Performance-based contracting

Performance-based contracting switches attention in government procurement arrangements from process to outputs by persuading the provider agency to share the financial risk. If an output, such as reduced custody or reduced placement in state care or shorter stays in out-of-home facilities are not achieved, the purchasing agency pays less or is not required to pay at all. The method is applied in all government sectors in the US. It has been used extensively and successfully to reduce volume of children in state care. It is now being tested in relation to evidence based programs.