Many of the most important functions of state and local governments – from building and maintaining roads to housing the homeless – involve contracting for goods and services supplied by the private sector. Increasing the effectiveness of procurements is therefore an essential component of improving governments’ overall performance in creating public value. Unfortunately, governments often treat procurement as a back office administrative function, rather than as a core part of their strategy for delivering better performance. Governments adopt inappropriate procurement strategies and contract types that are not aligned with their goals. Procurements can be overly prescriptive and regulated, stifling innovation and reducing competition. Contractor performance is rarely tracked in a meaningful manner. Contract management tends to focus on compliance instead of performance improvement, with contractors held accountable for inputs and activities rather than outcomes and impacts (if performance is measured at all). Governments make insufficient use of data on past performance in making future procurement decisions, and tend not to incorporate performance incentives into contracts.
The Results-Driven Contracting (RDC) strategies developed by the Government Performance Lab help state and local governments improve the quality and cost-effectiveness of contracted products and services and encourage better alignment of contracted spending with a government’s needs and priorities. See information about implementing RDC strategies below, or browse related resources in our RDC Library.