Outcomes-Based Contracting (OBC) recently emerged as a promising strategy to reform procurement practices in education. OBC is a framework for contract design and management in which payments to vendors are at least partially contingent on achieving specified outcomes, and the contract explicitly defines mutual goals, metrics, and continuous improvement processes for the project. By tying a portion of vendor compensation to student success (e.g., improvement in test scores, graduation rates), OBC seeks to align vendor incentives with district objectives and create shared accountability for results. In theory, such contracts can mitigate the principal–agent problem inherent in outsourcing (i.e., when a vendor’s goals may diverge from the district’s) by rewarding the vendor for producing the outcomes that the district values. OBC has parallels in performance-based contracting approaches used in other public sectors (e.g., workforce development, social services), which have shown mixed but often positive effects on provider performance and accountability (Koning & Heinrich, 2013). 

If carefully designed, outcomes-based contracts may spur innovation and focus resources on what works for students. However, poorly structured incentives might encourage providers to serve only the easiest-to-help populations or to game metrics. OBC attempts to address such concerns by balancing the incentive structure. For example, SEF’s OBC standards recommend making roughly 40% of the contract value contingent on outcomes, to ensure meaningful incentives, while still guaranteeing base funding for quality implementation. Additionally, these OBC standards emphasize mutual accountability and continuous improvement, meaning both the district and vendor commit to ongoing data sharing, reflection, and course correction during the contract period.

In this study, we analyze the contracts between districts and vendors of instructional services and products to understand how relationships between these parties are structured. We compare three types of contracts: those developed with the support of SEF’s Outcomes-Based Contracting (OBC) Cohort program, those between the same districts and other vendors without SEF support, and those involving the same vendors but with other districts that did not receive SEF assistance. During the cohort experience, participating districts received guidance from SEF’s Center for Outcomes-Based Contracting. The total cost of hosting each district in the cohort was $30,000, of which districts contributed $15,000, with the remaining expenses covered by SEF through philanthropic funding. We use the emerging OBC framework as a baseline to understand the extent to which traditional district–vendor contracts already incorporate elements of the OBC approach and other information pertinent to vendor quality and alignment. 

Our research questions are:

• RQ1: What information do contracts hold about a vendor’s quality and alignment to district needs, context, and strategy? How does this information vary among contracts developed as part of the OBC Cohort program, non-OBC Contracts in OBC Cohort districts, and non-OBC Contracts in OBC Cohort vendors?
• RQ2: What is the prevalence of the OBC Standards of Excellence in contracts? How does the prevalence vary among contracts developed as part of the OBC Cohort program, non-OBC Contracts in OBC Cohort districts, and non-OBC Contracts in OBC Cohort vendors?
• RQ3: What are the sources of variance in OBC Standards of Excellence and vendor information across contracts?

By answering these questions, our goal is to illuminate how district–vendor relationships are currently structured in contract documents and to identify opportunities for strengthening contracts as instruments of accountability and improvement. We build on and contribute to the emerging literature on outcomes-based procurement and public–private partnerships in education by providing empirical evidence from the first large-scale implementation of OBC in school districts. The findings show how contracts might be reformed to focus more on student outcomes and help shape theories of change about how districts and vendors can work together to improve schools.

Our analysis reveals several important patterns in how districts contract for instructional services: 

• Most contracts include minimal descriptive information about the vendor or how the product or service aligns with district needs. 
• Contracts developed as part of an OBC Cohort initiative exhibit significantly more outcome-focused content, demonstrating high fidelity to the OBC framework, compared to non-OBC Contracts, where such features are rare. 
• Non-OBC Contracts in OBC Districts are more likely to include some of the features of OBC Contracts than non-OBC Contracts that OBC Vendors enter with non-OBC Districts, highlighting the key role of districts in driving contract features.
• Two factors – contract size and the use of boilerplate contract templates – appear to drive some of the variation in contract content. Larger contracts (over $1 million) tend to contain more quality and outcome elements, whereas standard contract templates ensure legal compliance but often omit sections related to instructional goals or performance. 

These findings suggest that revising contracting processes (e.g., adapting templates, adopting emerging contracting models) could lead to a stronger focus on student outcomes in the procurement of educational services.