SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K


                                 CURRENT REPORT
                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


                Date of Report (Date of earliest event reported):
                                 AUGUST 25, 2004


                          THE MANAGEMENT NETWORK GROUP
               (Exact name of company as specified in its charter)


          DELAWARE                     1-27617                 48-1129619
(State or other jurisdiction   (Commission file number)       (IRS Employer
            of incorporation)                             Identification Number)

           7300 COLLEGE BOULEVARD, SUITE 302, OVERLAND PARK, KS 66210
               (Address of principal executive offices) (Zip Code)


                                 (913) 345-9315
              (Registrant's telephone number, including area code)


                                 NOT APPLICABLE
          (Former name or former address if changed since last report)









ITEM 8.01.   OTHER EVENTS

On August 25, 2004,  we entered into a mediated  settlement  agreement to settle
pending  claims in  litigation  brought  by us against a  significant  customer,
WilTel, arising from a consulting services agreement.

On December 10,  1999,  we entered into a  consulting  services  agreement  with
WilTel  under which  WilTel  committed  to purchase  an  aggregate  of up to $22
million  of  consulting  services  from us over a three year  period  commencing
January 1, 2000.  During  fiscal year 2002,  the  agreement was extended for two
additional  years  beyond  the  original  term of the  agreement.  At the end of
calendar year 2003, we invoiced WilTel for amounts due under the agreement. Such
amounts  were not paid when due and  WilTel  failed to cure such  default  after
receiving a notice and opportunity to cure.

On March 4, 2004,  we filed  suit  against  WilTel for breach of the  agreement,
seeking damages of approximately  $5.7 million against WilTel.  WilTel responded
to the suit on March 26, 2004 with its answer and two counterclaims,  neither of
which sought money damages.  WilTel requested a declaration that we breached the
agreement first, and that WilTel was therefore not liable for any damages and/or
excused from  performing  its  obligations  under the  agreement.  Additionally,
during the first quarter of fiscal year 2004, WilTel informed us of its decision
to cancel  the  consulting  agreement,  which  eliminated  their  obligation  to
purchase  additional  consulting  services  from us during 2004 (and reduced our
damage claim), but which triggered a termination fee payable to us.

Pursuant to the terms of the  settlement  agreement,  neither party has admitted
any  liability  for the claims made against them and WilTel has agreed to make a
settlement  payment to us on  October  1,  2004,  in the amount of $2 million to
settle all claims and disputes arising under the consulting  services agreement.
TMNG has no obligation to render further services to WilTel.

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 hereunto duly authorized.


                                 THE MANAGEMENT NETWORK GROUP, INC.


Date: August 31, 2004            By:      /S/ Donald E. Klumb
                                          -------------------------------------
                                          Donald E. Klumb
                                          Chief Financial Officer and Treasurer
                                          (Principal Financial Officer
                                          and Principal Accounting Officer)