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

                                    FORM 10-Q


(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the quarterly period ended September 30, 2000

                                       OR

[_]  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 0-23173

                         OAO TECHNOLOGY SOLUTIONS, INC.
             (Exact name of registrant as specified in its charter)


Delaware                                                  52-1973990
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)


7500 Greenway Center Drive
Greenbelt, Maryland                                       20770
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code (301) 486-0400



     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 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 [_]


     As of November 6, 2000, the registrant had outstanding 18,502,720 shares of
its Common Stock, par value $0.01 per share.


                                       1
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

       Quarterly Report on Form 10-Q for the Three and Nine Month Periods
                            Ended September 30, 2000


                                      INDEX


                                                                  Page Reference


COVER PAGE................................................................. 1


INDEX...................................................................... 2


PART I - FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

             Condensed Consolidated Balance Sheets as of September 30,
             2000 and December 31, 1999 (Unaudited).......................  3

             Condensed Consolidated Statements of Operations and
             Comprehensive Income for the Three and Nine Month
             Periods Ended September 30, 2000 and 1999 (Unaudited)........  4

             Condensed Consolidated Statements of Cash Flows for
             the Nine Months Ended September 30, 2000 and 1999
             (Unaudited)..................................................  5

             Notes to Condensed Consolidated Financial Statements
             (Unaudited)..................................................  6

Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS............................  9

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..... 14

PART II - OTHER INFORMATION............................................... 15

           Item 6. Exhibits and Reports on Form 8-K

SIGNATURES................................................................ 16


                                       2
<PAGE>

PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements

                         OAO TECHNOLOGY SOLUTIONS, INC.
                      Condensed Consolidated Balance Sheets
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                      September 30,          December 31,
                                                                            2000                 1999
                                                                      -----------------------------------
<S>                                                                      <C>                  <C>
ASSETS
Current assets:
    Cash and cash equivalents                                            $ 13,286             $ 13,142
    Accounts receivable:
     Billed, net of allowance of $ 581 and $1,014, respectively            18,331               21,066
     Unbilled, net of allowance of $ 449 and $ 493, respectively           10,177                5,059
                                                                      -----------------------------------
                                                                           28,508               26,125
    Note receivable - affiliate                                             2,320                2,520
    Deferred income taxes                                                   1,031                1,031
    Income tax receivable                                                     934                  934
    Other current assets                                                    7,097                6,447
                                                                      -----------------------------------
     Total current assets                                                  53,176               50,199
Property and equipment, net                                                 4,973                4,387
Purchased and developed computer software for sale, net                     2,348                1,596
Deposits and other assets                                                   1,048                  192
Goodwill                                                                    4,412                4,981
                                                                      -----------------------------------
     Total assets                                                        $ 65,957             $ 61,355
                                                                      -----------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Borrowings under revolving credit agreement                          $  6,000             $   --
    Accounts payable                                                        5,485                8,470
    Accrued expenses                                                        9,863               11,718
    Income taxes payable                                                      789                  605
    Unearned revenue                                                        1,152                  797
    Current portion of capital lease obligations                               12                   54
                                                                      -----------------------------------
     Total current liabilities                                             23,301               21,644

Capital lease obligations, net of current portion                              48                   89

Commitments and contingencies

Stockholders' equity:
    Preferred stock, par $.01 per share, 10,000,000 shares authorized;
     none issued and outstanding                                             --                   --
    Common stock, par $.01 per share, 50,000,000 shares authorized;
     18,503,689 and 18,101,124 shares issued and outstanding
     at September 30, 2000 and December 31, 1999, respectively                185                  181
    Additional paid-in capital                                             42,238               40,743
    Deferred compensation                                                     (35)                (131)
    Accumulated other comprehensive loss                                     (488)                (249)
    Stockholder receivable                                                 (2,933)              (2,933)
    Retained earnings                                                       3,641                2,011
                                                                      -----------------------------------
     Total stockholders' equity                                            42,608               39,622
                                                                      -----------------------------------
     Total liabilities and stockholders' equity                          $ 65,957             $ 61,355
                                                                      ===================================
</TABLE>

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


                                       3
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
    Condensed Consolidated Statements of Operations and Comprehensive Income
                                   (Unaudited)
           (Dollars and shares in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                       Three months ended        Nine months ended
                                                         September 30,             September 30,
                                                   -------------------------------------------------
                                                        2000         1999        2000         1999
                                                   -------------------------------------------------
<S>                                                  <C>          <C>        <C>          <C>
Revenues                                             $ 36,674     $ 38,887   $ 114,914    $ 113,823
Direct costs                                           30,904       34,058      96,468      101,052
                                                   -------------------------------------------------
                                                        5,770        4,829      18,446       12,771
Selling, general and administrative expense             6,017        4,095      16,615       11,430
                                                   -------------------------------------------------
Income (loss) from operations                            (247)         734       1,831        1,341
Interest and other income (expense), net                  566          223       1,004          681
                                                   -------------------------------------------------
Income before income taxes                                319          957       2,835        2,022
Provision for income taxes                                136          430       1,205          854
                                                   -------------------------------------------------
Net income                                                183          527       1,630        1,168
Other comprehensive income (loss):
    Foreign currency translation adjustment              (135)          15        (239)          74
                                                   -------------------------------------------------
Comprehensive income                                 $     48     $    542   $   1,391    $   1,242
                                                   =================================================

Net income per common share:
    Basic                                            $   0.01     $   0.03   $    0.09    $    0.07
                                                   =================================================
    Diluted                                          $   0.01     $   0.03   $    0.09    $    0.07
                                                   =================================================

Weighted average number of shares outstanding
       Basic                                           17,910       16,986      17,802       16,804
                                                   =================================================
       Diluted                                         18,269       17,667      18,552       17,355
                                                   =================================================
</TABLE>

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


                                       4
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                              Nine months ended
                                                                                September 30,
                                                                           -----------------------
                                                                              2000           1999
                                                                           -----------------------
<S>                                                                        <C>            <C>
Cash Flows from Operating Activities:
    Net income                                                             $  1,630       $  1,168
    Adjustment to reconcile net income to net
     cash (used in) provided by operating activities:
        Depreciation and amortization                                         2,402          1,564
        Change in fair value of stock guarantee                                (112)          --
    Change in assets and liabilities:
     Accounts receivable, net                                                (2,383)          (253)
     Other current assets                                                      (450)        (3,378)
     Deposits and other assets                                                 (760)          (536)
     Accounts payable                                                        (3,038)         1,246
     Income taxes payable                                                       184           --
     Accrued expenses                                                        (1,743)         2,565
     Unearned revenue                                                           355             95
                                                                           -----------------------
       Net cash (used in) provided by operating activities                   (3,915)         2,471
                                                                           -----------------------

Cash Flows from Investing Activities:
    Purchase of business, net of cash acquired                                 --             (164)
    Capitalized software costs                                               (1,236)          --
    Expenditures for property and equipment                                  (1,936)          (784)
                                                                           -----------------------
       Net cash used in investing activities                                 (3,172)          (948)
                                                                           -----------------------

Cash Flows from Financing Activities:
    Net borrowings under revolving credit agreement                           6,000           --
    Proceeds from common stock transactions, net                              1,499            257
    Payments on capital lease obligations                                       (83)          (639)
                                                                           -----------------------
        Net cash provided by (used in) financing activities                   7,416           (382)
                                                                           -----------------------
Effect of exchange rate changes on cash                                        (185)            74
Net increase in cash and cash equivalents                                       144          1,215
Cash and cash equivalents, beginning of period                               13,142          9,615
                                                                           -----------------------
Cash and cash equivalents, end of period                                   $ 13,286       $ 10,830
                                                                           =======================


Supplemental cash flow information:
    Cash paid for interest                                                 $     47       $     43
    Cash paid for income taxes                                             $  1,294       $    831
</TABLE>

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


                                       5
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Organization and basis of presentation

OAO  Technology   Solutions,   Inc.  (the  "Company"  or  "OAOT")  is  a  global
enterprise-wide  integrator of  information  technology  ("IT")  solutions.  The
Company,  along with its  wholly  owned  subsidiaries,  provides a wide range of
outsourced  information  technology solutions and professional  services.  These
services  include the  operation of  large-scale  service  delivery  centers and
networks;   distributed   systems  management;   custom  applications   software
development and maintenance;  professional IT services;  enterprise  application
solutions, integration, implementation and training services; web enablement and
e-business  solutions;  and proprietary  software solutions for the managed care
marketplace.  These services are provided  through four business lines:  Network
and Systems Business Solutions,  Professional  Services,  E-Business  Consulting
Solutions, and Healthcare IT Solutions.

The  condensed  consolidated  financial  statements  included  herein  have been
prepared by the Company without audit,  pursuant to the rules and regulations of
the Securities and Exchange  Commission  ("SEC") and include,  in the opinion of
management,  all  adjustments,   consisting  of  normal  recurring  adjustments,
necessary for a fair presentation of interim period results. Certain information
and footnote  disclosures  normally included in financial statements prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to such rules and  regulations.  These condensed  consolidated
financial statements should be read in conjunction with the financial statements
and notes  thereto  included in the  Company's  Annual Report on Form 10-K filed
with the SEC for the year  ended  December  31,  1999  and the  Company's  other
filings  with the SEC.  The results of  operations  for the three and nine month
periods ended September 30, 2000, are not necessarily  indicative of the results
to be expected for the full year.


2.   New accounting pronouncements

In December 1999,  the SEC issued Staff  Accounting  Bulletin No. 101,  "Revenue
Recognition in Financial  Statements" ("SAB 101"). SAB 101 summarizes certain of
the SEC's views on applying generally accepted accounting  principles to revenue
recognition in financial statements. The Company is required to adopt SAB 101 no
later than the fourth  quarter of fiscal 2000.  The Company does not expect that
the adoption of SAB 101 will have a material impact on its results of operations
and financial position.


In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  Involving Stock
Compensation--an  interpretation  of APB  Opinion  No.  25" ("FIN  44").  FIN 44
clarifies  the  application  of APB  Opinion  No. 25 and,  among  other  issues,
clarifies the following:  the definition of an employee for purposes of applying
APB Opinion No. 25, the criteria for  determining  whether a plan qualifies as a
non-compensatory  plan, the accounting  consequence of various  modifications to
the terms of previously fixed stock options or awards, and the accounting for an
exchange of stock  compensation  awards in a business  combination.  The Company
does not expect that the  adoption of this  interpretation  will have a material
impact on its results of operations and financial position.


3.   Software Licenses for Resale

The Company entered into a Value Added Industry Remarketer agreement with Siebel
Systems,  Inc.  on August  31,  1999.  As part of this  agreement,  the  Company
purchased  software  licenses in the amount of $5.1  million for resale to third
parties.  The software  licenses  were  purchased  with cash of $2.8 million and
228,800 shares of the Company's  common stock. The common stock had a guaranteed
per share value of $10 at August 31, 2000.  The  difference  between the closing
share price at August 31, 2000,  of $4.94,  and the  guaranteed  per share value
will be paid in cash.  The balance of the licenses is included in other  current
assets and the value of the  guarantee  is included  in accrued  expenses on the
accompanying balance sheets. Changes in the value of the guarantee are reflected
in the Statements of Operations in the amount of $.3 million and $.1 million for
the three and nine month period ended September 30, 2000, respectively.

                                       6
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                   (Continued)


4.   Earnings per share

Basic  earnings  per  share  has been  calculated  as net  earnings  divided  by
weighted-average common shares outstanding, while diluted earnings per share has
been  computed as net earnings  divided by weighted  average  common and diluted
shares   outstanding.   The  Company's  stock  options   outstanding   increased
outstanding  common  shares by 359,000  and  681,000  for total  diluted  shares
outstanding  of  18,269,000  and  17,667,000  for the three month  period  ended
September 30, 2000 and 1999, respectively,  and by 750,000 and 551,000 for total
diluted  shares  outstanding  of 18,552,000  and  17,355,000  for the nine month
period ended September 30, 2000 and 1999, respectively.


5.   Revolving credit agreement

The Company had $ 6.0 million  outstanding  under its revolving credit agreement
as of September 30, 2000 with interest payable at the prime rate of 9.5 %.


6.   Segment information

The Company manages its business segments primarily by service line. As reported
in  the   Company's   Annual   Report  on  Form  10K,   the  names  and  certain
classifications within the Company's reportable segments were changed in 1999 to
better  describe the services  provided.  The 1999  quarterly  results have been
reclassified  to  conform to the 2000  presentation.  The  Company's  reportable
segments  are Network and Systems  Business  Solutions,  Professional  Services,
E-Business Consulting Solutions, and Healthcare IT Solutions.

Network  and  Systems  Business  Solutions;   includes  data-center   operations
management, distributed systems management, and other IT services.

Professional  Services;  are  provided  by OAO  Services,  Inc,  a wholly  owned
subsidiary.  Through OAO Services,  Inc. the Company  provides highly skilled IT
professionals to augment  customer's  staffing  requirements  nationwide.  These
services  are  provided  primarily  to  strategic  customers  and on a time  and
materials basis.

E-Business  Consulting  Solutions;  provides  entire  life  cycle  services  for
organizations.  These services range from initial  business process modeling and
development,  through system installation and implementation and custom software
application  development and maintenance.  The E-Business  Consulting  Solutions
segment is dedicated to implementing and supporting systems from Siebel Systems,
NCR, SAP and Microsoft.  This segment also provides third party vendor  packaged
software including Siebel Systems, SAP and Microsoft, IBM and Rational on both a
licensed and Application Service Provider ("ASP") basis.

Healthcare IT Solutions;  provides  proprietary  software  products and business
solutions for healthcare organizations.  Through OAO HealthCare Solutions, Inc.,
a wholly owned  subsidiary,  the Company provides full service solutions via its
proprietary  MC400 software on a one-time  license and ASP basis.  This includes
product  development,  customer  service,  installation  service,  training  and
ongoing support.

The Company  evaluates the performance of each segment based on segment revenues
and gross  profit.  Segment gross profit  includes  only direct costs.  Selling,
general and administrative  expenses, net interest expense, and other income and
expenses are not allocated to segments.


                                       7
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                   (Continued)


Segment information (continued)

Summary information by segment is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                               Three months ended               Nine months ended
                                                                                  September 30,                   September 30,
                                                                           --------------------------------------------------------
                                                                               2000            1999           2000            1999
                                                                           --------------------------------------------------------
<S>                                                                        <C>             <C>             <C>            <C>
NETWORK and SYSTEMS BUSINESS SOLUTIONS
     Revenues                                                              $  13,514       $  17,213       $  46,426      $  51,843
     Gross profit                                                              2,209           3,319           8,621          9,929
PROFESSIONAL SERVICES
     Revenues                                                                 13,901          16,645          42,070         50,133
     Gross profit                                                              1,765           2,191           5,425          6,484
E-BUSINESS CONSULTING SOLUTIONS
     Revenues                                                                  5,661           1,824          15,266          4,165
     Gross profit (loss)                                                         330          (1,391)            243         (4,538)
HEALTHCARE IT SOLUTIONS
     Revenues                                                                  3,598           3,205          11,152          7,682
     Gross profit                                                              1,466             710           4,157            896
SEGMENT TOTALS
     Revenues                                                                 36,674          38,887         114,914        113,823
     Gross profit                                                              5,770           4,829          18,446         12,771
Selling, general and administrative expenses unallocated                       6,017           4,095          16,615         11,430
                                                                           --------------------------------------------------------
     Total consolidated income (loss) from operations                           (247)            734           1,831          1,341
      Interest and other income (expense), net unallocated                       566             223           1,004            681
                                                                           --------------------------------------------------------
       Total consolidated income before income taxes                       $     319       $     957       $   2,835      $   2,022
                                                                           ========================================================
</TABLE>

7.   Reclassifications

Certain reclassifications have been made to the condensed consolidated financial
statements  for the three and nine month  periods  ended  September  30, 1999 in
order to conform to the presentation used in 2000.


                                       8
<PAGE>

Item 2.
                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement

The following  discussion and analysis is provided to increase the understanding
of, and should be read in conjunction with the Condensed  Consolidated Financial
Statements of the Company and Notes thereto included elsewhere in this quarterly
report.  Historical  results and percentage  relationships  among any amounts in
these financial statements are not necessarily indicative of trends in operating
results for any future  period.  The statements  which are not historical  facts
contained in this quarterly report,  including this Management's  Discussion and
Analysis of Financial  Condition and Results of  Operations,  and Notes to these
Condensed   Consolidated  Financial  Statements,   constitute   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995. Such statements are based on currently available  operating,  financial
and competitive information, and are subject to various risks and uncertainties.
Future events and the Company's  actual results may differ  materially  from the
results reflected in these forward-looking statements.  Factors that might cause
such a difference  include,  but are not limited to, dependence on key strategic
and strategic  end-user  customers,  limited  ability to establish new strategic
customer relationships,  risks associated with fixed-price contracts, ability to
sustain and manage  growth,  variability  of quarterly  operating  results,  the
Company's  expansion and  development of new service lines,  marketing and other
business   development   initiatives,   the  commencement  of  new  engagements,
competition  in the industry,  general  economic  conditions,  dependence on key
personnel,  the ability to attract,  hire and retain  personnel  who possess the
technical  skills and experience  necessary to meet the service  requirements of
its  clients,  the  potential  liability  with  respect to actions  taken by its
employees,  risks associated with international sales, and other risks described
herein,  the  Company's  annual  report on Form 10K and in the  Company's  other
Securities and Exchange Commission filings.


Overview

The Company is a global  enterprise-wide  integrator of  information  technology
(IT) solutions. The Company provides a wide range of outsourced IT solutions and
professional  services,  including the operation of large-scale service delivery
centers  and  networks,  distributed  systems  management,  custom  applications
software  development  and  maintenance,  professional  IT services,  enterprise
application  solutions,  integration,  implementation and training services, web
enablement and e-business solutions,  and proprietary software solutions for the
managed care  marketplace.  These  services are provided  through four  business
segments:  Network  and  Systems  Business  Solutions;   Professional  Services;
E-Business Consulting Solutions and Healthcare IT Solutions.

The Company  provides  Network and Systems  Business  Solutions,  generally on a
long-term,  fixed-price  contractual basis, to strategic customers as part of an
IT outsourcing team,  providing services to a wide range of end-user  customers.
The  Company's  data  center  management  contract  was  renewed  for ten years.
Management  believes that revenues from this contract may increase over the term
of the contract; however, there is no assurance that revenues from this contract
will increase or continue at historical revenue and profitability levels.

Professional  Services provides information  technology personnel primarily on a
time and materials basis, that are regularly utilized within engagements to meet
short  or  indefinite  term  requirements.  There  are also  instances  where an
engagement  has  started  on  a  time  and  materials  basis  and  evolved  to a
fixed-price basis, as the requirements became sufficiently defined. Professional
Services are offered as part of the Company's service offerings to its strategic
customers as well as non-strategic customers.


                                       9
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


Overview (Continued)

E-Business  Consulting  Solutions are generally provided on a time and materials
contractual  basis.  The Company,  through its E-Business  Consulting  Solutions
services, provides entire life cycle services for organizations.  These services
range from initial business  process  modeling and  development,  through system
installation  and  implementation.  The  Company  also  provides a full suite of
continuous  support  services  to  help  maintain  and  upgrade  these  complex,
mission-critical   systems.  The  E-Business  Consulting  Solutions  segment  is
dedicated  to  implementing  and  supporting   third-party   designed   software
applications and systems sold on a licensed and ASP basis.

The Company's Healthcare IT Solutions practice provides proprietary managed care
software  application  solutions under software license agreements via its MC400
software.  The products  are provided on a one-time  license fee or a per member
per month (PMPM) long-term contractual basis and may include system development,
customer  service,  installation  services,  training,  and ongoing support.  In
addition,  other  services may be provided,  such as total  project  management,
hardware planning and implementation, and custom programming. MC400 is currently
installed at over 50 managed care sites in the United States and the Bahamas.

The Company focuses its efforts on middle market commercial  customers,  as well
as public  sector  customers.  In  support of these  efforts,  the  Company  has
established  strategic  relationships with third-party  software vendors such as
Siebel  Systems,  NCR, SAP, and  Microsoft.  The Company  signed a special Value
Added  Industry  Remarketer  (VAIR)  agreement  with Siebel  Systems,  Inc. This
agreement  permits OAOT to design,  install,  resell and host,  on an ASP basis,
Siebel solutions for commercial and public sector customers in North America and
Europe.  The  Company has also hired teams of Siebel  consultants  to  implement
comprehensive CRM solutions.

Management  intends to reinvest  profits  from its Network and Systems  Business
Solutions and Professional  Services segments to continue to develop new service
offerings in the  E-Business  Consulting  Solutions and  Healthcare IT Solutions
segments. These offerings include e-business application solutions,  application
service provider  services (ASP),  custom software  application  development and
maintenance (ADM), and customer relationship management services (CRM) including
license sales, application hosting, and consulting.  Company management believes
that timely investment in internet-centric businesses and information technology
infrastructure solutions will result in improved long-term stockholder value.


                                       10
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations

The following table sets forth, for the periods indicated, selected statement of
operations data as a percentage of net revenue:

<TABLE>
<CAPTION>
                                                        For the three months ended                For the nine months ended
                                                               September 30,                             September 30,
                                                  ---------------------------------------------------------------------------------
         (in millions)                                   2000                 1999                 2000                 1999
                                                  ---------------------------------------------------------------------------------
<S>                                               <C>         <C>       <C>        <C>       <C>        <C>       <C>        <C>
Revenues .......................................  $ 36.7      100.0%    $ 38.9     100.0%    $114.9     100.0%    $113.8     100.0%
Direct Costs ...................................    30.9       84.2%      34.1      87.7%      96.5      84.0%     101.1      88.8%
Selling, general and administrative expense ....     6.0       16.3%       4.1      10.5%      16.6      14.4%      11.4      10.0%
                                                  ---------------------------------------------------------------------------------
Income (loss) from operations ..................    (0.2)      -0.5%       0.7       1.8%       1.8       1.6%       1.3       1.2%
Interest and other income (expense), net .......     0.5        1.4%       0.2       0.5%       1.0       0.8%       0.7       0.6%
                                                  ---------------------------------------------------------------------------------
         Income before income taxes ............     0.3        0.9%       0.9       2.3%       2.8       2.4%       2.0       1.8%
Provision for income taxes .....................     0.1        0.4%       0.4       1.0%       1.2       1.0%       0.8       0.7%
                                                  ---------------------------------------------------------------------------------
         Net income ............................  $  0.2        0.5%    $  0.5       1.3%    $  1.6       1.4%    $  1.2       1.1%
                                                  =================================================================================
</TABLE>

Comparison of the three and nine month  periods ended  September 30, 2000 to the
three and nine month periods ended September 30, 1999.

Revenues

The  Company's  revenues  decreased $ 2.2 million or 5.7 % to $ 36.7 million for
the three months ended  September  30, 2000,  compared to $ 38.9 million for the
same  period in 1999.  For the nine months  ended  September  30, 2000  revenues
increased $ 1.1 million or 0.9 % to $ 114.9 million from $ 113.8 million for the
same period in 1999.  The decrease  and increase in revenues for the  respective
three and nine month  periods  ended  September  30,  2000 are the result of net
increases and decreases in revenues in the following business segments.  Revenue
increases  for the three  months  ended  September  30,  2000 were driven by the
E-Business  Consulting  Solutions  segment,  while  for the  nine  months  ended
September  30,  2000  revenue  increases  were  driven  by both  the  E-Business
Consulting Solutions and Healthcare IT Solutions segments. In both the three and
nine month periods ended  September  30, 2000 revenue  increases  were offset by
lower revenues in the Network and Systems  Business  Solutions and  Professional
Services segments compared to the same periods in 1999.

Revenues for E-Business  Consulting Solutions increased $ 3.9 million or 216.7 %
to $ 5.7 million,  for the three months ended  September  30, 2000 compared to $
1.8 million for the same period in 1999.  The increases for the third quarter of
2000 coupled with similar increases  reported for the first two quarters of 2000
lead to an increase in revenues of $ 11.1  million or 267.3 % to $ 15.3  million
for the nine months ended  September  30, 2000 compared to $ 4.2 million for the
same period in 1999. The increase in revenues for both the  three-month and nine
month periods ended  September 30, 2000 was due primarily to increased  activity
in the ADM and consulting  practices compared with the same periods in 1999. The
number of billable personnel continued to increase on new and existing contracts
through the first three  quarters of 2000,  compared to the first three quarters
of 1999  when the  contracts  had  lower  levels  of  activity.  Similarly,  the
consulting  practices  were in the start-up phase in the first three quarters of
1999 and had lower revenues in those  periods.  The first three quarters of 2000
reflect new  projects  and a general  increase in business  volume  resulting in
comparatively higher revenues from the same periods in 1999.

Revenues for the  Healthcare IT Solutions  segment  increased $ 0.4 million,  or
12.5 %, to $ 3.6 million for the three months ended  September 30, 2000 compared
to $ 3.2 million for the same period in 1999.  The  increase in revenues was due
primarily to an increase in recurring  revenues which includes  primarily annual
software  maintenance fees and per member, per month ("PMPM")  subscription type
license sales.  Recurring  revenues are from business sold in prior periods that
are being  recognized  during the three months  ended  September  30, 2000.  Two
additional  license  sales  occurred  under the PMPM pricing  model in the third
quarter of 2000,  which  reflects  the  Company's  decision  to  transition  the
Healthcare IT Solutions  segment to an Application  Service Provider (ASP) sales
model.  Revenues  from these sales will be  recognized  in future  periods.  The
recurring  revenue and perpetual license sales led to an increase in revenues of
$ 3.4 million or 44.5 % to $ 11.1  million for the nine months  ended  September
30, 2000 compared to $ 7.7 million for the same period in 1999.


                                       11
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Revenues (continued)

Revenues from Network and Systems Business Solutions  decreased by $ 3.7 million
or 21.5 % to $ 13.5  million  for the three  months  ended  September  30,  2000
compared  to $ 17.2  million for the same  period in 1999.  The  decrease in the
third  quarter  was due  primarily  to delays in the  signing of a new  contract
between a strategic  customer and end user  customer and  continued  pricing and
volume decreases from another  strategic  customer.  Additionally,  a low-margin
contract  was not renewed  which  contributed  to  approximately  $ 2 million of
revenues in the third  quarter of 1999.  The volume and pricing  decreases  were
partially  offset in the first  quarter by projects  from new  customers and the
effect of the UK  acquisition,  which  occurred  in the second  quarter of 1999.
Accordingly,  the  decrease  in  revenues  of $ 5.4  million or 10.5 % to $ 46.4
million for the nine months ended  September 30, 2000 compared to $ 51.8 million
for the same period in 1999 was driven primarily by the events in the second and
third quarters of 2000.

Revenues from Professional  Services decreased $ 2.8 million or 16.8 % to $ 13.9
million for the three months ended September 30, 2000 compared to $ 16.7 million
for the three months ended  September 30, 1999.  The decrease in revenues is due
to continued softness in staffing requisitions from a strategic customer,  which
began with the carry over effects of Y2K constraints.  The carry over effects of
the Y2K constraints and continued  softness in staffing  requisitions  lead to a
decrease  in  revenues  for the nine months  ended  September  30, 2000 of $ 8.0
million or 16.0 % to $ 42.1  million  compared  to $ 50.1  million  for the same
period in 1999.

Direct Costs

The  Company's  direct costs  decreased $ 3.2 million or 9.4 % to $ 30.9 million
for the three months ended  September  30, 2000,  compared to $ 34.1 million for
the same period in 1999. Direct costs also decreased as a percentage of revenues
to 84.2 % for the three months ended  September  30, 2000 versus 87.7 % for same
period in 1999.  For the nine months  ended  September  30,  2000,  direct costs
decreased $ 4.6 million or 4.5 % to $ 96.5 million from $ 101.1  million for the
same period in 1999.  Direct costs also decreased as a percentage of revenues to
84.0 % for the nine months ended  September  30, 2000 versus 88.8 % for the same
period in 1999.  The decrease in direct  costs as a  percentage  of revenues for
both the three and nine month periods  ended  September 30, 2000 compared to the
same periods in 1999 is due primarily to the E-Business Consulting Solutions and
the Healthcare IT Solutions  segments.  The other business segments maintained a
relatively constant relationship of direct costs to their respective revenues.

In the E-Business  Consulting  Solutions segment direct costs increased by $ 2.2
million to $ 5.4 million for the three  months ended  September  30, 2000 from $
3.2 million for the same  period in 1999.  However,  as a percent of the segment
revenues  direct costs decreased to 94.7 % of sales in the third quarter of 2000
from  177.8 % of sales in the same  period  in 1999.  The  results  in the third
quarter  of 2000 are a  continuation  of the same  experience  in the  first two
quarters of 2000,  which resulted in a increase in direct costs of $ 6.4 million
or 73.5 % to $ 15.1  million  for the  nine  months  ended  September  30,  2000
compared to $ 8.7  million  for the same  period last year.  For the nine months
ended  September 30, 2000 direct costs as a percentage of revenues  decreased to
98.7 % compared to 209.0 % for the same period in 1999.

In the Healthcare IT Solutions segment direct costs remained relatively constant
for both the three and nine month periods  ended  September 30, 2000 compared to
the same periods in 1999. However, as a percent of segment revenues direct costs
decreased  to 58.3 % of  revenues in the third  quarter of 2000,  from 78.1 % of
revenues in the same period in 1999.  For the nine months  ended  September  30,
2000 direct costs as a percentage  of segment  revenues  decreased to 62.5% from
88.3 % for the same  period  in 1999.  Direct  costs as a  percent  of  revenues
continue  to  decrease as a result of an  increase  in  recurring  revenues  and
perpetual use software license sales.


                                       12
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Selling, General and Administrative Expenses

Selling,  general  and  administrative  expenses  were $ 6.0  million  and $ 4.1
million  for  the  three-month  periods  ended  September  30,  2000  and  1999,
respectively. OAOT's selling, general and administrative expenses increased as a
percentage  of revenues for the three months ended  September 30, 2000 to 16.3 %
compared to 10.5 % for the same period in 1999. For the nine-month periods ended
September 30, 2000 and 1999 selling,  general and administrative expenses were $
16.6 million and $ 11.4 million or 14.4 % and 10.0 % of sales, respectively. The
increases  were a result  of  increased  sales  and  marketing  efforts  and the
continuation  of the  company's  infrastructure  build-out  to  accommodate  its
expected   growth.   However,   the  Company   expects   selling,   general  and
administrative  expenses to increase in absolute  dollars and as a percentage of
revenues as it has been  investing  and will continue to invest in its sales and
marketing  capabilities,  as  well  as  building  a  delivery  team  to  support
anticipated sales. During the three months ended September 30, 2000, the Company
began to eliminate unproductive sales, marketing and delivery staff, in addition
to reducing  corporate  overhead  costs.  The results of the reductions  will be
recognized in future periods.

Interest and Other Income (Expense) and Provision for Income Taxes

For the  three-month  period ended  September 30, 2000 interest and other income
increased  to $ 0.5  million  from $ 0.2  million  in the same  period  in 1999.
Interest income increased  primarily due to a higher amount of invested cash and
interest earned on a note receivable from OAO  Corporation,  and a positive mark
to market  adjustment in the amount of $ 0.3 million to the obligation  incurred
as a part of the  Siebel  VAIR  agreement.  The  impact  of the  mark to  market
adjustment had a lesser effect on the nine-month period ended September 30, 2000
by  increasing  interest and other  income by $ 0.1 million.  The mark to market
adjustment along with the other factors affecting the three-month  period led to
an  increase  in  interest  and other  income for the  nine-month  period  ended
September  30,  2000 to $1.0  million  from $ 0.7  million in the same period in
1999.

The  effective  tax rate was 42.5 % for the three and  nine-month  periods ended
September 30, 2000. The effective tax rate was increased in the third quarter of
1999 to  change  the  cumulative  effective  tax rate  from 40% in the first two
quarters  of 1999  to an  effective  rate of  42.2%  for the  nine-months  ended
September 30, 1999.

Liquidity and Capital Resources

Cash and cash equivalents were $ 13.3 million as of September 30, 2000, versus $
13.1 million as of December 31, 1999.  Cash used in operations was $ 3.9 million
for the nine months ended  September 30, 2000.  Cash used in operations  for the
nine months ended September 30, 2000 was due to the payment of accounts  payable
and accrued expenses and an increase in net accounts receivable. OAOT's business
segments of Network and Systems  Business  Solutions and  Professional  Services
provided net cash flows which were used to fund the Company's  newer  Healthcare
IT Solutions and E-Business Consulting Solutions business segments.  The Company
expects to continue to invest in the operations of its newer  business  segments
including  E-Business  Consulting  Solutions  and  Healthcare  IT Solutions  for
projects  including  ADM and  enhancement  of its ASP product.  The Company will
continue to invest in its sales and marketing capabilities,  as well as building
a delivery  team to support  anticipated  sales.  Such costs will continue to be
expensed  as  incurred  and  represent  significant  use of future cash which is
expected to be funded from Company  operations and available  cash. Cash used in
investing  activities was $ 3.2 million for the purchase of computers and office
equipment and certain  software  associated with the Healthcare IT segment.  The
Company's business  operations will require  additional capital  expenditures as
the Company  continues  to expand its ADM  business  and its other new  business
segments.  Uses of cash  were  offset  by  proceeds  from  borrowings  under the
revolving credit  agreement in the amount of $ 6.0 million,  and the sale of the
Company's  common stock through stock option  exercises and purchases  under the
employee stock purchase plan in the amount of $ 1.5 million.

The Company entered into a $35 million  combined  revolving credit and term loan
agreement  (the  "Agreement")  with Bank of America on September  30, 1999.  The
Agreement  provides a revolving  line of credit  "Revolver" in the amount of $15
million that matures on May 31, 2002. The Revolver provides for a commitment fee
based on the unused balance, and at the Company's option,  interest at the prime
rate,  or the LIBOR plus a 1.75% to 2.5% risk  adjusted  premium.  The term loan
facility, in the amount of $20 million, matures on May 31, 2001.


                                       13
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)


Liquidity and Capital Resources (continued)

Borrowings  under the  Agreement  are limited to a multiple  of earnings  before
interest, taxes, depreciation,  and amortization (EBITDA).  However, the Company
may  convert,  at its option,  the  Revolver  portion of the  Agreement  into an
asset-based loan whose borrowing  availability would be a percentage of eligible
billed and unbilled  receivables.  The Agreement  also requires  maintenance  of
certain  financial  covenants,  prohibits  the payment of dividends  among other
restrictions.  There were no borrowings  outstanding  under this Agreement as of
December 1999 and the revolving credit  agreement had $ 6.0 million  outstanding
as of September 30, 2000 with an interest rate of 9.5 %.

The Company  currently  anticipates  that its existing  cash balances as well as
cash generated from  operations will be sufficient to satisfy its operating cash
needs for the  foreseeable  future.  The Company has  announced  an  acquisition
program as part of its strategy to accelerate  revenues and earnings growth. The
Company expects to use bank credit to leverage the Company's financial position.
In addition,  the Company could consider  seeking  additional  public or private
debt or equity financing to fund future growth  opportunities.  No assurance can
be  given,  however,  that such  additional  debt or  equity  financing  will be
available to the Company on terms and conditions  acceptable to the Company,  if
at all.


Impact of the Year 2000 "Y2K" Issue

The Company  surveyed and  remediated  where  necessary  all of its business and
mission-critical  systems among other  procedures and tests,  as part of its Y2K
planning  process.  As of November 6, 2000, the Company had not  experienced any
significant Y2K related disruptions.


Item 3.

Quantitative and Qualitative Disclosures about Market Risk

The Company  conducts  business in foreign  countries,  primarily Canada and the
United Kingdom.  Foreign currency transaction gains and losses were not material
to the  Company's  results of  operations  for the three and nine month  periods
ended  September 30, 2000 and 1999.  The Company  believes its foreign  currency
risk is related primarily to the difference between amounts the Company receives
and disburses in Canada in U.S. dollars from U.S. dollar denominated  contracts.
The Company does not expect the amount of foreign  currency  risk to be material
in the future. To date, the Company has not entered into any significant foreign
currency forward exchange contracts or other derivative financial instruments to
hedge the effects of adverse fluctuations in foreign currency exchange rates.


                                       14
<PAGE>

PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit                                                                Page
  No.                  Description                                      No.
-------     -------------------------------------------------------    ----
 27.1       Financial Data Schedule. (1)                                17


(b)  No reports were filed on form 8-K during the quarter  ended  September  30,
     2000.

(1)  Not filed herewith.


                                       15
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   OAO Technology Solutions, Inc.
                                   (Registrant)

Date: November 13, 2000            By: /s/ Gregory A. Pratt
                                      -----------------------------------
                                   Gregory A. Pratt
                                   President and Chief Executive Officer

Date: November 13, 2000            By: /s/ J. Jeffrey Fox
                                      -----------------------------------
                                   J. Jeffrey Fox
                                   Vice President Finance and Chief Financial
                                   Officer


                                       16