Contracted or purchased services (tutoring, professional development, after-school care, etc.) constitute the second-largest category of school district expenditures after staff compensation. They add up to tens of billions of dollars each year. Typically, the procurement process for such services focuses on inputs and price, and unless something goes drastically wrong, districts are on the hook for the entire payment amount regardless of how well services are delivered. In 2021, the Center for Education Policy Research at Harvard University began piloting a different contracting model, looking to tie expenditures to specific, measurable results. A group of researchers at WestEd have published a new report evaluating these pioneering efforts.
Data come from eight unnamed districts that were early adopters of outcomes-based contracting (OBC) between the 2022–23 and 2024–25 school years in four states: California, Florida, Mississippi, and Texas. In the OBC model, contractors receive a baseline payment for providing services, with additional compensation—representing at least 40 percent of the overall contract value—contingent upon meeting predetermined success metrics that the district and provider agree upon collaboratively. Participating districts ranged in size from 10,000 to 100,000 students. The vast majority of students in all districts (more than 70 percent) were students of color, and the population of English language learners ranged from 3 percent to over 38 percent.
The specific services piloted via OBC were high-dosage tutoring (one-on-one or small-group tutoring focused on literacy or mathematics, delivered virtually or in person) and what is vaguely termed educational technology, described as “technology-based interventions for reading or math, typically implemented during the school day.” Between 700 and 2,500 students received one or both of these services in a given district each year. Quantitative data include student achievement and implementation metrics; qualitative data comprised interviews, observations, and document reviews.
WestEd’s analysts report six key findings, most of which focus on the contracting process itself and the “systems capacity” of districts. This is very important to those with a vested interest in OBC implementation, but less interesting for general audiences. So we will limit discussion here to the two most important findings. The first is district spending on OBC services. The analysts were limited in this regard to a subset of districts where data were available, but spending on services rendered via outcomes-based contracting in them was comparable to previous services obtained via traditional contracting processes. In other words, the new model did not lower district cost. They suggest, optimistically, that districts may therefore have received “greater intensity of services for a comparable cost,” but that is true only if student performance increased.
The second finding concerns student performance. Once again, data were limited to a subset of districts, but analysis showed some statistically significant gains caused by OBC compared to traditionally contracted services. For two examples: English language arts test proficiency boosts for second graders in one district, and a higher number of students meeting or exceeding typical literacy growth targets in another. On the upside, the specific OBC interventions under study were targeted at students determined to have the greatest need (low-income students, English language learners, students with special needs, etc.), thus magnifying the positive impact of OBC in those districts. On the downside, however, findings of positive impacts were limited to just two districts where contracted intervention services were delivered for the intended duration and in the contract-prescribed dosages. In the other districts, numerous implementation issues on both the provider and the school sides combined to render null impacts or, more commonly, no usable data at all.
It is this latter point that leads the report’s authors to cautiously conclude that OBC has “potential” to change contracting models in schools for the benefit of students. But fidelity of implementation (as ever) matters, and OBC generated a whole raft of new issues throughout the contracting process. The many lessons learned from these pilot programs (as detailed in the procedural findings) must be addressed before any more “potential” can be realized. To that point, it is also interesting to note that neither in the report nor in a recent interview did the analysts indicate whether any of the contracts had been reduced in scope or in price based on providers not achieving results. There seems to be plenty of evidence that a number of outcome goals were not realized, yet no clear evidence that payments contingent upon those outcomes were denied.
SOURCE: Kelsey Krausen et al., “Evaluation of Outcomes Based Contracting (OBC): Final Report,” WestEd (July 2026).
