SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D. C. - 20549
                        _________________________
                                FORM 10-Q

(Mark One)
* QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
  ACT OF 1934 
For the Quarterly Period Ended September 27, 1996
OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  
  ACT OF 1934

For the transition period from  to  

                       Commission File No. 0-12588
                        _________________________
                         GILBERT ASSOCIATES, INC. 
         (Exact name of registrant as specified in its charter)



  Delaware                           23-2280922  
(State of Incorporation)           (IRS Employer
                                    Identification No.)
 P.O. Box 1498, Reading, Pennsylvania              19603  
(Mailing address of principal executive offices) (Zip Code)


                                   (610) 856-5500
                (Registrant's telephone number, including area code) 
                            _________________________

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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  

                                              Class A        Class B 
Number of shares of each class of
common stock outstanding as of
September 27, 1996 (excluding 2,615,633
Class A treasury shares):                   5,905,368        464,299

<PAGE>

GILBERT ASSOCIATES, INC. AND SUBSIDIARIES
INDEX

Part I.  Financial Information Pages

Item I.

 Consolidated Condensed Balance Sheets at
  September 27, 1996 and December 29, 1995 (unaudited) 

 Consolidated Condensed Statements of Operations for the
  nine month and three month periods ended September 27, 1996
  and September 29, 1995 (unaudited) 

 Consolidated Condensed Statements of Cash Flows
  for the nine month periods ended September 27, 1996
  and September 29, 1995 (unaudited) 

 Notes to Consolidated Condensed Financial Statements 

Item II.

 Management's Discussion and Analysis of Results of
  Operations and Financial Condition 


Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K 

Signatures  

<PAGE>
<TABLE>
 GILBERT ASSOCIATES, INC. AND SUBSIDIARIES            
 Consolidated Condensed Balance Sheets           
 (Unaudited)           
                                              Sept. 27, 1996      Dec. 29, 1995    
 <S>                                          <C>                 <C> 


 ASSETS           
          
 Current assets:           
 Cash and cash equivalents                     $   4,335,000      $   8,674,000     
 Accounts receivable, net of allowance            
   for doubtful accounts of $1,702,000 and            
   $2,005,000, respectively                       26,893,000         24,717,000     
 Unbilled revenue                                  6,570,000         10,086,000     
 Inventories                                      14,197,000         11,548,000     
 Deferred income taxes                             3,860,000          5,860,000     
 Other current assets                              4,833,000          4,601,000     
                                                  ----------         ----------
  Total current assets                            60,688,000         65,486,000     
                                                  ----------         ----------          

 Property, plant and equipment, at cost           77,630,000         77,826,000     
 Less accumulated depreciation and           
   amortization                                   33,112,000         33,855,000     
                                                  ----------         ----------           
                                                  44,518,000         43,971,000     
                                                  ----------         ----------

 Deferred income taxes                               605,000            605,000     
 Other assets                                      1,279,000          1,320,000     
 Intangible assets                                34,317,000         33,962,000     
                                                 -----------        -----------
  Total Assets                                 $ 141,407,000      $ 145,344,000     
                                                 ===========        ===========
          

 LIABILITIES & STOCKHOLDERS' EQUITY           
             
 Current liabilities:           
 Accounts payable                              $   6,727,000      $   5,143,000     
 Salaries and wages                                4,512,000          4,158,000     
 Income taxes                                      2,265,000          1,670,000     
 Estimated liability for contract losses           3,032,000          3,171,000     
 Contractual billings in excess of           
    recognized revenue                               477,000            639,000     
 Other accrued liabilities                        10,473,000         16,196,000     
                                                  ----------         ----------
  Total current liabilities                       27,486,000         30,977,000     
                                                  ----------         ----------

 Long-term debt                                    1,163,000          2,226,000     
 Other long-term liabilities                       6,994,000          7,068,000     
 Self-insured retention                            2,464,000          2,592,000     
 Commitments and contingencies                          -                  -    
          
Stockholders' equity:          
 Common stock                                      8,985,000          8,985,000     
 Capital in excess of par value                   38,098,000         38,492,000     
 Deferred compensation - restricted stock           (416,000)              -    
 Retained earnings                                96,553,000         95,507,000     
 Treasury stock                                  (39,920,000)       (40,503,000)    
                                                 -----------        -----------
                                                 103,300,000        102,481,000     
                                                 -----------        -----------

  Total Liabilities and Stockholders' Equity   $ 141,407,000      $ 145,344,000     
                                                 ===========        ===========          


 The accompanying notes are an integral part of the consolidated condensed financial           
 statements.           
          
          
</TABLE>
<PAGE>          

<TABLE>
          
 GILBERT ASSOCIATES, INC. AND SUBSIDIARIES            
 Consolidated Condensed Statements of Operations           
 (Unaudited)           
          
          
                                       Nine Months Ended                 Three Months Ended   
                                Sept. 27, 1996   Sept. 29, 1995   Sept. 27, 1996   Sept. 29, 1995  
 <S>                             <C>              <C>              <C>              <C>
          
 Total revenue                   $ 134,663,000    $ 148,612,000    $  46,502,000    $  40,888,000  
          
 Costs and expenses:           
  Cost of revenue                  102,244,000      112,611,000       35,361,000       31,273,000  
  Selling, general and            
   administrative expenses          25,633,000       30,429,000        7,975,000        7,903,000  
                                   -----------      -----------       ----------       ----------
 Total costs and expenses          127,877,000      143,040,000       43,336,000       39,176,000  
                                   -----------      -----------       ----------       ----------
 Income before gain on sale of           
  subsidiary and provision          
  for taxes on income                6,786,000        5,572,000        3,166,000        1,712,000  
          
 Gain on sale of subsidiary               -          26,542,000             -                -   
                                     ---------       ----------        ---------        ---------
 Income before provision for           
  taxes on income                    6,786,000       32,114,000        3,166,000        1,712,000  
          
 Provision for taxes on income       2,590,000       10,168,000        1,210,000          713,000  
                                     ---------       ----------        ---------          ------- 
 Net income                      $   4,196,000    $  21,946,000    $   1,956,000    $     999,000  
                                     =========       ==========        =========          =======       
 Per share of common stock:           
          
  Net income                             $0.67            $3.28            $0.31            $0.16 
          
  Cash dividends                         $0.50            $0.60            $0.10            $0.20 
          
 Average number of shares of common            
  stock outstanding                  6,293,186        6,692,720        6,304,746        6,279,366  
          
          
 The accompanying notes are an integral part of the consolidated condensed
 financial statements.           
</TABLE>
          
<PAGE>

<TABLE>
 GILBERT ASSOCIATES, INC. AND SUBSIDIARIES         
 Consolidated Condensed Statements of Cash Flows        
 (Unaudited)        
                                                              Nine Months Ended    
                                                           Sept. 27,       Sept. 29,   
                                                                1996            1995 
                                                                <C>             <C>
 <S>                                 

 Cash flows from operating activities:        
       
  Net income                                            $  4,196,000   $  21,946,000   
  Adjustments to reconcile net income to net        
   cash provided by operating activities:       
      Gain on sale of Gilbert/Commonwealth, Inc.                -        (26,542,000)  
      Items not affecting cash                             6,119,000       5,712,000   
      Changes in current assets and current liabilities   (4,718,000)     (3,203,000)  
      Other, net                                            (236,000)        245,000   
                                                           ---------       ---------
  Net cash provided by(used for) operating activities      5,361,000      (1,842,000)  
                                                           ---------       ---------
 Cash flows from investing activities:        
       
  Payments for acquisition of XEL Corporation               (954,000)           -    
  Net increase in short-term investments                        -        (28,974,000)  
  Proceeds from sale of Gilbert/Commonwealth, Inc.              -         45,932,000   
  Payments for property, plant and equipment              (4,930,000)     (2,250,000)  
  Proceeds from sale of property, plant        
   and equipment                                             912,000            -    
                                                           ---------      ----------    
  Net cash provided by(used for) investing activities     (4,972,000)     14,708,000   
                                                           ---------      ----------
 Cash flows from financing activities:        
       
  Payments under note payable                                   -         (2,000,000)  
  Issuance of treasury stock in connection       
     with stock option, award and purchase         
     plans                                                   341,000         793,000   
  Payments to acquire treasury stock                        (583,000)     (9,423,000)  
  Cash dividends paid                                     (3,150,000)     (4,040,000)  
  Payments of long-term debt                              (1,134,000)        (83,000)  
  Other, net                                                (202,000)       (247,000)  
                                                           ---------      ----------   
  Net cash used for financing activities                  (4,728,000)    (15,000,000)  
                                                           ---------      ----------
  
 Net decrease in cash and cash equivalents                (4,339,000)     (2,134,000)  
       
 Cash and cash equivalents at beginning of period          8,674,000       7,427,000   
                                                           ---------       ---------
 Cash and cash equivalents at end of period             $  4,335,000    $  5,293,000   
                                                           =========       =========
 Supplemental cash flow disclosure:        
   Income taxes paid, net of refunds received           $     (5,000)   $  5,762,000   
                                                           =========       =========

The accompanying notes are an integral part of the consolidated condensed financial        
statements.       
       
</TABLE>
<PAGE>       

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

1. The financial statements furnished herein reflect all adjustments which are, 
in the opinion of management, necessary for a fair presentation of financial 
position and results of operations for the interim periods.  Such adjustments 
are of a normal recurring nature.  The consolidated condensed financial 
statements have been reclassified to conform with current year presentation.

2. Net income per share of common stock was determined using the average number 
of Class A and Class B shares outstanding.  Earnings per share are computed 
independently for each of the quarters presented.  Therefore, the sum of the 
quarterly earnings per share in 1995 does not equal the total computed for 
the year due to the timing of stock repurchases throughout the nine-month 
period ended September 29, 1995 and the large gain relative to the G/C sale.  
The effect on net income per share resulting from dilution upon exercise of 
outstanding stock options and restricted stock is not material, and therefore 
is not shown.
 An amendment to the Company's Certificate of Incorporation was approved 
during the second quarter of 1996 to reduce the number of authorized shares 
from 24,000,000 shares to 11,000,000 shares, 10,000,000 shares of which
are common stock and 1,000,000 shares of which are preferred stock.  No 
preferred stock was outstanding as of September 27, 1996.

3. During the second quarter of 1996, several key employees were issued an 
aggregate of 34,500 shares of restricted stock in the Company.  The value of 
this stock is recorded as deferred compensation in the stockholders' equity 
section of the consolidated condensed balance sheets, and will be expensed 
over the vesting period.  The vesting period will not exceed 10 years and may 
be accelerated depending upon the achievement of certain objectives.

4. Business segment information:
                        Three Months Ended              Nine Months Ended  
                 Sept. 27, 1996  Sept. 29, 1995  Sept. 27, 1996  Sept. 29, 1995 
In (000's)
Revenues:
 Technical Services     $22,288         $27,074        $ 65,538        $107,371
 Telecommunication       21,939          11,268          62,579          35,087
 Real Estate              2,295           1,617           6,582           4,665
 Other                      (20)            929             (36)          1,489
                         ------          ------         -------         ------- 
                        $46,502         $40,888        $134,663        $148,612
                         ======          ======         =======         =======
Operating Profit:
 Technical Services     $ 1,199         $ 1,456         $ 3,592        $  5,078
 Telecommunication        2,209           1,278           5,054           4,323
 Real Estate                673             143           1,840             305
 Other                     (915)         (1,165)         (3,700)         (4,134)
                          -----           -----           -----           -----
                        $ 3,166         $ 1,712         $ 6,786        $  5,572
                          =====           =====           =====           =====

 Segment operating profit is total revenue less operating expenses, including 
intangible amortization, and excludes interest expense, general corporate 
expenses and interest income.  Other operating profit includes a $700,000 
positive adjustment associated with a favorable legal settlement.  See Note 
10 for further information.

5. Under terms of a loan agreement, agented by CoreStates Bank, N.A., the 
Company has a working capital line of credit of $28,000,000 and an 
acquisition line of credit of $42,000,000, of which up to $5,000,000 could be 
used for additional working capital.  The agreement requires maintenance of 
certain financial covenants, and the Company pays a commitment fee of one-
eighth of one percent on the unused portion of the lines.
 The working capital line of credit is available through April 30, 1997.  At 
September 27, 1996, $8,743,000 was not committed for stand-by letters of 
credit or other reservations.  This amount increased to $26,743,000 as a 
result of the settlement discussed in Note 9.
 The acquisition line of credit is available through May 29, 1998.  Any 
balance outstanding at that time will convert to a term loan and be amortized 
in equal principal payments over the following 60 months.
 Interest charges will be based, at the Company's option, on a function of 
either LIBOR or the Prime Rate.

6. The components of inventories as of the balance sheet dates are as follows:

                   Sept. 27, 1996     Dec. 29, 1995
Raw material          $ 8,224,000       $ 6,789,000
Work in process         2,174,000         1,732,000
Finished goods          3,799,000         3,027,000
                       ----------        ----------
                      $14,197,000       $11,548,000
                       ==========        ========== 

7. Other accrued liabilities includes an accrual relating to workers' 
compensation of $2,163,000 and $2,282,000 at September 27, 1996 and December 
29, 1995, respectively.  Also included in other accrued liabilities at 
December 29, 1995, is a reserve of $2,200,000 for costs associated with a 
claim that was settled during the third quarter of 1996 and is more fully 
discussed in Note 10.

8. On September 30, 1996, the Company acquired the assets of SAFCO's
Electronic Systems Division (ESD).  Terms of the acquisition call
for the Company to pay SAFCO shareholders approximately $5 
million in cash at closing (subject to certain adjustments), issue 
approximately $25 million in notes payable and issue 7 year warrants 
exercisable to purchase 555,555 shares of the Company's stock at $18 per 
share.  Of the $25 million in notes payable, $15 million is to be paid in 
early 1997 and the remaining $10 million is to be paid over a 5 year term.  
The $10 million note carries a 7% coupon rate.  Also, under the terms of the 
agreement, the Company will pay SAFCO shareholders additional incremental 
amounts through 1999 based upon the achievement of certain revenue and 
operating income levels.  Any additional payments will increase goodwill.
 In connection with the ESD acquisition, $10,300,000, net of $6,500,000 income 
tax benefit, of in-process research and development costs will be expensed 
during the fourth quarter of 1996.  The purchased in-process research and 
development had not yet reached technological feasibility and the technology 
had no alternative future use as of the date of closing.
 The following unaudited consolidated condensed pro forma statement of 
operations for the nine month periods ended September 27, 1996 and September 
29, 1995 include SAFCO as if it had been acquired at the beginning of each of 
the respective periods:
                         Sept. 27, 1996         Sept. 29, 1995
Revenue                    $147,362,000           $157,357,000
Net income                   $4,149,000            $20,571,000
Net income per average 
  shares outstanding               $.66                  $3.07

 The pro forma statement of operations includes adjustments for elimination of 
interest income on cash used in the acquisition, interest expense and 
amortization of intangible assets.  The pro forma statement of operations
exclude the $10,300,000 in-process research and development write-off
discussed in Note 8.  Historically, SAFCO has been highly 
seasonal with up to 40% and 65% of its revenues and operating income, 
respectively, generated in the last quarter of the calendar year.

9. On October 18, 1996, the Company announced the settlement of a $12,000,000 
trial court verdict against the Company and Gilbert/Commonwealth, Inc. of 
Michigan relative to a dispute concerning construction management work 
performed by the former subsidiary of Gilbert/Commonwealth, Inc. (G/C) in 
1987 for Alaska-based Homer Electric Association.  Terms of the settlement 
call for the Company to be released from all liabilities in exchange for 
assignment of the Company's insurance rights to the Plaintiffs.  As a result 
of this settlement, the Alaska Trial Court released the $15,300,000 security 
bond previously posted by the Company.  This settlement had no impact on the 
Company's results of operations.

10. During the third quarter of 1996, the Company settled a claim filed by a 
former employee of a subsidiary which was closed in 1988.  The settlement 
resulted in an increase in net income of $435,000, net of income taxes of 
$265,000, or $.07 per share.

11. On October 27, 1995, the Company acquired all of the outstanding capital 
stock of XEL Corporation (XEL).  As part of the stock purchase agreement, the 
Company paid XEL shareholders approximately $954,000 in the first quarter of 
1996.  Also, under the terms of the agreement, the Company will pay XEL 
shareholders additional incremental amounts through 1998 based upon the 
achievement of certain earnings and revenue objectives.  Any additional 
amounts will increase goodwill. 

12. On June 16, 1995, the Company's Class B shareholders approved the sale of 
the Gilbert/Commonwealth, Inc. (G/C) subsidiary to The Parsons Corporation 
(Parsons) and on June 20, 1995, the Company completed the sale for a total 
purchase price of $45,932,000.  The sale of G/C resulted in a $18,742,000 
gain, net of income taxes of $7,800,000, or $2.74 per share.  The tax benefit 
of a $8,758,000 capital loss carryforward, for which a valuation allowance 
was previously recorded, was recognized to reflect utilization of the 
carryforward associated with this transaction.
 As part of the agreement, the buyer has signed a ten year lease with the 
Company for 200,000 square feet of office space.  The consolidated condensed 
statements of operations exclude the results of G/C subsequent to March 31, 
1995, the effective date of sale pursuant to the agreement with Parsons.


<PAGE>
Management's Discussion and Analysis of Results of Operations and 
Financial Condition

Results of Operations

Year to Date - 1996 vs. 1995

During the third quarter of 1996, the Company settled a claim filed by 
a former employee, for which it had reserved approximately $2,200,000.  
The actual settlement was approximately $1,500,000.  Accordingly, the 
Company has reversed the remaining $700,000 reserve in the current 
quarter, increasing net income by $435,000, or $.07 per share.  Also, 
during the second quarter of 1995, the Company sold 
Gilbert/Commonwealth, Inc. (G/C) for $45,932,000, resulting in an 
increase to net income of $18,742,000, or $2.74 per share.  G/C's 
results of operations are excluded from the consolidated condensed 
statement of operations from April 1, 1995 forward.  This sales 
transaction is more fully discussed in Note 12.

Excluding the reversal related to the aforementioned settlement and 
the G/C sale mentioned above, net income and earnings per share for 
the first nine months of 1996 increased 17% and 25% respectively, 
compared to the same period of 1995.  The increases in net income and 
earnings per share are due primarily to higher operating profits 
within the Telecommunication and Real Estate segments and lower 
corporate expenses offset in part by reduced Technical Services profit 
and lower interest income.  The percentage changes in net income and 
earnings per share differed due to fewer shares outstanding.

Excluding the former employee settlement, income before gain on sale 
of subsidiary and provision for taxes on income increased 9% from the 
prior year.  The difference in the percentage increase in net income and 
income before gain on sale of subsidiary and provision for taxes on income is 
primarily due to a lower effective state tax rate.

Total revenue declined 9% in the first nine months of 1996 as compared 
to the same period of 1995 due primarily to the absence of G/C and 
United Energy Services Corporation (UESC), offset in part by higher 
revenue within the Telecommunication segment.  The Company decided to 
close UESC at the end of 1995.

Third Quarter - 1996 vs. 1995

Excluding the reversal related to the former employee settlement 
mentioned above, net income increased 52% and earnings per share 
increased 50% in the third quarter of 1996 as compared to the third 
quarter of 1995.  Excluding the former employee settlement, income 
before gain on sale of subsidiary and provision for taxes on income 
increased 44% in the third quarter of 1996 compared to the same 
quarter in 1995.  The difference in the percentage increase in net income 
and income before gain on sale of subsidiary and provision for taxes on 
income is primarily due to a lower effective state tax rate.  The 
increase in net income and earnings per share relates primarily to 
higher operating profit within the Telecommunication and Real Estate 
segments, offset in part by lower interest income, which in 1995 was 
higher due to the proceeds on the G/C sale.  Revenue increased 14% due 
primarily to higher revenue within the Telecommunication segment, 
offset in part by a decline within the Technical Services segment.

Telecommunications Segment

The Telecommunication segment's operating profit increased 17% on a 
revenue increase of 78% in the first nine months of 1996 as compared 
to the same period in 1995.  The gross profit percentage decreased 
from 38% for the nine month period of 1995 to 35% for the same period 
in 1996.  The increases in revenue and decreases in gross profit 
percentage relate primarily to the inclusion of XEL.  The increase in 
operating profit for the nine month period relates primarily to the 
inclusion of XEL.

For the current quarter, the Telecommunication segment's operating 
profit increased 73% on a revenue increase of 95% from the third 
quarter of 1995.  The increase in operating profit relates primarily 
to higher sales from GAI-Tronics and, to a lesser extent, inclusion of 
XEL.  The gross profit percentage decreased from 37% for the third 
quarter of 1995 to 35% in the current quarter.  The increase in 
revenue and decrease in gross profit relates primarily to the 
inclusion of XEL.

The gross profit percentages have changed from prior reports due to a 
reclassification of costs within the Telecommunication segment.

Technical Services Segment

The Technical Services segment operating profit declined 29%, with 
revenues down 39% in the first nine months of 1996 as compared to the 
same period last year.  The gross profit percentage declined from 19% 
in the first nine months of 1995 to 12% in the same period of 1996.  
These declines are primarily the result of the disposals of G/C and 
UESC mentioned above.

Revenues declined 18% and the gross profit percentage declined from 
15% in the third quarter of 1995 to 12% in the current quarter.  These 
declines relate primarily to the absence of UESC's operations in the 
current quarter.  Operating profit decreased 18% from the third 
quarter of 1995 as compared to the current quarter due primarily to 
the absence of UESC's operations.

The operating profits and revenue of the remaining units, Resource 
Consultants, Inc. (RCI) and SRA Technologies (SRA), decreased 5% and 
4%, respectively, in the first nine months of 1996 as compared to the 
same period in 1995.  The gross profit percentage on these units was 
12% for both nine month periods.

The current quarter operating profits of the remaining units decreased 
1% on a similar revenue decline of 1% from the third quarter of 1995.  
The gross profit percentage was 12% in both quarters.

Real Estate Segment

The Real Estate segment operating profit was $1,840,000 and $673,000 
for the first nine months and third quarter of 1996, respectively, as 
compared to $305,000 and $143,000 in the same periods of 1995.  The 
increases in operating profit are primarily due to revenue increases 
of 41% and 42% for the first nine months and current quarter 
respectively, when compared to the same periods in 1995, which in turn 
relate primarily to a higher rate of leased space.  The total square 
feet available for lease is approximately 550,000 of which 
approximately 94% was leased as of September 27, 1996.  Approximately 
8% is leased to related subsidiaries.  Although the Company has 
experienced improved results from the prior year in its real estate 
operations, it should be noted that the Company is currently 
evaluating its options for monetizing its real estate assets.

Other Income

Other income includes interest income of $242,000 and $73,000 for the 
nine and three month periods ended September 27, 1996, respectively, 
as compared to $1,219,000 and $590,000 in the same periods of 1995.  
Prior year interest income was higher due to increased cash balances 
as a result of the G/C sale.

Selling, General and Administration

Selling, general and administrative expenses decreased 16% from the 
first nine months of 1995 to the same period of 1996.  The large 
decline is primarily related to the absence of G/C and UESC, offset in 
part by the costs associated with XEL.  Research and development 
costs, which are included in selling, general and administrative 
expenses, increased from $2,369,000 in the first nine months of 1995 
to $5,523,000 for the same period in 1996.  The increase relates 
primarily to XEL.

For the current quarter, selling, general and administrative expenses 
increased 1% from the third quarter of 1995 as the costs associated 
with XEL were offset by the absence of UESC costs.  Research and 
development costs increased from $910,000 in the third quarter of 1995 
to $1,683,000 in the current quarter due to the addition of XEL.

Provision for Taxes on Income

Excluding the effect of the G/C sale, the provision for taxes on 
income decreased from an effective rate of 42% in the first nine 
months of 1995 to 38% in the same period of 1996.  The effective rate 
decreased from 43% in the third quarter of 1995 to 38% in the current 
quarter.  The decreases relate primarily to lower state taxes.

Liquidity and Capital Resources

Working capital decreased $1,307,000, or 4% in the first nine months 
of 1996.  Cash and cash equivalents decreased $4,339,000.  Amounts 
generated from operations, combined with the available cash and cash 
equivalents and lines of credit should provide adequate working 
capital to satisfy the contingent payments to former IAI principals 
and XEL shareholders.

Lines of credit with CoreStates Bank, N.A., are available to fund both 
short-term cash needs as well as future acquisitions.  These lines are 
more fully discussed in Note 5.

The Company estimates that its total capital expenditures in 1996, 
excluding acquisitions, will be approximately $8,000,000.  However, 
only $4,000,000 relates to ongoing operations.  The additional 
$4,000,000 will be used for one time real estate related expenditures.  
No restrictions on cash transfers between the Company and its 
subsidiaries exist.

Other

On June 5, 1996, the Board of Directors announced that the Company has 
begun to explore strategic options for its remaining units within the 
technical services segment.  Separate investment banking firms have 
been retained to develop strategies for both SRA and RCI.  Also, as 
previously disclosed, the Company is continuing to explore options for 
monetizing its real estate holdings.  Alternatives could include an 
outright sale, a spin-off or leveraging.

Upon completion of the foregoing, the Company will be focused on 
telecommunications.

Final decisions and the execution of plans for the three operations 
could take up to one year to complete.  In the interim, and until 
definite decisions are made, operations at SRA and RCI, along with the 
Company's real estate division, will continue normally and their 
results will be included in ongoing operations.

The Form 10-Q contains certain statements of a forward-looking nature 
relating to future events or the future financial performance of the 
Company.  Such statements are only predictions and involve risks and 
uncertainties, and actual events or performance may differ materially.  
Potential risks and uncertainties include, without limitation:  the 
effect of general economic conditions, the impact of competitive 
products, services and pricing, and demand and market acceptance risks 
of current and new products and services; the Company's ability to implement 
strategic options for SRA, RCI and its real estate holdings, and the
timing thereof; with respect to the Technical Services segment, its
dependence on the U.S. government as a customer; and with respect 
to the Telecommunication segment, the uncertain effect of the
Telecommunications Act of 1996, technology change, and risks of product
development and commercialization difficulties.  Further information on the
factors that could affect the future financial performance of the Company
are included in the Company's Form 8-K filed with the Securities and
Exchange Commission on July 8, 1996.


<PAGE>
Part II.  Other Information 


Item 1.  Legal Proceedings
The Company announced the settlement of a $12,000,000 trial court judgement 
against the Company.  This is more fully discussed in Note 9 to the 
consolidated condensed financial statements in Part I.

 
Item 6.  Exhibits and Reports on Form 8-K
 (a) Exhibits
   Restated Certification of Incorporation filed with the 
State of Delaware on September 20, 1996.
 
 (b) Reports on Form 8-K:
   The Company filed Form 8-K on July 8, 1996 regarding the 
"safe habor" provision of the Private Securities 
Litigation Reform Act of 1995.
  


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.
      GILBERT ASSOCIATES, INC.

     /s/Paul H. Snyder 
     Paul H. Snyder
     Vice President and 
     Chief Financial Officer

Date: November 8, 1996

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