There are two strategies public agencies may use to ensure private contractors perform as desired. The first is to focus on inputs and include in the contract specifications how a job is to be performed and with what inputs. The second strategy is to focus on outcomes. Performance-based contracting is a contracting system that concentrates on intended results and incorporates incentives for the contractor to achieve them.
This report surveys contracting practices in Arizona on the state and local level. Its purpose is to determine the extent to which performance-based contracting is used by governments in Arizona for services contracted out to the private sector. The report looks at nine different services ranging from those, like solid waste collection, which have clear performance goals to "soft" services, such as mental health care and welfare, where performance is more difficult to measure.