But that could change in the months ahead.
A relatively new arm of the Southern Education Foundation, Outcomes Based Contracting (OBC), is trying to set a new standard for K-12 procurements where significant portions of contractor payments are contingent on measurable student growth. This type of arrangement also addresses educational equity gaps and fosters better collaboration between school districts and vendors, according to OBC’s website.
Through 2023, nine school districts in seven states worked with OBS to formalize vendor contracts with guaranteed results, and four other school districts have used OBC’s free toolkit or other open-sourced resources to establish similar procurement arrangements, said OBS Director Brittany Miller.
“We’ve seen a lot of early evidence that the services and relationships are focused on the right things,” she said. “Some have asked, ‘Why haven’t we been doing this all along?’ But it’s more of an art than a science. There’s no one right way of how you’re going to price an outcome.”
While free resources on OBC’s website are available to anyone, the organization also provides technical assistance to school districts through a series of workshops with fees ranging between $16,000 and $44,000, per its website. For 2024, OBC will work with two cohorts, each ranging from six to eight districts. One cohort is specific to high-impact tutoring contracts, while the other will be for ed-tech instructional interventions that customize content and support for students.
Miller said this work began with a feasibility study by Harvard University’s Center for Education Policy. A pilot with public schools in Denver, where Miller is based, proved to be successful, and it was later formally established as an arm of the Southern Education Foundation in 2021.
Outcome-based procurement is more common in the private sector and in some government services, Miller said. Public school leaders may not have considered this because of fear of drastic change or perceived policy and procedural concerns, “but we have yet to encounter any districts where it’s against regulations,” she said.
Still, Miller added, school leaders could be hesitant to embrace this idea, because it requires a shift in practice that’s more time-consuming and requires greater collaboration with personnel. She said the most common misnomer is that competitive bid always means lowest price; there are many other factors to consider in the procurement process than a vendor’s proposed costs.
Miller provided an example from a district that contracted for online tutoring tools and services, though she was not at liberty to identify either party in the contract. The outcome was based on eighth-grade math test scores. While significant improvement was shown, overall student performance still fell short of the agreed-upon metrics, so only 57 percent of the contract funds were paid to the vendor.
“Results improved,” she said, “but not to the level promised.”
Scott Muri, superintendent of the Ector County Independent School District in Texas, which serves 33,500 students in grades K-12, shared a similar experience. With the help of OBC last year, the district contracted with several vendors for reading and math virtual tutoring functions (tools and services) to the tune of $12 million. The majority of students exceeded growth expectations, and two of the vendors, FEV Tutor and Air Tutors, were paid their full amounts. The other vendors, whose tools and services were linked to lesser results, were not paid full amounts.
“You could see the results from those who truly partnered with us,” Muri said in a Jan. 8 interview, adding that his district will also use outcome-based procurements for professional services and professional development contracts. “This was a great success. From this point forward, this is how we’ll do it. The more we use this, the more vendors will embrace it.”
Project Unicorn, an organization that works to improve data interoperability in K-12 education, also advocates performance-based procurement and recently hosted a webinar connecting OBC with its membership.
Miller said she believes this concept will catch on in other states, starting with ed tech and curriculum-related contracts and possibly broadening to building projects and anything else that can save districts money.
“We would love to see it get to that point,” she said.
