The General Accounting Office (GAO) evaluated the Office of Economic Opportunity's (OEO) performance contracting experiment because of its potential impact in education. Performance contracting has been defined as an agreement between a local education agency, such as a public school, and a private educational firm, known as a learning system contractor. Payment to the contractor depends on student achievement. OEO initiated a major educational experiment over one school year in an effort to help poor children. The experiment was designed to assess the overall impact of remedial reading and mathematics programs conducted by private educational firms. A total of 27,000 students, 18 school districts, and 6 private educational firms were involved. It was found that the firms operating under performance contracts did not perform significantly better than the more traditional school systems. (Author/CK)