New Paper: Procurement doesn’t need to be a choke point

by Grace Edinger, Senior Manager of the Restoration Economy Center

Procurement doesn’t need to be a choke point:
Examples and recommendations for non-legislative pathways to state Pay for Success contract authorization

States are major funders of ecological restoration, and they usually pay for that restoration through traditional procurement methods or by issuing grants. These approaches often involve arduous procurement and contract management processes for both the contractors and government staff, and don’t guarantee the success of project delivery. However, some states have adopted Pay for Success contracting (PFS), also known as pay for performance or outcomes-based contracting, which is a procurement strategy that defines desired outcomes and invites the private sector to deliver those outcomes in advance of payment to ensure that only successful projects are funded. This paper highlights state Pay for Success efforts that did not require legislative action and makes recommendations for states interested in adopting Pay for Success programs through similar means. Particularly, we explore:

1. The California Department of Water Resources Lookout Slough Project and recent efforts to proliferate PFS,

2. North Carolina’s Division of Mitigation Services In-lieu fee programs, and

3. Washington state’s in-progress discussions to issue their first state environmental PFS pilot program.