Performance Improvement 2004. Privatization in practice: case studies of contracting for TANF case management


The purpose of this project was to conduct case studies of state and local governments that have privatized case management under the Temporary Assistance for Needy Families (TANF) program, a function traditionally provided by the human services agency. Privatization of welfare services increased significantly and expanded into new services after passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) gave states additional flexibility to design and operate their TANF programs. Despite its increasing popularity, privatizing welfare services poses significant challenges to the state and local government agencies that are responsible for contracting out. Study sites contracted with a variety of organizations, including both for-profits and non-profits (including faith- based organizations), and used a variety of contract types, including pure pay-for-performance, cost- reimbursement, fixed price, and hybrid contracts. The project described the key decisions and activities undertaken in privatizing TANF case management and documented the lessons learned in six study sites from their experiences in privatizing TANF case management. Key topics included (1) the why, what and to whom of privatizing TANF case management; (2) ensuring a fair, effective and competitive procurement process; (3) designing contract performance measures and payment structures; (4) monitoring TANF contractors to ensure accountability; (5) addressing the challenges of service provision under privatization; and (6) some key lessons learned by public welfare agencies as they took on new responsibilities in privatizing TANF case management.

PIC ID: 7755
Agency Sponsor: ASPE-OHSP, Office of Human Services Policy
Federal Contact: McCormick, Ann, 202-401-6659
Performer: Mathematica Policy Research, Inc., Washington, DC

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