SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                   FORM 8-K/A

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


      Date of Report (Date of earliest event reported): September 2, 1999
                                                        -----------------


                             GRC INTERNATIONAL, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


  Delaware                          1-7517                       95-2131929
--------------              ------------------------         -------------------
 (State of                  (Commission File Number)          (I.R.S. Employer
Incorporation)                                               Identification No.)


                    1900 Gallows Road, Vienna, Virginia 22182
               --------------------------------------------------
               (Address of principal executive office) (Zip Code)


                                 (703) 506-5000
                         -------------------------------
                         (Registrant's telephone number)

<PAGE>


Item 2.           ACQUISITION OR DISPOSITION OF ASSETS
                  ------------------------------------

Item 2 is amended to add the following paragraph.

     The  acquisition  has been  accounted  for  using  the  purchase  method of
     accounting and its operations will be consolidated  with GRCI from the date
     of  acquisition.  The  goodwill  to be  recognized  in the  transaction  is
     estimated  at $21  million,  which the Company  expects to amortize  over a
     period of 30 years.

Item 7.           FINANCIAL STATEMENTS AND EXHIBITS
                  ---------------------------------

(a) (1) FINANCIAL STATEMENTS.  Consolidated financial statements for MCR for the
fiscal year ended February 28, 1999, and Report of Independent Auditors.

(b) (2) PRO FORMA FINANCIAL INFORMATION. Pro forma financial information of GRCI
reflecting the acquisition of MCR.

The following GRCI pro forma condensed  consolidated statement of operations for
the year ended June 30, 1999, and the GRCI pro forma consolidated  balance sheet
as of June 30, 1999,  are unaudited and have been prepared to give effect to the
acquisition  of MCR as if the  transaction  had  occurred  on July 1,  1998  for
purposes of the statement of operations  and as of June 30, 1999 for purposes of
the balance sheet.

The pro forma condensed  consolidated statement of operations for the year ended
June 30, 1999 does not purport to  represent  what GRCI's  result of  operations
would  actually  have  been  had  the   transaction  in  fact  occurred  on  the
aforementioned  date, or to project  GRCI's results of operations for any future
periods. The pro forma adjustments are based upon available information and upon
certain   assumptions   that  management   believes  are  reasonable  under  the
circumstances.

The pro forma  condensed  consolidated  financial  statements  should be read in
conjunction  with the  historical  financial  statements  of both  GRCI and MCR,
including the notes thereto.

                                       2
<PAGE>

                        Consolidated Financial Statements


                     Management Consulting & Research, Inc.


                          Year ended February 28, 1999
                       with Report of Independent Auditors

                                       3
<PAGE>




                     Management Consulting & Research, Inc.

                        Consolidated Financial Statements

                          Year ended February 28, 1999




                                    Contents


Report of Independent Auditors..............................................5

Audited Consolidated Financial Statements

Consolidated Balance Sheet..................................................6
Consolidated Statement of Income............................................7
Consolidated Statement of Stockholders' Equity..............................8
Consolidated Statement of Cash Flow.........................................9
Notes to Consolidated Financial Statements.................................10

                                       4
<PAGE>

                         Report of Independent Auditors



Board of Directors
Management Consulting & Research, Inc.

We have  audited  the  accompanying  consolidated  balance  sheet of  Management
Consulting  &  Research,   Inc.  as  of  February  28,  1999,  and  the  related
consolidated statements of income,  stockholders' equity, and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  Management
Consulting & Research,  Inc. at February 28, 1999, and the consolidated  results
of its operations and its cash flows for the year then ended in conformity  with
generally accepted accounting principles.


/s/ Ernst & Young, L.L.P.

McLean, Virginia
July 6, 1999

                                       5
<PAGE>

<TABLE>
<CAPTION>
                     Management Consulting & Research, Inc.

                           Consolidated Balance Sheet



                                                                                 February 28,
                                                                                     1999

                                                                              -------------------
<S>                                                                                    <C>
  Assets
  Current assets:
     Cash                                                                         $     121,112
     Accounts receivable                                                              8,461,960
     Prepaid expenses and other current assets                                          273,839
     Current portion of note receivable                                                 120,000
                                                                              -------------------
  Total current assets                                                                8,976,911
  Equipment, net                                                                        724,126
  Due from officers                                                                     186,602
   Note receivable                                                                      102,175
   Due from majority stockholder, including accrued interest of $287,797
                                                                                      1,500,000
   Cash surrender value of officer's life insurance                                     954,113
   Other assets                                                                          69,148
                                                                              ===================
   Total assets                                                                     $12,513,075
                                                                              ===================

  Liabilities and stockholders' equity Current liabilities:
     Accounts payable                                                             $     686,000
     Accrued compensation                                                             1,524,219
     Accrued ESOP & profit sharing                                                      767,193
     Income taxes payable                                                               792,809
     Deferred income taxes                                                            2,422,419
     Other current liabilities                                                           91,961
                                                                              -------------------
  Total current liabilities                                                           6,284,601
  Other liabilities                                                                     321,474
  Minority interest                                                                   1,112,540
  Commitments and contingencies
  Stockholders' equity:
     Common stock, $0.0015 par value - 5,000,000 shares
       authorized; 2,000,000 shares issued and outstanding                                3,000
     Treasury stock                                                                      (5,600)
     Retained earnings                                                                4,797,060
                                                                              -------------------
  Total stockholders' equity                                                          4,794,460
                                                                              ===================
  Total liabilities and stockholders' equity                                        $12,513,075
                                                                              ===================


See accompanying notes.
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>


                     Management Consulting & Research, Inc.

                        Consolidated Statement of Income


                                                                                  Year ended
                                                                                 February 28,
                                                                                     1999
                                                                              -------------------
<S>                                                                                 <C>

  Services revenue                                                                 $28,660,597

   Operating expenses:
     Cost of services                                                               14,240,666
     Selling, general, and administrative expenses                                  11,627,038
                                                                              -------------------
  Total operating expenses                                                          25,867,704
                                                                              -------------------

  Income from operations                                                             2,792,893

  Other income/(expenses):
     Interest income                                                                   136,004
     Interest expense                                                                  (51,494)
     Other                                                                             (19,005)
                                                                              -------------------
  Total other income                                                                    65,505
                                                                              -------------------

  Income before income taxes and minority interest                                   2,858,398

   Provision for income taxes                                                        1,134,086
                                                                              -------------------

  Income before minority interest                                                    1,724,312

  Minority interest                                                                    344,862
                                                                              ===================

  Net income                                                                        $1,379,450
                                                                              ===================

  Basic and diluted earnings per common share                                           $0.69
                                                                              ===================

  Weighted average common shares used in computing share amounts, basic and
     diluted                                                                         2,000,000
                                                                              ===================
</TABLE>



See accompanying notes.

                                       7
<PAGE>

<TABLE>
<CAPTION>

                                              Management Consulting & Research, Inc.

                                          Consolidated Statement of Stockholders' Equity



                                           Common                     Treasury
                                           Stock                       Stock
                                       ----------------------------------------------------------       Retained
                                           Shares        Amount        Shares         Amount            Earnings            Total
                                       ---------------------------------------------------------------------------------------------
<S>                                         <C>          <C>            <C>             <C>              <C>                 <C>

  Balance at February 28, 1998           2,000,000      3,000              -               -         3,497,546          3,500,546

  Dividends declared ($.04 per share)            -          -              -               -           (79,936)           (79,936)

  Purchase of stock                              -          -         (1,600)         (5,600)                -             (5,600)

  Net income                                     -          -              -               -         1,379,450          1,379,450
                                       ---------------------------------------------------------------------------------------------

  Balance at February 28, 1999           2,000,000     $3,000         (1,600)        $(5,600)       $4,797,060         $4,794,460
                                       =============================================================================================



See accompanying notes.
</TABLE>
                                       8
<PAGE>

<TABLE>
<CAPTION>

                     Management Consulting & Research, Inc.

                      Consolidated Statement of Cash Flows


                                                                                  Year ended
                                                                                 February 28,
                                                                                     1999
                                                                              -------------------
<S>                                                                                    <C>

  Operating activities:
  Net income                                                                        $1,379,450
     Adjustments to reconcile net income to net cash provided  by operating
       activities:
         Depreciation and amortization                                                 295,836
         Deferred income taxes                                                         443,199
         Interest earned on amounts due from officers and
           majority stockholder                                                       (127,870)
         Minority interest                                                             344,862
       Changes in assets and liabilities:
         Accounts receivable                                                           247,389
         Other assets                                                                 (115,129)
         Accounts payable and accrued expenses                                        (528,371)
         Other liabilities                                                              79,916
                                                                              -------------------
  Net cash provided by operating activities                                          2,019,282

   Investing activities:
   Purchases of equipment                                                             (336,969)
  Note receivable                                                                      110,339
  Net advances to officers and majority stockholder                                   (174,352)
                                                                              -------------------
  Net cash used in investing activities                                               (400,982)

  Financing activities:
  Dividends paid                                                                       (50,000)
  Purchase of stock                                                                     (5,600)
  Payments to related parties                                                         (271,608)
  Proceeds from line of credit                                                       6,380,174
  Payments on line of credit                                                        (7,670,096)
                                                                              -------------------
  Net cash used in financing activities                                             (1,617,130)
                                                                              -------------------

  Net increase in cash and cash equivalents                                              1,170
  Cash at beginning of year                                                            119,942
                                                                              ===================
  Cash at end of year                                                                 $121,112
                                                                              ===================



See accompanying notes.

</TABLE>


                                       9
<PAGE>

                     Management Consulting & Research, Inc.

                   Notes to Consolidated Financial Statements

                                February 28, 1999

1.  Description of Business

The consolidated financial statements of Management Consulting & Research,  Inc.
(the  "Company")  include  the  accounts  of  the  parent  company,   Management
Consulting & Research,  Inc. ("MCR"), and its five majority-owned  subsidiaries.
The Company's  majority-owned  subsidiaries include MCR Federal,  Inc. (formerly
MCR Services Group,  Inc.), MCR Healthcare,  Inc., MCR  Technologies,  Inc., MCR
Federal Systems, Inc., and MCR International, Inc.

MCR Healthcare,  Inc. includes the accounts of its wholly-owned subsidiary,  MCR
Federal Healthcare (formerly MCR Bengtsson International Inc.). In addition, MCR
Technologies,  Inc. includes the accounts of its two wholly-owned  subsidiaries,
MCR Business Technologies, Inc. and MCR Advanced Technologies Inc.

MCR Federal,  Inc. performs  development and lifecycle cost analysis and similar
consulting services under contracts  primarily with the Federal government.  MCR
Healthcare,   Inc.  performs  facilities  and  design  consulting  services  for
commercial  clients.  MCR Federal Systems,  Inc.  performs  information  systems
consulting services to government and industry clients.  MCR Technologies,  Inc.
and MCR International, Inc. perform consulting services to industry clients.

The  Company's  board  of  directors  approved  an  increase  in the  number  of
authorized  common stock shares to 5 million (par value $.0015) and authorized a
4 for 1 stock  split  in  February  1999.  Accordingly,  all  references  in the
financial  statements to number of shares and related amounts have been restated
to reflect the stock split.

2.  Significant Accounting Policies

Principles of Consolidation

The  consolidated  financial  statements  include  the  accounts  of  Management
Consulting  &  Research,  Inc.  and its  majority-owned  subsidiaries  and their
wholly-owned subsidiaries.  The minority interest reflects the non-Company owned
stockholder   interests  in  the  majority-owned   subsidiaries.   All  material
intercompany accounts and transactions have been eliminated.

                                       10
<PAGE>

2.  Significant Accounting Policies (Continued)

Equipment

Equipment is stated at cost.  Depreciation  is computed  using the straight line
method with estimated useful lives ranging between 3 and 7 years.

Income Taxes

The Company uses the liability  method to account for income  taxes.  Under this
method,  deferred tax assets and liabilities are determined based on differences
between the financial  reporting and tax basis of assets and liabilities and are
remeasured  using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

Stock Based Compensation

In October 1995, the Financial  Accounting  Standards Board issued SFAS No. 123,
Accounting  for  Stock-Based  Compensation.  SFAS No.  123 allows  companies  to
account for stock-based compensation either under the provisions of SFAS No. 123
or under the provisions of Accounting Principles Bulletin No. 25, Accounting for
Stock Issued to Employees ("APB No. 25"), but requires pro forma  disclosures in
the footnotes to the financial  statements as if the  measurement  provisions of
SFAS  No.  123 had  been  adopted.  The  Company  accounts  for its  stock-based
compensation in accordance with APB No. 25.

Earnings Per Share

The Company has adopted Financial  Accounting Standards Board Statement No. 128,
"Earnings Per Share," ("SFAS 128") which established new standards for computing
and  presenting net income per share  information.  Basic earnings per share was
determined  by  dividing  net income by the  weighted  average  number of common
shares outstanding  during the period.  Diluted earnings per share is consistent
with  that of basic  earnings  per share  while  giving  effect to all  dilutive
potential common shares,  if any, that were outstanding  during the period.  The
dilutive effect of outstanding  options issued by the Company,  if any, has been
reflected in diluted  earnings per share by  application  of the treasury  stock
method. A reconciliation  of the net earnings per share and the number of shares
used in  computing  basic and diluted net income per share is  presented in Note
12.

                                       11
<PAGE>

2.  Significant Accounting Policies (Continued)

Services Revenue

The Company is engaged  principally in  time-and-materials  contracts,  but also
performs  under  fixed-price  contracts and cost plus award fee  contracts.  For
time-and-materials  contracts,  revenue  is  recognized  by the  application  of
contract  labor and material rates as services are  performed.  For  fixed-price
contracts,  revenue is recognized on the  percentage-of-completion  method.  For
cost plus award fee  contracts,  revenue is  recognized  by the  application  of
contract  labor and material rates as services are performed plus the applicable
award fee. The Company provides for anticipated  losses on contracts by a charge
to income during the period such losses are first identified.

Contract costs,  including  indirect costs,  are subject to audit by agencies of
the United States  Government  and have been audited  through  1997.  Management
believes any future adjustment from the audits, if any, will not have a material
effect on the consolidated financial statements.

Concentration of Credit Risk

Cash

The Company maintains cash balances at a single financial institution.  Accounts
at this  institution are insured up to $100,000.  Balances in these accounts may
from time to time exceed the insured amount.

Major Customers

Approximately 96% of revenue earned in 1999 is attributable to services provided
to the Federal  government,  in  particular,  the  Department  of the Air Force,
through  prime or  subcontracts.  Substantially  all  accounts  receivable  were
related to such contracts at February 28, 1999.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  amounts  reported  in the  consolidated  financial  statements  and
accompanying notes. Actual results could differ from those estimates.

                                       12
<PAGE>




2.  Significant Accounting Policies (Continued)

Statements of Cash Flows
<TABLE>
<CAPTION>
Non-cash financing activities and supplemental cash flow information includes:

                                                                                 Year ended
                                                                                February 28,
                                                                                    1999
                                                                              ------------------
                         <S>                                                          <C>

                        Dividends declared                                          $  79,936
                                                                              ==================
                        Interest paid                                               $  51,494
                                                                              ==================
                        Income taxes paid                                            $732,580
                                                                              ==================
</TABLE>

Recent Pronouncements

For the year ended  February 28, 1999,  the Company  adopted FASB  Statement No.
130, "Reporting Comprehensive Income," which establishes standards for reporting
and displaying  comprehensive income and its components in financial statements.
The  adoption  of SFAS 130 did not have any  effect on the  Company's  financial
statements as the Company does not have any elements of comprehensive income.

For the year ended  February 28, 1999,  the Company  adopted FASB  Statement No.
131, "Disclosure About Segments of an Enterprise and Related Information," which
establishes  standards for  disclosures  about  products,  geographies and major
customers.  The  Company's  implementation  of this  standard  does not have any
effect on its financial statements.

In March 1998, AcSEC issued Statement of Position 98-1 ("SOP 98-1"),  Accounting
for the Costs of Computer  Software  Developed For or Obtained For Internal Use.
SOP 98-1 is effective  for the Company  beginning  March 1, 1999.  SOP 98-1 will
require the  capitalization of certain costs incurred after the date of adoption
in  connection  with  developing  or obtaining  software  for internal  use. The
Company  does not expect the  adoption of SOP 98-1 to have a material  effect on
the Company's financial statements.

Reclassifications

Certain  prior year amounts have been  reclassified  to conform with the current
year presentation.

                                       13
<PAGE>

3.  Accounts Receivable
<TABLE>
<CAPTION>

Accounts  receivable were due under prime contracts with the Federal government,
contracts with commercial or private entities,  and subcontracts with commercial
contractors  performing  contracts  for the Federal  government.  Components  of
accounts receivable consist of the following:

                                                                               February 28,
                                                                                   1999
                                                                             ------------------
                         <S>                                                         <C>

                       Billed                                                      $5,150,747
                       Unbilled                                                     3,311,213
                                                                             ------------------
                                                                                   $8,461,960
                                                                             ==================
</TABLE>


Unbilled accounts receivable are stated at estimated realizable value.

4.  Equipment
<TABLE>
<CAPTION>

Property and equipment consists of the following:

                                                                                February 28,
                                                                                    1999
                                                                              ------------------
                         <S>                                                          <C>

                       Furniture and fixtures                                     $   428,470
                       Computer equipment                                             866,687
                       Other                                                                -
                                                                              ------------------
                                                                                    1,295,157
                       Less: accumulated depreciation                                (571,031)
                                                                              ==================
                                                                                  $   724,126
                                                                              ==================
</TABLE>


The Company wrote-off fully depreciated equipment totaling $1,321,590 during the
year ended February 28, 1999.

                                       14
<PAGE>

5.  Due from Officers and Majority Stockholder

The Company has  $186,602  due from two  officers of the Company at February 28,
1999.  Interest is fixed at 7% and is payable  monthly.  The principal amount is
due on demand.  The amount is classified  as  noncurrent  due to lack of payment
during the preceding year.

The Company maintains a $1.5 million line of credit that expires on June 5, 2001
and bears interest at 8% for the benefit of its majority stockholder.  There was
$1.5 million due from the majority stockholder,  which includes accrued interest
of $287,797,  at February 28, 1999.  The  majority  stockholder  has  personally
guaranteed  repayment  of all  borrowed  funds and has pledged  his  interest in
certain common stock of the Company as collateral.

6.  Cash Surrender Value of Officer's Life Insurance

The Company  maintains life insurance through various policies on its president,
of which the Company is the beneficiary except for a split-dollar  policy. Under
the  split-dollar  policy,  the  Company  pays the premium  and  receives,  upon
termination of the policy,  the lesser of the cash surrender value of the policy
or the total of premiums paid by the Company. Upon the death of the insured, the
Company would  receive the amount of the total  premiums paid by the Company and
remit any  excess  proceeds  to the  estate  or  beneficiary  named.  Two of the
policies  have been  assigned  to the bank that  provides  the line of credit as
additional security.

7.  Line of Credit

The Company has a $1.5 million line of credit,  which  expires on September  30,
1999.  Interest  is payable at the  lender's  prime rate plus  one-half  percent
(8.25% at February 28, 1999). Amounts drawn on the line of credit are secured by
the Company's assets, cash surrender value of the officer's life insurance,  and
personal guarantees by the Company's  president.  There was $0 outstanding under
the line of credit at  February  28,  1999.  The Company is required to maintain
certain financial and non-financial covenants pursuant to the line of credit.

                                       15
<PAGE>

8.  Stockholders' Equity

The Company  reserved  500,000  shares for issuance  under the MCR Omnibus Stock
Plan during the year ended February 28, 1999.
<TABLE>
<CAPTION>

Common stock option activity is as follows for the year ended February 28, 1999:

                                                                                                 Weighted average
                                                                                                  exercise price
                                                                                  Shares
                                                                            ----------------------------------------
                    <S>                                                              <C>                   <C>

                  Outstanding at February 28, 1998                                         -            -
                  Granted                                                            144,000          $5.25
                  Exercised                                                                -            -
                  Canceled                                                                 -          $5.25
                                                                            ========================================
                  Outstanding at February 28, 1999                                   144,000          $5.25
                                                                            ========================================
</TABLE>


Vesting generally occurs ratably over 3 years. There were no options exercisable
at February 28, 1999.

The  effect of  applying  Statement  123's fair  value  method to the  Company's
stock-based  awards  results in a net  income of  $1,368,885  in 1999,  with net
earnings  per share of $0.68.  The  effect of  applying  SFAS No. 123 on the pro
forma net  income is not  necessarily  representative  of the  effects on future
years due to, among other  things,  the vesting  period of the stock options and
the fair value of additional stock options in future years.

                                       16
<PAGE>

9.  Income Taxes
<TABLE>
<CAPTION>

Following is a summary of the components of the net deferred tax liability:

                                                                                February 28,
                                                                                    1999
                                                                             ------------------
                    <S>                                                              <C>

                    Deferred tax assets:
                      Net operating loss carryforward                         $
                                                                                           -
                      Other                                                                -
                                                                             ------------------
                                                                                           -
                    Deferred tax liabilities:
                      Cash basis reporting for tax purposes                        2,381,788
                      Equipment                                                       40,631
                                                                             ------------------
                                                                                   2,422,419
                                                                             ==================
                    Net deferred tax liability                                    $2,422,419
                                                                             ==================
</TABLE>

<TABLE>
<CAPTION>

The provision for income taxes consists of the following:
                                                                                 Year ended
                                                                               February 28,
                                                                                    1999
                                                                             ------------------
                    <S>                                                             <C>

                    Current:
                      Federal                                                    $   619,333
                      State and local                                                 71,554
                                                                             ------------------
                                                                                     690,887
                    Deferred:
                      Federal                                                        382,210
                      State and local                                                 60,989
                                                                             ------------------
                                                                                     443,199
                                                                             ==================
                                                                                  $1,134,086
                                                                             ==================
</TABLE>

<TABLE>
<CAPTION>

The effective tax rate differed from the statutory rate as follows:

                                                                     Year ended
                                                                 February 28, 1999,
                                                              --------------------------
                    <S>                                                   <C>

                Statutory federal rate                                    34%
                State taxes                                                6%
                                                              ==========================
                Effective tax rate                                        40%
                                                              ==========================
</TABLE>

                                       17
<PAGE>

10.  Commitments

Leases
<TABLE>
<CAPTION>

The Company  leases  office  space under  operating  leases  expiring in various
years. Minimum future rental payments under  non-cancelable  operating leases at
February 28, 1999 are as follows:
                         <S>                                                                   <C>

                        2000                                                              $1,219,755
                        2001                                                               1,060,626
                        2002                                                               1,028,891
                        2003                                                                 992,347
                        2004 and thereafter                                                2,482,752
                                                                                   ==================
                                                                                          $6,784,371
                                                                                   ==================
</TABLE>

Rent expense was approximately $1,140,000 for the year ended February 28, 1999.

11.  Employee Benefit Plans

Retirement Plan

The Company has a defined  contribution  retirement  plan (the "Plan")  covering
employees  meeting  certain  eligibility  requirements.  Employees of all of the
companies may contribute to the Plan in amounts up to 10% of their compensation,
subject  to  certain   Internal   Revenue  Service   requirements.   A  matching
contribution  of up to 5% of the  employee's  compensation  is made to the Plan.
Employee  contributions vest 100% immediately while employer  contributions vest
20% per year until they reach 100% after five  years.  The  Company  contributed
approximately $393,000 under the Plan during the year ended February 28, 1999.

The Company may make a discretionary  contribution to the Plan determined by the
Board of Directors. Vesting in discretionary contributions occurs as follows: 0%
if employed less than four years; 40% after four years;  100% after five or more
years  of  employment.   The  Company  made  a  discretionary   contribution  of
approximately $300,000 during the year ended February 28, 1999.

                                       18
<PAGE>

11.  Employee Benefit Plans (continued)

Employee Stock Ownership Plan

The Company has a non-leveraged Employee Stock Ownership Plan ("ESOP"). The ESOP
covers employees meeting certain eligibility requirements.  Contributions to the
plan are  determined  by the Board of  Directors.  Vesting in the ESOP occurs as
follows:  0% if less  than  five  years  and 100%  after  five or more  years of
employment.  The  Company's  obligation  to purchase  shares  allocated  to Plan
participants  if all  participants  terminated  employment  and exercised  their
options to have the Company  purchase their shares would be $892,569 at February
28,  1999.  The Company  contributed  $516,000 to the ESOP during the year ended
February 28, 1999.

12.  Earnings Per Share
<TABLE>
<CAPTION>

The following  table set forth the computation of basic and diluted net loss per
share:

                                                                           1999
                                                             ----------------------------------
<S>                                                                           <C>

Numerator:
   Net income                                                            $  1,379,450
                                                             ----------------------------------
Numerator for basic and diluted earnings per share
                                                                         $  1,379,450
                                                             ==================================

Denominator:
   Denominator  for basic  earnings  per  share -  weighted
     average shares                                                         2,000,000
   Effect of dilutive securities
       Employee stock options                                                       -
                                                             ----------------------------------
   Denominator for diluted earnings per share                               2,000,000
                                                             ==================================
Basic earnings per share                                                        $0.69
                                                             ==================================
Diluted earnings per share                                                      $0.69
                                                             ==================================
</TABLE>

                                       19
<PAGE>

13.  Subsequent Events

Acquisition

The  Company's  stockholders  entered  into an  agreement  and  plan  of  merger
subsequent to year end whereby the  outstanding  common stock and options of the
Company and subsidiaries  will be acquired by GRC  International,  Inc. ("GRC").
Total  consideration  is $27.1  million  consisting  of 2 million  shares of GRC
common stock and the remainder in cash.

Minority Interest

In May 1999,  the Company  issued 500,000 shares of common stock in exchange for
all minority interests in the consolidated subsidiaries.

Common Stock Options

The Company  granted an  additional  18,000  common  stock  options at $7.18 per
share.

14.  Impact of Year 2000 (Unaudited)

The Year 2000 Issue is the result of computer  programs  being written using two
digits  rather than four to define the  applicable  year.  Any of the  Company's
computer programs that have  time-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

The Company has completed its study of the  implications of the Year 2000 on its
information  systems.  The  Company's  efforts  did not  require  a  significant
commitment of resources and costs to resolve the potential  problems  associated
with this event.  Interfaces  to external  suppliers  and  customers  (including
banks) were included in the Company's assessments. However, the Company does not
have  control  over these  third  parties  and, as a result,  can not  currently
estimate to what extent future  operating  results may be adversely  affected by
the  failure of these  third  parties to  successfully  address  their Year 2000
issues.

The  Company  believes  that  the Year  2000  Issue  will  not pose  significant
operational  problems  for  its  computer  systems.  However,  there  can  be no
guarantee and actual  results could differ  materially  from those  anticipated.
Specific factors that might cause such material differences include, but are not
limited  to, the  ability to locate and correct  all  relevant  computer  codes,
interfaces with third parties, and similar uncertainties.

                                       20
<PAGE>

<TABLE>
<CAPTION>
                                                      GRC INTERNATIONAL, INC.
                                          UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
                                                        As of June 30, 1999


                                                                                               PRO FORMA
                                                                      HISTORICAL               ADJUSTMENTS                 PRO FORMA
                                                                      ----------               -----------                 ---------
<S>                                                                    <C>                        <C>                         <C>

CURRENT ASSETS:
Cash and cash equivalents                                          $          88           $             0         $            88
Accounts receivable, net                                                  36,438                     6,291                  42,729
Unbilled reimbursable costs and fees                                       2,924                         0                   2,924
Other receivables                                                          1,339                         0                   1,339
Prepaid expenses and other current assets                                    522                        30                     552
Deferred income taxes                                                      6,871                         0                   6,871
                                                                    ------------            --------------           -------------
Total current assets                                                      48,182                     6,321                  54,503
                                                                    ------------            --------------           -------------

PROPERTY AND EQUIPMENT:
Land, buildings and leasehold improvements                                 5,298                         0                   5,298
Equipment, furniture and fixtures                                         17,294                       819                  18,113
  Less accumulated depreciation and amortization                         (13,497)                        0                 (13,497)
                                                                    ------------            --------------           -------------
     Property and equipment, net                                           9,095                       819                   9,914
                                                                    ------------            --------------           -------------

OTHER ASSETS:
Goodwill and other intangible assets, net                                  1,989                    20,802                  22,791
Deferred income taxes                                                     15,428                     1,510                  13,918
Deposits and other                                                         1,387                     1,026                   2,413
                                                                    ------------            --------------           -------------
     Total other assets                                                   18,804                    20,318                  39,122
                                                                    ------------            --------------           -------------

TOTAL ASSETS:                                                       $     76,081            $       27,458           $     103,539
                                                                    ============            ==============           =============

CURRENT LIABILITIES:
Current maturities of long-term debt                                $          9            $            0           $           9
Accounts payable                                                           5,567                       688                   6,255
Accrued compensation and benefits                                         14,461                     1,525                  15,986
Accrued expenses and other current liabilities                             3,063                     1,929                   4,992
                                                                    ------------            --------------           -------------
     Total current liabilities                                            23,100                     4,142                  27,242
                                                                    ------------            --------------           -------------

LONG-TERM LIABILITIES:
Long-term debt                                                            12,623                     6,496                  19,119
Other long-term liabilities                                                  299                       958                   1,257
                                                                    ------------            --------------           -------------
     Total long-term liabilities                                          12,922                     7,454                  20,376
                                                                    ------------            --------------           -------------

     Total stockholders' equity                                           40,059                    15,862                  55,921
                                                                    ------------            --------------           -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $     76,081            $       27,458           $     103,539
                                                                    ============            ==============           =============
</TABLE>

                                       21
<PAGE>

The pro forma adjustments  represent the allocation of the net purchase price of
approximately  $23 million for all of the assets,  liabilities,  and  intangible
assets of MCR and  subsidiaries.  The excess of the purchase price over the fair
value of the net assets acquired was estimated at approximately  $21 million and
will be  amortized  on a  straight-line  basis  over 30 years.  The  preliminary
purchase  price  allocation  may change  during the year ending June 30, 2000 as
additional information concerning the net asset valuation is obtained.

The  adjustments  reflect the increase in GRCI's line of credit and the increase
in  stockholders  equity  related to the issuance of 2,000,000  common shares at
$7.80 per share to purchase MCR.

                                       22
<PAGE>

<TABLE>
<CAPTION>

                                                      GRC INTERNATIONAL, INC.
                                     UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                                                        As of June 30, 1999


                                                                                               PRO FORMA
                                                                      HISTORICAL               ADJUSTMENTS               PRO FORMA
                                                                      ----------               -----------               ---------
<S>                                                                       <C>                       <C>                      <C>

Revenues                                                           $     164,602             $      30,165            $    194,767

Cost of services                                                         138,770                    15,029                 153,799

Indirect and other costs                                                  16,574                    12,552                  29,126
                                                                   -------------             -------------            ------------

Operating income                                                           9,258                     2,584                  11,842

Interest expense, net                                                     (1,215)                     (463)                 (1,678)
                                                                   -------------             -------------            ------------

Income from continuing operations
  before income taxes                                                      8,043                     2,121                  10,164

Income tax benefit/(provision)                                               863                    (1,123)                   (260)
                                                                   -------------             -------------            ------------

Income from continuing operations                                          8,906                       998                   9,904

Income from discontinued operations                                          225                         0                     225
                                                                   -------------             -------------            ------------

Net income                                                         $       9,131             $         998            $     10,129
                                                                   =============             =============            ============

Income per common and common equivalent share:

Basic
     Continuing operations                                         $        0.87             $        0.50            $       0.81
     Net income                                                    $        0.89             $        0.50            $       0.83
                                                                   -------------             -------------            ------------

Number of shares used in basic EPS
  calculation                                                             10,230                     2,000                  12,230
                                                                   =============             =============            ============

Diluted
     Continuing operations                                         $        0.85             $        0.48            $       0.79
     Net income                                                    $        0.87             $        0.48            $       0.81
                                                                   -------------             -------------            ------------

Number of shares used in diluted EPS
  calculation                                                             10,498                     2,071                  12,569
                                                                   =============             =============            ============
</TABLE>

                                       23
<PAGE>

The pro forma  adjustments  include the  historical  results of MCR for the year
ended June 30, 1999 adjusted to reflect the goodwill  amortization  of $696,000,
and estimated interest expense of $455,000 on the increase in debt.

The tax  provision  in the pro forma  adjustments  of 53% of the related  pretax
income  is above  the  normal  statutory  tax rate as a result  of the  goodwill
amortization not being tax deductible.

                                       24
<PAGE>

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

                                GRC INTERNATIONAL, INC.



Date:    November 12, 1999      By: /s/ Thomas E. McCabe
                                    --------------------------------------------
                                    Thomas E. McCabe
                                    Senior Vice President, Director of Corporate
                                      Development, General Counsel & Secretary

                                       25
<PAGE>