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Letter of Correspondence

 July 22, 2005

 Mr. Craig Wilson

 Senior Assistant Chief Accountant

 United States Securities and Exchange Commission

 Washington, DC 20549

Re:

Telos Corporation

Form 10-K for Fiscal Year Ended December 31, 2004

Filed April 18, 2005

File No. 001-08443

Form 10-Q for Fiscal Quarter Ended March 31, 2005

Filed May 16, 2005

File No. 001-08443

 Dear Mr. Wilson:

 Telos Corporation is pleased to provide the following responses to your comment letter dated
June 14, 2005 requesting additional information concerning the above-referenced filings. To facilitate your review we have included your numbered comments followed by our responses.

 Form 10-K for the year ended December 31, 2004

 Management Discussion and Analysis of Financial Condition and Results of Operations, page 8

 Results of Continuing Operations, page 10

 Years ended December 31, 2004, 2003 and 2002, page 10

 Cost of sales, page 10

1.
We note your disclosure that your 2003 cost of sales included a credit of $1.1 million settlement received in July 2003, as a result of litigation against a former business partner.
Please expand on this litigation settlement and why you considered it appropriate to classify this in cost of sales.

 The $1.1 million settlement is comprised of two items, a cash payment of $825,000 and forgiveness of Telos indebtedness by the settling party in the
amount of $245,000. The underlying basis for the litigation determined the treatment of this settlement as cost of sales. The Company incurred significant costs per the terms and conditions of the agreement in which the business partner failed to
provide the Company with the opportunity to recover such costs by its failed performance to select the Company to provide services on future contracts. Such costs were originally classified as cost of sales.

 Liquidity and Capital Resources, page 11

2.
MD&A should consider enhanced analysis and explanation of the sources and uses of cash and material changes in particular items underlying the major captions reported in their
financial statements, rather than recitation of the items in the cash flow statements. Specifically explain the reasons for the significant increase in billed accounts receivable at December 31, 2004. Discuss any changes in payment terms or credit
terms, as applicable. Tell us how you considered the guidance in Section IV of Release No. 34-48960 regarding your MD&A disclosures.

 For the year ended December 31, 2004, there were no material changes in either payment terms or credit
terms for any customers that would produce a significant increase in billed accounts receivable (A/R). The guidance in Release No. 34-48960 (Section IV.B.1.) suggests that companies should address material changes in the underlying drivers of cash
flows. However, the increase in A/R was due primarily to the timing of cash receipts on two specific contracts, neither of which was unusual or significant to the Company’s normal business operations, other than the fact that they both were
coincidentally outstanding as of the balance sheet date. This large increase in A/R was also offset, in terms of working capital, by a corresponding increase in the liabilities associated with purchasing equipment with the intent to resale.
Accordingly, there did not appear to have been any material effect on liquidity or working capital, and the increase was therefore not indicative of a change or trend.

 Consolidated Financial Statements

 Consolidated Statements of Operations, page 18

3.
We note in your disclosures that you have service and product revenue. You should separately present revenue from the sales of products and services on the face of the income
statement. See Regulation S-X, Article 5-03(b)(l) and (2). The costs relating to each type of revenue similarly should be reported separately on the face of the income statement. We note similar disclosures within your Form 10-Q filed on May 16,
2005.

 In the past, the Company viewed its
various revenue streams from a ‘customer solutions’ perspective. Under a ‘solutions’ approach, the discrete components of a purchased solution, such as products and labor, and the mix of these components, were considered less
significant than the final delivered solution. Accordingly, the Company managed its business by the major business lines, as reported in the segment disclosures. As such, the Company’s accounting system was not designed to delineate types of
revenue. Based upon our review of the facts and in discussions with those presently familiar with past practices, it appears the Company made the decision, upon the advice and with the concurrence of the external auditors at that time, to present
revenue as one line item.

 Beginning with the third
quarter of 2004, with the implementation and capability of Deltek’s Costpoint accounting system, the Company now has the ability to separately account for product and services revenue, and will accordingly report such items separately in the
future at such time as such comparable information is available for all periods presented. The single-line presentation was maintained in the 2004 filing, so as to provide comparability between the periods and in recognition of the unduly burdensome
nature of separately reconstructing revenue from products and services. Separation of the revenue types would require an analysis of thousands of sales orders executed in the time periods presented, as well as a complete analysis of the associated
costs. In addition, segment disclosures provide relevant information on a ‘customer solutions’ basis that, in our view, adequately informs the user of the financial statements.

 Note 1. Summary of Significant Accounting Policies, page 24

 Revenue Recognition, page 24

4.
Your revenue recognition policy disclosures should reference the appropriate accounting principles. See APB No. 22, paragraph 12. In this regard, you should indicate the accounting
literature that is applicable to your various revenue generating arrangements. For each type of revenue generating activity (i.e., integration services, products, integration, support services, software arrangements) describe your accounting
and refer to the authoritative accounting literature you apply. Clarify whether you follow the guidance in SOP 97-2, SAB 104, and/or EITF 00-21 for each type of activity and explain the basis for that conclusion.

 The Company’s current disclosure generally references the principles
the Company applies for different types of contracts and the Company segregates its revenue

recognition under a separate heading within the summary of significant accounting policies. The Company does not, however, reference any specific
accounting literature. Future filings will provide more detail in referencing appropriate accounting principles for revenue recognition.

 Revenues are recognized in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements, as amended by SAB 104, Revenue Recognition. The Company considers amounts to be earned upon evidence that an arrangement has been obtained, services are delivered, fees are fixed or
determinable, and collectibility is reasonably assured. Additionally, revenues on arrangements requiring the delivery of more than one product or service are recognized in accordance with EITF 00-21, Accounting for Revenue
Arrangements with Multiple Deliverables, except as the pronouncement states, on contracts where higher-level GAAP (either SOP 81-1 or SOP 97-2 as described below) prevails.

 The Company recognizes revenues for software arrangements upon persuasive
evidence of an arrangement, delivery of the software, and determination that collection of a fixed or determinable license fee is probable. Revenues for software licenses sold on a subscription basis are recognized ratably over the related license
terms. For arrangements where the sale of software licenses is bundled with other products, including software products, upgrades and enhancements, post-contract customer support (“PCS”), and installation, the relative fair value of each
element is determined based on vendor-specific objective evidence (“VSOE”). VSOE is defined by Statement of Position 97-2, Software Revenue Recognition (“SOP 97-2”), and Statement of Position
98-9, Modification of SOP 97-2, Software Revenue Recognition With Respect to Certain Transactions (“SOP 98-9”), and is limited to the price charged when the element is sold separately or if the element is
not yet sold separately, the fair value assigned under the residual method or the price set by management having the relevant authority. If VSOE does not exist for the allocation of revenue to the various elements of the arrangement, all revenue
from the arrangement is deferred until the earlier of the point at which (1) such VSOE does exist or (2) all elements of the arrangement are delivered. PCS revenues, upon being unbundled from a software license fee, are recognized ratably over the
PCS period.

 Substantially all of the Company’s
contracts are contracts with the United States Government involving the complex delivery of technology products and services. Accordingly, these contracts are within the scope of the AICPA’s Audit and Accounting Guide for
Audits of Federal Government Contractors. To the extent contracts are incomplete at the end of an accounting period, revenue is recognized on the percentage of completion method using costs incurred in relation to
total estimated costs.

 5. You indicate that you record
revenues from fixed-price services contracts using the percentage-of-completion method of accounting. Tell us more about the nature of your service contracts and explain why you believe it is appropriate to use contract accounting for those
arrangements. In this regard, footnote 1 of SOP 81-1 indicates that SOP 81-1 is not intended to apply to service transactions.

 Approximately 88% of the Company’s contracts are fixed price contracts that involve the complex delivery of technology products and services.
Comparing the Company’s disclosures to the disclosures of its competitors, the Company believes that its contracts are most aptly described in terms of complex solutions contracts, such as engineering (for instance, CACI’s disclosure
reads: “A significant portion of the Company’s fixed price-completion contracts involve the design and development of complex, client systems. For these contracts that are within the scope of Statement of Position 81-1,
Accounting for Performance of Construction-Type and Certain Production-Type Contracts (“SOP 81-1”), revenue is recognized on the percentage of completion method using costs incurred in relation to total
estimated costs.”) As the Company’s business is similar to that of its competitors (complex delivery of products and services as technology solutions), the Company suggests replacing the word ‘services’ with enhanced descriptions
of its technology solutions for all future filings.

 Regarding the application of SOP 81-1 to the Company’s business, Chapter 3 (paragraph 3.02) of
AICPA Audit and Accounting Guide for Audits of Federal Government Contractors, states, in part –

 “Revenue generally is recognized when the activity surrounding the sale of products or rendering of services is complete or virtually complete and
an exchange has taken place. However, revenue is sometimes recognized as performance progresses. This exception is based on the consensus that a better measurement of periodic income results. Chapter 11, section A, paragraph 13, of ARB No. 43,
Government Contracts, states…

 It is, however, a generally accepted accounting procedure to accrue revenues under certain types of contracts and thereby recognize profits, on the basis of partial performance, where the circumstances are such
that total profit can be estimated with reasonable accuracy and ultimate realization is reasonably assured. Particularly where the performance of a contract requires a substantial period of time from inception to completion, there is ample precedent
for pro rata recognition of profit as the work progresses, if the total profit and the ratio of the performance to date to the complete performance can be computed reasonably and collection is reasonably assured. Depending upon the circumstances,
such partial performance may be established by deliveries in installments or the performance of services… “

 Substantially all of the Company’s contracts are contracts with the United States Government involving the complex delivery of technology products
and services. Accordingly, these contracts are within the scope of the AICPA’s Audit and Accounting Guide for Audits of Federal Government Contractors. To the extent contracts are incomplete at the end of an
accounting period, revenue is recognized on the percentage of completion method using costs incurred in relation to total estimated costs.

6.
Your accounting policy disclosures should clearly indicate how multiple element arrangements impact revenue recognition and how you apply EITF 00-21 and/or SOP 97-2 to your
arrangements. In this regard, it appears that your individual arrangements include multiple elements. Clearly identify the different elements included in your contractual arrangements, clarify how you allocate fair value to each element and refer to
the accounting literature that supports your accounting. If some of your arrangements have deliverables that are subject to the scope of more than one higher-level of literature (e.g., SOP 81-1 or SOP 97-2) explain how your accounting is consistent
with the guidance in EITF 00-21.

 Revenues
are recognized in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, as amended by SAB 104, Revenue Recognition. The Company
considers amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectibility is reasonably assured. Additionally, revenues on arrangements requiring the delivery of more
than one product or service are recognized in accordance with EITF 00-21, Accounting for Revenue Arrangements with Multiple Deliverables, except as the pronouncement states, on contracts where higher-level GAAP
(either SOP 81-1 or SOP 97-2 as described below) prevails.

 The Company recognizes revenues for software licenses upon persuasive evidence of an arrangement, delivery of the software, and determination that collection of a fixed or determinable license fee is probable.
Revenues for software licenses with limited terms are recognized ratably over the related license terms. For arrangements where the sale of software licenses is bundled with other products, including software products, upgrades

and enhancements, post-contract customer support (“PCS”), and installation, the relative fair value of each element is determined based on
vendor-specific objective evidence (“VSOE”). VSOE is defined by Statement of Position 97-2, Software Revenue Recognition (“SOP 97-2”), and Statement of Position 98-9, Modification of SOP 97-2,
Software Revenue Recognition With Respect to Certain Transactions (“SOP 98-9”), and is limited to the price charged when the element is sold separately or, if the element is not yet sold separately, the
fair value assigned under the residual method or the price set by management having the relevant authority. If VSOE does not exist for the allocation of revenue to the various elements of the arrangement, all revenue from the arrangement is deferred
until the earlier of the point at which (1) such VSOE does exist or (2) all elements of the arrangement are delivered. PCS revenues, upon being unbundled from a software license fee, are recognized ratably over the PCS period.

 Substantially all of the Company’s contracts are contracts with the
United States Government involving the complex delivery of technology product