VERSAR, Inc. Awarded Multi-Year New York State Energy Contract

Business Wire, Jan 23, 2007

SPRINGFIELD, Va. -- VERSAR, Inc. (Amex:VSR) announced today the award to its subsidiary, GEOMET Technologies, Inc., of a contract from the New York State Energy Research and Development Authority (NYSERDA). The contract supports NYSERDA's Enhanced Commercial and Industrial Performance Program (ECIPP) along with related combined heat and power, distributed generation, renewable generation and environmental efforts. This new contract consists of one base year and two, two year options, with a potential value of $1 million and expands the firm's work into combined heat and power and related areas.

NYSERDA's Enhanced Commercial and Industrial Performance Program offers performance-based incentives to implement energy efficiency improvements or summer on-peak demand reduction measures. The contract provides for technical review of New York energy reduction applications and engineering designs to determine the economic viability of each proposed energy project.

Over 1,000 NYSERDA projects are in various stages of completion. Incentives to industry of more than $105 million have been awarded by NYSERDA with another $30 million in incentives available. These projects have realized annual savings of 910 million kWh and 190 MW total peak demand reduction.

Dr. Ted Prociv, President and CEO of Versar said, "The NYSERDA energy program is one of the best in the nation. With our expansion of services, we are pleased to continue a long-term relationship with NYSERDA. NYSERDA's forward thinking attitude and management has proven successful and allows for increased energy security for New York."

Peter R. Smith, President and CEO of NYSERDA said, "NYSERDA commends GEOMET Technologies, Inc.'s efforts to reduce energy consumption and implement energy-efficiency programs to reduce summer on-peak demand for electricity in New York State. Our Commercial and Industrial programs combine technical and financial incentives for the installation of cost-effective and energy-efficient equipment, environmentally sustainable buildings, and promote electric-demand reduction. Today's announcement mirrors NYSERDA's commitment to help make New York State more energy efficient and less dependent on fossil fuels."

VERSAR, INC., headquartered in Springfield, VA, is a publicly held infrastructure program management company for the Federal Government and the commercial market specializing in homeland defense, engineering and construction management, environmental health and safety and the management of toxic and hazardous materials. VERSAR operates a number of web sites, including the corporate Web sites, http://www.versar.com, http://www.homelanddefense.com, and http://www.geomet.com; a B2B portal for homeland defense products and services, http://www.nbcprotect.com and http://www.dtaps.com and a Avian (Pandemic) Flu services site at http://www.aviandefense.com.

This press release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described herein and in Versar's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended June 30, 2006. The forward-looking statements are made as of the date hereof and Versar does not undertake to update its forward-looking statements.