Editor’s note: This essay is an entry in Fordham’s 2026 Wonkathon, which asked contributors to answer this question: “What rules should govern the uses of digital technology in schools—and who should set them?” Learn more.
During the 2024–25 school year, a large urban school district serving predominantly students of color from low-income families began using an AI tutoring intervention for early literacy. Students in grades two to four who had scored below proficient on the state assessment in ELA used the one-on-one virtual platform for 30 minutes per week over the course of 25 weeks.
The results were striking but uneven. Second graders who received AI-powered tutoring experienced a 28-percentage-point increase in proficiency on the end-of-year assessment compared with similar students who did not receive tutoring. Third and fourth graders, despite similarly high usage, showed no measurable difference in outcomes.
Knowing which students a tool works for—and which it doesn’t—is exactly the kind of information district leaders need but rarely get. And that gap is fueling a national techlash, with growing numbers of states and districts imposing bans, moratoriums, and limits on ed tech and student-facing AI.
The answer isn’t to embrace every new tool—or ban them all. It’s to change the terms on which schools buy them. But without a playbook of best practices or a solid evidence base for separating effective ed tech products from the slop, how are school leaders expected to procure the right solutions for their students and avoid simply buying the shiny new thing?
This example district embraced a new approach: outcomes-based contracting (OBC), a procurement model that ties a portion of vendor payment to agreed-upon student learning outcomes and specifies each party’s implementation responsibilities. Unlike traditional contracts, which pay for software licenses or tutoring sessions regardless of impact, OBC creates a partnership built on shared accountability.
Five questions every district should ask
The Center for Outcomes Based Contracting has developed Standards of Excellence for OBC™ to guide states and districts in adopting this model. Drawing on those standards, leaders should ask five questions before inking a contract:
- Who is this for? Define the students the intervention is intended to serve, the research-based intervention they will receive, and the dosage needed to achieve results.
- How will we know it worked? Set outcomes at the district level and measure them using valid, reliable assessments, not metrics selected by the vendor.
- How much of the payment depends on results? At least 40 percent of the contract value should be contingent on students achieving the agreed-upon outcomes.
- What do we owe in return? Specify the district’s implementation responsibilities, with meaningful consequences if it fails to meet them. Unlike models that place all the risk on providers, a rigorous OBC establishes mutual accountability to protect implementation integrity.
- How will we fix what isn’t working? Require regular district-provider data reviews to identify problems during implementation, not after the money has been spent.
These questions turn procurement from a transaction into an accountability framework: vendors have a stake in student outcomes, and districts commit to the conditions needed to achieve them.
At the end of the contract, the district can then determine whether to renew for the next year from a data-based perspective. They can restart the cycle by answering, “Did this work for our students based on the outcomes and metrics we identified before services were implemented?”
Better evidence, better decisions
A new WestEd report evaluating instructional interventions implemented under OBC offers evidence of the model’s potential. The report found tying payment to student results rather than service delivery—and implementing interventions for their intended duration—can produce measurable improvements in student outcomes.
The example district that saw literacy gains was among those included in the report. That district also adopted virtual math tutoring through an OBC for seventh and eighth graders furthest behind. Proficiency rates rose by 29 percentage points, and the district increased the number of students entering high school ready for Algebra I while reducing the number requiring remedial math instruction.
OBC does more than incentivize results; it helps districts generate the kind of evidence the education field rarely gets. Because each contract defines which students it serves and measures results with the state and local assessments districts already use for accountability, the data for rigorous evaluation exist from day one—drawn from real implementation across a district, not a small pilot or a hand-picked group of highly engaged students. Because OBC tracks implementation alongside outcomes, researchers can rule out common explanations when results fall short. In the opening example, the district knew its flat third- and fourth-grade results weren’t an implementation problem—a level of clarity most districts never get about the products they buy.
This transparency also changes how districts operate. When vendor performance is tied to outcomes that already matter, like state assessments and district strategic plans, leaders have a clearer basis for holding the broader system accountable and deciding what deserves continued investment amid budget cuts.
In fact, the example district that experienced literacy and math gains as a result of the tutoring programs procured through OBC told researchers the structure of the contract did just that. It strengthened the district’s involvement with school-level implementation, prompting them to conduct school visits and host data conversations with educators and school staff, all of which ultimately led to the improved scores.
Better ed tech purchasing takes multi-level leadership
So who should set the rules? Districts should lead decisions about their own purchases because they sign the contracts, know their students, and answer for results. States and the federal government can help make effective purchasing practices easier to adopt and sustain.
States including Arkansas, California, Texas, Florida, Indiana, and Louisiana are embedding OBC into statewide initiatives, while Michigan’s new funding law links virtual and AI-enabled tutoring flexibility to evidence of impact and OBC. States can build on these efforts by publishing model contract language, providing technical assistance to help districts interpret assessment data and monitor implementation, and collecting results across districts so evidence from one community can inform purchasing decisions in another.
The federal government can reinforce this work through guidance and funding incentives. Federal guidance on responsible ed tech use has encouraged school leaders to explore contracting models built around shared performance measures and evidence of effectiveness, building on the Department of Education’s February 2026 supplemental priority explicitly naming OBC. Washington can go further by prioritizing OBC in funding streams and grant competitions.
These steps are especially urgent as districts face budget constraints, declining enrollment, and growing scrutiny over technology spending. Leaders need to demonstrate not just that they purchased a promising tool, but that it delivered results for the students it was meant to serve. Guidance without practical support, however, risks becoming another unfunded expectation.
District leaders spend enormous energy debating what to buy and far less considering how they buy it. The evidence suggests that balance is backward. OBC is not a silver bullet, but contract design is one of the most underused levers for improving implementation, identifying what works, and improving student outcomes.
The shiny new thing will keep showing up. The right contract makes it prove itself.
