Outcomes-Based Contracting: A Mindshift in Vendor-District Partnerships

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Outcomes-based contracting (OBC) transforms traditional models, emphasizing results over processes. It’s a shift from districts considering the cost of a service to its worth in terms of its impact on student outcomes.

The edLeader Panel “Driving Impact: How Outcomes-Based Contracting Can Increase Student Achievement” delved into the core principles of OBC, looking at how it drives mutual accountability between providers and school districts and strategies for a successful rollout.

Outcomes-Based Contracting: What It Is

According to the Southern Education Foundation, OBC directly links school district resource expenditures to improving student outcomes, addressing pervasive equity gaps, and supporting collaborative partnerships between districts and vendors to better meet student needs.

In a traditional contract, districts pay for services delivered or achieved, regardless of impact. In an OBC partnership, providers receive a base payment for service delivery. A significant portion of the money the provider and district agree to is contingent on student outcomes.

In an OBC arrangement, provider services are incentivized: The more outcomes are met, the more providers are paid.

A district does not micromanage its relationship with the provider. Instead, districts and providers work toward mutual accountability. The district must implement practices, structures, timelines, etc., to ensure it meets established outcomes and does right by every student it has selected.

The provider outlines minimum service requirements. Research informs implementation. For example, an edtech intervention requires an implementation success plan, professional learning, and continuous improvement processes.

The Success of OBC: A Case Study

Dr. Scott Muri, Superintendent for Ector County Independent School District in Texas, is a staunch OBC believer. As the leader of once one of the lowest-performing school districts in Texas, he recognized that the district’s students deserved a high-quality academic experience.

The district opted for high-dosage tutoring. However, it needed help finding the number of tutors necessary to provide accelerated reading and math support for the 6,000 students.

It established OBC partnerships with four vendors, stipulating a base pay for every hour of a tutoring session provided and additional funds per students’ leveled growth beyond expectations.

Muri explained that the companies agreed to several conditions, including students having the same tutor at every session, using the district curriculum, meeting with the teachers and tutors at least once monthly, and providing weekly data reports.

The district reciprocated with agreements that included ensuring students attended their tutoring sessions and that teachers could meet with the tutors.

Muri said the results exceeded expectations. Now scaled and embedded in the district’s general fund, the intervention has been successful. Many students have doubled or tripled their growth in reading and mathematics. The success of the tutoring led to the elimination of other interventions.

“Ultimately,” Muri emphasized, “the kids are winning.”

Essential Strategies

To implement and carry out OBC partnerships effectively, the panelists suggested:

  • Using data, such as those from state assessments, to decide with teachers and principals which students need intervention
  • Setting research-based expectations that inform an intervention’s construct and impact
  • Building research into contracts to ensure everyone stays accountable for the delivery of the outcome
  • Piloting initiatives before launching on a full scale to determine how the intervention has worked in its test phase to modify and expand
  • Including outcomes-specific language in the contract. Ector County addressed individual student price outcomes to gauge how many students were achieving anticipated results and ensure that everybody in the system focused on each student in the intervention, not an aggregate number, to drive behaviors and outcomes.
  • Monitoring OBC partnerships to identify challenges to rectify upon contract renewal. Muri noted one instance when, on the district side, students were not regularly attending sessions and a school-based student engagement strategy was absent. On the vendor side, the tutors were sometimes being switched, so important relationships between a student and a tutor couldn’t be formed.
  • Tracking data to determine, for example, the quality of implementation, student attendance and engagement, and outcomes. Data prove a program’s worth, resonating with leaders who renew contracts.

Learn more about this edWeb broadcast, Driving Impact: How Outcomes-Based Contracting Can Increase Student Achievement, sponsored by Age of Learning.

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Article by Michele Israel, based on this edLeader Panel