This report extends the results of an earlier study on the use of performance measures and standards to suggest principles for designing outcome-based program improvement systems. It examines the implications of that research for enhancing accountability in future federal work force preparation legislation. It also illustrates specifically how the language of the Carl Perkins Vocational and Applied Technology Education Act of 1990 (Perkins II) could be changed to carry out the recommendations of the earlier study. Four features are identified that were lacking in Perkins II but are important for an outcome-based system to promote effective program improvement: (1) coordinate separate components into a more integrated system for planning, implementing, monitoring, and improving vocational education and training; (2) increase the emphasis on the use of the system of performance measures and standards as a program improvement tool; (3) clarify the requirements for measures and standards and improve their technical quality; and (4) increase the amount of technical assistance provided by federal and state agencies to support change at the local and state levels. Specific examples are given of changes in the language of Perkins II to incorporate these principles. An appendix contains the complete text of the proposed revisions with detailed commentary comparing the new law to the old. (YLB)