Procurement in the Connecticut Family Stability Project

Pay for success (PFS) encourages governments to shift from paying for outputs to paying for outcomes. This change may affect how governments approaches procurement, including defining services, selecting providers, and establishing the terms that define relationships. Our new paper provides government stakeholders interested in PFS with important lessons on how a strong procurement process can improve PFS projects.

To learn more about the procurement process for PFS, we spoke with Elizabeth Duryea, Chief of Staff for the Connecticut Family Stability Project’s end payor, Connecticut’s Department of Children and Families (DCF). The project uses Family-Based Recovery (FBR)—an in-home, parent-child therapy program that includes substance misuse treatment and recovery support—to reduce the number of out-of-home placements and referrals to DCF. 

PFSI: How did this project get started?

Duryea: The Harvard Government Performance Lab began providing us with training and technical assistance in 2013. They helped us to think through policy priorities for the state, learn about the project life cycle, and break the project into phases. In the early days, we looked at everything from behavioral health to juvenile justice to early childhood, but we eventually arrived at the unique focus of parent or caregiver substance abuse.

Connecticut, like many states, has struggled to respond to the opioid crisis. There’s a steady spike of children coming into foster care, with credible theories that substance abuse on the part of the parents is one of the primary drivers of that trend. Harvard helped us to structure the scope of the project and identify service gaps that might inform decisions regarding where we might expand services.

We had a sense of which programs might fit PFS, but recognized the benefits of a feasibility study that assessed substance use services nationwide. Having a great program was one goal, but we also needed to assess the fiscal context, evaluation base, and scalability factors before deciding on a program model.  After completing the feasibility study, which looked at over 70 substance abuse interventions, there was strong consensus that FBR was a good fit for PFS, and FBR’s developer, Yale Child Study, was engaged as a project partner.

PFS gave us a concrete framework in which we could think outside the box on how we typically contract for services, and focus on launching new services for our children and families.

PFSI: What was the procurement process for this project? How did you select partners, and who was involved?

Duryea: There were a lot of concurrent threads. In the fall of 2013, we issued a request for information (RFI), which was an initial attempt to narrow down to policy areas. That helped inform where we saw our own readiness and where we’d likely need partners. We were educating ourselves, not just about the policy areas, but also the sense of readiness and interest from existing providers within Connecticut. We also fielded inquiries from providers outside of the state.

With every step, we consulted with Connecticut’s Office of Policy and Management on the fiscal considerations. Connecticut was facing, and continues to face, challenging fiscal realities, which required that we structure appropriated funding to ensure it remained intact over the duration of the project. OPM’s support also helped us navigate some of the questions that arose as we transitioned from the RFI to the RFP.    

We knew we were going to need an intermediary, so that became the primary driver of our RFP, which was released in 2015. After reviewing proposals, we selected Social Finance and they have been phenomenal project partner. We structured our deal with Social Finance as the central hub, enabling them to engage the remaining project partners around the model. That made everything much simpler for us since Social Finance did not have to go through the traditional procurement process that a government agency would. 

PFSI: How were the outcome measures defined and selected for this project?

Duryea: We anecdotally knew the outcomes we would focus on, but determining the monetary value of those outcomes required in-depth analysis from our partners. Our outcomes are reductions on entry into foster care, reductions in repeat maltreatment, sustained enrollment in the program, and reductions in positive toxicology screenings. The daily cost for the range of foster care placement types averaged out to $92 per day. We also got creative in finding other ways the project could save money to assess the cost-benefit of a successful project. For example, toxicology screening kits that cost $45 per kit to administer, and reducing their use would result in cost savings. 

PFSI: How was the contract structured?

Duryea: The only contract that DCF is direct party to is the one with Social Finance. Social Finance then executed separate contracts with the evaluator and the model developer. They hold independent partnership contracts with providers who are administering the FBR Program to clients in the launch sites. 

DCF ultimately holds other legal agreements with these parties to address issues related to data sharing, evaluation, and service delivery. We were cautious and deliberate in having the appropriate legal agreements in place to maintain the integrity of the program, ensure confidentiality where needed, and establish clear roles and responsibilities of partnering organizations. We drew a lot of insights from looking at contracts from other states.

PFSI: Did the procurement process for the Family Stability Project differ significantly from other projects?

Duryea: PFS projects, at their core, are performance-based contracts, and governments are toying with this kind of contract more and more, especially with budget cuts in a lot of states. We focused our procurement on an intermediary, and let the intermediary contract with the remaining project partners. Our intermediary contract has standard terms and conditions found in other contracts. It’s critical that in the contract, you address how you measure and pay on the outcomes you’ve identified, and how you will be able to do that over the life of the project. In PFS, you need to be very clear on the outcomes and benchmarks of success that impact payment. The overall project and contract cycle are longer, and the payments are driven by a variable rate that adjusts depending on the degree to which your program is successful in achieving the outcomes.   

PFSI: What advice would you give to other PFS projects?

Duryea: First, do your homework. The field of PFS is broader now than it was in 2013, so there is value in drawing on prior experiences with PFS projects. We benefitted from talking to other states that have launched these services. I also think that strong partners and commitment from leadership is important. It’s important for government to take stock of lessons earned and where else we could apply those, such as the need to be thoughtful and disciplined about how we’re allocating our services.

Please note that this interview was edited for length and clarity. 

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