A National Imperative: Joining Forces to Strengthen Human Services in America (Jan 2018)

• • Support of funding for programs, general operations, and capacity-building by expanding access to capital through creative use of CRA programs, credit guarantees, and social impact bonds • • Cross‑staffing via fellowships and related programs

Exhibit 8: Proposed attributes of a strategic approach to human services CBO relationship management Traditional approach to procurement Value levers

Partnership and relationship approach to procurement

Not a focus

Contribute to growth, returns, impact

Investment in joint innovation, policy and program development

Focus on short-term risk mitigation (operational risks, transactional downside) Crisis management and corrective actions in event of supplier stress or risk event

Mitigate risk

Focus on short-term risks plus long-term sustainability, shared risk structures, potential for impact to brand and reputation Cooperative funding models (e.g., provision of credit guarantees)

Top-down quality and oversight

Reduce costs

Costs important but not primary determinant of contract awards (provided base requirements met)

Heavy focus on short-term cost optimization: lowest cost bid contract awards, volume incentives, etc.

“Low cost supplier mindset”

Equal partners pursuing shared policy goals

This migration to a strategic partnership approach implies a significant change in how government agencies think about and approach the contracting process. Criteria for awarding contracts should be broadened to include demonstrated track record of success as well as factors like governance, staff and leadership development, financial health, and capacity for innovation, in addition to program delivery cost. One idea might be to only allow bids from CBOs that meet minimum standards for those factors. Contract terms likely need to change to allow for more flexible funding, and more reliable payment schedules. Contract performance metrics likely need to change to place greater emphasis on outcomes and on CBO capacities for deeper collaboration and innovation. Industry associations should commit to encouraging and facilitating these partnerships. They can play an important role in introducing potential partners to each other and facilitating exploratory discussions, as well as in developing and promoting standard partnership models (e.g., shared services models, strategic collaboration approaches, lead agency models,

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