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 June 30, 2001
                               -------------

                                       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 August 6, 2001, the registrant had outstanding  19,104,521  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 Six Month Periods Ended
                                 June 30, 2001

                                      INDEX


                                 Page Reference


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


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


PART I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

           Condensed Consolidated Balance Sheets as of June 30, 2001 and
           December 31, 2000 (Unaudited)......................................3

           Condensed Consolidated Statements of Operations and
           Comprehensive Income for the Three and Six Month Periods
           Ended June 30, 2001 and 2000 (Unaudited)...........................4

           Condensed Consolidated Statements of Cash Flows
           for the Six Months Ended June 30, 2001 and 2000 (Unaudited).........5

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

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS..................................10

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........16

PART II - OTHER INFORMATION...................................................17

           Item 4. Submission of Matters to a Vote of Security Holders

           Item 6. Exhibits and Reports on Form 8-K

SIGNATURES....................................................................18


                                       2
<PAGE>

PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                                        June 30,   December 31,
                                                                          2001        2000
                                                                        ---------------------
<S>                                                                     <C>         <C>
ASSETS
Current assets:
    Cash and cash equivalents                                           $  9,196    $ 11,779
    Accounts receivable:
      Billed, net of allowance of $2,020 and $1,280, respectively         21,000      25,129
      Unbilled, net of allowance of $949 and $449, respectively           12,104       6,684
                                                                        ---------------------
                                                                          33,104      31,813
    Note receivable - OAO Corporation                                      2,020       2,160
    Deferred income taxes                                                  1,093       1,093
    Other current assets                                                   5,748       7,713
                                                                        ---------------------
      Total current assets                                                51,161      54,558
Property and equipment, net                                                6,311       5,778
Purchased and developed software for sale, net                             2,120       2,279
Deposits and other assets                                                  1,808       2,204
Goodwill                                                                   4,341       4,758
                                                                        ---------------------
      Total assets                                                      $ 65,741    $ 69,577
                                                                        =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Borrowings under revolving credit agreement                         $  2,000    $  6,000
    Accounts payable                                                       6,875       6,464
    Accrued expenses                                                      12,123      11,068
    Unearned revenue                                                       1,321         959
    Current portion of capital lease obligations                             896         610
                                                                        ---------------------
      Total current liabilities                                           23,215      25,101

Capital lease obligations, net of current portion, and other               1,581       1,234

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;
      18,884,066 and 18,648,765 shares issued and outstanding
      at June 30, 2001 and December 31, 2000, respectively                   189         186
    Additional paid-in capital                                            43,151      42,725
    Deferred compensation                                                     (8)        (25)
    Accumulated other comprehensive loss                                    (339)       (520)
    Shareholders' receivable                                              (2,933)     (2,933)
    Retained earnings                                                        885       3,809
                                                                        ---------------------
      Total stockholders' equity                                          40,945      43,242
                                                                        ---------------------
      Total liabilities and stockholders' equity                        $ 65,741    $ 69,577
                                                                        =====================
</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      Six months ended
                                                        June 30,               June 30,
                                                 ---------------------------------------------
                                                    2001       2000        2001        2000
                                                 ---------------------------------------------
<S>                                              <C>         <C>         <C>         <C>
Revenues                                         $ 40,380    $ 39,695    $ 79,895    $ 78,240
Direct costs, exclusive of write-down of
    prepaid software licenses                      32,740      32,369      65,741      65,564
Write-down of prepaid software licenses             5,085          --       5,085          --
                                                 ---------------------------------------------
                                                    2,555       7,326       9,069      12,676

Selling, general and administrative expense         6,723       5,885      12,836      10,598
Write-down of certain receivables and advances      1,660          --       1,660          --
                                                 ---------------------------------------------
(Loss) income from operations                      (5,828)      1,441      (5,427)      2,078
Interest and other income (expense), net              140        (158)        341         438
                                                 ---------------------------------------------
(Loss) income before income taxes                  (5,688)      1,283      (5,086)      2,516
(Benefit) provision for income taxes               (2,417)        545      (2,162)      1,069
                                                 ---------------------------------------------
Net (loss) income                                  (3,271)        738      (2,924)      1,447
Other comprehensive income (loss) :
    Foreign currency translation adjustment            88         (72)        181        (104)
                                                 ---------------------------------------------
Comprehensive (loss) income                      $ (3,183)   $    666    $ (2,743)   $  1,343
                                                 =============================================
Net (loss) income per common share:
    Basic                                        $  (0.18)   $   0.04    $  (0.16)   $   0.08
                                                 =============================================
    Diluted                                      $  (0.18)   $   0.04    $  (0.16)   $   0.08
                                                 =============================================
Weighted average number of shares outstanding:
    Basic                                          18,302      17,755      18,196      17,695
                                                 =============================================
    Diluted                                        18,302      18,372      18,196      18,745
                                                 =============================================
</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>
                                                                  Six months ended
                                                                     June 30,
                                                               ---------------------
                                                                  2001        2000
                                                               ---------------------
<S>                                                            <C>         <C>
Cash Flows from Operating Activities:
    Net (loss) income                                          $ (2,924)   $  1,447
    Adjustment to reconcile net (loss) income to net
      cash provided by (used in) operating activities:
      Depreciation and amortization                               1,909       1,561
      Change in fair value of stock guarantee                        --         235
      Write-down of certain receivables and advances              1,660          --
      Write-down of prepaid software licenses                     5,085          --
    Change in assets and liabilities:
      Accounts receivable, net                                   (2,482)       (610)
      Other current assets                                       (2,982)       (746)
      Deposits and other assets                                     (56)       (675)
      Accounts payable                                              310      (3,114)
      Income taxes payable                                           --         (28)
      Accrued expenses                                            1,055        (421)
      Unearned revenue                                              362         279
                                                               ---------------------
        Net cash provided by (used in) operating activities       1,937      (2,072)
                                                               ---------------------
Cash Flows from Investing Activities:
    Capitalized sofware development costs                            --        (544)
    Expenditures for property and equipment                        (725)     (1,615)
                                                               ---------------------
        Net cash used in investing activities                      (725)     (2,159)
                                                               ---------------------
Cash Flows from Financing Activities:
    Proceeds from common stock transactions, net                    429       1,233
    Proceeds from sale-leaseback transactions                       312          --
    Net repayments on revolving credit facility                  (4,000)         --
    Payments on capital lease obligations                          (414)        (74)
                                                               ---------------------
         Net cash (used in) provided by financing activities     (3,673)      1,159
                                                               ---------------------
Effect of exchange rate changes on cash                            (122)        (91)
                                                               ---------------------
Net decrease in cash and cash equivalents                        (2,583)     (3,163)
Cash and cash equivalents, beginning of period                   11,779      13,142
                                                               ---------------------
Cash and cash equivalents, end of period                       $  9,196    $  9,979
                                                               =====================
Supplemental cash flows information:
    Cash paid for interest                                     $     40    $     38
    Cash paid for income taxes                                 $  1,150    $  1,168
</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 integrator
of  information  technology  and  eBusiness  solutions.  The  Company  began its
operations in 1993 as a division of OAO  Corporation,  was incorporated in March
1996 and was spun off from OAO  Corporation in April 1996. The Company  operates
four business  segments:  Healthcare IT Solutions,  Enterprise  Applications and
eBusiness Solutions, Managed IT Services, and Professional Services.

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
the 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,  2000  and the  Company's  other
filings  with the SEC.  The results of  operations  for the three and  six-month
periods ended June 30, 2001, are not necessarily indicative of the results to be
expected for the full year.

2. Revenue Recognition

The Company  provides  services under  contracts,  primarily to large commercial
customers.  Service revenues are generally recognized ratably over the period of
the related contract. Revenue for fixed-price contracts is recorded on the basis
of the estimated  percentage of completion,  based on costs incurred as compared
to estimated  costs at  completion  of the  services  rendered.  Revenues  under
time-and-materials  contracts  are recorded at the  contracted  rates plus other
direct costs as they are incurred.  Losses,  if any, on contracts are recognized
as soon as they become known.

The Company  recognizes  software  revenue under the  provisions of Statement of
Position (SOP) No. 97-2,  "Software Revenue  Recognition" (as amended by SOP No.
98-4  and SOP No.  98-9).  Except  as noted  below,  software  license  fees are
recognized as revenue upon the customer's  execution of a noncancelable  license
agreement and the Company's  delivery of the software,  provided that the fee is
fixed and  determinable,  collectibility  is probable,  and customization of the
software is not required.  Revenues are  recognized  from per member,  per month
(PMPM)  software  license  arrangements  as payments from customers  become due.
Revenues from software  maintenance  contracts are  recognized  ratably over the
maintenance  period based upon their vendor specific  objective evidence of fair
value.  Revenues  from  consulting  and training  services are  recognized  on a
time-and-materials basis as services are performed.  Amounts received in advance
of the delivery of software or the  performance  of services are  classified  as
unearned revenue on the consolidated balance sheets.

3. Earnings (Loss) 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. For the three-month period ended June 30, 2000 the Company's
stock options outstanding  increased  outstanding common shares by 617,000,  for
total diluted shares  outstanding of 18,372,000.  For the six-month period ended
June 30, 2000 the Company's  stock  options  outstanding  increased  outstanding
common shares by 1,050,000 for total diluted shares outstanding of 18,745,000.

For the three and six month  periods ended June 30, 2001,  the  Company's  stock
options were not dilutive.

                                       6
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

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

4. Special charges

The Company  continually  has assessed the  recoverability  of its investment in
prepaid  software  licenses  related to its CRM business.  OAOT has historically
evaluated the recoverability of its prepaid software licenses based on the depth
and  quality of its sales  pipeline,  level of active  proposals  and letters of
intent to purchase licenses,  sales, and the number of qualified leads generated
from its focused sales programs among other factors.

During the second  quarter of 2001,  the Company  received  notice that a signed
letter of intent for a  significant  quantity  of  licenses  was  cancelled.  In
addition,  due to circumstances beyond the Company's control,  other significant
Siebel sales  opportunities  identified  by OAOT were not won or  determined  by
management to be highly  unlikely of being won.  Further,  the Company  received
notice  that  the  company  with  which  it was  teaming  was  not  awarded  the
significant  outsourcing  contract.  Accordingly,  OAOT  wrote-off  $5.1 million
representing  all presently on hand and future  purchase  commitments to acquire
Siebel software licenses as of June 30, 2001.

At June 30, 2001 the Company also increased its reserves for certain receivables
and  advances  by $1.7  million.

5. Segment information

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

The Healthcare IT Solutions segment provides  proprietary  software products and
business  solutions for  healthcare  organizations.  The division  provides full
service  solutions via its proprietary  MC400 software on a one-time  license or
PMPM basis. This includes customer service,  installation service,  training and
ongoing support.

The Enterprise Applications and eBusiness Solutions segment provides integration
services and software  solutions.  These practice  areas focus on AMS,  Portals,
eCommerce and ERP.


                                       7
<PAGE>

                         OAO TECHNOLOGY SOLUTIONS, INC.

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

Segment information (Continued)

The  Managed  IT  Services   segment   provides   network  and  systems  design,
integration,  and management of  large-scale  data-center  environments  linking
multiple  technologies,  operating systems,  protocols and geographic areas. The
division manages enterprise  systems and provides desktop  management  services,
which includes on-site and remote network systems management.

The Professional Services segment provides information technology personnel that
are regularly  utilized  within  engagements  to meet short or  indefinite  term
requirements.  These highly  skilled  professionals  are provided to augment the
client's staffing requirements.

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

Summary information by segment is as follows:

<TABLE>
<CAPTION>
                                                                      Three-months ended      Six-months ended
                                                                           June 30,                June 30,
                                                              ------------------------------------------------
    (Amounts in thousands):                                      2001         2000        2001       2000
                                                              ------------------------------------------------
<S>                                                              <C>          <C>        <C>         <C>
MANAGED IT SERVICES
    Revenues                                                     $ 13,899     $ 16,183   $ 28,629    $ 32,912
    Gross profit                                                    3,167        3,289      6,471       6,412
PROFESSIONAL SERVICES
    Revenues                                                       13,193       13,825     26,089      28,169
    Gross profit                                                    1,668        1,853      3,027       3,660
ENTERPRISE APPLICATIONS AND
     eBUSINESS SOLUTIONS
    Revenues                                                        9,306        5,330     18,110       9,605
    Gross profit (loss)                                            (3,770)         233     (2,827)        (87)
HEALTHCARE IT SOLUTIONS
    Revenues                                                        3,982        4,357      7,067       7,554
    Gross profit                                                    1,490        1,951      2,398       2,691
SEGMENT TOTALS
    Revenues                                                     $ 40,380     $ 39,695   $ 79,895    $ 78,240
    Gross profit                                                    2,555        7,326      9,069      12,676
Selling, general  and other charges - unallocated                   8,383        5,885     14,496      10,598
                                                              ------------------------------------------------
    Total consolidated (loss) income from operations               (5,828)       1,441     (5,427)      2,078
     Interest and other income (expense), net unallocated             140         (158)       341         438
                                                              ------------------------------------------------
      Total consolidated (loss) income before income taxes       $ (5,688)     $ 1,283    $(5,086)    $ 2,516
                                                              ================================================
</TABLE>


                                     Page 8
<PAGE>

6. Reclassification

Certain reclassifications have been made to the condensed consolidated financial
statements  for the three and six-month  periods ended June 30, 2000 in order to
conform to the presentation used in 2001.

7. New Accounting Pronouncements

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  No. 141 ("SFAS  141"),  "Business
Combinations."  SFAS 141 requires the purchase method of accounting for business
combinations    initiated    after   June   30,   2001   and    eliminates   the
pooling-of-interests  method.  The Company does not believe that the adoption of
SFAS 141 will have a significant impact on its financial statements.

     In July 2001, the FASB issued Statement of Financial  Accounting  Standards
No. 142 ("SFAS 142"). "Goodwill and Other Intangible Assets", which is effective
January 1, 2002. SFAS 142 requires,  among other things,  the  discontinuance of
goodwill  amortization.  In addition,  the standard includes  provisions for the
reclassification  of  certain  existing  recognized   intangibles  as  goodwill,
reassessment   of  the  useful   lives  of  existing   recognized   intangibles,
reclassification  of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential future
impairments  of  goodwill.  SFAS 142 also  requires  the  Company to  complete a
transitional goodwill impairment test six months from the date of adoption.  The
Company is currently assessing but has not yet determined the impact of SFAS 142
on its financial position and results of operations.


                                       9
<PAGE>

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

The following  discussion and analysis is provided to increase the understanding
of, and should be read in conjunction with, the Condensed Consolidated Financial
Statements  and Notes  thereto found in this Form 10-Q.  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 Form 10-Q,
including  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations and Notes to 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 end-user  customers,  the ability to
establish  new  strategic   customer   relationships,   risks   associated  with
fixed-price  contracts,  future  financial  results,  the ability to sustain and
manage growth,  lower than expected growth of non-strategic  customer  revenues,
success in achieving  marketing and sales goals and other  business  development
initiatives,  difficulties  of  investments  in  infrastructure,   uncertainties
relating to the difficulties of transacting on the Internet,  transitioning  the
Company to New Business Sector  businesses,  potential changes in the prevailing
technology away from outsourcing IT applications,  the failure of the Company to
make necessary  enhancements or developments to its existing software  products,
opportunities in the market place, competition in the industry, general economic
conditions,  the possibility  that strategic or end-user  customers could invoke
early  termination  clauses  contained  in the  Company's  long-term  contracts,
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 including
exposure to fluctuations  between the U.S. dollar and other foreign  currencies,
and other risks  described  herein and in the  Company's  other  Securities  and
Exchange Commission filings.


Overview

OAO Technology Solutions,  Inc. ("the Company" or "OAOT") is a global integrator
of information  technology and eBusiness  solutions.  The Company  operates four
business  segments  within two broad business  sectors.  The New Business Sector
includes services in relatively  higher margin,  faster growth business segments
that are newer to OAOT and where management believes there is significant future
growth  potential.   The  Traditional   Business  Sector  includes  services  in
relatively  lower  profit  margin,  slower  growth  business  segments  that are
currently  profitable  and have a recurring  positive cash flow.  The Company is
leveraging  the  advantages  of its  Traditional  Business  Sector by  investing
profits from the Traditional  Business sector into the New Business sector.  The
Company's business sectors and segments are as follows:

New Business Sector
     Healthcare IT Solutions
     Enterprise Applications and eBusiness Solutions

Traditional Business Sector
     Managed IT Services
     Professional Services

The Healthcare IT Solutions  segment provides managed care software  application
solutions under software license agreements via its MC400 software which is sold
on a per member, per month (PMPM) subscription basis or for a one-time perpetual
license  fee.  OAOT's  MC400  software  provides a  comprehensive  solution  for
healthcare benefit  organizations (health maintenance  organizations,  indemnity
insurance  plans,  physician  hospital   organizations,   independent  physician
organizations and self-insured employer plans among others). The MC400 system is
web-enabled  and provides over thirty  modules that include  claims  processing,
patient care management, eligibility,


                                       10
<PAGE>

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

Overview (continued)

enrollment,   utilization,   internet  connectivity,   data  warehousing,   care
management and web portals in one integrated  system. The Company has over fifty
installed  sites and  offers a viable  solution  that is ready  for the  federal
requirements of the Health Insurance Portability and Accountability Act (HIPAA).

The  Enterprise   Applications   and  eBusiness   Solutions   segment   provides
customer-centric  integration  services and software solutions that are designed
to work  cohesively  within the framework of our  customers'  existing  business
models.    The   division's    three   practices   are   eBusiness    Solutions,
Application/Managed Service Provider (A/MSP) and Application Management Services
(AMS).   These   practice   areas   focus   on   the   following   partnerships:
Portals/Plumtree,  eCommerce/IBM and ERP with SAP and Great Plains.  The Company
has decided to exit the software  license  reseller portion of this practice and
write-off its investment in Siebel pre-paid CRM software  licenses.  The Company
will further focus its practice on providing service solutions. OAOT offers both
customized and pre-packaged  solutions.  Integration services are delivered on a
consulting  and  project  basis  under both time and  materials  and fixed price
arrangements,  while our application  management and software solutions services
are made available through an A/MSP model or outsourced from the customer.

The  Managed  IT  Services   segment   provides   network  and  systems  design,
integration,  and  management of large-scale  environments,  which link multiple
technologies,  operating  systems,  protocols and geographic areas. OAOT manages
enterprise  systems and provides  desktop  management  services,  which  include
on-site and remote  network  systems  management.  These  services are provided,
generally  under  long-term  fixed  price  contracts,  as  either  part of an IT
outsourcing  team with our  strategic  customers to a wide range of end users or
directly to middle  market  customers.  The  Company's  strategic  partners  and
customers  include IBM and Compaq. In 2000, the Company's data center management
contract was renewed for ten years. Management believes that revenues from these
contracts  may  increase  over the term of the  contract;  however,  there is no
assurance that revenues from this contract will increase or continue at historic
revenue and profitability levels.

The Professional  Services segment provides  information  technology  personnel,
primarily on a  time-and-materials  basis,  that are regularly  utilized  during
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.
The  Professional   Services  business  is  concentrated  within  one  strategic
customer;  however,  the  Company has  expanded  its  customer  base in 2000 and
continues to focus on expanding its customer base in the future.

Management  recognizes  the  need  to  aggressively  diversify  and  expand  the
Company's  services  and  customer  base.  We are focusing our 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 Plumtree,  Great  Plains,  Mi8,  SAP, and
Microsoft as part of its marketing effort to provide value added services.


                                       11
<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 six months ended
                                                             June 30,                            June 30,
                                                 --------------------------------------------------------------------
     (in millions)                                     2001             2000               2001             2000
                                                 --------------------------------------------------------------------
<S>                                              <C>      <C>      <C>      <C>      <C>      <C>      <C>     <C>
Revenues .....................................   $40.4    100.0%   $39.7    100.0%   $79.9    100.0%   $78.2   100.0%
Direct Costs, exclusive of write-down of
     prepaid software licenses ...............    32.7     80.9%    32.4     81.6%    65.7     82.2%    65.5    83.8%
Write-down of prepaid licenses ...............     5.1     12.6%      --       --      5.1      6.4%      --      --
Selling, general and administrative expense ..     6.7     16.6%     5.9     14.9%    12.8     16.0%    10.6    13.5%
Write-down of certain receivables and advances     1.7      4.2%      --       --      1.7      2.1%      --      --
                                                 -----    -----    -----    -----    -----    -----    -----   -----
(Loss) income from operations ................    (5.8)   -14.3%     1.4      3.5%    (5.4)   -6.7%      2.1     2.7%
Interest and other income (expense), net .....     0.1      0.2%    (0.2)   -0.5%      0.3      0.3%     0.4     0.5%
                                                 -----    -----    -----    -----    -----    -----    -----   -----
     (Loss) income before income taxes .......    (5.7)   -14.1%     1.2      3.0%    (5.1)   -6.4%      2.5     3.2%
(Benefit) provision for income taxes .........    (2.4)   -5.9%      0.5      1.3%    (2.2)   -2.8%      1.1     1.4%
                                                 -----    -----    -----    -----    -----    -----    -----   -----
     Net (loss) income .......................   $(3.3)   -8.2%    $ 0.7      1.7%   $(2.9)   -3.6%    $ 1.4     1.8%
                                                 =====    ====     =====    =====    =====    ====     =====   =====
</TABLE>

Comparison  of the three and six month  periods ended June 30, 2001 to the three
and six-month periods ended June 30, 2000.

Revenues
The Company's  revenues increased $ .7 million or 1.8 % to $40.4 million for the
three months ended June 30, 2001, compared to $ 39.7 million for the same period
in 2000. For the six months ended June 30, 2001 revenues  increased $1.6 million
or 2.0 % to $ 79.9  million  from $ 78.2  million  for the same  period in 2000.
Revenue  increases  for both the three and six month periods ended June 30, 2001
were driven by the  Company's  New business  sector,  primarily  the  Enterprise
Applications  and  eBusiness  Solutions  segment.  New Business  Sector  revenue
increases  were  partially  offset by  decreases  in revenues  in the  Company's
Traditional  business  sector,  in both the Managed IT Services and Professional
Services segments.

Revenues from the Company's New business sectors increased $3.6 million to $13.3
million for the three-month period ended June 30, 2001 from $ 9.7 million in the
same period in 2000,  while revenues  increased by $8.0 million to $25.2 million
for the  six-month  period  ended June 30,  2001 from $17.2  million in the same
period in 2000.

Revenues for Enterprise  Applications and eBusiness  Solutions segment increased
$4.0 million or 75.5% to $ 9.3 million, for the three months ended June 30, 2001
compared to $5.3 million for the same period in 2000.  Revenues  increased  $8.5
million  or  88.5% to $18.1  million  for the six  months  ended  June 30,  2001
compared to $9.6  million for the same period in 2000.  The increase in revenues
for both the  three-month  and  six-month  periods  ended June 30,  2001 was due
primarily  to  increased  activity  in  the  AMS  business.  Billable  headcount
increased from 177 in June 2000 to 362 in June 2001. It is anticipated that this
business will  continue to have a favorable  impact for the balance of the year.
Increases  in AMS  revenues  were  partially  offset by  decreases  in eBusiness
solutions  revenue,  which has been impacted by the lower than expected  revenue
from reselling Siebel CRM licenses.


                                       12
<PAGE>

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

Revenues (continued)

Revenues for the  Healthcare IT Solutions  segment  decreased  $0.4 million,  or
9.1%, to $ 4.0 million for the three months ended June 30, 2001 compared to $4.4
million for the same period in 2000. The decrease in revenue was attributable to
lower levels of integration and implementation  services.  Further,  the Company
accounted  for a  significant  license sale and  integration  project  under the
percentage of completion  method,  which caused the Company to defer revenue and
profit  recognition until later periods as the work is completed.  The effect of
these lower revenue levels was partially offset by sale of software  products in
the second  quarter of 2001.  The same  factors led to a decrease in revenues of
$0.5  million or 6.6% to $7.1  million  for the six months  ended June 30,  2001
compared  to $7.6  million  for the same  period in 2000.  The  decline  in this
revenue  stream  is in  alignment  with  management's  strategic  objectives  to
increase  recurring  revenues  under  long term  contracts  achieved  by selling
standardized  software on a  subscription  basis and  becoming  less  reliant on
perpetual  license sales revenues and  integration and  implementation  services
revenues.

Revenues from the Company's  Traditional Business Sectors decreased $2.9 million
to $27.1 million for the three-month period ended June 30, 2001 from $30 million
in the same period in 2000.  Revenues decreased by $6.4 million to $54.7 for the
six-month  period  ended June 30, 2001 from $61.1  million in the same period in
2000.

Revenues from Managed IT Services segment  decreased by $2.3 million or 14.2% to
$13.9 million for the three months ended June 30, 2001 compared to $16.2 million
for the same period in 2000.  The decline in revenues  was due  primarily to the
non-renewal  of a  contract,  and lower  pricing and  service  levels  under its
current contract requirements. These declines were partially offset by increased
project  work  through a strategic  customer  of the  Company's  United  Kingdom
operations.  Accordingly,  the  decrease in revenues of $4.3 million or 13.1% to
$28.6  million for the six months ended June 30, 2001  compared to $32.9 million
for the same  period in 2000 was driven  primarily  by the same events as in the
second quarter of 2001.

Revenues  from  Professional  Services  decreased  $0.6 million or 4.3% to $13.2
million for the three months ended June 30, 2001  compared to $13.8  million for
the three  months  ended June 30,  2000.  The  decrease  in  revenues  is due to
continued softness in staffing requisitions from a strategic customer and by the
decline in IT staff  requisitions due to the slow down in the technology market.
This softness may continue into future periods.  This also lead to a decrease in
revenues for the six months ended June 30, 2001 of $2.1 million or 7.4% to $26.1
million  compared to $28.2  million for the same period in 2000.  The Company is
diversifying  its  customer  base which is expected to  partially  mitigate  any
future declines.


                                       13
<PAGE>

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

Direct Costs

The Company's  direct costs  increased  $5.5 million or 17% to $37.8 million for
the three  months ended June 30,  2001,  compared to $32.3  million for the same
period in 2000.  Direct costs increased as a percentage of revenues to 93.6% for
the three months  ended June 30, 2001 versus 81.4% for same period in 2000.  For
the six months ended June 30, 2001, direct costs increased $5.2 million to $70.8
million  from  $65.6  million  in the same  period in 2000.  Direct  costs  also
increased as a percentage of revenues to 88.6% for the six months ended June 30,
2001 versus 83.8% for same period in 2000.

The increase in direct costs in absolute dollars and as a percentage of revenues
for both the three  and six  month  periods  ended  June 30,  2001 is due to the
write-down  of $5.1  million  related to  prepaid  software  licenses  which are
attributable  to the  CRM  practice,  within  the  Enterprise  Applications  and
eBusiness  Solutions  segment.  Excluding  the  write-off  of  prepaid  software
licenses, the ratio of direct costs to revenues for the Company decreased.  This
improvement  partially  offset  the  effect  of the  write-down  of the  prepaid
software licenses.

In the Enterprise Applications and eBusiness Solutions segment, exclusive of the
write down of the prepaid  licenses,  direct  costs as a  percentage  of Segment
revenues  were 86% and 96.2% for the three  months ended June 30, 2001 and 2000,
respectively.  Direct costs as a percentage  of segment  revenues were 87.3% and
101%  for the  six  months  end  June  30,  2001  and  2000,  respectively.  The
improvement  is a result of a more  favorable  mix in billable  to  non-billable
headcount,  and an overall  increase in headcount in the AMS business.  Further,
billable headcount  increased from 76% of total headcount in June 2000 to 80% of
total  headcount  in June 2001.  Despite a decline  in  revenue,  the  eBusiness
Solutions  group was able to improve  the  relationship  of direct  costs to its
group  revenues  in the three and  six-month  periods by  reducing  staff in the
second  half  of  2000  and  the  first  half  of  2001  and  thereby  improving
utilization.  Exclusive of the write-down of the prepaid software licenses,  the
Enterprise  Applications and eBusiness  Solutions segment direct costs increased
by $2.9  million to $8.0  million for the three  months ended June 30, 2001 from
$5.1 million for the same period in 2000.  The results in the second  quarter of
2001 are a  continuation  of the same  experience  in the first quarter of 2001,
which resulted in a increase of $6.1 million to $15.8 million for the six months
ended June 30, 2001 compared to $9.7 million for the same period last year.  The
increases in absolute dollars reflect the overall increase in business  activity
in the segment.

Managed It Services  segment  direct costs as a percentage  of Segment  revenues
were  77%  and  79.6%  for  the  three  months  end  June  30,  2001  and  2000,
respectively.  Direct costs as a percentage  of segment  revenues were 77.3% and
80.5%  for the six  months  end June 30,  2001 and 2000,  respectively.  Segment
direct costs  decreased  by $2.2  million to $10.7  million for the three months
ended June 30, 2001 from $12.9 million for the same period in 2000. Direct costs
decreased  by $4.3  million to $22.1  million for the six months  ended June 30,
2001 compared to $26.4 million for the same period last year. The improvement is
a result of operating  efficiencies  gained in the business,  and higher margins
realized with newer customers.

The  relationship of direct costs to revenues in the HealthCare IT Solutions and
Professional  Services  segments,  remained generally constant for the three and
six-month periods ended June 30, 2001 compared to the same periods in 2000.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses were $6.7 million and $5.9 million
for the three-month periods ended June 30, 2001 and 2000,  respectively.  OAOT's
selling,  general and  administrative  expenses  increased  as a  percentage  of
revenues  for the three  months ended June 30, 2001 to 16.6 % compared to 14.9 %
for the same period in 2000.  For the six-month  periods ended June 30, 2001 and
2000 selling,  general and administrative  expenses were $12.8 million and $10.6
million or 16.0% and 13.5% of sales,  respectively.  The increases were a result
of  increases  in  indirect  expenses in the  Company's  new  business  sectors,
primarily the AMS business, as a result of the growth in that business.


                                       14
<PAGE>

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

Selling, General and Administrative Expenses (continued)

The Company also experienced  incremental  increases from an acquisition in late
2000 and has experienced  other increases as a result of the continuation of the
company's  infrastructure  build-out  to  accommodate  its  growth.  The Company
expects future selling, general and administrative expenses to grow less rapidly
as a percentage of revenues as expenses stabilize and revenues increase.

Write-down of certain receivables and advances

Special charges,  in addition to the write-down of the Siebel prepaid  licenses,
were incurred in the second quarter of 2001 totaling $1.7 million. There were no
such special charges in the same periods in 2000.

Interest and Other Income and Provisions for Income Taxes

For the three and  six-month  periods  ended June 30,  2001  interest  and other
income  (expense)  increased  to $0.1 million from a loss of $0.2 million in the
same period in 2000.  Interest and other income increased  primarily  because of
the negative  effect of a non-recurring  mark to market  adjustment in the three
and  six-months  ended June 30, 2000 relating to the stock fair value  guarantee
incurred in connection with the value added industry  remarketer  agreement with
Siebel  Systems,  Inc.  The  effective  tax rate was  42.5 % for the  three  and
six-months  ended June 30, 2001  essentially  consistent with the same period in
2000.  However,  the losses for the three and six month  periods  ended June 30,
2001  resulted  in a benefit of $2.4  million  and $2.1  million  compared to an
income tax expense of $.5 million and $1.1 million for the comparable periods in
2000.

Liquidity and Capital Resources

Cash and cash equivalents  were $9.2 million as of June 30, 2001,  versus $ 11.8
million as of December 31, 2000.  Cash provided by  operations  was $1.9 million
for the six months ended June 30, 2001.  Cash provided by operations for the six
months ended June 30, 2001 was primarily due to earnings before special non-cash
charges,  depreciation  and  amortization  and an increase in unearned  revenue,
which was  partially  offset by an  increase in  accounts  receivable.  Accounts
receivable  increased  due  to  increased  software  license  sales  and  timing
differences  in  receipt  of  amounts  due  from  strategic  customers.   OAOT's
traditional  business sectors of Managed IT Services and  Professional  Services
continue to manage collections of accounts  receivable and these cash flows were
used to fund the  Company's  new business  sector:  Healthcare  IT Solutions and
Enterprise Applications and eBusiness Solutions business segments.

The  Company  expects  to  continue  to  invest in the  operations  of its newer
business  sectors and will also invest in sales and marketing as it develops its
demand  generation  capabilities for these newer business  services.  Such costs
will  continue to be expensed  as  incurred  and  represent a use of future cash
which is expected to be funded from Company  operations and available cash. Cash
used in investing  activities  was $0.7 million for the purchase of hardware and
office  equipment used primarily by its  Enterprise  Applications  group and for
certain software developed for sale by the Healthcare IT segment.  To the extent
that additional  funds are required,  the Company has arranged a $6.5 million of
lease credit lines with two financial  institutions.  As of June 30, 2001,  $4.2
million had been utilized under the facility.


                                       15
<PAGE>

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

Liquidity and Capital Resources (continued)

The Company has a $35 million combined  revolving credit and term loan agreement
("the Agreement") with a Bank. 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 Agreement's term loan facility  provides for a draw
fee of 0.50% payable when drawn upon and interest at LIBOR plus a risk- adjusted
premium.  The term loan facility,  in the amount of $20 million,  matures on May
31, 2001. However, since there were no borrowings under the term facility by May
31,  2001,  the  maturity  is  extended to May 31,  2002.  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 and pledges all Company assets as
collateral,  among other restrictions.  However, there can be no assurance that,
based on the Company's  operations,  its covenants  will permit the full amounts
under the Agreement to be utilized in the future.  Borrowings  outstanding under
this  Agreement  were $5 million and $2 million as of December 31, 2000 and June
30, 2001.  The amount  outstanding  at June 30, 2001 bears interest at a rate of
6.75%, and was repaid in July 2001.

The Company currently  anticipates that its existing cash balances,  bank credit
facilities or any 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.

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 six months ended June
30, 2001 and 2000.  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's
foreign  currency risk will  increase with the growth of its business.  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 potential  adverse  fluctuations in foreign currency  exchange rates;
however,  the Company periodically reviews its exposure to foreign currency risk
and may take action to limit its foreign  currency  exchange  exposure if deemed
appropriate.


                                       16
<PAGE>

PART II - OTHER INFORMATION


Item  4.    Submission Of Matters To A Vote Of Security Holders:


     A.   The Annual Meeting of Shareholders was held May 12, 2001 at the Hilton
          Garden Inn - Hotel in Washington, DC.

     B.   The  following  individuals  were  elected as  directors at the Annual
          Meeting:

                                              Votes For         Votes Withheld
          1.       Jerry L. Johnson           17,103,386        99,501
          2.       Cecile D. Barker           17,128,549        74,338
          3.       Gregory A. Pratt           17,117,001        85,886
          4.       Yvonne Brathwaite Burke    17,116,037        86,850
          5.       Frank B. Foster, III       17,126,703        76,186
          6.       John F. Lehman             17,133,633        69,254
          7.       Richard B. Lieb            17,133,513        69,374


     C.   Deloitte & Touche,  LLP,  independent  accountants,  were  selected as
          independent auditors for the fiscal year ending December 31, 2001 by a
          vote of 17,136,704 for, 55,000 against and 11,183 abstentions.

     D.   Vote on the  approval  of the  amended  and  restated  OAO  Technology
          Solutions,  Inc.  Employee  Stock  purchase  plan  (ESPP) by a vote of
          11,577,755 for, 411,836 against and 25,229 abstentions.



Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

     None

(b)  No reports were filed on form 8-K during the quarter ended June 30, 2001.


                                       17
<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:    August 13, 2001              By:      /s/ Gregory A. Pratt
                                              ----------------------------------
                                               Gregory A. Pratt
                                               President and Chief Executive
                                               Officer

Date:    August 13, 2001              By:      /s/ J. Jeffrey Fox
                                              ----------------------------------
                                               J. Jeffrey Fox
                                               Senior Vice President Finance and
                                               Chief Financial Officer