Performance contracts, in which an outside organization undertakes to provide instruction in a local educational agency's jurisdiction, are discussed in this report. Characteristics of the outside educational organization are described. Payment schedules are outlined in detail, as are the problems of accurately measuring gains. Arguments for and…

Problems which should be considered in relation to performance contracting include: legal problems, time for planning, teachers' objections, and measuremet problems. Advantages include: the learning experience of planning, Hawthorne effect excitement, and the low cost of this experimentation. (MS)