DURING A YEAR OF PRELIMINARY WORK, 500 PROTOTYPES FOR A LOW-COST ALARM SYSTEM (IN THE $200-$500 PRICE RANGE) WERE TESTED UNDER A LEAA-FUNDED PROGRAM. INITIAL MARKETING SURVEYS FOUND GREAT POTENTIAL FOR A RELIABLE LOW-COST CENTRAL ALARM SYSTEM FOR SMALL- AND MEDIUM-SIZE COMMUNITIES AND SMALL BUSINESSES. INTEREST WAS ESPECIALLY HIGH BECAUSE OF RISING RESIDENTIAL AND COMMERCIAL BURGLARY RATES. IT HAD BEEN HOPED THAT THE PRIVATE SECTOR WOULD DEVELOP SUCH A SYSTEM, BUT BECAUSE OF THE NATURE OF THE MARKET (LOW- TO MIDDLE-INCOME RESIDENTS AND SMALL BUSINESSMEN), IT IS UNLIKELY THAT WIDE-SCALE AVAILABILITY WILL RESULT FROM PRIVATE EFFORTS ALONE. RESULTS OF A SERIES OF TECHNICAL TESTS RUN MAY 17-AUGUST 20, 1976 ARE REPORTED. IN ADDITION, SITE-SELECTION CRITERIA FOR A GENERAL FIELD TEST ARE DEVELOPED. THE FINAL DESIGN, A BASIC SYSTEM COSTING $250 PLUS OPTIONS, IS PRESENTED. A FULL-SCALE 1-YEAR FIELD TRIAL OF THIS DESIGN IS RECOMMENDED.