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, 1999

                                       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 3, 1999, the registrant had outstanding 17,573,221 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 Quarterly Period Ended June 30, 1999



                                      INDEX


Page Reference


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


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


PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of June 30, 1999
        and December 31, 1998 (Unaudited) ..................................   3

Condensed Consolidated Statements of Operations and Comprehensive
  Income for the Three and Six Months Ended June 30, 1999 and 1998
 (Unaudited)  ..............................................................   4

Condensed Consolidated Statements of Cash Flows
   for the Six Months Ended June 30, 1999 and 1998 (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

PART II -  OTHER INFORMATION ..............................................   16

Item 4. Submission of Matter to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K

SIGNATURES ................................................................   17



                                       2
<PAGE>


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

                         OAO TECHNOLOGY SOLUTIONS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                   June 30,    December 31,
                                                                                     1999         1998
                                                                                   --------     --------
                                     ASSETS
<S>                                                                                 <C>           <C>
Current Assets:
   Cash and cash equivalents                                                        $10,694       $9,615
   Accounts Receivable:
    Billed, net of allowance for  uncollectible accounts
         of $814 and $959, respectively                                              17,159       15,458
    Unbilled, net of allowance for uncollectible accounts
         of $493 and $710, respectively                                              11,339       11,082
                                                                                   --------     --------
                                                                                     28,498       26,540
   Note receivable - related party                                                    2,520        2,520
   Income tax receivable                                                              1,400        1,337
   Deferred tax asset                                                                 1,136        1,136
   Other current assets                                                                 955          469
                                                                                   --------     --------
            Total current assets                                                     45,203       41,617
Property and equipment, net                                                           3,820        4,007
Deposits and other assets                                                               494          455
Goodwill                                                                              5,201        5,039
                                                                                   --------     --------
               Total assets                                                         $54,718      $51,118
                                                                                   ========     ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                                  $7,848       $6,481
   Accrued expenses                                                                   9,726        7,761
   Unearned revenue                                                                     173          545
   Current maturities of capital lease obligations                                      375          436
                                                                                   --------     --------
              Total current liabilities                                              18,122       15,223

Capital lease obligations, net of current  maturities                                   301          447

Commitments and contigencies                                                             --           --

Stockholders' equity:
   Common stock, par value $0.01 per share, authorized shares of 50,000,000 and
      25,000,000 at June 30, 1999 and December 31, 1998, respectively;
      16,797,387 and 16,694,060 issued and outstanding at
      June 30, 1999 and December 31, 1998, respectively                                 167          167
   Additional paid-in capital                                                        35,856       35,729
   Deferred compensation                                                               (152)        (173)
   Accumulated other comprehensive loss                                                (376)        (435)
   Retained earnings                                                                    800          160
                                                                                   --------     --------
              Total stockholders' equity                                             36,295       35,448
                                                                                   --------     --------
              Total liabilities and stockholders' equity                            $54,718      $51,118
                                                                                   ========     ========
</TABLE>


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

                                       3

<PAGE>


                         OAO TECHNOLOGY SOLUTIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                        Three months ended                  Six months ended
                                                                              June 30,                           June 30,
                                                                   -----------------------------      ------------------------------
                                                                       1999             1998             1999              1998
                                                                   ------------     ------------      ------------     ------------
<S>                                                                <C>              <C>               <C>              <C>
Revenues                                                           $     39,219     $     20,340      $     74,933     $     43,346
Direct cost                                                              35,217           17,647            66,991           36,733
                                                                   ------------     ------------      ------------     ------------
Gross profit                                                              4,092            2,693             7,942            6,613
Selling, general and administrative                                       3,889            7,067             7,335           10,108
                                                                   ------------     ------------      ------------     ------------
Income (loss) from operations                                               203           (4,374)              607           (3,495)
Interest and other income, net                                              362              195               459              381
                                                                   ------------     ------------      ------------     ------------
Income (loss) before income taxes                                           565           (4,179)            1,066           (3,114)
Income tax provision (benefit)                                              226           (1,507)              426           (1,080)
                                                                   ------------     ------------      ------------     ------------

Net income (loss)                                                           339           (2,672)              640           (2,034)


Other comprehensive income (loss), net of tax:
   Foreign currency translation adjustment                                   15             (146)               35             (135)
                                                                   ------------     ------------      ------------     ------------

Comprehensive income (loss)                                        $        354     $     (2,818)     $        675     $     (2,169)
                                                                   ============     ============      ============     ============

Net income (loss) per common share:

      Basic                                                        $       0.02     $      (0.16)     $       0.04     $      (0.12)
                                                                   ============     ============      ============     ============
      Diluted                                                      $       0.02     $      (0.16)     $       0.04     $      (0.12)
                                                                   ============     ============      ============     ============

Weighted average number of common shares outstanding:

      Basic                                                          16,737,000       16,392,000        16,715,000       16,346,000
                                                                   ============     ============      ============     ============

      Diluted                                                        17,139,000       16,392,000        17,190,000       16,346,000
                                                                   ============     ============      ============     ============
</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,
                                                                        -------------------------
                                                                           1999        1998
                                                                         --------     --------
<S>                                                                      <C>          <C>
Cash flows from operating activities:
   Net income (loss)                                                     $    640     $ (2,034)
   Adjustments to reconcile net income (loss) to net cash provided by
       (used in) operating activities:
     Depreciation and amortization                                            994          435
     Increase (decrease) in the allowance for uncollectible accounts         (362)       2,771
   Changes in assets and liabilities, net of effects of acquisitions:
     Accounts receivable, net                                              (1,422)       3,299
     Other current assets                                                    (516)      (2,254)
     Deposits and other assets                                               (375)         328
     Accounts payable                                                       1,201       (4,046)
     Accrued expenses                                                       1,902          915
     Unearned revenues                                                       (372)        (728)
                                                                         --------     --------
         Net cash provided by (used in) operating activities                1,690       (1,314)
                                                                         --------     --------

Cash flows from investing activities:
   Acquisitions, net of cash acquired                                        (139)        (938)
   Purchases of property and equipment                                       (451)      (1,745)
                                                                         --------     --------
         Net cash used in investing activities                               (590)      (2,683)
                                                                         --------     --------

Cash flows from financing activities:
   Proceeds from the exercise of stock options
     and employee stock purchases                                             127          160
   Payments on stockholders' receivables                                       --          129
   Payments on capital lease obligations                                     (207)        (321)
   Payments on notes payable                                                   --         (378)
                                                                         --------     --------
   Net cash used in financing activities                                      (80)        (410)
                                                                         --------     --------

Effect of exchange rate changes on cash                                        59         (225)
                                                                         --------     --------

Net increase (decrease) in cash and cash equivalents                        1,079       (4,632)
Cash and cash equivalents, beginning of period                              9,615       22,221
                                                                         --------     --------
Cash and cash equivalents, end of period                                 $ 10,694     $ 17,589
                                                                         ========     ========

Supplemental disclosure of cash flow information
    Cash payments for interest                                           $     32     $     46
    Cash payments for income tax                                         $    333     $    645
</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.   OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

     OAO Technology Solutions, Inc. (the "Company" or "OAOT") along with its
wholly owned subsidiaries, is an enterprise information technology
infrastructure solution provider. The Company provides a wide range of
out-sourced information technology solutions and professional services
including: the operation of large-scale service delivery centers and networks,
distributed system management, application development and maintenance; staff
augmentation services; enterprise application solutions, implementation training
services, web enablement and e-business solutions; and state-of-the-art software
solutions for the managed care marketplace. These services are organized through
four business lines: Managed Services; Staff Augmentation; Enterprise
Application Solutions ("EAS") 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
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. The Company believes that its
disclosures are adequate to make the information presented not misleading. 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 for the year ended December 31, 1998. The results of
operations for the three month and six month periods ended June 30, 1999, are
not necessarily indicative of the results to be expected for the full year.


2.   SOFTWARE DEVELOPMENT COSTS

     Development costs incurred in the research and development of new software
products and enhancements to existing software products are expensed as incurred
until technological feasibility has been established. Additional development
costs are capitalized in accordance with Statement of Financial Accounting
Standard No. 86 "Accounting for the costs of computer software to be sold,
leased or otherwise marketed." Such costs are included in deposits and other
assets on the condensed, consolidated balance sheets and amortized over the
lesser of three years or the economic life of the product.


3.   CREDIT AGREEMENTS

     The Company entered into a $35 million combined revolving credit and term
loan agreement (the "Agreement") with Bank of America on June 30, 1999. The
Agreement's revolving line of credit portion matures on May 31, 2002. It is in
the amount of $15 million and provides for a commitment fee of 0.30 % to 0.50%
on the unused portion and interest at the prime rate or, at the Company's option
at LIBOR plus a 1.75% to 2.5% risk adjusted premium based on the Company's total
funded debt to EBITDA. The term loan facility matures on May 31, 2001, is in the
amount of $20 million and provides for a .50% fee payable when drawn upon and
interest is LIBOR plus a risk adjusted premium. Borrowings under the Agreement
are limited to a multiple of earnings before interest, taxes, depreciation and
amortization ("EBITDA"). However, the Company may convert the revolving line of
credit to an asset-based loan limited to 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 and replaces the Company's
Revolving Credit Agreement with another bank. There were no borrowings
outstanding under either bank agreement as of June 30, 1999 and December 31,
1998.


                                       6
<PAGE>


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. For the three and six month periods ended June 30, 1998 all
common stock equivalents were anti-dilutive and therefore not included in the
calculation of diluted earnings per share. For the three and six month periods
ended June 30, 1999, the Company's stock options outstanding increased
outstanding common shares by 402,000 and 475,000 respectively, for total diluted
shares outstanding of 17,139,000 and 17,190,000, respectively.


5.   ACQUISITIONS

     OAO/ICOR, Ltd.

     On May 27, 1999, the Company completed the acquisition of 50% of the
outstanding capital stock of OAO/ICOR not already owned by the Company pursuant
to a Stock Purchase Agreement dated May 27, 1999 among Capita Business Services
Limited, a registered English and Wales company, and the Company. The
acquisition was effective as of April 1, 1999.

     Pursuant to the terms of the Stock Purchase Agreement the Company paid
$161,900 for the outstanding capital stock and repayment of OAO/ICOR
indebtedness to Capita Business Services Limited in the amount of $526,175. The
purchase resulted in an excess of purchase price over net assets acquired of
$501,000, which is being amortized on a straight-line basis over 7 years. The
acquisition was accounted for under the purchase method of accounting and the
Company included the results of operations of OAO/ICOR as a consolidated entity
from the effective date of acquisition. The Company previously used the equity
method of accounting for the results of operations prior to acquisition. Pro
forma information related to this acquisition is not included herein, as the
acquisition was not material.


     OAO Services, Inc.

     On July 28, 1998, the Company completed the acquisition of all the
outstanding capital stock of OAO Services, Inc., pursuant to a Stock Purchase
Agreement dated July 24, 1998 among OAO Services, Inc., the Company, OAO
Corporation ("OAOC") and an individual shareholder (the individual shareholder
together with OAOC, the "Stockholders"). The acquisition was effective as of
July 1, 1998.

     Pursuant to the terms of the Stock Purchase Agreement, the purchase price
payable by the Company to the Stockholders in connection with the acquisition
included (i) cash in the amount of $2,305,000, subject to certain purchase price
adjustments, (ii) the payment by OAOT to the bank of $4,561,000 for the
retirement of outstanding debt under a financing agreement (of this amount,
$3,465,611 is a paydown of the portion of the debt allocated to the Company,
with the remainder, being a payment of the balance allocated to OAOC), and (iii)
earn-out payments to the Stockholders in amounts equal to 10% of the OAOT's
Pre-Tax Profit, as defined in the Stock Purchase Agreement, in excess, if any,
of $2,000,000, subject to increases as defined in the Stock Purchase Agreement,
for the three years ending December 31, 1999, 2000 and 2001. The aggregate of
all earn-out payments under the Stock Purchase Agreement will not exceed
$5,000,000, and each earn-out payment will be payable by OAOT on the 90th
business day after the OAOT receipt of its audited financial statements for the
year for which such payment is to be made.

     The unaudited pro forma information for the three and six months ended June
30, 1998 set forth below gives effect to the OAO Services acquisition as if it
had occurred at the beginning of that period. No pro forma information is
presented for the three months and six months ended June 30, 1999 as the results
of the OAO


                                        7

<PAGE>

Services acquisition were included in the Company's results of
operations for the entire period. The pro forma information is presented for
informational purposes only and is not necessarily indicative of the results of
operations that actually would have been achieved had the acquisition been
consummated as of that time.



<TABLE>
<CAPTION>
                         For the three months ended             For the six months ended
                               June 30, 1998                          June 30, 1998
                        ---------------------------------     ---------------------------------
                        (unaudited, dollars in thousands)     (unaudited, dollars in thousands)
<S>                             <C>                                     <C>
    Revenue                     $   35,192                              $   72,032
    Net income(loss)                (2,367)                                 (1,300)
    Basic loss per share             (0.15)                                  (0.08)
    Diluted loss per share           (0.15)                                  (0.08)
</TABLE>

6.   SEGMENT INFORMATION

     The Company manages its business segments primarily by service line. The
Company's reportable segments are Managed Services, Staff Augmentation,
Healthcare IT Solutions, and EAS.

     Managed Services includes datacenter operations management, distributed
systems management, application development and maintenance, and other IT
services.

     Staff Augmentation services are provided by OAO Services, Inc. a wholly
owned subsidiary. Staff augmentation services provides technical IT skills to
strategic customers nationwide on a time and materials basis. Highly skilled
professionals are provided to augment the client's staffing or to respond to
requirements that cannot be sufficiently defined to permit fixed prices.

     Healthcare IT Solutions provides managed care information software products
and business solutions for health care organizations. OAO HealthCare Solutions,
Inc., a wholly owned subsidiary, provides full service solutions to users of the
managed care product MC400. This includes product development, customer service,
installation service, training and ongoing support.

     Enterprise Application Solutions provides entire life cycle services for
organizations using ERP software, internet website enablement and e-business
applications. These services range from initial business process modeling and
development, through system installation implementation to ongoing operating
maintenance and system optimization.

     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 costs are currently not allocated
to each segment. The basis of segmentation is the same as that used for the
December 31, 1998 annual report to shareholders.



                                       8
<PAGE>


     Summary information by segment as of and for the three and six months ended
June 30, 1999 and 1998 is as follows (in thousands):

<TABLE>
<CAPTION>
                                           For the three months ended                  For the six months ended
                                                     June 30,                                   June 30,
                                           ---------------------------                 -------------------------
                                           1999                   1998                 1999                 1998
                                           ----                   ----                 ----                 ----
<S>                                       <C>                  <C>                  <C>                  <C>
MANAGED SERVICES
   Revenues                               $ 18,233             $ 18,331             $ 34,866             $ 38,484
   Gross profit                              2,501                2,941                4,884                5,785
   Segment assets                           24,694               33,926               24,694               33,926

STAFF AUGMENTATION
   Revenues                                 17,401                   --               33,489                   --
   Gross profit                              2,315                   --                4,293                   --
   Segment assets                           16,075                   --               16,075                   --

EAS
   Revenues                                    801                  693                1,719                  693
   Gross profit (loss)                        (906)                (186)              (1,423)                (186)
   Segment assets                            2,568                2,100                2,568                2,100

HEALTHCARE IT SOLUTIONS
   Revenues                                  2,784                1,316                4,859                4,219
   Gross profit (loss)                         182                  (62)                 188                1,014
   Segments assets                           3,651                2,595                3,651                2,595

SEGMENT TOTALS
   Revenues                                 39,219               20,340               74,933               43,346
   Gross profit                              4,092                2,693                7,942                6,613
   Segments assets                          46,988               38,621               46,988               38,621
</TABLE>


     The following table reconciles reportable gross profit and segment assets
to the Company's consolidated totals. Selling, general and administrative
expenses, interest and other income expenses are not allocated to segments (in
thousands).


<TABLE>
<CAPTION>
                                                                             For the three months ended For the six months ended
                                                                                 June 30,                           June 30,
                                                                          ------------------------         -------------------------
                                                                           1999             1998             1999            1998
                                                                          --------        --------         --------        --------
<S>                                                                       <C>             <C>              <C>             <C>
Gross profit for reportable segments                                      $  4,092        $  2,693         $  7,942        $  6,613
   Selling, general and administrative
   expenses unallocated                                                      3,889           7,067            7,335          10,108
                                                                          --------        --------         --------        --------
     Total consolidated income (loss) from operations                          203          (4,374)             607          (3,495)
   Interest and other income unallocated                                       362             195              459             381
                                                                          --------        --------         --------        --------
     Total consolidated income (loss) before income taxes                 $    565        ($ 4,179)        $  1,066        ($ 3,114)
                                                                          ========        ========         ========        ========

Total assets for reportable segments                                      $ 46,988        $ 38,621         $ 46,988        $ 38,621
   Note receivable - related party                                           2,520              --            2,520              --
   Property and equipment unallocated                                        2,674           4,667            2,674           4,667
   Deferred and other income taxes unallocated                               2,536           1,448            2,536           1,448
                                                                          --------        --------         --------        --------
     Total consolidated assets                                            $ 54,718        $ 44,736         $ 54,718        $ 44,736
                                                                          ========        ========         ========        ========
</TABLE>


                                       9
<PAGE>



7.   RECLASSIFICATION

     Certain reclassifications have been made to the financial statements for
the three and six months ended June 30, 1998 in order to conform to the
presentation used in 1999.



                                       10
<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 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, contain certain forward-looking statements that involve 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 customers, limited ability to establish new
strategic customer relationships, risks associated with fixed-price contracts,
competition in the industry, ability to sustain and manage growth, variability
of quarterly operating results, general economic conditions, dependence on key
personnel, risks associated with international sales and other risks described
herein and in the Company's other Securities and Exchange Commission filings.


Overview

     The Company is an enterprise information technology ("IT") infrastructure
solution provider. The Company provides a wide range of out-sourced IT solutions
and professional services, including the operation of large-scale service
delivery centers and networks, distributed systems management, applications
software development and maintenance, staff augmentation services, enterprise
application solutions, integration, implementation and training services, web
enablement and e-business solutions, and state-of-the-art software solutions for
the managed care marketplace. These services are organized through four business
lines: Managed Services; Staff Augmentation; Enterprise Application Solutions
("EAS", and HealthCare IT Solutions.)

     The Company is transforming its business model to include enterprise
solutions that help to adapt data management to the internet. Management intends
to reinvest profits from its managed services and staff augmentation segments to
develop new IT businesses. These businesses include e-business enablement and
enterprise applications development and implementation. Company management
believes that timely investment in web-centric, digital infrastructure solutions
will result in improved long-term shareholder value.

     The Company provides managed services generally on a long-term, fixed-price
contractual basis, to strategic customers as part of an IT out-sourcing team
providing services to a wide range of end-user customers. The Company also
provides staff augmentation services as part of the Company's service offerings
to its strategic customers. These services, provided on a time and material
basis, are regularly utilized within engagements to meet short or indefinite
term requirements, to deliver personnel who augment the client's staffing or to
respond to requirements that cannot be sufficiently defined to permit fixed
prices. There are also instances where an engagement has started on a time and
material basis and evolved to a fixed-price basis, as the requirements became
sufficiently defined.

     EAS services are generally provided on a time and material contractual
basis. The Company, through its EAS service line, provides entire life cycle
services for organizations and internet website enablement and e-business
applications. 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 Company focuses its efforts
on public sector



                                       11
<PAGE>

customers as well as middle market commercial customers. In support of these
efforts, the Company has established strategic relationships with SAP and
Microsoft.

     The Company provides Healthcare IT Solutions services under software
license agreements with end-users, mostly within the managed care segment of the
healthcare industry via its MC400 software. The agreements include product
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.

     Quarterly results can be affected by the Company's level of investment in
the expansion and development of new service lines, as well as the commencement
of new contracts and engagements, the loss of strategic or end-user customers,
the timing of personnel cost increases and the portion of revenues derived from
new client engagements.

     The Company's strategic customers have been IBM's Global Services and
Compaq. Revenues from its strategic customers for the three months ended June
30, 1999 and 1998 were $35.5 million and $18.2 million which comprised 90% and
89% of revenues, respectively. Revenues from strategic customers were $68.1 and
$38.3 for the six months ended June 30, 1999 and 1998 which composed 91% and 88%
of revenues, respectively. The loss of a strategic customer or a decrease in the
revenue derived from the Company's relationships with either IBM or Compaq could
have a material adverse effect on the Company's business, operating results and
financial condition. There can be no assurance that either strategic customer
will renew existing contracts maturing within the next twelve months or continue
to engage the Company's services at historical levels, if at all. The
termination or non-renewal of a strategic customer's contract by an end-user
customer could also have a material adverse effect on the Company's business,
operating results and financial conditions. The Company data center contracts
with IBM's Global Services are up for renewal during the next six to twelve
months. IBM's Global Services is expected to initiate the request for proposal
process in the third quarter of 1999. These contracts generated approximately
$40 million in revenue for the Company in 1998 and are expected to provide $39
million of revenue in 1999. There can be no assurance that OAOT will win all or
any portion of these contracts or that all or any portion of these contracts
retained would continue at historical profitability levels.


Results of Operations

Revenues

     The Company's revenues increased approximately $18.9 million or 93% to
$39.2 million and $31.6 million or 73% to $74.9 million for the three and six
months ended June 30, 1999, compared to $20.3 million and $43.3 million for the
same prior year periods. Revenue increased primarily due to the acquisition of
the staff augmentation business (OAO Services, Inc.) in July 1998 which
contributed revenues of $17.4 and $33.5 million, respectively for the three and
six months ended June 30, 1999. Additionally, 1999 revenues included
approximately $.8 million of revenues from the OAO/ICOR acquisition. The results
of OAO/ICOR, previously reported under the equity method of accounting, were
included in the consolidated financial statements for the three months ended
June 30, 1999.

     Managed service revenues declined for the six months ended June 30, 1999 by
$3.5 million versus the same 1998 period. The decline was primarily due to
reductions in the amount of work, head count downsizing on continuing projects
due to automation, consolidation of sites, insourcing (where Company functions
were transferred back to internal client personnel) and elimination of revenue
on smaller, non-recurring projects with strategic customers. However, managed
service revenues were approximately the same between the three months ended June
30, 1999 and 1998 due to new engagements for Year 2000 related projects.

     During the three and six months ended June 30, 1999, HealthCare IT
Solutions (OAO HealthCare, Inc.) revenues increased $1.5 million and $.6 million
to $2.8 million and $4.9 million, respectively versus the comparable prior year
periods. The increase was due to increased installation and customization
revenue on previously sold software systems and license sales of new software
modules to the existing installed system client base.

     The Company signed a contract with IBM to provide ADM services to AT&T in
February 1999. The contract is for a ten year term with estimated revenues of
$150 million. The Company has built its own applications software



                                       12
<PAGE>

factory in Moncton, Canada to service this contract. The software factory
expands OAOT's array of services and ability to diversify its customer base.
Revenues during the three and six months ended June 30, 1999 were approximately
$.8 million and $.6 million and are expected to grow in 1999 as more billable
staff are added to the contract.


Direct Costs

     The Company's direct costs increased $17.5 million or 99% to $35.2 million
and $30.3 million or 82% to $67.0 million for the three and six months ended
June 30, 1999 compared to $17.6 million and $36.7 million for the same prior
year periods. Direct costs consist primarily of direct labor, related fringe
benefits and indirect costs of managing a project or business unit. As a
percentage of revenue, direct costs increased to 90% and 89.4% for the three and
six months ended June 30, 1999, compared to 86.8% and 84.7% for the comparable
periods in 1998.

     Direct costs increased primarily due to the acquisition of the staff
augmentation business (OAO Services, Inc.) in July 1998 which incurred $15.1
million and $29.2 million of direct costs for the three and six months ended
June 30, 1999 compared to the same period in 1998. Additionally, OAOT incurred
approximately $.8 million and $3.6 million of increased direct costs associated
with its ADM and EAS businesses for the three and six months ended June 30, 1999
compared to the same periods in 1998. The newer businesses are important to
transition the Company into what management believes are higher margin, faster
growth businesses once they gain future economic scale. Company management
expects to see future improvement within these businesses. Direct costs for the
Healthcare IT segment increased $1.6 million and $2.0 million for the three and
six months ended June 30, 1999 versus the comparable prior year periods. The
increased direct costs are due to a change in the revenue mix. During the three
and six month periods ended June 30, 1999, Healthcare segment revenue was earned
predominantly from time and material service based revenue that has a higher
direct cost component than software license sales to new customers, which was
the predominant form of revenue earned during the comparable 1998 periods.

     The Company's gross profit margin was 10.4% and 10.6% for the three and six
months ended June 30, 1999 versus 13.3% and 15.3% for the comparable prior year
periods. The decline in gross profit margin is due to reduction in margin within
the managed services segment due to the business earning more revenues on time
and material projects and pricing pressure from its strategic customers on fixed
price projects. The Company expects continued pricing pressure from its
strategic customers in its managed services segment. OAOT is investing Company
resources in the ADM and EAS businesses to position the Company into what
management believes are higher margin and faster growth opportunities. The
Company incurred increased operating losses in these businesses of $.9 million
and $1.4 million during the three and six months ended June 30, 1999 which
negatively effected the 1999 gross profit margins. Additionally, the Healthcare
IT business experienced higher gross profit margins for the three months ended
June 30, 1999 and lower gross profit margins for the six months ended June 30,
1999 versus comparable 1998 periods. Healthcare IT's gross profit margins are
significantly affected by the revenue mix of its business. Software license
sales to new customers have a higher gross profit margin than time and material
based services.


Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased $3.2 million or 45%
and $2.8 million or 27% to $3.9 million and $7.3 million, respectively, for the
three and six months ended June 30, 1999 compared to $7.1 million and $10.1
million for the same prior year periods. As a percentage of revenues, these
expenses decreased to 9.9% and 9.8% respectively, for the three and six months
ended June 30, 1999 from 34.7% and 23.3% for the same prior periods.

     The decline in the 1999 selling, general and administrative expenses is due
to the Company recognizing approximately $3.1 million of charges for provision
for uncollectible accounts and severance accruals in the second quarter of 1998.
Additionally, the three and six months ended June 30, 1999 amounts include
approximately $1.3 million and $2.4 million of selling, general and
administrative costs incurred by the staff augmentation business that were not
incurred in the prior year periods. On a comparable basis, selling, general and
administrative expenses for



                                       13
<PAGE>

the three and six month periods ended June 30, 1999 declined by approximately
$1.1 million and $2.1 million versus the three and six months ended June 30,
1998. The reduction in selling, general and administrative expenses is due to
reductions in the cost of outside consultants, administrative programs and
administrative infrastructure.

Interest and Other Income

     Interest income increased approximately $.2 million in the quarter ended
June 30, 1999 and $.1 million for the six months ended June 30, 1999 compared to
the same prior year periods. The increases were due to a higher amount of
invested cash and a higher average rate of interest primarily due to a note
receivable from OAO Corporation.

Liquidity and Capital Resources

     Cash and cash equivalents were $10.7 million as of June 30, 1999, and $9.6
million at December 31, 1998. Cash flows provided by operations were $1.7
million for the six months ended June 30, 1999 versus $1.3 million of cash flow
used in operations for the six months ended June 30, 1998. Cash provided by
operations for the six months ended June 30, 1999 was primarily the result of
the Company improving management of vendor credit.

     The Company's managed services and staff augmentation segments of business
are not capital intensive, and expenditures in any given year are ordinarily not
significant. The Company capitalized software development costs and expects to
continue to incur and possibly capitalize additional costs associated with the
enhancement of existing and development of new system modules for its MC400
healthcare software during the remainder of 1999. OAOT also expects to continue
to invest in the operations of its applications development and maintenance and
enterprise application solutions businesses during the next six to nine months.
Such costs will continue to be expensed as incurred and will represent a
significant use of future cash which is expected to be funded from the Company's
existing cash position.

     The Company entered into a $35 million combined revolving credit and term
loan agreement (the "Agreement") with a bank on June 29, 1999. The Agreement's
revolving line of credit portion, in the amount of $15 million, matures on May
31, 2002. The term loan facility, in the amount of $20 million, matures on May
31, 2001. 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 revolving line of credit portion of the
Agreement in to 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 the restrictions and replaces the Company's Revolving Credit
Agreement with another bank. There were no borrowings outstanding under the
Agreement as of June 30, 1999.

     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 revenue 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 recognizes the need to ensure that its operations will not be
adversely impacted by Y2K failures. This problem is a result of computer
programs having been written using two digits (rather than four) to define the
applicable year. Any information technology ("IT") systems that have time
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations and system failures. As of
June 30, 1999, the Company has surveyed all of its business and mission critical
systems and defined its mission critical systems as its accounting, electronic
billing and collection and MC 400 software packages. Each of the operating
segments, as well as our administrative functions, have completed the inventory
and assessment phases of the year 2000 implementation plan and are currently
implementing plans to remediate the non-compliant systems identified. The
Company is also in the process of obtaining compliance certificates from its
third party vendors. The cost of the replacement systems is estimated at
approximately $75,000, scheduled to be incurred during the first


                                       14
<PAGE>

nine months of 1999 in the normal course of business. The Company has a written
contingency plan regarding the effect, if any, should any of its third party
vendors fail to deliver Y2K compliance. The plan has been reviewed by remote
site and corporate headquarters personnel. Testing of the plan is scheduled for
October 1999.

     Based on its efforts to date, the Company believes that the vast majority
of both its IT and its non-IT systems, including all mission critical and
important systems, will remain up and running after January 1, 2000. At this
time, the Company believes that the most likely "worst-case" scenario involves
potential disruptions in areas in which the Company's operations must rely on
such third parties whose systems may not work properly after January 1, 2000.
While such failures could affect important operations of the Company and its
subsidiaries, whether directly or indirectly, in a significant manner, the
Company cannot at present estimate either the likelihood or the potential cost
of such failures. Additionally, there can be no assurance that the Year 2000
will not have a material adverse effect on the Company's financial position of
results of operations.

     The nature and focus of the Company's efforts to address the year 2000
problem may be revised periodically as new issues are identified. In addition,
it is important to note that the description of the Company's efforts
necessarily involves estimates and projections with respect to activities in the
future. The estimates and projections are subject to change as work continues,
and such changes may be substantial.


Quantitative and Qualitative Disclosures about Market Risks

     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, 1999 and 1998. OAOT 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.


                                       15
<PAGE>


PART II - OTHER INFORMATION

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

     The Company held its annual meeting of stockholders on May 14, 1999. The
information requested by this item is incorporated by reference to the
Registrant's definitive Proxy Statement for the Annual meeting of Stockholders
with the Commission on April 23, 1999.

     The results of the stockholders vote on matters at the meeting were as
follows:

<TABLE>
<CAPTION>
          I.       Election of Directors:                         For                   Withheld
                   ----------------------                         ---                   --------
<S>                                                            <C>                       <C>
                   Jerry L. Johnson                            14,555.571                241,893
                   Cecile D. Barker                            14,557,471                239,993
                   Gregory A. Pratt                            14,557,611                239,853
                   Yvonne Brathwaite Burke                     14,539,161                258,303
                   Frank B. Foster, III                        14,544,321                253,143
                   John F. Lehman                              14,544,221                253,243
                   Richard B. Lieb                             14,557,301                240,163

          II.      Proposal to amend the 1996 equity compensation plan

                      For                           Against                            Abstain
                      ---                           -------                            -------
                   11,137,544                       569,541                            24,361

          III.     Proposal to amend our certificate of incorporation to increase the number of
                   authorized shares of common stock

                      For                           Against                            Abstain
                      ---                           -------                            -------
                   14,666,810                       569,541                             13,503

          IV.      Proposal to amend our certificate of incorporation to increase the number of
                   authorized shares of preferred stock

                      For                           Against                            Abstain
                      ---                           -------                            -------
                   11,177,834                       534,932                             18,680

          V.       Proposal to ratify selection of auditors for the year ending December 31, 1999

                      For                           Against                            Abstain
                      ---                           -------                            -------
                   14,755,287                        31,544                             10,633
</TABLE>

Item 6. Exhibits and Reports on Form 10-Q

(a)   Exhibits

   Exhibit                                                                Page
     No.                          Description                              No.
   -------    -----------------------------------------------------      ------
     10.9     Credit Agreement dated June 30, 1999 by and among OAO        18
              Technology Solutions, Inc., and its subsidiaries and
              NationsBank, N.A. (1)

     27.1     Financial Data Schedule.  (1)                               130


----------
(1)  Filed herewith.



                                       16
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized.



                                  OAO Technology Solutions, Inc.
                                  (Registrant)

Date: August 16, 1999             By:_____________________________________
                                     Gregory A. Pratt
                                     President and Chief Executive Officer

Date: August 16, 1999             By:_____________________________________
                                     J. Jeffrey Fox
                                     Vice President and Chief Financial Officer

                                       17