WASHINGTON, D.C. 20549

                                  FORM 10-Q/A

                                (AMENDMENT NO.1)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of  1934  for  the  Quarterly  Period  Ended  March  31,  2005.


[ ]  Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934 for the Transition Period from ________ to ________ .
Commission File Number: 0-26494
                               GSE SYSTEMS, INC.
              (Exact name of registrant as specified in its charter)

              Delaware                               52-1868008
          -------------------                    -------------------

   (State or other jurisdiction of      (I.R.S. Employer Identification No.)
    incorporation or organization)

                 9189 Red Branch Road, Columbia Maryland, 21045
              (Address of principal executive office and zip code)

       Registrant's telephone number, including area code: (410) 772-3500
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 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 [ ] No [ X ]

As of May 2, 2005, there were 8,999,706 shares of the Registrant's  common stock

Item 4. Controls and Procedures

     (a)  Evaluation  of  disclosure  controls  and  procedures.  Based on their
evaluation as of the end of the period  covered by this Form 10-Q, the Company's
principal  executive officer and principal financial officer have concluded that
the Company's  disclosure controls and procedures (as defined in Rules 13a-15(e)
under the Securities Exchange Act of 1934 (the "Exchange Act")) are effective to
ensure that information  required to be disclosed by the Company in reports that
it  files  or  submits  under  the  Exchange  Act is  recorded,  processed,  and
summarized  and reported  within the time periods  specified in  Securities  and
Exchange Commission rules and forms.

     (b)  Changes in internal  control.  Based upon the  evaluation  of internal
controls  that the Company  performed in the fourth  quarter  2004,  the Company
identified a material  weakness which had existed since the second quarter 2004,
and which  existed as of December 31, 2004,  with respect to the  identification
and accounting for derivative  transactions in accordance with the  requirements
of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities".
(A material weakness is a significant deficiency,  or combination of significant
deficiencies,  that  result in more  than a remote  likelihood  that a  material
misstatement of the annual or interim financial statements will not be prevented
or  detected.)  Specifically,  the  Company  did not have a process  in place to
ensure that it obtained  information  with  respect to its Swedish  subsidiary's
forward foreign currency contracts.  Accordingly, the Company's controls did not
ensure that the fair  market  value of the forward  foreign  currency  contracts
would be recorded in the financial statements.  This control weakness was due to
the  combination  of the following  factors:  a  resignation  of a member of the
Company's corporate accounting staff who had previously monitored the accounting
for the forward foreign currency contracts,  the lack of training of the Swedish
controller  in the U.S.  GAAP  requirements  for such forward  foreign  currency
contracts, and the transfer of the Swedish subsidiary's currency transactions to
a small  branch  of a new bank  that was not  familiar  with the U.S.  reporting
requirements.  While  management  concluded that the error was immaterial to the
Company's 2004 interim  financial  results,  we nevertheless  concluded that the
lack of control could have resulted in a material  error in future  consolidated
financial statements.

     In the first quarter 2005, the Company  revised its internal  controls with
respect to derivative  transactions  to ensure that these  transactions  will be
captured and  accounted  for in a timely  manner.  The  specific  steps that the
Company completed to remediate the material weakness consisted of:

     *    the training of the Swedish controller on the U.S. accounting for such
          forward  foreign  currency  contracts  which  differs from the Swedish
          accounting requirements,

     *    the requirement that all forward foreign  currency  contracts or other
          derivative  transactions  have  corporate  approval  before  they  are
          entered into, and

     *    the  addition  to  the  Company's   quarterly   subsidiary   reporting
          requirements  that a fair market valuation report be obtained from the
          issuing bank and forwarded to the chief financial officer for review.

The Company  believes that these steps have eliminated the material  weakness as
of March 31, 2005 and that no additional steps are necessary. There have been no
material costs incurred by the Company in instituting these control changes.

Item 6. Exhibits
          31.1 Certification of the Chief Executive  Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.**

          31.2 Certification of the Chief Financial  Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.**

          32.1 Certification of the Chief Executive  Officer and Chief Financial
               Officer  pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
* Filed previously.
** Filed herewith.


     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.
Date: August 16, 2005           GSE SYSTEMS, INC.

                               /S/ JOHN V. MORAN
                                 John V. Moran
                            Chief Executive Officer
                         (Principal Executive Officer)

                              /S/ JEFFERY G. HOUGH
                                Jeffery G. Hough
               Senior Vice President and Chief Financial Officer
                  (Principal Financial and Accounting Officer)