UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1999

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from ...... to ......


                       Registrant, State of Incorporation,
                          Address and Telephone Number
                          ----------------------------

                             GRC INTERNATIONAL, INC.
                            (a Delaware Corporation)
                                1900 Gallows Road
                             Vienna, Virginia 22182
                                 (703) 506-5000
Commission                                                     I.R.S. Employer
 File No.                                                     Identification No.
----------                                                    ------------------

 1-7517                                                           95-2131929


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. YES X NO .


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

                                                                Outstanding at
Class of Common Stock                                          October 31, 1999
---------------------                                          ----------------

   $.10 par value                                              12,370,435 shares

<PAGE>

                                    CONTENTS


Forward-Looking Statements

In addition to historical information,  this Form 10-Q Quarterly Report contains
forward-looking  statements. The forward-looking statements contained herein are
subject to certain risks and  uncertainties  that could cause actual  results to
differ  materially  from  those  reflected  in the  forward-looking  statements.
Factors  that might  cause such a  difference  include,  but are not limited to,
those  discussed  in the  section  of this  Form  10-Q  captioned  "Management's
Discussion  and  Analysis".  The Company  undertakes  no  obligation to publicly
revise these forward-looking statements, to reflect events or circumstances that
arise after the date hereof.  Readers should  carefully  review the risk factors
described  in the  Company's  Form 10-K Annual  Report and other  documents  the
Company  files from time to time with the  Securities  and Exchange  Commission,
including the Quarterly Reports on Form 10-Q filed by the Company  subsequent to
this Form 10-Q and any Current Reports on Form 8-K filed by the Company.

                                                                            Page
                                                                            ----

PART I - FINANCIAL INFORMATION

A.    FINANCIAL STATEMENTS

      Condensed Consolidated Statements of Income                            3

      Condensed Consolidated Balance Sheets                                  4

      Condensed Consolidated Statements of Cash Flows                        6

      Notes to Condensed Consolidated Financial Statements                   8


B.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         10


C.    PART II - OTHER INFORMATION                                           15

Note:      The condensed  consolidated financial statements included herein have
           been prepared by the Company,  without  audit,  pursuant to the rules
           and  regulations of the Securities and Exchange  Commission.  Certain
           information and footnote  disclosures  normally included in financial
           statements  prepared in accordance with generally accepted accounting
           principles have been condensed or omitted  pursuant to such rules and
           regulations  although the Company  believes that the  disclosures are
           adequate to make the information presented not misleading.

           It  is  suggested  that  these   condensed   consolidated   financial
           statements be read in  conjunction  with the  consolidated  financial
           statements  and the notes thereto  included in the  Company's  latest
           annual report on Form 10-K.

                                       2
<PAGE>

<TABLE>
<CAPTION>

                             GRC INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except for per share data)
                                   (unaudited)

                                                                           Three Months Ended
                                                                              September 30,
                                                                           1999            1998
                                                                        ---------       ----------
<S>                                                                         <C>            <C>

Revenues                                                                 $  45,821       $ 36,756

Cost of revenues                                                            36,992         30,964

Indirect costs and other costs                                               4,656          3,675
                                                                         ---------       --------

Operating income                                                             4,173          2,117

Interest expense, net                                                         (230)          (352)
                                                                         ---------       --------

Income from continuing operations
   before income taxes                                                       3,943          1,765

Income tax (provision) benefit                                              (1,585)         1,265
                                                                         ---------       --------

Income from continuing operations                                            2,358          3,030

Gain from discontinued operations
   (net of tax)                                                                ---             54
                                                                        ----------      ---------

Net Income                                                              $    2,358      $   3,084
                                                                        ==========      =========

Income per common and
   common equivalent share:

Basic
       Continuing operations                                           $      0.22      $    0.29
       Discontinued operations                                                 ---           0.01
                                                                       -----------      ---------
       Net income                                                      $      0.22      $    0.30
                                                                       ===========      =========

Number of shares used in basic EPS
   calculation                                                              10,959         10,214
                                                                       ===========      =========

Diluted
       Continuing operations                                           $      0.21      $    0.29
       Discontinued operations                                                 ---           0.01
                                                                       -----------      ---------
       Net income                                                      $      0.21      $    0.30
                                                                       ===========      =========

Number of shares used in diluted EPS
   calculation                                                              11,418         10,386
                                                                       ===========      =========
</TABLE>

         The Company had no items of other comprehensive income or loss.
        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

                             GRC INTERNATIONAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)


                                                                               September 30,            June 30,
                                                                                   1999                   1999
                                                                               ------------           -----------
                                                                                         (in thousands)
<S>                                                                                <C>                    <C>

CURRENT ASSETS:

   Cash and cash equivalents                                                   $      88              $       88
   Accounts receivable, net                                                       44,935                  36,438
   Unbilled reimbursable costs and fees                                            1,322                   2,924
   Other receivables                                                               1,040                   1,339
   Prepaid expenses and other current assets                                         634                     522
   Deferred income taxes                                                           5,895                   6,871
                                                                               ---------               ---------
         Total current assets                                                     53,914                  48,182
                                                                               ---------               ---------


PROPERTY AND EQUIPMENT,
   at cost, net of accumulated depreciation
      and amortization of $14,040 and $13,497                                      9,689                   9,095
                                                                               ---------               ---------


OTHER ASSETS:

   Goodwill and other intangible assets, net                                      22,715                   1,989
   Deferred income taxes                                                          13,428                  15,428
   Deposits and other                                                              2,104                   1,387
                                                                               ---------               ---------
         Total other assets                                                       38,247                  18,804
                                                                               ---------               ---------

TOTAL ASSETS                                                                   $ 101,850               $  76,081
                                                                               =========               =========
</TABLE>








        The accompanying notes are an integral part of these statements.

                                       4
<PAGE>

<TABLE>
<CAPTION>

                             GRC INTERNATIONAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)


                                                                               September 30,           June 30,
                                                                                   1999                  1999
                                                                               -------------          -----------
                                                                                          (in thousands)
<S>                                                                               <C>                    <C>

CURRENT LIABILITIES:

   Current maturities of long-term debt                                        $       6               $       9
   Accounts payable                                                                5,332                   5,567
   Accrued compensation and benefits                                              14,700                  14,461
   Accrued expenses and other current liabilities                                  4,397                   3,063
                                                                               ---------               ---------
         Total current liabilities                                                24,435                  23,100
                                                                               ---------               ---------

LONG-TERM LIABILITIES:

   Long-term debt                                                                 16,500                  12,623
   Other long-term liabilities                                                     1,244                     299
                                                                               ---------               ---------
         Total long-term liabilities                                              17,744                  12,922
                                                                               ---------               ---------

COMMITMENTS AND CONTINGENCIES:                                                       ---                     ---

STOCKHOLDERS' EQUITY:

   Commonstock,   $.10  par  value -
         Authorized  -  30,000,000  shares
         Issued  -  12,623,906 shares
           and 10,549,003 shares                                                   1,262                   1,055
   Paid-in capital                                                               100,324                  83,277
   Accumulated deficit                                                           (38,070)                (40,428)
                                                                               ---------               ---------
                                                                                  63,516                  43,904

   Less:  Treasury stock, at cost; 300,000 shares                                 (3,845)                 (3,845)
                                                                               ---------               ---------

         Total stockholders' equity                                               59,671                  40,059
                                                                               ---------               ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $ 101,850                $ 76,081
                                                                               =========                ========
</TABLE>




        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

<TABLE>
<CAPTION>

                             GRC INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                                           Three Months Ended
                                                                                              September 30,
                                                                                         -------------------------
                                                                                           1999             1998
                                                                                         -------           -------
                                                                                              (in thousands)
<S>                                                                                          <C>                <C>

CASH FLOWS FROM CONTINUING OPERATIONS:
     Income from continuing operations                                                  $   2,358          $  3,030
     Reconciliation of income from continuing operations to net
         cash provided by (used in) operating activities:
              Depreciation and amortization                                                   671               816
              Deferred income tax provision (benefit)                                       1,584            (1,300)
              Changes in assets and liabilities:
                 Accounts receivable and unbilled
                    reimbursable costs and fees                                               224               293
                 Prepaid expenses and other current assets                                    369                 9
                 Accounts payable, accruals and
                    other current liabilities                                              (1,809)           (3,172)
                 Other                                                                        (23)              (59)
                                                                                       ----------         ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                         3,374              (383)
                                                                                       ----------         ---------

CASH FLOWS FROM DISCONTINUED OPERATIONS:
     Gain from discontinued operations                                                        ---                54
     Reconciliation of income from discontinued operations:
              Non-cash charges and changes in working capital                                 (59)               42
                                                                                       -----------        ---------
NET CASH (USED IN) PROVIDED BY DISCONTINUED OPERATIONS                                        (59)               96
                                                                                       ----------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Acquisitions of property and equipment                                                  (412)             (372)
     Purchase of business, net of cash acquired                                            (7,053)              ---
                                                                                       ----------         ---------
NET CASH USED IN INVESTING ACTIVITIES                                                      (7,465)             (372)
                                                                                       ----------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on debt and capital lease obligations                                       (12,623)             (448)
     Bank borrowings                                                                       16,500               488
     Issuance of common stock                                                                 273               ---
                                                                                       ----------        ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                   4,150                40
                                                                                       ----------        ----------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS                                                     0              (619)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                               88             3,648
                                                                                       ----------         ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                             $       88         $   3,029
                                                                                       ==========         =========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       6
<PAGE>

<TABLE>
<CAPTION>

                             GRC INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


                                                                                    Three Months Ended
                                                                                      September 30,
                                                                                ------------------------
                                                                                 1999              1998
                                                                                -------          -------
                                                                                     (in thousands)
<S>                                                                               <C>                <C>

Supplemental disclosures:

Cash paid for:

     Interest                                                                   $   221         $   421

     Income taxes                                                               $    80         $    35

</TABLE>
























        The accompanying notes are an integral part of these statements.

                                       7
<PAGE>

                             GRC INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999
                                   (unaudited)


(1)      Basis of Presentation.  The condensed consolidated financial statements
         included  herein have been  prepared  by the  Company,  without  audit,
         pursuant to the rules and  regulations  of the  Securities and Exchange
         Commission.  Certain  information  and  footnote  disclosures  normally
         included in financial  statements prepared in accordance with generally
         accepted accounting  principles have been condensed or omitted pursuant
         to such rules and  regulations.  The  results of  operations  presented
         herein are not necessarily indicative of the results to be expected for
         a  full  year.   Although  the  Company   believes  that  all  material
         adjustments (consisting only of normal recurring adjustments) necessary
         for a fair  presentation of the interim periods  presented are included
         and that the disclosures are adequate to make the information presented
         not  misleading,  these  condensed  consolidated  financial  statements
         should  be  read  in  conjunction  with  the   consolidated   financial
         statements and notes thereto included in the Company's Annual Report on
         Form 10-K for the fiscal year ended June 30, 1999.


(2)      New Accounting  Pronouncements.  For the year ending June 30, 2001, the
         Company will be required to adopt SFAS 133,  Accounting  for Derivative
         Instruments  and  Hedging  Activities.   Management  does  not  believe
         adoption of this Standard will have a material  impact on its financial
         statements.


(3)      Debt. The Company  maintains a $35 million  revolving  credit agreement
         effective August 27, 1999. The Company has both Prime and LIBOR (London
         Interbank  Offered  Rate)  based  borrowing  options  under the  Credit
         Agreement.  The interest  accrued on LIBOR loans is based on a ratio of
         debt to cash flow.  The current  premium is 1.10% above the  applicable
         LIBOR rate. The Company also pays a performance  based  commitment fee,
         which is currently 0.30% of the line of credit.
<TABLE>
<CAPTION>

         Debt  at  September  30,  1999  and  June  30,  1999  consisted  of the
         following:

                                                           September 30, 1999             June 30, 1999
                                                           ------------------             -------------
<S>                                                            <C>                             <C>

         Revolving Credit Agreement                            $ 16,500                      $  7,873
         Term Loans                                                 ---                         4,750
         Other                                                        6                             9
                                                               --------                      --------

         Total Debt                                              16,506                        12,632
         Less:  Current Portion                                      (6)                           (9)
                                                               --------                      --------

         Long Term Debt                                        $ 16,500                      $ 12,623
                                                               ========                      ========
</TABLE>

(4)     Acquisition  of  Management  Consulting  and  Research,  Inc.  Effective
        September 2, 1999, the Company acquired all of the outstanding  stock of
        Management  Consulting and Research,  Inc. (MCR). The net purchase price
        of  approximately  $23 million was paid

                                       8
<PAGE>

        with 2 million shares of GRCI's common stock valued at approximately $16
        million  and the  remainder  of  approximately  $7  million in net cash,
        financed through the new credit  agreement.  The resulting $20.8 million
        in goodwill is to be amortized over 30 years. MCR provides  professional
        services  to the  U.S.  Government  primarily  in the  areas  of  budget
        analysis,  cost  estimating and program  management.  MCR's revenues are
        approximately  $30 million per year.  The  acquisition  is accounted for
        using the purchase method of accounting and  consolidated  with GRC from
        the date of acquisition.


(5)     Segment Information The Company adopted SFAS No. 131, "Disclosures about
        Segments of an Enterprise and Related  Information"  during fiscal 1999.
        SFAS No. 131  establishes  standards  for  reporting  information  about
        operating segments and related  disclosures about products and services,
        geographic areas and major customers.

        All  of  the  Company's  business  relates  to  information   technology
        consulting  services.  The chief  operating  decision-maker  is provided
        information  about the  revenues  generated  by  operating  segment  and
        utilizes  income  before  interest  and  taxes as a measure  of  segment
        performance.  The Company's  services are delivered to clients primarily
        in the United States,  and the Company's  long-lived  assets are located
        within the United  States.  Based on SFAS No. 131 criteria,  the Company
        has two reportable  operating  segments;  U.S. Federal  Government,  and
        Commercial.  Within the U.S. Federal Government segment are sales to the
        Company's largest customer, the Department of Defense ("DoD").  Revenues
        from the DoD represented 98% of total U.S.  Government revenues in first
        quarters of both fiscal 2000 and fiscal 1999.
<TABLE>
<CAPTION>

                                                  U.S. Federal
                                                   Government         Commercial     Corporate        Total
                                                   ----------         ----------     ---------        -----
                                                                       (In Thousands)
<S>                                                 <C>                 <C>             <C>          <C>

     First quarter fiscal 2000

     Revenues                                        $44,031        $   1,790       $     ---         $45,821
     Income before interest and taxes                  4,413              248            (488)          4,173
     Depreciation and amortization                       337                8             326             671
     Assets                                           71,631            3,555          28,056         103,242
     Capital expenditures                                319                2              91             412

     First quarter fiscal 1999

     Revenues                                        $34,966        $   1,790       $     ---         $36,756
     Income before interest and taxes                  1,814              531            (228)          2,117
     Depreciation and amortization                       539               24             253             816
     Assets                                           40,436            3,186          27,254          70,876
     Capital expenditures                                233              ---             139             372

</TABLE>

                                       9
<PAGE>

                             GRC INTERNATIONAL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                 THREE MONTHS ENDED SEPTEMBER 30, 1999 and 1998



Acquisition of Management Consulting and Research, Inc.
-------------------------------------------------------

Effective  September 2, 1999, the Company acquired all of the outstanding  stock
of Management  Consulting and Research,  Inc.  (MCR).  The net purchase price of
approximately  $23 million was paid with 2 million shares of GRCI's common stock
valued at  approximately  $16  million and the  remainder  of  approximately  $7
million in net cash,  financed through the new credit  agreement.  The resulting
$20.8  million in  goodwill  is to be  amortized  over 30 years.  The  operating
results of MCR are included in the consolidated operating results since the date
of acquisition.


Results of Operations - Three Months Ended September 30, 1999 and 1998
----------------------------------------------------------------------


Revenues
--------

Revenues for the first  quarter of fiscal 2000  increased  25% to $45.8  million
from $36.8  million  for the same  quarter  in fiscal  1999.  Revenues  from the
Company's largest contract,  the GCSS program,  reached $9.2 million in the most
recent quarter, an increase of $4.0 million over the same period in fiscal 1999.
The  recently  acquired  business  of MCR added  $2.5  million of revenue in the
current quarter for the one month since its acquisition.  The remaining  revenue
growth was  derived  from a broad base of other U.S.  government  contracts  and
subcontracts.
<TABLE>
<CAPTION>

The following  table sets forth for the periods  indicated the  percentage  that
certain items of income and expense bear to revenues.

                                                                    Three Months Ended
                                                                    ------------------
                                                                    9/30/99   09/30/98
                                                                    -------   --------

<S>                                                                 <C>         <C>

Revenues                                                           100.0%       100.0%

Cost of revenues                                                    80.7%        84.2%

Indirect and other costs                                            10.2%        10.0%
                                                                   ------       ------

Operating income                                                     9.1%         5.8%
                                                                   ======       ======
</TABLE>


Cost of Revenues
----------------

Cost of revenues  for the first  quarter of fiscal 2000  increased  19% to $37.0
million, or 80.7% of revenues, from $31.0 million, or 84.2% of revenues, for the
same  quarter in fiscal  1999.  The cost of revenue  increase of $6.0 million is
primarily a result of the increase in revenues. The decrease in cost of revenues
as a percent of revenues is  partially  due to two  non-recurring

                                       10
<PAGE>

items,  which  resulted in the  recognition  of  approximately  $920 thousand of
revenue with no associated costs. These items related to favorable settlement of
government  cost audits  completed in the quarter ($700 thousand) and settlement
of an old claim for a contract  overrun  ($220  thousand).  The remainder of the
decrease of cost of revenues as a percentage of revenues is due to  efficiencies
achieved  in  labor  productivity,  program  management,  and  control  of other
operating costs.

Indirect Expenses and Operating Income
--------------------------------------

Indirect expenses consist of selling,  general and administrative,  research and
development,  and other costs. Indirect expenses for the first quarter of fiscal
2000  increased  $1.0  million to $4.7  million  from $3.7 million for the first
quarter of fiscal 1999.  Indirect expenses as a percentage of revenue were 10.2%
for first quarter 2000, compared to 10.0% for first quarter 1999.

Operating  income for the first  quarter of fiscal  2000  increased  97% to $4.2
million, or 9.1% of revenues,  from $2.1 million,  or 5.8% of revenues,  for the
same  quarter  of fiscal  1999.  The  one-time  revenue  items of $920  thousand
discussed  above added 2.0% to  operating  margins in the most  recent  quarter.
Without  these items,  operating  margins  would have been 7.1% of revenues,  an
increase of 1.3% over last year,  which was related to the  reduction in cost of
revenues.

Net Interest Expense
--------------------

Net interest  expense for the first quarter of fiscal 2000 decreased 35% to $230
thousand,  from $352  thousand,  for the first  quarter  of  fiscal  1999.  This
decrease of $122  thousand  reflects a reduction  in debt levels  stemming  from
positive  operating cash flows in the past year,  partially offset by the effect
of borrowings in September to complete the MCR acquisition.

Net Income Tax Provision
------------------------

The net tax  provision  recognized in the first quarter of fiscal 2000 was 40.2%
of pretax  income.  In the first  quarter of 1999,  the  Company  recorded a tax
benefit of $1.3  million  related to the  recognition  of the benefit of tax net
operating losses from prior years.


Liquidity and Capital Resources
-------------------------------

Net cash  provided  by  operations  amounted  to $3.4  million  during the first
quarter of fiscal 2000, compared to cash used in operations of $383 thousand for
the first  quarter of fiscal 1999.  The  increased  operating  cash flow was the
result of higher earnings before income taxes. Also, no significant income taxes
were  paid in  either  period  because  of the  offset  available  from  tax net
operating loss carryforwards. Cash flows used in investing activities during the
first quarter of fiscal 2000 were $7.5  million,  compared to $372 thousand used
in the first  quarter of fiscal  1999,  due to $7.1  million of cash used in the
purchase of MCR, Inc. The net cash  requirements  in the first quarter of fiscal
2000 were met through  additional  borrowings  under the Company's  bank line of
credit.

On August 27, 1999,  subsequent to the fiscal year end, the Company replaced its
revolving  credit and term loan with a new, 2-year revolving line of credit with
a total  borrowing  capacity of $35 million.  The line of credit can be used for
working capital,  acquisitions and for any surge in

                                       11
<PAGE>

working capital  requirements  from a slow down in customer payments which might
arise as a result of Year 2000 computer problems.

The Company believes that its cash flow from operations,  particularly  with the
availability  of  tax  operating  loss   carryforwards   to  offset  future  tax
liabilities, and its line of credit are sufficient to meet its financing needs.


Forward Looking Statements
--------------------------

This  filing  may  contain  "forward-looking"  statements  which are  subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those reflected in the forward-looking statements. Factors which
could cause a material  difference in results  include,  but are not limited to,
the  following:  significant  changes  in  economic  conditions  or in  national
priorities  which  result in changes in demands by the U.S.  Government  for the
Company's services;  changes in government laws and regulations;  changes in the
procurement  practices of the U.S.  Government which could negatively effect the
Company's ability to compete,  or its profitability;  the risk of termination of
any individual  contract or the inability of the Company to capture the value in
its backlog  because of failure of a customer to continue  funding of a project;
the ability of the Company to fully staff to meet its contract  requirements  at
salary levels sufficient to maintain profitability;  the uncertainties discussed
more fully in the section  entitled  "Year 2000  Issue";  and the ability of the
Company to generate sufficient taxable income in the future to fully capture the
benefit of its tax net operating  loss  carryforwards  that are reflected in the
Company's deferred tax assets.


Year 2000 Issue
---------------

The Year 2000 (Y2K)  problem is the result of computer  programs  being  written
using two digits rather than four to define the applicable  year. Thus, the year
1998 is  represented  by the number "98" in many legacy  software  applications.
Consequently,  on  January  1,  2000,  the year will  jump back to "00",  and to
systems that are non-Y2K compliant, the time will seem to have reverted back 100
years.  So,  when  computing  basic  lengths  of time,  the  Company's  computer
programs, certain building infrastructure components (including elevators, alarm
systems,  telephone  networks,  sprinkler  systems,  security access systems and
certain  HVAC  systems)  and any  additional  time-sensitive  software  that are
non-Y2K  compliant may recognize a date using "00" as the year 1900.  This could
result in system failures or miscalculations  which could cause personal injury,
property  damage,  disruption of operations,  and/or delays in payments from the
Company's  customers,  any or all of which could materially adversely effect the
Company's business, financial condition, cash flows or results of operations.

During the fourth  quarter of fiscal 1998,  the Company  implemented an internal
Y2K  compliance  task  force.  The goal of the task  force  is to  minimize  the
disruptions to the Company's business,  which could result from the Y2K problem,
and to minimize other  liabilities,  which the Company might incur in connection
with the Y2K  problem.  The task force  consists  of existing  employees  of the
Company,  and no new  employees  have been hired  specifically  to  address  the
Company's internal Y2K issues.

Since 1998,  the Company has been in the process of  conducting  a  company-wide
assessment  of its computer  systems and  operations  infrastructure,  including
systems being developed to improve business functionality,  to identify computer
hardware,  software, and process control

                                       12
<PAGE>

systems that are not Y2K compliant.  The Company presently  believes that all of
its business-critical computer systems, which were not Y2K-compliant,  have been
replaced, upgraded or modified.

The Company's financial  accounting software system was built in the 1980's on a
commercial database platform by Company employees. The Company has modified this
system to be Y2K  compliant.  The system has also been tested for Y2K compliance
by the vendor of the  platform on which the system  resides,  and the vendor has
concluded  that  the  Y2K  compliance  risks  associated  with  the  system  are
insignificant.

The Company's management systems, such as human  resources/payroll,  purchasing,
and classified document control, are separate off-the-shelf  commercial systems,
which are certified as Y2K compliant by the vendors of the systems.  The Company
has also  completed  certain  internal  testing of the Y2K  compliance  of these
systems and has found them to be Y2K compliant.

The Company has also initiated  communications with third parties whose computer
systems'  functionality could impact GRCI. These communications have facilitated
the  coordination  of Y2K  solutions  and have  permitted  GRCI to determine the
extent to which the Company may be  vulnerable  to failures of third  parties to
address  their own Y2K issues.  However,  as to the systems of the third parties
that are linked to GRCI, in particular those of the U.S.  Government,  there can
be no guarantee  that such systems that are not now Y2K compliant will be timely
converted to Y2K compliance.

The Company is also  assessing  any potential  Y2K-related  exposure it may have
with  respect to software or hardware it has  delivered  to its  customers.  The
assessment  is almost  complete  with no  indication  of material  liability  or
exposure.

The costs of the  Company's  Y2K  compliance  efforts are being funded with cash
flows from  operations.  As normal  business  costs,  these costs are  generally
reimbursable by the government under the Company's government  contracts,  under
present regulations.  In total, these costs are not expected to be substantially
different  from the  normal,  recurring  costs  that are  incurred  for  systems
development,  implementation and maintenance.  As a result,  these costs are not
expected  to have a  material  adverse  effect  on  GRCI's  overall  results  of
operations or cash flows.

Additionally,  there  can  be  no  guarantee  that  third  parties  of  business
importance to GRCI, in particular the U.S.  Government,  will  successfully  and
timely  reprogram  or replace,  and test,  all of their own  computer  hardware,
software and process  control  systems.  Because the  majority of the  Company's
business  is  contracted  with  the U.S.  Government,  the  failure  of the U.S.
Government  to achieve Y2K  compliance by the year 2000 could have a significant
adverse effect on GRCI's business, financial position, results of operations and
cash flows.

The Company has completed its Y2K contingency plan. The Company will continue to
modify this plan periodically prior to January 1, 2000 as additional information
is received.  The Company believes there are two significant  areas of potential
risk  to its  financial  position  as a  result  of the  Y2K  issue.  The  first
significant  area of risk  is the  result  of the  Company's  dependence  on the
ability of the U.S.  Government to meet its  obligation to pay all invoices in a
timely manner.  The Company has in place a revolving credit line which currently
has approximately $15 million of additional borrowing capacity that is available
to cover the effect on working capital  requirements of delays that may occur in
the  processing  of  payments by U.S.

                                       13
<PAGE>

Government  paying offices.  The Company  believes the borrowing  capacity to be
sufficient, but the interest cost related to such payment delays would adversely
effect  the  Company's  earnings.  The  second  significant  area of risk is the
delivery of public utilities to its facilities.  The Company has developed plans
to accommodate  minor  interruptions  in these  services,  but will be unable to
avoid negative financial impact should such interruptions be extensive.

The  foregoing  assessment  of the impact of the Y2K problem on GRCI is based on
management's best estimates at the present time, and could change substantially.
The assessment is based upon numerous assumptions as to future events. There can
be no guarantee  that these  estimates will prove  accurate,  and actual results
could differ from those estimated if these assumptions prove inaccurate.

                                       14
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                           PART II - OTHER INFORMATION


Items 1, 2, 3, 4 and 5 are inapplicable.
---------------------------------------

Item 6(a) Exhibits.
------------------

         Exhibit No.       Description
         ----------        -----------

            3.2            Amended and Restated Bylaws

            11             Statement of Computation of Earnings Per Share

            27             Financial Data Schedule

Item 6(b) Reports on Form 8-K.
-----------------------------

During the quarter  ended  September  30, 1999,  the Company filed a Form 8-K on
September 17, 1999,  relating to the  acquisition  of Management  Consulting and
Research, Inc. ("MCR").

Subsequent  to the end of the quarter,  the Company  filed a Form 8-K on October
26, 1999,  relating to the election of Dr.  Gerald R.  McNichols to its board of
directors.

Also, on November 12, 1999,  the Company  amended its previous Form 8-K relating
to the MCR acquisition, to add certain financial information.

                                       15
<PAGE>

                                   SIGNATURES
                                   ----------


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


                                      GRC INTERNATIONAL, INC.



                                      By: /s/ James P. Allen
                                          --------------------------------------
                                          James P. Allen
                                          Senior Vice President, Chief Financial
                                            Officer and Treasurer

November 15, 1999