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Wednesday, August 31, 2016

Protect Taxpayers When Governments Spend Their Money on Contractors

By Dominic M. Calabro, President & CEO

When taxpayers pay for a road or a school, the expectations are clear – a new street that helps traffic move or a new building that safely houses our students.

But so many services that taxpayers pay for are less tangible – helping children receive quality health care, giving prisoners the tools to stay away from crime upon release, protecting the state’s most  vulnerable children and adults with support and assistance.

That’s why the issue of procuring state contracts is critical. When the state contracts with a private entity to perform a government service, it is a critical opportunity to ensure that taxpayer money is being spent wisely.

And it is why “performance based contracting” is a valuable tool. Making sure that taxpayers are paying for outcomes and results rather than a vague mission statement is not only good business, it’s good public policy.

While the details of government contracting are complex, the basics are not.

Governments do not have the ability to perform some tasks that the public demands and requires. When it comes to social services, for example, locally based non-profit organizations have the resources and experience to best help families in need. As a result, the state has contracts with dozens of non-profit groups around the state to make sure that children and families who are in need of help receive services and support to be safe and healthy.

Like any agreement, these contracts work best when the parties focus on the desired outcome rather than a simple contract on how much money to spend. For example, rather than a mere agreement to “help children and families,” these agreements must contain specific targets that show improvements in things like receiving medical check-ups, attending school and maintaining a safe environment.

While they may be called incentives, they are also common sense. Just like every employee or student works hard for raises or recognition, fair but firm goals help assure a clear focus and establish targets that everyone wants to meet. Performance based contracts don’t fit every agreement that state and local governments make with outside providers, but they do allow taxpayers to have assurances that their money is being spent to help people with incentives and safeguards in place.

To read Florida TaxWatch’s full report on performance based contracting, click here.

Dominic M. Calabro is the President and CEO of Florida TaxWatch

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