What Works Cities Blog Post: What contracting has to do with solving homelessness

Photo of the Seattle skyline at night

September 29, 2016 – Beginning in August 2015, a Government Performance Lab (GPL) fellow in Seattle provided yearlong support to the City of Seattle’s Human Services Department (HSD) on the design and implementation of the results-driven contracting (RDC) project for the department’s most important homelessness contracts. This project is part of Bloomberg Philanthropies’ What Works Cities (WWC), an initiative to help 100 mid-sized U.S. cities enhance their use of data and evidence to improve services, inform local decision-making, and engage residents. In this blog post, we describe how the GPL helped Seattle develop a performance tracking system to monitor progress against the city’s goals in real time and set up a framework for the city and providers to meet regularly to troubleshoot problems and spot opportunities for improving performance.

Contracting for results

Procurement and contract management is almost always treated as a back office function. Contract staff tend to focus solely on enforcing regulations, reviewing invoices, and preparing for audits, often missing the opportunity to use contracts as a mechanism to drive a policy agenda and improve residents’ lives. While policymakers create innovative plans and pass needed legislation, the next steps—writing good contracts and more importantly, actively managing those contracts—shape whether or not those policies are effective and can be enacted on the ground as envisioned. For example, Seattle is in the process of restructuring its homeless service delivery system and implementing a person-centered plan to support people experiencing homelessness. However, to achieve their stated goals, they will also incorporate RDC practices into many of their homeless services contracts.

RDC is in large part about good contract management: if policymakers routinely check in with contract staff—who in turn regularly engage with service providers to understand what is happening on the ground—the city can respond in real time and create positive feedback loops. This can lead to more targeted, coordinated, and ultimately more impactful services.

Seattle’s problem: Spending more hasn’t reduced homelessness

Homelessness is increasing in Seattle. According to the most recent comprehensive One Night Count data (from 2015), there were over 10,000 homeless people in King County, including 2,813 people sleeping unsheltered within the City of Seattle alone. Since 2011, the number of unsheltered Seattleites reported on One-Night Counts has risen by 13 percent per year.

In response, the city has expanded programs, implemented new initiatives, and increased funding, yet these efforts have not measurably reduced the number of people living on the street. Homelessness has grown so quickly that, in November of 2015, Mayor Ed Murray declared the city in a state of emergency regarding homelessness.

HSD and the city, however, have limited control over many of the drivers of homelessness. Mental health programs, for example, are funded and managed by King County and the stock of affordable housing is determined by a number of different factors. Nevertheless, HSD does have control over the city’s $50 million annual homelessness budget. Ideally, the department would allocate these resources based on need and program effectiveness, ensure that the right people are matched to the right services, and verify that programs are improving the outcomes of people experiencing homelessness.

Improving results of homelessness contracts

When the GPL began providing technical assistance, HSD was already in the process of implementing a new “portfolio pilot” project to consolidate existing contracts held by the same service provider. The GPL and HSD recognized that this pilot could also be an opportunity to orient contracts to be performance-focused. HSD contract managers could be equipped with the tools necessary to better understand on-the-ground program performance and could establish a more hands-on, active approach focused on collaborating with providers to achieve the community’s goals.

HSD and the GPL identified three reasons the department could not reliably track whether city-funded services helped homeless individuals and families move into stable housing: 1) HSD required different data from each service provider, 2) data was often incomplete and siloed in three different systems, and 3) program evaluation was done in an ad hoc manner. Below, we outline how the GPL addressed each of these challenges.

Step 1: Set up a performance tracking system

Reported metrics were not only inconsistent across similar programs, but they often counted activities (showers taken at a day center), in lieu of outcomes (people transitioned into stable, permanent housing). Without high-quality and meaningful data, HSD would not be able to move forward with active contract management.

The GPL worked with city staff and service providers to develop a set of standardized outcome and process metrics to support program evaluation during the course of contracts, thus providing the city with crucial information for making decisions about key programmatic, funding, and policy issues. These universal metrics will allow HSD to compare performance across programs and allow the department to monitor system-wide trends in performance, utilization, and need.

Step 2: Structure contract payments to encourage better data collection

Every service provider is contractually obligated to participate in the Homeless Management Information System (HMIS), a universal data management tool that, in theory, collects data from all providers and produces comprehensive information on the services delivered to homeless individuals and families. However, many service providers also have their own internal systems, and staff are frequently forced to double-enter client information, once in their internal system and then again in HMIS. A negative cycle had emerged: service providers did not enter complete data because they were pressed for time; HSD, in turn, did not regularly use HMIS data to make policy decisions because the data were incomplete, which reinforced providers’ assumption that they shouldn’t prioritize data completion.

With the GPL’s help, HSD implemented contracts that tie a small portion of payment to complete and timely data collection and submission. Not only are providers incentivized to measure and report on outcomes consistently, they are held accountable to delivering that information to HSD in a way that both parties can use in real time. The GPL helped streamline the data collection process, eliminate redundant information, and consolidate data into a single report that is accessible and easy to understand.

Step 3: Implement active contract management

HSD is relatively high-performing, strives to be data-driven, and seeks to implement forward-thinking initiatives. The department is one of the largest in the city with a budget of $142 million in 2016. HSD’s staff are dedicated to supporting high-quality services for some of Seattle’s most vulnerable populations. Staff work hard to complete routine contract management activities, such as fulfilling invoices, managing contract revisions, and preparing for audits. However, there are no consistent practices through which staff have the opportunity to review provider performance or to take steps to help improve program outcomes, such as by identifying and spreading best practices.

To address this, the city established a governance structure through which HSD staff will regularly review data with service providers to identify homelessness trends, discuss challenges of delivering effective services, and develop strategies to improve outcomes. Via monthly one-on-one check-ins and quarterly all-provider meetings, in addition to regular internal HSD meetings, the department is now able to troubleshoot program-specific issues, track and serve individual subpopulations, and create dynamic, responsive policies and strategies. A quick feedback loop further enables the department to identify issues, develop concrete actions to intervene, and follow up a month or a quarter later to review the impacts of its program and policy changes.

Learning from Seattle’s experience

Like Seattle, many cities across America seek to maximize the impact of their limited resources and address major social problems via improved human services contracting. As the Seattle project demonstrates, however, RDC is about much more than just writing a good contract. To fully realize the potential of their contracted dollars, cities need to set up the necessary systems—clearly identifying goals, tracking performance, and meeting regularly with providers—to actively manage their contracts.

The City of Seattle and the GPL are hosting a convening on September 29, 2016, to discuss key aspects of this pilot project, including orienting contracting structures around desired outcomes, identify and building consensus on meaningful outcome metrics, and implementing active contract management using data. Staff from other WWC cities, including San Francisco, Anchorage, Tacoma, Bellevue, Portland, Denver, Gresham, Las Vegas, and Boston, are attending as well to learn about Seattle’s work, discuss their cities’ challenges with homelessness, and share about their own successful initiatives.

To learn more, please see the GPL’s policy brief about Seattle’s results-driven contracting project on homelessness.

Chrissie Grover-Roybal is a fellow with the Government Performance Lab and led the GPL’s work in Seattle.

The Government Performance Lab at the Harvard Kennedy School conducts research on how governments can improve the results they achieve for their citizens. An important part of this research model involves providing pro bono technical assistance to state and local governments. Through this hands-on involvement, the Government Performance Lab gains insights into the barriers that governments face and the solutions that can overcome these barriers.

Posted by Christina Grover-Roybal
Fellow, Government Performance Lab at the Harvard Kennedy School