Contracts That Pay Vendors for Performance Get Boost From Walton Foundation

Contributing Writer
performance-based contracts get boost from Walton Foundation

A nonprofit has received a grant for nearly $4.6 million to expand a program that helps school districts adopt performance-based contracting for some ed-tech procurements. 

The Southern Education Foundation, an Atlanta-based organization, has been leading a project to get districts to pursue contracts that pay education companies based on student growth and performance. 

A three-year grant from the Walton Family Foundation totaling $4.55 million will “enable many additional school districts to use outcomes-based contracting for services that improve student outcomes,” the SEF said.

In a statement, SEF CEO Raymond Pierce said the nonprofit will use the grant to partner with school districts “on OBC projects to build a more equitable education environment for all students.”

The idea of tying vendor pay to outcomes is popular in a range of industries, but remains a fairly novel concept in the K-12 marketplace. 

In 2021, as part of a national pilot program, the SEF helped four districts — Duval County, Fla.; Ector County, Texas; Denver; and Fulton County, Ga. — begin implementing outcomes-based contracts

Starting earlier this year, six additional districts joined the program led by the SEF as part of its second cohort. Those districts include: the Albuquerque Public Schools; the Jackson Public Schools (Miss.); the Richmond Public Schools (Va.); the Santa Ana (Calif.) Unified School District; Colorado Springs School District 11; and Uplift Schools, a network of free charter schools in the Dallas-Fort Worth area.

Most districts in the program are currently using performance-based contracts solely for procurements involving high-impact math tutoring, the SEF said.

(The Walton Family Foundation has provided financial support to Education Week and EdWeek Market Brief for their coverage of advancing opportunities for students most in need, including those from low-income families and communities. Editorial decisions are left solely to the two publications.)

Purchasing Playbook

How does it work?

School systems are setting specific academic benchmarks in RFPs, and if students receiving tutoring don’t hit those metrics, the vendor doesn’t get paid the full contract value. 

As part of the program, districts are provided with an RFP template, and are given access to an assessment expert to provide guidance on how to identify reasonable outcomes for contracts, along with other, ongoing support. 

Researchers from the SEF have also designed materials — ranging from a “playbook” to a rate card for pricing — that districts can use to launch their own outcomes-based contracting efforts without needing to join one of the organization’s cohorts. 

Several districts — including the San Antonio Independent School Districthave pursued that path

Alan Richard, an SEF spokesman, said the new grant money will allow the nonprofit to develop new materials, and hold more training workshops for school systems and vendors. That money will also help school systems currently in the program expand their performance-based contracting efforts to other ed-tech procurements outside of math tutoring, he said. 

Moving forward, the SEF is planning to recruit between six to nine new districts for each year-long cohort. With a growing number of districts participating, the SEF is hoping to reach a goal of 30-56 districts participating in the project. 

“We’ll have more cohorts in the next few years,” Richard said, “and we’ll have more training and materials available to school systems, even if they’re not in a cohort.” 

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