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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

For the Quarterly Period Ended June 29, 2003

OR

For the transition period from __________ to __________

Commission file number 0-21682

SPARTA, Inc.

(949) 768-8161

Not Applicable

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 or 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X]   No [  ]

As of June 29, 2003, the registrant had 5,018,813 shares of common stock, $.01 par value per share, issued and outstanding.

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SPARTA, Inc.

QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 29, 2003

INDEX

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PART I

Item 1 Financial Statements

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SPARTA, Inc.
CONSOLIDATED BALANCE SHEET
(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements

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SPARTA, Inc.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements

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SPARTA, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements

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SPARTA, INC.
Notes to Consolidated Financial Statements
(Unaudited)

Note A - Basis of Presentation

     The accompanying financial information has been prepared in accordance with the instructions to Form 10-Q and therefore does not necessarily include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

     The Company’s fiscal year is the 52 or 53 week period ending on the Sunday closest to December 31. The Company’s last fiscal year ended on December 29, 2002, its second quarter ended June 29, 2003, and its corresponding second quarter last year ended on June 30, 2002. To aid the reader of the financial statements, the year-end has been presented as December 31, 2002 and the three-month period ends have been presented as June 30, 2003 and June 30, 2002.

     In the opinion of management, the unaudited financial information for the three-month periods ended June 30, 2003 and June 30, 2002 reflects all adjustments (which include only normal, recurring adjustments) necessary for a fair presentation thereof.

Note B - Income Taxes

     Income taxes for interim periods are computed using the estimated annual effective rate method.

Note C – Computation of Earnings Per Share

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Note D – Accounting for Stock-Based Compensation

     The Company accounts for employee stock-based compensation in accordance with the intrinsic value method described in Accounting Principles Board Opinion No. 25 (“APB 25”) and related interpretations. Had compensation expense for these plans been determined in accordance with the fair value method described in Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), the Company’s net income and net income per share would have been reduced to the pro forma amounts in the following table.

Note E – Treasury Stock

     Treasury stock is shown at cost, and consisted of 1,173,124 shares and 923,949 shares of common stock at June 30, 2003 and December 31, 2002, respectively. Repurchase of outstanding stock by the Company in exercise of its right of repurchase upon termination of employment (as defined) are made at estimated fair value. The stock price is calculated quarterly by the Company using a formula approved by the Board of Directors (which the Company believes estimates fair value), and is evaluated annually by an independent valuation firm.

Note F – New Accounting Standards

     The Company adopted the following Statements of Financial Accounting Standards (SFAS) as of January 1, 2002: SFAS 141, which addresses accounting for acquired business using the purchase method of accounting; SFAS 142, which addressees accounting for acquired goodwill and other intangible assets; SFAS 143, which addresses accounting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs; and SFAS 144, which addresses the impairment or disposal of long-lived assets. Adoption of these standards did not have a material effect on the Company’s financial position or results of operations.

     During December 2002, the Financial Accounting Standards Board (FASB) issued SFAS 148, which provides alternative transition methods for companies adopting a voluntary change to the fair

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value method of accounting for stock-based compensation. SFAS 148 also requires enhanced disclosure regarding the method of accounting and the effect of the method used on reported results of operations. SFAS 148 is effective for fiscal years ending after December 15, 2002 and interim periods beginning after December 15, 2002. The Company adopted the disclosure provisions of SFAS 148 in December 2002, and has elected to continue to account for its stock-based compensation under the intrinsic value method.

     In November 2002, the FASB issued FASB Interpretation (FIN) 45, which requires disclosures about obligations under certain guarantees issued by the Company, and which requires recognition of a liability for the fair value of the obligation undertaken in issuing the guarantee. The liability recognition provisions of FIN 45 are applicable to guarantees issued or modified after December 31, 2002, and the disclosure provisions are effective for interim or annual fiscal periods ending after December 15, 2002. Adoption of FIN 45 did not have a material effect on the Company’s financial position or results of operations.

     In January 2003, the Company adopted SFAS 146, which addresses accounting for costs associated with exit or disposal activities. In addition, the FASB issued FIN 46, which requires that certain variable interest entities be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have a controlling financial interest or do not have sufficient equity at risk. FIN 46 is effective immediately for all variable interest entities created after January 31, 2003. For all such entities created prior to February 1, 2003, FIN 46 is effective for interim or annual fiscal periods ending after June 15, 2003. Adoption of these statements did not have a material effect on the Company’s financial position or results of operations

     In April 2003, the FASB issued SFAS 149, which amends and clarifies accounting guidance on derivative instruments and hedging activities. In May 2003, the FASB issued SFAS 150, which addresses accounting for certain financial instruments that have characteristics of both liabilities and equity. The Company has not entered into derivative instruments covered by SFAS 149 or financial instruments covered by SFAS 150. Adoption of these statements is therefore not expected to have a material effect on the Company’s financial position or results of operations.

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Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     The following tables present certain key operating data for the periods indicated:

(1)

The Company defines gross profit as sales less all costs that are allowable for and allocable to contracts under government procurement regulations. As such, gross profit excludes certain unallowable expenses. Management considers gross profit, and gross profit as a percentage of costs, to be key measures of the Company’s contract performance. It should also be considered in conjunction with income from operations, net income, and other measures of financial performance. The following presents a reconciliation of gross profit to income from operations (amounts in thousands) :

     The Company’s contract revenues for the three-month period ended June 30, 2003 increased 25%, from $40.7 million for the second quarter of 2002 to $51.0 million for the second quarter of 2003. Year-to-date sales for 2003 are $98.1 million, an increase of 28% above performance in the first half of 2002. BMD revenues increased 48%, from $17.6 million for the three-month period ended June 30, 2002 to $26.0 million for the corresponding period in 2003. In addition to continuing its work on BMD systems engineering and technical analysis, the Company has generated growth in its BMD business base through penetration of other BMD program elements. Revenue on other DoD programs increased 20%, from $19.6 million during the second quarter of 2002 to $23.5 million for the second quarter of 2003, primarily due to increased revenue on programs for a variety of intelligence agencies as a result of the government’s increased focus on intelligence in response to the terrorist attacks of September 11. Non-DoD sales decreased 65% during the second quarter, from $3.8 million as of June 2002 to $1.3 million as of June 2003, due to the completion in July 2002 of a contract to provide a variety of engineering and other range support services to the NASA Dryden Flight Research Center.

     The Company defines gross profit as sales less all costs that are allowable for and allocable to contracts under government procurement regulations. As such, gross profit excludes certain unallowable expenses, as well as interest income and interest expense. Management considers gross profit, and the gross profit rate (gross profit as a percentage of contract costs), to be key measures of the Company’s

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contract performance. It should also be considered in conjunction with income from operations, net income, and other measures of financial performance.

     The gross profit rate (gross profit as a percentage of contract costs) decreased from 10.8% in the second quarter of 2002 to 10.1% in second quarter of 2003. The decline in the gross profit rate is primarily attributable to contract mix. Revenue on BMD programs increased from 43% of total second quarter sales in 2002 to 49% in 2003. The gross profit rate on many of the Company’s BMD programs tends to be lower than on other programs, and subcontractor costs (on which the Company typically receives lower fees) comprise a significant portion of the work effort on many BMD programs. In addition, the Company generally earns a higher profit rate on firm fixed price composite production contracts, due to the greater risk associated with such contracts. However, due to faster growth rates in other business areas, such contracts comprised a lower percentage of second quarter revenue in 2003, falling from 5.6% of second quarter revenue in 2002 to 4.7% in 2003.

     As a percentage of total revenue, labor and benefits costs decreased from 55.5% at the end of the second quarter of 2002 to 50.8% at of the end of the second quarter of 2003, while during this same period, subcontractor costs increased from 25.1% to 32.1% of total revenue. As noted in the preceding paragraph, subcontractors comprise a significant portion of the work effort on many BMD programs. Because revenues on BMD programs comprised a higher percentage of total revenues in the second quarter of 2003 than in the corresponding period in 2002, the percentage of revenues derived from subcontractor costs increased as well.

     The Company earned net interest income during the second quarter of 2003 and 2002. During the second quarter of 2003, the Company had cash receipts totaling $49.8 million, an increase of $8.5 million over the corresponding period in 2002. Both the Company’s investments in cash equivalents and short term investments and the Company’s long-term debt are floating rate. Accordingly, the reduction in average interest rates from 2002 to 2003 had a minimal effect on net interest.

     The Company’s effective income tax rate was 41% and 40% during the second quarter of 2003 and 2002, respectively. The increase in the effective tax rate in 2003 is attributable to an increase in certain non-deductible compensation expenses.

Backlog

     Although the Company’s backlog has historically been indicative of its future revenues, there can be no assurance that this will continue. The Company’s backlog is typically subject to variations from year to year as contracts are completed, major existing contracts are renewed, or major new contracts are awarded. Additionally, all U.S. Government contracts included in backlog, whether or not funded, may be terminated at the convenience of the U.S. Government. Moreover, U.S. Government contracts are conditioned upon the continuing availability of congressional appropriations. New presidential administrations, changes in the composition of Congress, and disagreement or significant delay between Congress and the Administration in reaching a defense budget accord can all significantly affect the timing of funding on the Company’s contract backlog. Delays in contract funding resulting from these factors may have a significant adverse effect on the Company’s financial position and results of operations.

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     The following table compares the Company’s 12-month contract backlog as of the dates indicated:

     The 12-month contract backlog, representing expected sales over the next twelve months on existing contracts increased from $174.6 million at the end of 2002 to $187.5 million as of June 30, 2003, an increase of 7%. BMD contract backlog increased $9 million, or 11%, during the first six months of 2003, as the Company has continued to generate growth in its BMD business base, both through increased level-of-effort in certain of the Company’s existing BMD program areas, and through penetration of other BMD program elements. Other DoD contract backlog increased $5.1 million, or 6%, while Non-DoD contract backlog decreased $1.2 million, a decrease of 17%, during the first six months of 2003.

     In the second quarter of 2003, the Company had eight significant competitive contract/task-order wins, two sole-source wins, a major contract extension, and three competitive contract/task-order losses. In our Homeland Security business area, the Defense Systems and Technology Operation (DSTO), as a subcontractor to Cubic Corporation, won a competitive Indefinite Delivery, Indefinite Quantity (IDIQ) contract from the Defense Threat Reduction Agency in their Weapons of Mass Destruction Defeat Modeling and Simulation program. Revenue expected on this program is estimated to be between $5 million and $7 million over seven years. DSTO also won a competitive contract under a Broad Area Announcement (BAA) from the Technical Support Working Group for the Improved Explosive Device Component Database program. The total value of this task order is $1.2 million over 18 months. The Electro-Optic Systems Division (ESD) won a competitive contract under a BAA from the Defense Advanced Research Projects Agency (DARPA) to investigate Fluorescent Detection of Bio-Aerosols. The value of this contract is $1.1 million over 18 months. DSTO lost a competitive contract with the Program Executive Office for Simulation, Training and Instrumentation (PEO-STRI) for their Contamination Avoidance Detector Test Suite Active Stand-Off Chamber Design and Development program, which was valued at $4.3 million over ten months.

     In Missile Defense, the Advanced Systems Technology Operation (ASTO) was awarded a $44 million, 42 month sole-source contract to provide analytical support to the Missile Defense Agency’s (MDA’s) Hercules Decision Architecture program. ASTO was also granted a contract extension to continue support of the MDA Systems Engineering Deputate. This extension is valued at $20 million over seven months. As a subcontractor to Computer Science Corporation, ASTO won a competitive task order for sensor technical support to MDA. The value of this task order is estimated to be approximately $3.8 million over four years (1 year base plus 3 one-year option periods).

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     As part of our Military Systems business area, several operations contributed to six contract bids within the System Development and Demonstration Phase of the Army’s Future Combat Systems (FCS) program. We were successful in four of these bids, lost one, and the sixth is expected to be announced during the third quarter. The Technical Acquisition and Support Operation (TASO), as a subcontractor to Northrop Grumman, won the FCS Logistics Decision Support Systems program for $2.5 million over two years. The Information System and Security Operation (ISSO), as a subcontractor to Northrop Grumman, won the FCS Network Management program, a $6 million effort over five years. DSTO, also as a subcontractor to Northrop Grumman, won the FCS Training Support Package program, valued at $2.6 million over six years. Additionally, DSTO, as a subcontractor to Austin Information Systems, won the FCS Situation Understanding program. The value of this contract is $2.0 million over six years. ASTO, as a subcontractor to Northrop Grumman, lost the FCS Battle Command and Mission Execution program, valued at $2.3 million over six years.

     Advanced Logistics Solution (ALS), a joint venture partnership between SPARTA and two other companies, lost a competitive task-order from the Army’s Aviation and Missile Command (AMCOM) for the Aviation Reset Logistics Management program. The value of ALS’ proposal was $3.5 million over three years. Most of this effort was planned for SPARTA. The Space and Missile Defense Operation (SMDO) lost a competitive contract for DARPA’s Clustered Human Attack Rotor Vehicle program. The value of our proposal was $3.5 million over three years.

     Effective June 20, 2003, SPARTA acquired the Network Security Research division of Network Associates, Inc. This division, which is now a part of ISSO, immediately won a sole-source contract from Veridian IT Services for development of High Assurance Internet Protocol Encryptors. The source of the funds for this program, which is valued at $2.8 million over two years, plus options, are the National Security Agency and the Navy’s Space and Naval Warfare Systems Command.

Liquidity and Capital Resources

     The following tables sets forth, for the periods indicated, selected financial information:

Overview

     The Company’s principal sources of capital for funding its operations are funds generated by ongoing business activities and proceeds from exercise of stock options and the issuance of common stock. These sources are augmented, as necessary, by borrowings under the Company’s bank line of credit. The principal uses of capital are for the repurchase of preferred and common stock, repayments of amounts borrowed under the bank line of credit, principal payments on subordinated promissory notes, and capital expenditures.

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     U.S. Government contracts are conditioned upon the continuing availability of congressional appropriations. Congress usually appropriates funds on a fiscal year basis, even though contract performance may take several years. Consequently, at the outset of a major program, the contract is usually partially funded and additional monies are normally committed to the contract by the procuring agency only as Congress makes appropriations for future years. These appropriations are therefore subject to changes as a result of increases or decreases in the overall budget. New presidential administrations, change in the composition of Congress, and disagreement or significant delay between Congress and the Administration in reaching a defense budget accord can all significantly affect the timing of funding on the Company’s contract backlog. Delays in contract funding resulting from these factors may have a significant adverse effect on the Company’s liquidity and days sales outstanding (DSO).

     The Company’s bank line of credit provides for borrowings of up to $6.0 million, and matures July 1, 2004. Borrowings under the line of credit agreement are secured by accounts receivable and certain equipment and improvements, and bear interest at the prime rate. The line of credit agreement prohibits the payment of dividends by the Company without the bank’s prior consent and requires the Company to maintain certain financial ratios. The Company was in compliance with all such requirements at June 30, 2003. The Company believes that, as in the past, it will be able to renew its banking agreement under similar terms. There were no amounts outstanding under the bank line of credit at June 30, 2003

     Generally, the Company limits its stockholders to current employees and directors of the Company. Accordingly, the Company’s Amended and Restated Certificate of Incorporation places restrictions on the transferability of the Company’s common stock and grant the Company the right to repurchase the shares held by any stockholder whose association with the Company terminates. Generally, the Company’s policy is to repurchase the stockholdings of all individuals terminating their association with the Company, so as to retain all stockholdings among active employees and directors. However, during 1993 and 1994, the 40% reduction in the Company’s staff level resulted in the termination of employees who held, in the aggregate, approximately 30% of the Company’s total common stock then outstanding. Consequently, in April 1994, the Company temporarily suspended the policy of repurchasing all of the stock held by terminating employees so as not to deplete stockholders’ equity. As of June 30, 2003, the percentage of the Company’s outstanding common stock held by former employees totaled approximately 3.5%.

     The policy of repurchasing all stockholdings of terminated employees was reinstated in 1997. In support of this policy the Board of Directors authorized the Company’s Chief Executive Officer to issue, at his discretion, promissory notes to repurchase stock held by certain terminating employees. Such promissory notes are subordinated to borrowings under the bank line of credit. In addition to repurchasing the stockholdings of terminated employees, the Company has established and maintains a program that periodically permits the Company’s stockholders to offer shares for sale to the Company. The Company’s repurchase program, which is conducted on a quarterly basis, is a voluntary program on the part of the Company, and the Company’s stockholders therefore have no right to compel the Company to repurchase any of the stockholders’ shares. There can be no assurance that the Company will continue its voluntary repurchase program. Moreover, the number of shares that the Company may repurchase is subject to legal restrictions imposed by applicable corporate law affecting the ability of corporations generally to repurchase shares of their capital stock. In addition, the number of shares which the Company may repurchase is subject to a self-imposed quarterly repurchase limitation which is designed to ensure that the Company’s repurchase of its shares does not materially impair the Company’s liquidity or financial condition. The Board of Directors may approve waivers to the self-imposed quarterly repurchase limitation.

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Cash Flow Information

     During the first two quarters of 2003 the Company’s cash balances increased $3.1 million compared with the prior year end.

     Operating activities generated $7.1 million in cash during the first two quarters of 2003. The Company generated $5.0 million in net income through June of 2003. Non-cash expenses totaled $4.2 million, of which $3.3 million related to the Company’s practice of issuing shares of common stock in connection with certain compensation and benefit plans. The Company expects to continue to follow this practice for the foreseeable future. In addition, the income tax benefit relating to stock compensation plans provided $1.0 million in cash flow. However, offsetting these increases to cash flow, the Company used $3.1 million in cash for working capital during the first half of 2003, principally to reduce accrued compensation and accounts payable.

     Although sales through June, 2003 increased 28% in comparison with the corresponding period in 2002, accounts receivable increased only 11% from $31.9 million at December 31, 2002 to $35.5 million at June 30, 2003. This favorable aspect of working capital performance (relative to sales growth) is primarily a result of the reduction in average DSO from 68 days as of June 2002 to 64 days as of June 2003. The Company continues to emphasize rapid billing and collection of its receivables, however, there can be no assurance that the Company will be able to further reduce, or maintain, its average DSO.

     Through June of 2003, the Company’s capital expenditures totaled approximately $0.7 million. The Company currently does not expect a significant change in its level of capital expenditures.

     In connection with the aforementioned stock repurchase policies, the Company repurchased a total of 249,175 common shares totaling approximately $5.3 million. Of this total, $0.2 million was repurchased in exchange for promissory notes. Year-to-date principal payments on promissory notes as of the end of the second quarter of 2003 totaled $1.2 million. Proceeds from the issuance of common stock, primarily as the result of exercises of stock options, totaled $3.2 million.

     The Company anticipates that its existing capital resources and access to its line of credit will be sufficient to fund planned operations for the next year and for the foreseeable future.

Effects of Federal Funding for Defense Programs

     The Company continues to derive over 90% of its revenues from contracts with U.S. Government agencies. The Company’s government contracts may be terminated, in whole or in part, at the convenience of the customer (as well as in the event of default). In the event of a termination for convenience, the customer is generally obligated to pay the costs incurred by the Company under the contract plus a fee based upon work completed. There were no contracts terminated in the first or second quarters of 2003. However, in July 2003, the Company was notified that one of its contracts would be terminated for the convenience of the U.S. Government. The total contract value of this contract was $0.1 million. The Company does not expect this termination to have a material effect on its financial condition or results of operations. The Company does not anticipate any additional termination of programs or contracts in 2003. However, no assurances can be given that such events will not occur.

     In addition to the right of the U.S. government to terminate contracts for convenience, U.S. government contracts are conditioned upon the continuing availability of congressional appropriations. These appropriations are therefore subject to changes as a result of increases or decreases in the overall budget. New presidential administrations, change in the composition of Congress, and disagreement or significant delay between Congress and the Administration in reaching a defense budget accord can all

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significantly affect the timing of funding on the Company’s contract backlog. Delays in contract funding resulting from these factors may have a significant adverse effect on the Company’s revenue recognition, liquidity, and DSO.

Forward-Looking Statements

     All statements in this report that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, many of which are outside the Company’s control. These factors could cause our actual results, performance, achievements or industry results to differ materially from the results, performance or achievements expressed or implied by such forward-looking statements. These factors are described in more detail in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2002, and such other filings that the Company makes with the SEC from time to time. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

Item 3    Quantitative and Qualitative Disclosures about Market Risk

Refer to item 7A in the Company’s Annual Report on Form 10-K for the year ended December 29, 2002.

Item 4    Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures

     Management has evaluated the Company’s disclosure controls and procedures as of August 8, 2003 (a date within 90 days of the filing of this Quarterly Report on Form 10-Q). Based on the results of this evaluation, management believes that such controls and procedures are operating effectively.

(b)

Changes in Internal Controls

     There were no significant changes in the Company’s internal controls or in other factors that could significantly affect the aforementioned controls and procedures subsequent to August 8, 2003 (the date of their evaluation).

Part II    OTHER INFORMATION

Item 1    Legal Proceedings

     The Company has no material investigations, claims, or lawsuits arising out of its business, nor any known to be pending. The Company is subject to certain legal proceedings and claims that arise in the ordinary course of its business. In the opinion of management, the ultimate outcome of such matters will not have a material impact on the Company’s financial position, results of operations or cash flows.

Item 2    Changes in Securities and Use of Proceeds

     Not Applicable

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Item 3    Defaults Upon Senior Securities

     Not Applicable

Item 4    Submission of Matters to a Vote of Security Holders

     The Company’s Annual Meeting was held on June 6, 2003 at which time proxies and shareholders present voted on the election of Directors and to continue PricewaterhouseCoopers LLP as the Company’s independent accountants for the year ending December 31, 2003.

Item 5    Other Information

     Not Applicable

Item 6    Exhibits and Reports on Form 8-K

(a)

Exhibits

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Signature

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.

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Certification

I, Robert C. Sepucha, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of SPARTA, Inc.;
2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.

The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

August 11, 2003

/s/ Robert C. Sepucha

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Certification

I, David E. Schreiman, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of SPARTA, Inc.;
2.		Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a)		designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b)		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c)		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.

The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

August 11, 2003

/s/ David E. Schreiman

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EXHIBIT INDEX

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