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The GAO found that: (1) although federal regulations caution against lengthy cost-plus-fixed-fee contracts because they provide minimum incentives for cost control, the PTO entered into a $289 million, 18-year, cost-plus-fixed-fee contract to design, develop, implement, and maintain the system; (2) as of December 1985, the PTO had procured several hardware components for the system and was developing and testing system software; (3) the system is not operational, but the first evaluation of the system is scheduled for January 1986; (4) the PTO did not conduct a space management analysis before it made major acquisition decisions, and potential space problems contributed to the decision to reconfigure the system; (5) problems have been identified with the contractor's accounting systems because they are not in compliance with certain required cost accounting standards; (6) the PTO has not elected to establish an on-site team for contract administration and oversight; and (7) the project is more than 1 year behind its original schedule for system development.