Performance-Based Contracting Can Lead to More Successful Public Outcomes

TALLAHASSEE, Fla. - Florida TaxWatch, the state’s premier non-profit, non-partisan government watchdog, highlights how performance-based contracting, or pay-for-performance, can increase efficiency and create successful outcomes in public sector contracting in its August 2016 Economic Commentary.  Evidence shows that when applied correctly, performance-based contracting can minimize the risk to the taxpayer while maximizing project outcomes.

Using performance-based contracting empowers state and local governments to lay out specific goals for service projects and tie compensation of providers to these outcomes. This system can better ensure that taxpayers are paying for efforts that actually generate the desired social and economic benefits instead of just activities that are intended to do so.

“Performance-based contracts promote accountability in public contracting. These arrangements ensure that desired outcomes are clear at the beginning and can be an effective means of ensuring that taxpayers get the full benefit of vital service contracts where otherwise accountability can be difficult to achieve,” said Florida TaxWatch President and CEO Dominic M. Calabro.

“Our office works daily to ensure that Floridians know exactly how their tax dollars are being spent, and I’m pleased to see that TaxWatch shares in our mission of providing transparency tools to the people of Florida,” said Chief Financial Officer Jeff Atwater (For more information on the CFO’s transparency efforts, go to www.myfloridacfo.com).

“As an experienced businessman, I know that taxpayers can save money with prudent contracting guidelines,” said John Alexander, Chairman of the Government Efficiency Task Force. “Incentives within contracts clearly benefit all Floridians by saving money and enforcing smart deadlines and objectives.”

To read this month’s Economic Commentary, click here.