11.18 Pay For Performance

Effective date: August 7, 2017

WIOA authorizes Local WDBs to utilize pay-for-performance contract strategies with its service providers.

Pay-for-Performance Strategy

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.

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

Limitations

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

Responsibilities

State DWD

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.