Pennsylvania Releases Request for Information on ‘Pay for Success’ Opportunities
March 25, 2015
Harrisburg, PA – Governor Tom Wolf announced today that Pennsylvania has released a Request for Information to obtain feedback to assist the Commonwealth in developing its proposal for evidence-based, innovative Pay for Success Pennsylvania opportunities.
Pay for Success (PFS) performance contracts – also known as “Social Impact Bonds” – are rigorous, binding agreements based on a straightforward proposition: taxpayers will only pay for services that actually get results and save money in the long-run.
In the Pay for Success model, governments partner with private sector investors who provide up-front funding to promising service providers. Investors only receive a repayment from the government if objective benchmarks for savings and other benefits are achieved. Because governments pay only if the programs work, the PFS model has the potential to effectively allocate taxpayer dollars while increasing funding for programs that deliver improved social outcomes. These public-private partnerships will be selected on a competitive basis, and payment will only occur after validation by an independent, third-party evaluator.
Governor Wolf’s FY2015-16 Executive Budget includes proposed legislation that would enable the Commonwealth to enter into Pay for Success contracts. The Governor’s proposal identifies five high-priority areas for possible Pay for Success initiatives:
- Early childhood care and education, including pre-kindergarten education and services that address maternal and child outcomes from pregnancy through age 2;
- Education, workforce preparedness and employment, including school-to-work programs and alternative education services;
- Public safety, including programs that reduce recidivism;
- Health and human services, including addiction treatment, chronic homelessness, supportive housing and child welfare; and
- Long-term living and home- and community-based services.
Earlier this month, Governor Wolf announced that Pennsylvania was selected as one of five states and localities to receive technical assistance from the Harvard Kennedy School to help develop Pay for Success projects.
The Commonwealth is seeking input from service providers and other stakeholders in order to make this initiative as successful as possible. In order to help the state develop the most effective program, respondents are invited to provide information on:
- What promising policy areas, service providers and interventions could be candidates for Pay for Success contracts in Pennsylvania?
- What considerations should the Commonwealth take into account in structuring Pay for Success contracts?
- What outcomes should the Commonwealth prioritize in Pay for Success contracts?
- Are there opportunities for the Commonwealth to partner with local government entities on Pay for Success contracts that achieve savings and benefits at multiple levels of government?
- What lessons can the Commonwealth learn from the experience in other states that have implemented Pay for Success contracts?
- What other information would be useful to the Commonwealth of Pennsylvania in preparing a formal Request for Proposals for Pay for Success contracts?
To review the information requested by the commonwealth, go to: http://www.emarketplace.state.pa.us/Solicitations.aspx?SID=OB%202015-1
All responses are due by May 8, 2015 and the responses will be posted for public review on June 4, 2015.
MEDIA CONTACT: Jeff Sheridan – 717.783.1116
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