Delivering Educational ROI

Outcomes-based contracting delivers measurable student success

When we make a deal, even an informal one sealed with a handshake, we commit to fulfilling our obligations. In return, we expect the other party to do the same. It seems straightforward enough. Yet for many reasons — ambiguous goals, unclear duties or shifting priorities — our agreements do not always unfold as planned.

Take, for example, a contract for a full-scale kitchen renovation. We receive an initial estimate and estimated timeline from our preferred contractor for the general scope of work. We sign on the dotted line, sighing with relief that we will return to a refreshed space in just a few short months. Unfortunately, the unexpected happens. The construction company gets sidetracked by other client projects, or we fail to pick out the needed materials on time, delaying subcontractors and installations.

In that case, what started as a straightforward agreement spiraled into a chain reaction of missed deadlines and unmet expectations. Could this issue have been averted? Possibly. Consider if, from the start, we had collaborated with the contractor to explicitly define the outcome — a completed kitchen renovation by a set date for a full paycheck — and assigned clear responsibilities to both parties to achieve it. We could have even thrown in a sizable bonus if the crew achieved the goal on an expedited timeline. That alignment and mutual accountability could have helped both sides stay on track and had us back in our home sooner.

Now imagine applying that same concept of contracting for a specific result to a different sector, one that many would agree has much higher stakes: pre-K-12 education. That is what Forward Arkansas is doing by introducing outcomes-based contracting in our state. Why would an education nonprofit like Forward Arkansas focus on a strategy like that? Because we are committed to elevating and advancing innovative, system-level approaches that lead to better outcomes for kids.

Every year, our nation’s education sector spends billions on goods and services to increase student achievement. Yet the Southern Education Foundation notes there is often a “fundamental disconnect” between districts and their vendors, which can lead to educational spending “without clear mechanisms to ensure those investments translate into measurable learning gains.” How can we determine whether certain services, tools or educational strategies work effectively in advancing student learning? Outcomes-based contracting.

The Hechinger Report, a national nonprofit newsroom, states that “smarter education spending” may start with signing “smarter contracts.” With outcomes-based contracting, districts and providers must determine and commit to specific results and associated responsibilities, including establishing student dosage expectations (e.g., lessons delivered) and fidelity metrics (percentage of students receiving the academic support). A substantial portion of the payment — at least 40 percent — is contingent on the service provider delivering the agreed-upon outcome. While districts set the contract price, they are also held accountable for ensuring their students use the service or product in alignment with the defined dosage.

The results are incredibly promising. The Center for Outcomes Based Contracting confirms that the model helps ensure “dollars spent deliver academic impact.” It reports that districts that use the agreements “have seen meaningful improvements in student achievement, with funds being directed toward the most effective interventions.” At the same time, the center notes, “Students benefit from research-backed interventions that are rigorously implemented and continuously improved.” It is a win-win.

With the support of the Walton Family Foundation, Forward Arkansas is bringing the transformative model to the Natural State. Soon, we will launch the Outcomes Based Contracting High-Impact Tutoring Cohort. Our goal is to help participating districts turn their innovative tutoring programs into measurable student success. In partnership with the Center for Outcomes Based Contracting at the Southern Education Foundation, we will provide targeted coaching to select school districts to help them design and execute contracts to fuel lasting academic growth. Each participating district will receive a flexible $12,000 grant to support the work, including exclusive access to workshops, peer networking and implementation resources.

Forbes recently noted that districts are “under mounting pressure to deliver measurable academic improvements while making every dollar count.” At Forward Arkansas, we recognize outcomes-based contracting alone will not solve every challenge we face in education. No single solution or strategy can. However, we believe it is a promising tool in our broader efforts to transform pre-K-12 learning. With outcomes-based contracting, we are confident that we can help ensure that our state’s educational investments lead to stronger outcomes for all Arkansas students.

Ben Kutylo is the president and CEO of Forward Arkansas, a nonprofit with a mission to accelerate the innovative and equitable transformation of education in Arkansas. For more information, visit forwardarkansas.org.