Research continued on natural gas-fired turbines.The objective of Task 3 was to perform initial trade studies and select one engine system (Gas-Fired Advanced Turbine System [GFATS]) that the contractor could demonstrate, at full scale, in the 1998 to 2000 time frame. This report describes the results of the selection process. This task, including Allison internal management reviews of the selected system, has been completed. Allison`s approach to ATS is to offer an engine family that is based on the newest T406 high technology engine. This selection was based on a number of parameters including return on investment (ROI), internal rate of return (IRR) market size and potential sales into that market. This base engine family continues a history at Allison of converting flight engine products to industrial use.