Alion Science & Technology 11-K Annual report of employee stock purchases

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

þ	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended September 30, 2006
o	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission file number 333-114935

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

THE ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive offices:

ALION SCIENCE AND TECHNOLOGY CORPORATION

10 West 35th Street	1750 Tysons Boulevard
Chicago, IL 60616	Suite 1300
(312) 567-4000	McLean, VA 22102 (703) 918-4480

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

TABLE OF CONTENTS

	Page
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS		1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of September 30, 2006 and 2005		3
Statements of Changes in Net Assets Available for Benefits for the Years Ended September 30, 2006 and 2005		5
Notes to Financial Statements		7
SUPPLEMENTAL SCHEDULE AS OF SEPTEMBER 30, 2006:
Form 5500, Schedule H, Part IV, Line 4i — Schedule of Assets (Held at End of Year)		14
Signatures		15

NOTE: All other schedules required under Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, have been omitted because they are not applicable.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ESOP Committee

Alion Science and Technology Corporation

Employee Ownership, Savings and Investment Plan:

We have audited the accompanying statements of net assets available for benefits of Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan (the “Plan”) as of September 30, 2006, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Plan for the year ended September 30, 2005 were audited by other auditors whose report, dated March 24, 2006, included an explanatory paragraph regarding the supplemental schedule of assets (held at end of year).

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of September 30, 2006, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2006 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. Such supplemental schedule has been subjected to the auditing procedures applied in our audit of the basic 2006 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

/s/  DELOITTE & TOUCHE LLP

McLean, Virginia

March 27, 2007

1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ESOP Committee
Alion Science and Technology Corporation
Employee Ownership, Savings and Investment Plan:

We have audited the financial statements of the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan (the Plan) as of September 30, 2005 and for the year then ended, as listed in the accompanying table of contents. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of September 30, 2005, and the changes in net assets available for benefits for the year then ended, in conformity with U.S. generally accepted accounting principles.

/s/  KPMG LLP

Chicago, Illinois

March 24, 2006

2

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 2006

			ESOP
	Non-ESOP		Allocated		Unallocated		Total		Plan Total
Assets:
Cash and cash equivalents	$	—		5,758,155		—		5,758,155		5,758,155
Investments:
Alion Science and Technology Corporation common stock		—		213,719,338		—		213,719,338		213,719,338
Mutual funds		141,223,534		—		—		—		141,223,534
Participant loans		1,455,315		—		—		—		1,455,315
Total investments		142,678,849		219,477,493		—		219,477,493		362,156,342
Receivables:
Employer contribution		124,024		179,321		—		179,321		303,345
Participant contributions		969,616		3,315,635		—		3,315,635		4,285,251
Other contributions		30,760		16,711				16,711		47,471
Stock subscription receivable		—		26,348				26,348		26,348
Total receivables		1,124,400		3,538,015		—		3,538,015		4,662,415
Total assets		143,803,249		223,015,508		—		223,015,508		366,818,757
Liabilities:
Stock subscription payable		—		8,989,949		—		8,989,949		8,989,949
Net assets available for benefits	$	143,803,249		214,025,559		—		214,025,559		357,828,808

See accompanying notes to financial statements.

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ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 2005

			ESOP
	Non-ESOP		Allocated		Unallocated		Total		Plan Total
Assets:
Cash and cash equivalents	$	—		1,504,329		—		1,504,329		1,504,329
Investments:
Alion Science and Technology Corporation common stock		—		184,783,018		—		184,783,018		184,783,018
Mutual funds		112,600,912		—		—		—		112,600,912
Participant loans		1,309,956		—		—		—		1,309,956
Total investments		113,910,868		186,287,347		—		186,287,347		300,198,215
Receivables:
Employer contribution		80,711		—		—		—		80,711
Participant contributions		401,923		164,784		—		164,784		566,707
Other contributions		—		5,028				5,028		5,028
Total receivables		482,634		169,812		—		169,812		652,446
Total assets		114,393,502		186,457,159		—		186,457,159		300,850,661
Liabilities:
Stock subscription payable		—		1,509,357		—		1,509,357		1,509,357
Net assets available for benefits	$	114,393,502		184,947,802		—		184,947,802		299,341,304

See accompanying notes to financial statements.

4

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 2006

				ESOP
	Non-ESOP			Allocated		Unallocated		Total		Plan Total
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments	$	8,361,148			25,519,768		—		25,519,768		33,880,916
Interest		1,175,171			64,364		—		64,364		1,239,535
Investment income		9,536,319			25,584,132		—		25,584,132		35,120,451
Contributions:
Employer contributions		2,308,892			7,786,826		—		7,786,826		10,095,718
Participant contributions		12,857,526			5,294,573		—		5,294,573		18,152,099
Rollovers		10,331,041			6,537,133		—		6,537,133		16,868,174
Transfer between ESOP and Non-ESOP		(2,868,434	)		2,868,434		—		2,868,434		—
Transfer of merged plan assets		15,131,398			—		—		—		15,131,398
Total additions		47,296,742			48,071,098		—		48,071,098		95,367,840
Deductions to net assets attributable to:
Benefits paid to participants		17,878,434			18,993,341		—		18,993,341		36,871,775
Fees (short-term trading)		8,561			—		—		—		8,561
Total deductions		17,886,995			18,993,341		—		18,993,341		36,880,336
Increase in net assets available for benefits		29,409,747			29,077,757		—		29,077,757		58,487,504
Net assets available for benefits:
Beginning of period		114,393,502			184,947,802		—		184,947,802		299,341,304
End of period	$	143,803,249			214,025,559		—		214,025,559		357,828,808

See accompanying notes to financial statements.

5

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED SEPTEMBER 30, 2005

			ESOP
	Non-ESOP		Allocated			Unallocated		Total			Plan Total
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments	$	7,670,723		66,547,122			—		66,547,122			74,217,845
Interest		451,943		271,979			—		271,979			723,922
Investment income		8,122,666		66,819,101			—		66,819,101			74,941,767
Contributions
Employer contributions		2,069,825		5,707,360			—		5,707,360			7,777,185
Participant contributions		9,428,525		4,007,627			—		4,007,627			13,436,152
Rollovers		1,640,143		1,609,723			—		1,609,723			3,249,866
Transfer between ESOP and Non-ESOP		31,381,695		(31,381,695	)		—		(31,381,695	)		—
Transfer of merged plan assets		48,238,694		79,038,985			—		79,038,985			127,277,679
Total additions		100,881,548		125,801,101			—		125,801,101			226,682,649
Deductions to net assets attributable to:
Benefits paid to participants		13,592,591		8,198,231			—		8,198,231			21,790,822
Fees (short-term trading)		2,788		—			—		—			2,788
Total deductions		13,595,379		8,198,231			—		8,198,231			21,793,610
Increase in net assets available for benefits		87,286,169		117,602,870			—		117,602,870			204,889,039
Net assets available for benefits:
Beginning of period		27,107,333		67,344,932			—		67,344,932			94,452,265
End of period	$	114,393,502		184,947,802			—		184,947,802			299,341,304

See accompanying notes to financial statements.

6

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006 AND 2005

(1)  PLAN DESCRIPTION AND RELATED INFORMATION

The following is a general description of Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan (formerly known as Beagle Holdings, Inc. ESOP and 401(k) Plan and then as Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan) (the Plan). The following description of the Plan provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions.

General — Alion Science and Technology Corporation (the Plan Sponsor, Alion or the Company) established the Plan effective as of December 19, 2001. The Plan was subsequently amended and restated on October 1, 2006. The Plan operates as a tax exempt employee stock ownership plan (ESOP) with a 401(k) component (401(k)) under the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (IRC). The Plan is administered by the ESOP Committee, which is comprised of seven persons appointed by the chief executive officer of the Company. As of September 30, 2006, two trusts had been established to hold Plan assets. State Street Bank & Trust Company is the trustee for the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Trust (the ESOP Trust), which holds legal title to the shares of Company common stock in the ESOP component of the Plan. Principal Financial Group is the record keeper for the ESOP. The ESOP Committee is the trustee for the 401(k) component of the Plan. Fidelity Investments (Fidelity) is record keeper and custodian for the 401(k) component of the Plan.

Eligibility — Employees are immediately eligible to make elective deferrals to the Plan and become eligible to receive employer contributions after one year of employment. The number of employees participating in the Plan totaled 5,092 and 3,878 at September 30, 2006 and 2005, respectively.

Contributions — Participants may elect to contribute up to 60% of their eligible compensation to the Plan, subject to statutory annual maximum limits which are adjusted each year for increases in the cost of living as provided in applicable IRC regulations. The annual limitations apply to all of a participant’s salary reduction contributions and similar contributions under this and other plans. A participant may not contribute more than 11% of his or her eligible compensation to the ESOP component of the Plan. The Company makes a matching contribution of 100% of the first 3% and 50% of the next 2% of the eligible compensation contributed by each participant. The Company also makes a retirement plan contribution of 2.5% of the eligible compensation contributed by each participant consisting of 1% (not participant directed) in stock and 1.5% (participant directed) in cash. The Company may also make an annual discretionary contribution to the Plan. Each plan year, the Company determines what portion of its profits, if any, to contribute to the Plan. The Company made no discretionary contribution for the plan years ended September 30, 2006 and 2005. During the 2006 plan year, Company contributions of $10,095,718 included $7,786,826 in shares of common stock of the Company and $2,308,892 in cash. During the 2005 plan year, Company contributions of $7,777,185 included $5,707,360 in shares of common stock of the Company and $2,069,825 in cash.

Participant Accounts — The ESOP Committee, as of each valuation date, allocates earnings (losses) in the ESOP component of the Plan to participant accounts so that the total of all participant account balances equals the fair market value of the ESOP trust fund as of each respective valuation date. Each participant’s 401(k) account is credited with the participant’s contributions, the Company’s contributions, the participant’s share of plan earnings (losses) and appreciation (depreciation) from investment of such contributions, less administrative expenses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.

Voting Rights — On matters involving the approval or disapproval of any Company merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all of the Company’s assets, tender offer for, or other offer to purchase, the shares of the Company common stock or other such transactions prescribed

7

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

by applicable regulation, each participant is entitled to exercise voting rights attributable to the shares of Company common stock allocated to his or her ESOP account. In all such cases, the ESOP Trustee is required to notify the participants of such voting rights prior to the time that such rights are to be exercised. The ESOP Trustee is to vote for any allocated shares for which participant instructions have not been received and any unallocated shares in accordance with ESOP Committee instructions. In all other circumstances, and except as limited by its fiduciary duties, the ESOP Trustee is to vote all shares of Company common stock as directed by the ESOP Committee.

Vesting — Each eligible participant has immediate, fully vested rights in all elective deferrals, rollover contributions and Company-matching contributions. Other Company retirement plan contributions to the Plan, and the earnings on such contributions, vest over a five-year period as follows:

•  25% vests after two years of service;

•  50% vests after three years of service;

•  75% vests after four years of service; and

•  100% vests after five years of service.

Participants of the John J. McMullen Associates, Inc. Employee Stock Ownership Plan (the JJMA ESOP) who terminated employment with JJMA prior to April 1, 2005 and whose JJMA ESOP accounts were merged with the Plan are currently vested in a percentage of their merged JJMA ESOP accounts according to the following schedule:

•  20% vested after one year of service with JJMA;

•  40% vested after two years of service with JJMA;

•  60% vested after three years of service with JJMA;

•  80% vested after four years of service with JJMA; and

•  100% vested after five years of service with JJMA.

Investment Options — The Plan provides for various investments in mutual funds and Company common stock. As of September 30, 2006, there were 25 non-ESOP investment options available through Fidelity Investments. The Plan uses the State Street Global Advisors Short-Term Investment Fund as the short-term investment option for the ESOP component of the Plan to hold contributions until the ESOP Trustee can purchase common stock of the Company. All contributions and earnings (losses) for the ESOP component of the Plan are used to purchase shares of common stock of the Company.

Loans to Participants — Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of the lesser of $50,000 or 50% of their vested account balance, subject to certain restrictions. A participant may have no more than two loans outstanding at any time. All loans are amortized over a period not to exceed five years, except for loans to purchase or construct a primary residence which are permitted to be repaid over a maximum of fifteen years. Participant loans are secured by the balance in the participant’s account and bear a reasonable rate of interest that provides a return commensurate with the prevailing interest rate charged on similar loans by persons in the business of lending money. Principal and interest are paid ratably through payroll deductions.

Payment of Benefits

Non-ESOP Component

For any event that may result in a distribution of benefits, a participant’s benefit is distributed in a single, lump sum payment in cash and is recorded when paid.

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ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

ESOP Component

Distributions from the ESOP component of the Plan are made in the form of shares of common stock of the Company that must be immediately sold back to the Company.

The Company is legally obligated to repurchase shares of the Company’s common stock from terminating participants subject to specific rules regarding distributions.

Distribution of benefits as a result of retirement, death, and/or disability are paid in a single, lump sum cash payment or in substantially equal, annual cash payment installments not to exceed five years beginning on the earlier of:

a. the first valuation of the Company’s common stock following the participant’s retirement, death, and/or disability, or

b. one year after the end of the Plan year in which the participant’s death, disability or retirement occurs.

In general, distribution of benefits as a result of resignation, dismissal, or layoff are paid in a single, lump sum cash payment or in substantially equal, annual cash payment installments not to exceed five years beginning on the earlier of:

a. the sixth Plan year following the participant’s resignation, dismissal, or layoff, or

b. the first valuation of the Company’s common stock following the participant’s sixty-fifth birthday.

Special Price Protection — Initial participants who were 55 years of age or older as of December 31, 2002 and who request a distribution at any time prior to January 1, 2008 due to death, disability, or separation from service on or after reaching age 60, have the right to require the Company to purchase the stock allocated to their accounts at a price per share that is equal to the greater of:

a. $10.00, or

b. the then-current fair market value of a share of the Company’s common stock.

The special price protection provisions only apply to shares of Company common stock purchased in December 2002.

Diversification — Participants close to retirement have the opportunity to diversify part of the value of their investment in Company common stock. Any participant who is at least age 55 with 10 or more years of participation in the Plan may elect to diversify a portion of his or her ESOP account to other investment options. In each of the first five years thereafter, a participant may diversify up to 25% of the shares allocated to his or her ESOP account, less any shares previously diversified. In the sixth year, the percentage increases to 50%. Years of participation in the Human Factors Applications, Inc. Profit Sharing & 401(k) Plan, Innovative Technology Solutions Corporation 401(k) Profit Sharing Plan and Trust, and John J. McMullen Associates, Inc. Employee Stock Ownership Plan are counted for purposes of diversification.

Special Diversification — Beginning on October 1, 2007, and then in the first quarter of each year thereafter, all participants hired by the Company on December 20, 2002, will be permitted to diversify 10% of their ESOP account balance provided any such diversification does not violate any loan covenants in effect at the time. Participants hired after that date are eligible for this diversification feature following five years of service with the Company.

Forfeitures — Effective October 1, 2003, all non-vested account balances of terminated participants are used to reduce future Company contributions or to pay administrative expenses. Forfeitures of ESOP account balances of $192,679 for terminated participants were used to reduce future Company contributions to the ESOP component of the Plan during the year ended September 30, 2006. Forfeitures of non-ESOP account balances of $291,721 for

9

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

terminated participants were used to reduce Company contributions to the non-ESOP component of the Plan during the year ended September 30, 2006. Forfeitures of ESOP account balances of $244,100 for terminated participants were used to reduce future Company contributions to the ESOP component of the Plan during the year ended September 30, 2005. Forfeitures of non-ESOP account balances of $108,291 for terminated participants were used to reduce future Company contributions to the non-ESOP component of the Plan during the year ended September 30, 2005.

Termination — Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event that the plan is terminated, participants would become 100% vested in all Plan account balances and the Company would file a request with the IRS to request approval of the termination of the Plan. Following receipt of approval of the termination of the Plan from the IRS, benefits would be distributed in accordance with the Plan’s distribution provisions.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Use of Estimates — The accompanying financial statements are prepared on the accrual basis of accounting. Certain prior year balances have been reclassified to conform to the current year presentation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan Sponsor’s management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from those estimates.

Risks and Uncertainties — The Plan provides for various investments in cash and cash equivalents, mutual funds, and the Company’s common stock. In general, such investment securities are exposed to various risks, such as significant world events, interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.

Investment Valuation and Income Recognition — The shares of common stock of the Company are valued semi-annually March 31 and September 30. The estimated fair value of the Company’s common stock for all purposes under the Plan is determined by the ESOP Trustee based upon a valuation performed by an independent appraiser. Quoted market prices are used to value the mutual funds. Participant loans are stated at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest is recorded on accrual basis.

Administration of Plan Assets — The Plan’s assets, which consist of Company common stock, and mutual funds, are held by the ESOP Trustee, State Street Bank & Trust Company, and the record keeper and custodian of the non-ESOP component, Fidelity Investments. Certain administrative functions are performed by officers or employees of the Company who receive no compensation from the Plan. Administrative and trustee expenses are to be paid by the Plan. However, the Company may pay for administrative and trustee expenses at its own discretion. For the years ended September 30, 2006 and 2005, all administrative and trustee expenses were paid by the Company. The Plan is required to return excess contributions in accordance with the Internal Revenue Code.

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ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

3.   INVESTMENTS

The fair values of the investments representing five percent or more of the Plan’s net assets at September 30, 2006 and 2005 were as follows:

	September 30,
	2006		2005
Alion Science and Technology Corporation common stock	$	213,719,338		184,783,018
Fidelity Retirement Government Money Market		24,558,694		29,778,909
Fidelity Growth Company		15,373,215		15,641,012
Total	$	253,651,247		230,202,939

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value for the years ended September 30, 2006 and 2005 as follows:

	September 30,
	2006		2005
Mutual funds	$	8,361,148		7,670,723
Alion Science and Technology Corporation common stock		25,519,768		66,547,122
Net appreciation in fair market value of investments	$	33,880,916		74,217,845

The Plan’s investment in Company common stock as of September 30, 2006 and 2005 has been delineated as follows:

	September 30,
	2006		2005
Alion Science and Technology Corporation common stock — number of shares		5,210,125		5,153,185
Cost	$	85,533,865		69,161,065
Fair value	$	213,719,338		184,783,018

4.   FEDERAL INCOME TAX STATUS

The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated August 9, 2005, that the Plan, as amended through the Ninth Amendment, and related trusts are designed in accordance with applicable sections of the IRC. The Plan was amended and restated effective as of October 1, 2006 since receiving a favorable determination letter dated August 9, 2005 and an application was filed with the IRS on January 30, 2007 to request a determination letter stating that the Plan and related trusts are designed in accordance with applicable sections of the IRC. The Company and the Plan administrator believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

5.   RELATED-PARTY TRANSACTIONS

The Plan holds Alion Science and Technology Corporation common stock. As Alion Science and Technology Corporation is the employer and plan sponsor, any transactions in its common stock qualify as party-in-interest transactions.

11

ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

The number of outstanding shares of Alion common stock as of September 30, 2006 was 5,210,125 valued at $213,719,338, while the number of outstanding shares of Alion common stock as of September 30, 2005 was 5,153,185 valued at $184,783,018.

Certain Plan investments are shares of mutual funds managed by Fidelity. Fidelity is the record keeper and custodian for the non-ESOP component of the Plan and, therefore, these transactions qualify as party-in-interest transactions.

All investment fund earnings or losses posted to each Plan participant’s accounts are net of investment management fees charged by each investment fund under the Plan.

6.   PLAN AMENDMENTS

There were four Plan amendments adopted during the plan year ending September 30, 2006, referenced as amendments number 11, 12, 13, and 14. Plan amendment number 11 was adopted to allow a qualified individual to elect to withdraw all or a portion of his or her account balance under the Plan to pay for certain expenses resulting from Hurricane Katrina pursuant to the Katrina Emergency Tax Relief Act of 2005. Plan amendment number 12 was adopted to permit the merger of assets in the BMH Associates, Inc. 401(k) Profit Sharing Plan into the Plan and to name Washington Consulting, Inc. as an Adopting Employer under the Plan. Plan amendment number 13 was adopted to permit to increase the maximum Elective Contributions to be invested in Common Stock under the ESOP component of the Plan from 7% to 11% for individual participants and from 3% to 5% total Elective Contributions for all participants. Plan amendment number 14 was adopted to permit the merger of assets in the Micro Analysis & Design, Inc. 401(k) Plan into the Plan.

7.   ACQUISITIONS, PLAN MERGERS, AND ASSET TRANSFERS

The Company acquired certain employees of Anteon Corporation on July 1, 2006. Former employees of Anteon Corporation who became employees of the Company on July 1, 2006 received credit for their service with Anteon Corporation with respect to Company retirement plan and matching contributions, as well as vesting.

The Company acquired Micro Analysis & Design, Inc. on May 19, 2006, the legal effective date of the merger of the Micro Analysis & Design, Inc. 401(k) Plan with the Plan. On June 19, 2006, a total of $4,969,352 in cash and other assets were transferred from the Micro Analysis & Design, Inc. 401(k) Plan into the Plan. Employees of Micro Analysis & Design, Inc. on May 19, 2006 who became employees of the Company on May 20, 2006 received credit for their service with Micro Analysis & Design, Inc. with respect to Company retirement plan and matching contributions, as well as vesting.

The Company acquired Washington Consulting, Inc. on February 24, 2006. On September 13, 2006, a total of $847,951 in cash was transferred from the Administaff 401(k) Plan, a multi-employer defined contribution plan, into the Plan. Employees of Washington Consulting, Inc. on February 24, 2006 who became employees of the Company on February 25, 2006 received credit for their service with Washington Consulting, Inc. with respect to Company retirement plan and matching contributions, as well as vesting.

The Company acquired BMH Associates, Inc. on February 10, 2006, the legal effective date of the merger of the BMH Associates, Inc. 401(k) Profit Sharing Plan with the Plan. On March 21, 2006, a total of $9,315,176 in cash and other assets were transferred from the BMH Associates, Inc. 401(k) Profit Sharing Plan into the Plan. Employees of BMH Associates, Inc. on February 10, 2006 who became employees of the Company on February 11, 2006 received credit for their service with BMH Associates, Inc. with respect to Company retirement plan and matching contributions under the Plan and are 100% vested in Company retirement plan and matching contributions regardless of the amount of service with BMH Associates, Inc.

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ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS — (Continued)

The Company acquired John J. McMullen Associates, Inc. on April 1, 2005, the legal effective date of the merger of the John J. McMullen Associates, Inc. Employee Stock Ownership Plan and 401(k) Profit Sharing Plan with the Plan. On April 1, 2005, a total of $79,038,985 in cash and other assets were transferred from the John J. McMullen Associates, Inc. Employee Stock Ownership Plan into the Plan. On May 13, 2005, a total of $48,238,694 in cash and other assets were transferred from the John J. McMullen Associates, Inc. 401(k) Profit Sharing Plan into the Plan. Employees of John J. McMullen Associates, Inc. on April 1, 2005 who became employees of the Company on April 2, 2005 received credit for their service with John J. McMullen Associates, Inc. with respect to Company retirement plan and matching contributions, as well as vesting.

The Company acquired Carmel Applied Technologies, Inc. on February 25, 2005. Employees of Carmel Applied Technologies, Inc. on February 25, 2005 who became employees of the Company on February 26, 2005 received credit for their service with Carmel Applied Technologies, Inc. with respect to Company retirement plan and matching contributions, as well as vesting.

The Company acquired ManTech Environmental Technology, Inc. on February 11, 2005. Employees of ManTech Environmental Technology, Inc. on February 11, 2005 who became employees of the Company on February 12, 2005 received credit for their service with ManTech Environmental Technology, Inc. with respect to Company retirement plan and matching contributions, as well as vesting.

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ALION SCIENCE AND TECHNOLOGY CORPORATION
EMPLOYEE OWNERSHIP, SAVINGS AND INVESTMENT PLAN

Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
September 30, 2006

		(c)
		Description of
		Investments,
		Including Maturity Date,
	(b)	Rate of Interest,		(e)
(a)	Identity of Issuer/Borrower,	Collateral,	(d)	Current
Notes	Lessor, or Similar Party	Par, or Maturity Value	Cost	Value
(1)	State Street Global Advisors Short Term Investment Fund	Short-term investment fund, 5,758,155 shares	$5,758,155	$	5,758,155
(1)	Alion Science and Technology Corporation	Common stock, 5,210,125 shares	85,533,865		213,719,338
	Fidelity Management Trust Company Mutual Funds:
(1)	Fidelity Capital & Income	Mutual fund	(2)		3,671,754
(1)	Fidelity Contrafund	Mutual fund	(2)		6,206,202
(1)	Fidelity Diversified International	Mutual fund	(2)		14,462,954
(1)	Fidelity Dividend Growth	Mutual fund	(2)		8,827,751
(1)	Fidelity Equity Income	Mutual fund	(2)		7,284,954
(1)	Fidelity Freedom 2000	Mutual fund	(2)		338,963
(1)	Fidelity Freedom 2005	Mutual fund	(2)		113,444
(1)	Fidelity Freedom 2010	Mutual fund	(2)		5,684,386
(1)	Fidelity Freedom 2015	Mutual fund	(2)		3,798,915
(1)	Fidelity Freedom 2020	Mutual fund	(2)		2,337,233
(1)	Fidelity Freedom 2025	Mutual fund	(2)		707,841
(1)	Fidelity Freedom 2030	Mutual fund	(2)		1,258,199
(1)	Fidelity Freedom 2035	Mutual fund	(2)		667,141
(1)	Fidelity Freedom 2040	Mutual fund	(2)		894,838
(1)	Fidelity Freedom Income	Mutual fund	(2)		631,914
(1)	Fidelity Growth Company	Mutual fund	(2)		15,373,215
(1)	Fidelity Investment Grade Bond	Mutual fund	(2)		3,494,769
(1)	Fidelity Low-Priced Stock	Mutual fund	(2)		7,359,997
(1)	Fidelity Magellan	Mutual fund	(2)		8,166,724
(1)	Fidelity New Millennium	Mutual fund	(2)		7,640,968
(1)	Fidelity Retirement Government Money Market	Mutual fund	(2)		24,558,694
(1)	Fidelity U.S. Bond Index	Mutual fund	(2)		4,219,797
(1)	Goldman Sachs Mid-Cap Value A	Mutual fund	(2)		1,818,187
(1)	Royce Low-Priced Stock	Mutual fund	(2)		6,648,553
(1)	Spartan U.S. Equity Index	Mutual fund	(2)		5,056,141
	Participant loans	168 loans (interest rates ranging from 4.00% to 8.25% and maturing through 2021)	—		1,455,315
				$	362,156,342

(1)	Represents party-in-interest.
(2)	Cost information omitted for participant-directed investments

See report of independent registered public accounting firm.

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SIGNATURES

The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

THE ALION SCIENCE AND TECHNOLOGY

CORPORATION EMPLOYEE OWNERSHIP,

SAVINGS AND INVESTMENT PLAN

By:  /s/  John M. Hughes

Name: John M. Hughes

Title:   Chief Financial Officer

Date: March 29, 2007

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