11.18.1 Pay For Performance
Effective date: August 7, 2017
WIOA authorizes Local WDBs to utilize pay-for-performance contract strategies with its service providers.
This is a specific type of performance – based contract strategy that has four distinct characteristics:
- It is a strategy to use WIOA Pay-for-Performance contracts. 1
- Identifies a workforce development problem and target populations for which a local area would hope to achieve through a Pay-for-Performance contract relative to baseline performance and the acceptable cost to government associated with achieving these outcomes
- It must include a method for independently validating the performance outcomes achieved under each contract within the strategy prior to payment occurring.
- Include a description of how the local area will reallocate funds to other activities under the contract strategy in the event a service provider does not achieve performance benchmarks under a WIOA Pay-for-Performance contract.
A type of performance based contract that a local WDB can be entered with eligible service providers to serve targeted populations for Adult/Dislocated Worker Training Services 2 and Youth Activities. 3
- No more than 10% of the total Adult and Dislocated Worker annual allocation can be reserved for the implementation of WIOA Pay-for-Performance contract strategies for Adult and Dislocated Worker training services and 10% of the Youth annual allocation for youth activities.
- Cost – plus a percentage contract is not authorized. 4
- Provide technical assistance to Local WDBs including assistance with
- structuring WIOA Pay-for-performance contracting strategies;
- performance data collection;
- meeting performance data entry requirements; and
- identifying levels of performance.
- Collect and report to DOL; on the Pay-for-Performance Report Template with information on the performance of service providers entering into WIOA Pay-for-Performance contracts. The performance must be measured against the levels of performance benchmarks specified in the contract(s).
- Collect and report to DOL, State and/or local evaluations of the design and performance of the WIOA Pay-for-Performance contract strategies, and where possible, the level of satisfaction with the strategies among employers and participants benefitting from the strategies.
- Each year, monitor the Local WDB's use of WIOA Pay-for-Performance contract strategies to ensure compliance with §683.500 and the contract specifications in §683.510, and State procurement policies.
- Monitor local areas' expenditures to ensure that neither no more than 10% of a local area's adult and dislocated worker allotments or no more than 10% of a local area's youth allotment is reserved and used for WIOA Pay-for-Performance contract strategies.
- Requirements assigned to the state by the Secretary of Labor in future guidance.
- Complete and send ETA Form 9174 to the federal departments annually.
Local Workforce Development Boards
When a Local WDB uses Pay-for Performance strategies, the board must:
- Inform DET of the use of all WIOA Pay-for-Performance contracts;
- Report in ASSET services delivered through a Pay-for-Performance contract. See the Performance TAG for instructions to report Pay-for-Performance services;
- Provide ETA 9174 with a narrative to DWD within 30 days following the end of the Program Year.