SecProbe.io

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Room 4561
August 25, 2005

via U.S. mail

Charles K. Narang
Chairman and Chief Executive Officer
NCI, Inc.
11730 Plaza America Drive
Reston, Virginia 20190

      Re:	NCI, Inc.
      Registration Statement on Form S-1
      Filed July 29, 2005
		File No. 333-127006

Dear Mr. Narang:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General
1. We will process your amendments without price ranges.  Since
the
price range triggers a number of disclosure matters, we will need
sufficient time to process the amendment when it is included.
Please
understand that its effect on disclosure throughout the document
may
cause us to raise issues on areas not previously commented upon.
Please note that when you file a pre-effective amendment that
includes your price range, it must be bona fide.  We interpret
this
to mean that your range may not exceed $2 if you price below $20
and
10% if you price above $20.
2. We also note that you intend to provide several of your
exhibits,
including the opinion of counsel, to your registration statement
in
your next amendment.  Similar to our preceding comment, we will
need
a reasonable period of time to review these exhibits as well as
all
disclosure in the registration statement that you modify or add as
a
result of this new information.  We may have additional comments
after reviewing this additional information.
3. We note numerous spaces throughout your registration statement
for
information that you are not entitled to omit under Rule 430A.
Fill
in all blanks throughout the registration statement prior to
effectiveness except for the specific information that you are
allowed to omit.  See Section II.A.7 of SEC Release 33-6714.
Also,
confirm that you have not circulated copies of the registration
statement and will not circulate such copies until you include an
estimated price range and maximum number of shares, and all other
information except information you may exclude in reliance upon
Rule
430A.
4. Revise the disclosure throughout your registration statement to
either define various industry specific terms and phrases having
meanings not overtly obvious or discernible from the context or
provide a reference to that portion of your registration statement
that provides such clarification.  For example, supplement your
disclosure to define or provide a cross-reference to the
following:
* government wide acquisition contracts, or GWACs;
* sensitive compartmentalized information facilities, or SCIFs;
* best value awards;
* multiple award contracts;
* prime contractor;
* indefinite delivery/indefinite quantity, or ID/IQ;
* funded and unfunded backlogs, e.g. as used in the narrative
found
under the risk factor subheading "We cannot guarantee that our
estimated contract backlog...";
* GSA schedule contracts; and
* blanket purchase agreements.

Inside Front Cover Page
5. Please provide us with any artwork or graphics that you intend
to
use.  Provide us with sufficient time to review and comment on
these
graphics.  Inside front cover graphics should be clear
illustrations
of your product or business with concise language describing the
illustrations.  See Corporation Finance Current Issues Outline,
March
31, 2001 Quarterly Update, Section VIII.

Summary, page 1
6. Please provide a basis for your statement that you are a
"leading"
provider of information technology services and solutions to U.S.
federal government agencies.
7. Please explain the basis for your statement that your contract
base is diversified given the statistics you provide on pages 1
and
23 that indicate that approximately 99% of your revenues are
derived
from the federal government and approximately two-thirds of your
revenues are from engagements with defense and intelligence
agencies.
8. You indicate that defense and intelligence agencies with whom
you
have engagements, currently have, and are expected to continue to
have, significant funding for transformation through information
technology initiatives.  In your response letter provide support
to
substantiate this claim.
9. Revise to provide a concise and balanced summary of the
material
information you disclose elsewhere.  For example, you discuss the
significant market opportunities available to you, your strengths
that make you "well-positioned to meet the rapidly evolving needs
of
federal government agencies for IT services and solutions" and
your
strategy growing your business as a "leading provider of
information
technology services and solutions to government agencies while
improving [y]our profitability" without discussing the
corresponding
obstacles and challenges you face in achieving such goals.
Balance
the positive aspects of your business with a discussion of the
risks
and limitations that could harm your business or inhibit your
strategic plans.  For example, discuss the challenges you face
from
competitors or the risks that you may not achieve the anticipated
revenues from your estimated contract backlog.  As another
example,
revise your discussion of revenue on page 2 to provide balancing
disclosure regarding costs and expenses and net income.  Please
note
that it is not sufficient to simply refer the reader to the risk
factors section.  Where applicable, make corresponding changes
elsewhere in your prospectus, e.g., the business section beginning
on
page 36.
10. We note that your summary and disclosure elsewhere in your
registration statement includes statistics and statements by, for
example, INPUT, for support.  For each statistic cited, furnish in
your response letter the source of the statistic from the
organization or entity.  To expedite our review, note the date of
each source, clearly mark each source to highlight the applicable
portion or section containing the statistic and cross-reference it
to
the appropriate location in your prospectus.  Tell us whether the
information is available to the public without charge or at a
nominal
cost and provide appropriate details in that respect.  If the
source
is not publicly available at nominal or no cost, it appears that
consent of the third party to the use of the information in the
prospectus and to the reference to that firm should be obtained
and
filed as an exhibit.  Please see Rule 436 of Regulation C and Item
601(b)(23) of Regulation S-K for additional guidance.
Alternatively,
you may adopt these statements as your own.
11. Explain what you mean by the phrases on page 1 that your
largest
engagement "is not scheduled for recompetition until 2011" and
that
several of your GWACs have "a ceiling of $[XX] million over [XX]
years."  Also, tell us whether you would expect to be awarded
contracts that are valued at or near the ceiling, or whether these
ceilings represent the total amounts that may be awarded to
several
different contractors.  If you do not expect to receive contracts
valued at or near the ceiling, disclose (a) the amount or
percentage
typically awarded to one contractor or to a contractor providing
the
type of services that you would provide and (b) the amount or
percentage you have been awarded in the past on similar contracts.
Transactions Prior to the Offering, page 6

Revocation of S Corporation Status, page 6
12. You indicate that the actual amount of the distribution of S
corporation earnings to your current stockholders will depend on
the
amount of your income prior to the revocation of your S
corporation
status.  To the extent practicable, please disclose an estimate of
the expected amount of such distribution.  We note the reference
in
footnote 2 on page 5 to a distribution amount of $18 million.

Risk Factors, page 10
13. A risk factor does not adequately describe a material risk if
it
could apply to any business.  Your "Risk Factor" section includes
several risk factors that appear to be generic or fail to raise
material, concrete risks.  Please revise your risk factor
subheadings
and the narrative that follows to avoid generic language, such as
"adversely affect" and "harm" to describe the impact of the risk
factors on your business, collectively, or on specific results of
your business.  Replace this language with specific disclosure of
how
your business, operations and/or financial conditions would be
affected and the resulting risk to investors.  For example, revise
the risk factor subheadings "[W]e depend on contracts with the
federal government...[o]ur business would be adversely
affected..."
and "[o]ur business could be adversely affected by significant
changes in the contracting or fiscal policies of the federal
government"  as well as the narrative found under the subheading
"[w]e may not be successful in identifying acquisition
candidates..."
Other examples include "Our employees may engage in misconduct..."
and "Our quarterly operating results may fluctuate..."  With
respect
to the last example, we note the discussion you have provided in
the
last paragraph on page 34 regarding the relationship between the
federal government`s fiscal year and your clients` suspension of
engagements or their increase in purchase requests.  Please revise
these discussions to describe risks more specific to you and each
risk`s specific impact on your business.
14. Additionally, to provide appropriate context, where
applicable,
please provide specific disclosure regarding the risks or
challenges
you have faced in the past.  For example, in the risk factor where
you discuss the substantial cost that may be incurred in the
competitive procurement process, please disclose the costs you
have
incurred in past procurements.  As another example, please discuss
in
the appropriate risk factor the specific systems or service
failures
you have experienced, any intellectual property infringement
claims
you have received, and any unfavorable federal audits you have
received in the past.
Many of our federal government clients..., page 13
15. You indicate that if the federal government elects to use a
contract vehicle that you do not hold you will not be able to
compete
as a prime contractor.  Clarify this disclosure, explaining the
circumstances in which you would not hold a contract vehicle.

Dividend Policy, page 18
16. You indicate that you will need to rely upon dividends and
other
payments from your subsidiary to generate the funds necessary to
make
dividend payments, if any, on your Class A common stock but that
your
subsidiary is legally distinct from you and has no obligation to
pay
amounts to you.  Explain how this is the case given your
disclosure
on page 6 indicating that prior to the registered offering, your
subsidiary will become a wholly owned subsidiary and that this
prospectus is written assuming this has already taken place.

Management`s Discussion and Analysis..., page 23

Overview, page 23
17. Please supplement your overview to provide insight into
material
opportunities, challenges and risks, such as those presented by
known
material trends and uncertainties, on which the company`s
executives
are most focused for both the short and long term.  See Section
III.A
of SEC Release 33-8350.  For example, does management anticipate a
trend in terms of changes in the current contract mix, e.g. an
increase in the proportion of contracts that are fixed-price
contracts, or an increase in the proportion of contracts that rely
on
subcontracted labor or third party material purchases as opposed
to
relying on your own employees` labor?  If so, to the extent you
are
able to quantify the effects of this trend on your results of
operations, working capital requirements and liquidity, please
supplement your disclosure accordingly.
18. As another example, you indicate in the narrative under the
risk
factor subheading "Our federal government contracts may be
terminated..." found on page 12 that you derive most of your
revenue
from federal government contracts that typically span one or more
base years and one or more option years, that such option periods
may
cover more than half of a contract`s potential duration and that
federal government agencies have the right not to exercise these
option periods.  Furthermore, you indicate in the narrative under
the
risk factor subheading "Many of our federal government clients
spend
their procurement budgets..."  that budgetary pressures and
reforms
in the procurement process have resulted in increased competition
and
pricing pressure, requiring you to make sustained post-award
efforts
to realize revenue under the relevant contract vehicle.  Are these
conditions a recent development?  If so, has management revised or
does it anticipate revising its methodologies for estimating
contract
backlog so as to take a more conservative approach to valuing
backlog?  What consideration has management given to such
budgetary
pressures and reforms when planning your future strategy, growth,
capital expenditures, etc.?  Similar to the prior comment, to the
extent you are able to quantify the effects of this trend on your
results of operations, working capital requirements and liquidity,
please supplement your disclosure accordingly.
19. Provide detailed disclosure in this section that clearly
explains
contract backlog in the context of your business, its relation to
your future prospects and potential revenue, the methodologies
used
to calculate a contract`s value, and the difference between funded
and unfunded backlogs.  To the extent you discuss contract backlog
elsewhere in your registration statement, provide a cross-
reference
to this explanation.
20.
You indicate that in June 2004, USTRANSCOM awarded you two new
seven-
year task orders, with a total value of approximately $117 million
and that each task order has one base year and six option years.
Explain in your disclosure how this value is calculated and what
portion of this amount can be earned during the base year and each
subsequent option year.  Given that it is now July 2005, has
USTRANSCOM exercised their option and if so, for how many years?
To
the extent that USTRANSCOM has not exercised their option for all
six
years, does management have an expectation of the likelihood that
USTRANSCOM will exercise such option years?
Revenue, page 24
Contract Types, page 24
Time-and-material contracts, page 24
21. You indicate that to the extent that your actual labor costs
under a time-and-materials contract vary significantly from the
negotiated hourly rates, you can generate more or less than the
targeted amount of profit.  Expand your disclosure to discuss the
circumstances under which actual labor costs would vary
significantly.  Is this a common occurrence?
Fixed-price contracts, page 24
22. Explain the difference between the three categories of fixed-
price contracts.
Results of Operations, page 26

23. There are many instances where two or more sources of a
material
change have been identified, but the dollar amounts for each
source
that contributed to the change were not disclosed.  For instance,
the
revenue, cost of revenue and G&A expense disclosures do not
quantify
each source that contributed to the change.  The disclosure should
quantify eac