10. Results-Driven Contracting

The practices of the Arizona ManagementSystem create the foundation of a culture where results-driven analysis is baked into everything we do, including contracting. As a result, agencies use a modified version of Active Contract Management built into their regular business and operations reviews. The Department of Administration manages its telecommunications contracts, AZNet III, in this way. The State’s service-level agreements have financial penalties if certain benchmarks are not met.Oversight of large IT projects is done the same way, with the addition of a public portal to view the progress and spending of the largest IT vendors. Another example is the Arizona HealthCare Cost Containment System’s practice of working with an independent evaluator to conduct comprehensive evaluations of programs approved under Section1115 of the Social Security Act. This approach enables AHCCCS to ensure itsMedicaid programs are clinically appropriate, fiscally responsible and effective.

29 Del. C. c. 69 Pay for Success Contracts authorizes Pay for success contracts in Delaware. Under these contracts, outcome-based performance is sought, investors provide funding to state agencies that agree to repay investors if the program or service meets the performance measures and outcomes in the agreement. The Delaware Office of Management and Budget/Government Support Services Procurement Manual has Chapter 6 which covers active contract administration: corrective action reports, regular reporting by vendors and feedback loops prior to rebid or extension decisions.

​​To expand economic opportunity and a diverse business community, Governor Roy Cooper issued Executive Order 25 in 2017 directing state agencies to increase procurement from Historically Underutilized Businesses (HUBs). E.O. 25 set a goal that HUBs account for 10% of agency spending on goods and services contracts.​

The state utilizes a Major Project Governance Policy to provide all state agencies with guidance and resources to actively manage contracts and utilize data and contract procurement and management resources. Contracted projects meeting specific criteria must complete certain agency work products during the project process and coordinate with the Major Project Governance (MPG) Office. Agencies complete a baseline for key performance indicators (KPIs) and measures of success. These KPIs and measures are tracked post-implementation to determine if the project goals and benefits are achieved. The post-implementation measures are collected on a quarterly basis via the Value Reporting Portal.

The State of Utah Division of Purchasing has created the new Office of Contract Management Support (OCMS) in order to improve the overall efficacy of contracts and contract management throughout the State. OCMS is being implemented with a focus on creating and continuing partnership relations and being a value-add resource. It aims to accomplish this through multiple focus areas; creation of contract management standards, proactive engagement and support to agencies, trend analysis, vendor scoring.

In order to improve outcomes and eliminate disparities, the Washington State Department of Children, Youth, and Families (DCYF) is shifting its entire contracted client services portfolio to performance-based contracts, a key priority in the agency’s 2021–2026 Racial Equity and Strategic Plan. The project intentionally focuses on deepening stakeholder engagement, using Performance-Based Contracting as a tool to identify and address disproportionality and outcome disparities, and facilitating continuous improvement through data and research. DCYF has successfully initiated the shift in over 70% of its portfolio, which includes over 1,000 contracts that invest approximately $1 billion each biennium in services to children, youth, and families. Statewide, the Department of Enterprise Services has provided a series of enterprise contracts and procurement training that include performance-based contract practices. This is required training for all employees who manage, monitor, or serve as subject matter experts on contracts.