/18/99                    1,000
                                            3/19/99                    1,500
                                            3/22/99                    1,000
                                            8/20/99                    8,000

H. Furlong Baldwin                          5/1/99                    13,417                           (1)

                                       29
<PAGE>

                                                                 Number of Shares
                                                                  of Common Stock
Name                                        Date                Purchased or (Sold)                 Footnote
----                                        ----                ------------------                  --------

Peter A. Cohen                              1/6/98                      351                            (2)
                                            4/2/98                      558                            (2)
                                            4//22/98                  10,000
                                            4/28/98                    2,500
                                            4/28/98                    2,500                           (3)
                                            7/1/98                      251                            (2)
                                            10/1/98                     389                            (2)
                                            10/30/98                   2,500
                                            10/30/98                   2,000                           (3)
                                            11/3/98                   10,000                           (3)
                                            11/4/98                    2,000                           (3)
                                            1/4/99                      411                            (2)
                                            4/1/99                      343                            (2)
                                            5/1/99                      706                            (1)
                                            5/21/99                    3,000                           (3)
                                            7/1/99                      428                            (2)

Gary L. Denman                              1/6/98                   449.1824                          (4)
                                            4/3/98                      475                            (4)
                                            7/6/98                   474.9270                          (4)
                                            10/5/98                  861.6236                          (4)
                                            1/6/99                   942.0366                          (4)
                                            4/6/99                   698.5684                          (4)
                                            7/6/99                   651.9500                          (4)
                                            8/16/99                   16,714                          (5,6)

Leslie B. Disharoon                         5/1/99                     7,846                           (1)

Charles H.P. Duell                          1/6/98                      374                            (2)
                                            4/2/98                      542                            (2)
                                            7/1/98                      283                            (2)
                                            10/1/98                     445                            (2)
                                            1/4/99                      476                            (2)
                                            4/1/99                      404                            (2)
                                            5/1/99                     5,058                           (1)
                                            7/1/99                      428                            (2)

Thomas E. McCabe                            4/22/98                    5,000                           (6)
                                            4/22/98                   (5,000)
                                            4/22/98                    2,272                           (5)
                                            4/22/98                   (2,272)
                                            4/22/98                   (2,913)
                                            4/22/98                   (4,956)
                                            8/4/98                  16,117.156                         (7)
                                            8/25/99                    2,440                           (5)
                                            8/25/99                     137                            (5)

                                       30
<PAGE>

                                                                 Number of Shares
                                                                  of Common Stock
Name                                        Date                Purchased or (Sold)                 Footnote
----                                        ----                ------------------                  --------

Gerald R. McNichols                         5/7/99                     1,700
                                            9/3/99                   2,000,000                         (8)

Leon E. Salomon                             7/1/99                      288                            (2)

Michael G. Stolarik                         10/1/98                    2,403                           (9)
                                            1/4/99                      810                            (9)
                                            4/1/99                      760                            (9)
                                            7/1/99                     1,122                           (9)

Joseph R. Wright, Jr.                       4/22/98                   10,000
                                            8/3/98                     5,000
                                            5/1/99                     4,002                           (1)
</TABLE>

(1)      Deferred Stock Units  acquired on  termination  of Company's  Directors
         Retirement Plan.
(2)      Awarded in lieu of directors  fees under the  Company's  Directors  Fee
         Replacement Plan.
(3)      Purchased  and/or held in accounts over which Mr. Cohen has  investment
         discretion.
(4)      Purchased through the Company's Employee Stock Purchase Plan.
(5)      Stock option exercise.
(6)      Financed in part with margin loan of approximately  $67,925,  which was
         fully repaid as of the date of this proxy statement.
(7)      Units of GRC International  Stock Fund purchased in Company's  Deferred
         Income Plan.
(8)      Acquired in connection with the acquisition of Management  Consulting &
         Research, Inc.
(9)      Purchased through the Company's Cash Compensation Replacement Plan.

                MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS

Except as described in this  Appendix A or in the proxy  statement,  none of the
Participants nor any of their respective affiliates of associates (together, the
"Participant Affiliates"), (i) directly beneficially owns any shares of Stock of
the Company or any  securities of any  subsidiary of the Company or (ii) has had
any  relationship  with the Company in any capacity other than as a shareholder,
employee, officer or director. Furthermore, except as described in this Appendix
A or in the proxy statement, no Participant or Participant Affiliate is either a
party to any  transaction or series of  transactions  since July 1, 1998, or has
knowledge of any currently proposed  transaction or series of transactions,  (i)
to which the Company or any of its subsidiaries was or is to be a party, (ii) in
which the amount involved exceeds $60,000, and (iii) in which any Participant or
Participant  Affiliate had or will have, a direct or indirect material interest.
Except  for the  employment  agreements  described  in the proxy  statement,  no
Participant  or  Participant   Affiliate  has  entered  into  any  agreement  or
understanding  with any person  respecting any future  transactions to which the
Company or any of its affiliates will or may be a party.  Except as described in
this Appendix A or in this proxy statement, there are no contracts, arrangements
or understandings  by any Participant or Participant  Affiliates within the past
year with any person with respect to the Company's Stock.

                                       31
<PAGE>

--------------------------------------------------------------------------------
                                    IMPORTANT

1.   Be sure to vote on the WHITE proxy card.  We urge you not to sign any proxy
     card which is sent to you by Cilluffo Associates.

2.   If any of your  shares  are  held in the  name of a bank,  broker  or other
     nominee,  please contact the person responsible for your account and direct
     him or her to vote on the WHITE proxy "FOR"  management's  nominees,  "FOR"
     approval of Deloitte & Touche as accountants  and "AGAINST" the shareholder
     proposal to terminate the Shareholder Rights Plan.

3.   If you have questions or need assistance in voting your shares, please call
     toll free:

                                   GEOERGESON
                                  SHAREHOLDER
                              COMMUNICATIONS INC.
                          17 State Street, 10th Floor
                               New York, NY 10004

                         Call Toll-Free (800) 223-2064
                         -----------------------------




--------------------------------------------------------------------------------
                                       32
<PAGE>

<TABLE>
<CAPTION>
<S>                                       <C>

PROXY                                 GRC INTERNATIONAL, INC.                                            PROXY

The undersigned hereby authorizes PETER A. COHEN, LESLIE B. DISHAROON, CHARLES H.P. DUELL, GERALD R. McNICHOLS
and LEON E. SALOMON, and each of them, with several powers of substitution, to vote and otherwise represent all
shares of Common Stock of GRC INTERNATIONAL, INC. ("Company") owned or otherwise held by the undersigned at the
Annual Meeting of Shareholders of the Company on November __, 1999, and at any and all adjournments or
postponements thereof, as follows:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2.

1.  ELECTION OF DIRECTORS

___ FOR both nominees                            NOMINEES:  GARY L. DENMAN and JOSEPH R. WRIGHT, JR. To withhold
                                                 vote from an individual nominee, check here [__] and write the
                                                 name of the nominee as to whom vote is withheld.

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

                                                 To allocate votes among the nominees, write the name(s) of the
                                                 nominee(s) and the number of votes allocated to such nominee(s)

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

___ WITHHOLD AUTHORITY to vote for both nominees

2.  RATIFICATION OF DELOITTE & TOUCHE AS INDEPENDENT PUBLIC ACCOUNTANTS

___ FOR           ___ AGAINST                        ___ ABSTAIN

3.   SHAREHOLDER PROPOSAL TO TERMINATE THE SHAREHOLDERS RIGHTS PLAN

___ FOR           ___ AGAINST                        ___ ABSTAIN

The  shares  represented  by this  proxy  will be voted as  directed  or,  if no
direction is made, will be voted "FOR" items 1 and 2.

                        THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS
                                   (continued and to be signed on reverse side)

                                       33
<PAGE>




(continued from other side)


The undersigned  confers upon the proxies hereby appointed  authority to act upon all matters incident to the conduct of the meeting
and in their  discretion upon such other matters as may properly come before the meeting.  Unless otherwise  indicated  above,  such
authority includes the discretionary  authority to cumulate votes in connection with the election of directors. If you withhold your
vote for a nominee, all of your cumulative votes will be allocated to the remaining nominee. Management knows of no other matters to
be presented at the meeting.

All other proxies previously given by the undersigned to vote shares of Common Stock of the Company are hereby expressly revoked.

Please sign exactly as your name appears hereon. If you are signing for the shareholder, please sign the shareholder's name and your
own name, and state the capacity in which you are signing.



                                                                                         -------------------------------------------
                                                                                              Signature



                                                                                         -------------------------------------------
                                                                                              Additional Signature (if held jointly)




                                                                                         Date:                                , 1999
                                                                                              --------------------------------
</TABLE>


                                       34
<PAGE>