This report defines the concepts and some of the problems of accountability and performance contracting with special emphasis on measurement problems in the latter. Measurement problems involve both the validity and the reliability of standardized achievement tests as a basis for reimbursing a contractor. The author suggests the use of criterion referenced tests as a possible remedy to some of these problems, but cautions that results should be translatable into units that will yield measures of gain or growth. Related documents are EA 003 347, EA 003 356, EA 003 391, and EA 003 387. (JF)