State Child Welfare Policy Guide

11.3 Performance-based Contracting

Improving outcomes for children is not solely the responsibility of the agencies it is a responsibility that is shared with the private organizations that provide specific services through contractual relationships with the agencies. Nevertheless, it is uncommon for child welfare agencies to hold providers accountable for the well-being of the children they jointly serve. One successful approach has been performance based contracting, which is generally defined as contracts between the agency and private providers that:

• Emphasize results related to output, quality, and outcomes rather than how the work is performed,

• Have an outcome orientation and clearly defined objectives and timeframes,

• Use measurable performance standards and quality assurance plans, and

• Provide performance incentives and tie payment to outcomes. [i]

Performance based contracting in child welfare has resulted in: increased permanency; increased stability of permanency; increased stability of placements; decreasing caseloads; and reinvestment of resources. [ii] The primary example of performance based contracting remains the Illinois Department of Children and Family Services (DCFS).  DCFS has consistently improved permanency for children and families by aligning results with the financial interests of private providers. The agency also made significant investments in activities by the providers that would support permanency through staff positions; service dollars to ensure resources both at the time of placement and after reunification; and the flexibility to use administrative funds to support different models. [iii]

Policy Option: States can mandate that performance-based contracting is required, monitored, and enforced to hold private providers accountable for improving child well-being, safety and permanence.

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