Describes the first two years of the pioneering Texarkana performance contracting programs, under a five-year ESEA Title VIII program to cut dropouts and improve achievement among the many disadvantaged blacks and whites in the newly integrated school systems. Texarkana's program featured the first attempt to (1) hold a private contractor strictly accountable for academic achievement; (2) use a management support contractor; (3) select performance contractors through competitive bidding; (4) use an outside evaluator of contract performance and also for management feedback of program evaluation; and (5) use an outside evaluation auditor. A test-teaching scandal invalidated the first year's achievement data, while the dramatic decrease in the dropout rate went unnoticed. Dropout rate decreased again the second year of overall success, but academic gains were insignificant, so the achievement program was returned to the schools. Major unsolved problems included measuring achievement, determining contractor payment, and defining roles and responsibilities of the many contractors and managers. Pertinent contracts are appended.
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