Procurements are often perceived as routine processes to obtain products and services while complying with regulatory requirements. Instead, major procurements should be regarded as opportunities to advance the government leaders’ strategic goals. As part of Bloomberg Philanthropies’ What Works Cities Initiative, the Government Performance Lab provides technical assistance to cities that seek to improve the results they achieve with their contracted dollars by employing results-driven contracting strategies, including:
- Identifying goals for their key procurements and designing their procurement strategy, including the selection of competition strategy, contract type, payment structure, and requirements, to align the contractors’ incentives with these goals;
- Setting up systems to measure outcomes, impacts and/or cost-effectiveness of procurements using analytical methods and administrative data and enabling a comparison of performance over time and across similar contractors;
- Using performance data to actively manage ongoing contracts, including by collaborating with the contractor to monitor progress, detect issues real-time and implement mid-course corrections as needed; and
- Identifying a city’s portfolio of key procurements and strategically managing these procurements to continuously improve outcomes.
As part of this work, we have developed a six-stage continuum that we use with governments as a roadmap to diagnosing and improving procurement practices, making procurement a core part of their strategy for delivering better performance.
In our Overview of Results-Driven Contracting, we describe the elements of effective results-driven contracting and discuss methods governments can use to advance procurement best practices, including leveraging competition and volume to improve cost-effectiveness, staffing procurement offices to allow for effective management of ongoing contracts, strengthening accountability to residents, and removing regulatory barriers and streamlining the procurement process to increase competition.
In our chapter in the Manhattan Institute’s book Retooling Metropolis, we outline cities’ top ten contracting and procurement challenges and describe how cities can address these issues by treating procurement as a strategic priority rather than a back-office compliance activity.
For an example of our RDC work, read our Seattle homelessness policy brief describing our project with the City of Seattle to implement results-driven contracting with five homelessness service providers, rewriting the contracts to focus on the goals of achieving permanent housing stability for homeless individuals and families.