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In the paper a GPS controlled frequency reference source has been described. The source combines the advantages of very good short term stability of high quality quartz oscillator with advantages of GPS signal over the long term. Details of the internal workings of the source have been presented. The deviation of the local oscillator from the ideal reference is determined by counting the pulses of the multiplied local oscillator frequency between successive GPS pulses. Special arrangement of counting circuitry eliminates discrete error. The correction voltage at the oscillator's control input consists of two terms. One term is computed from averaging the counted pulses over 1s interval and is thus responsible for minimizing the short term frequency deviation. The other term is computed from the accumulated phase time drift. The control algorithm ensures that the frequency accuracy averaged over one day is significantly better than 10-11 and the peak accumulation of phase time drift does not exceed 200 ns.