This report provides additional detail on the problems of test and measurement and cost analysis associated with performance contracting programs. The guide, addressed to school board members, administrators, and other educational decisionmakers who may be contemplating a performance contracting program, delineates the questions, issues, and choices these decisionmakers are likely to confront. Appendix A develops six points dealing with the measurement of learning gains. Appendix B explores the conceptual and methodological bases of cost analysis and describes a planning cost model to be used in estimating "comparable replication and incremental costs." Appendix C contains eight illustrative contracts between local educational agencies and learning system contractors. Related documents are ED 050 496-497, ED 056 247-252 and ED 060 391. (Author)