34

If competitive bidding is used, then each proposal should b evaluated by key internal staff decision makers. While an outsid management support group can develop the procedures fo evaluation, it is critical for those who will be involved in the projec during the demonstration or the turnkey phases to have a voice i the final decision. Moreover, the process of reviewing proposals i an excellent training tool for all parties. Staff recommendation should be presented to the school board not only in terms of relativ strengths and weaknesses but also in terms of several assume levels of student performance. For example, while one firm's guaran tee or fee for students achieving at a one-grade-level increase ma be more competitive than the rest, another firm may provide a mor advantageous pricing arrangement if the students achieve tw grade levels. Presentation of alternatives requires professiona judgements regarding the projected learning curve of the students the effectiveness of the proposed learning system, and other cor siderations. For large projects being considered for turnke operations, administrators should consider simulating the relativ cost-effectiveness of the proposed program and should examine th economics of the system through sensitivity and trade-off analyses Blaschke reports that his firm finds this very useful for determinin the opportunity costs of various learning systems under various cor straints that will remain in force during the turnkey phase.

Criteria for selecting a contractor could include the following soundness of educational approach, pricing arrangement and fee and corporate and personnel experience. There are other factor Staff members presenting strengths and weaknesses should tak into account the trade-offs between soundness of approach an pricing arrangements. For example, one firm's representative migh not explain his proposed approach in depth, yet guarantee that a students will achieve a certain level, under which level he woul receive no payment. Another might describe his firm's approach i great detail but his pricing arrangement might suggest that he ha lower confidence in his system. An indication of corporate commi ment, as well as the commitment of consultants, should be specifie in writing. For example, in one case, upon learning of the contra initiated by one of their divisions, corporate headquarters officia who viewed performance contracting as a low priority attempted t terminate.

6. What are the important considerations in final contract a proval? The performance contract will evolve as a negotiate document based on the specifications or RFP and the company proposal, plus the inclusion or exclusion of errors of omissic arrived at through negotiation. The question of abdication responsibility is much more likely to arise in those instances whe the final contract is more similar to the contractor's proposal tha the original specifications or request for proposal. One co sideration critical to the success of the program is the trade-off b

ween an extremely detailed contract arrived at through bitter guments and one more simple in nature based on a greater deal of ood faith10 Board members should also realize that a contract will e a public document, possibly creating political problems. For Kample, Blaschke reports that in one project his company eveloped, the favored firm wanted a contract to specify that the invidual school system would determine whether a given student as fit emotionally for the program. The school district did not want specify individuals, for obvious political reasons.

7. What about monitoring procedures and systems? A anagement information system that allows for continuous onitoring and evaluation needs to be included in the overall plan. should permit staff and board members to be responsive to uestions from the community and general public. The creation of a oject office with standard operating procedures is necessary if ose contract administration is to be guaranteed.

e Turnkey Operation

Not all performance contracts, by any means, provide for turney. Blaschke insists that they should. After all, if the prime tionale for employing a private firm is to demonstrate the value of ew approaches, then once the demonstration is completed the ivate firm should withdraw. Blaschke therefore recommends areful scrutiny by administration and board of (a) the turnkey alysis and (b) the configuration of the contractor's program if dopted by the school conditional upon the changes the school is illing to make.

The turnkey analysis attempts to determine the costfectiveness of the contractor's program with the target population limited subject matter areas compared with the schools' instruconal system counterpart. It is important that all relevant costs be onsidered in the analysis. A firm could hide certain costs, if it was illing to take a loss the first year in the hope of recouping if the chool should adopt the program on a widescale turnkey basis in llowing years. Assumptions underlying the cost-effectiveness nalysis should be carefully examined. For example, since few Chool districts teach a course in reading at the junior and senior gh level, what segments of what courses (such as language arts or glish) should be considered as a "reading" program for comarison with the contractor's reading program? A thorough turnkey alysis will examine the use of a teacher's time in such areas as dministration, instruction, testing, etc., to plan for economies. If an tempt is to be made during the turnkey phase to differentiate acher roles, it is important for manpower planning purposes to

A

good example of a simple document, quickly drawn and speedily accepted, is the contract tween BRL and the Gary board, which covers only a few pages, yet arranges for a private firm to erate an entire school for three years. It could become a source of difficulty when the final financial ttlement is made.

35

36

know the functional requirements for operating a turnkey classroom

If a cost-effectiveness study of the contractor's program ir dicates that it is more productive than the school program, then second analysis is conducted to analyze the economics of the con tractor's learning system proposed for turnkey adoption. Thi analysis should reveal what changes have to be made within th school system to achieve similar cost-effectiveness. The contracto might agree to guarantee that the school will achieve 80 percent c what he demonstrated could be done if the school also will utiliz incentives for students, incentives for teachers, differentiated sta fing, etc. Without these changes, the contractor might only guaran tee 20 percent. The "Cost-Ed" model Blaschke's firm used in som 30 school districts in 1970-71 to conduct the turnkey analysis in cluded manipulation and assessment of approximately 1,20 variables for determining optimal configurations.

3.

A Concluding Note

Reading the professional literature on performance contracting and brief handbooks such as this one, while important, is no substitute for down-to-earth discussions with administrators and teachers who have successfully (or even unsuccessfully) experimented with performance contracting. Their experience is now comparatively rich, and a number of sites have been well publicized. A satisfactory visit can usually be arranged by telephone. A curious, knowledgeable, and observant professional, if he visits with an open mind, can learn a great deal from a few days of conversation and observation.

One such visitor was Bel Kaufman, teacher and author of the widely admired Up the Down Staircase. Writing in Today's Health in September 1971 after a visit to the Banneker School in Gary, Indiana (Behavioral Research Laboratories had been in charge for a year), she revealed a good deal of ambivalence about performance contracting. At this point it seems that this ought to be the dominant educator reaction.

Here are some of Miss Kaufman's observations:

I must admit my conflicts: I am jealous for my profession, reluctant to abdicate to big business, apprehensive about its potential dangers. I want to cry out: "Waitnot yet-don't take away our children, Sir. . . ." Yet who is to say what is best and for which child?

The Banneker experiment offers no radical teaching method. It does provide excellent materials, efficient organization, and eagerness to succeed, motivated in part by the need to protect its investment, but also, I think, by a genuine desire to improve education . . .

This is the first step; without it, the Banneker kids are lost.... but my doubts about this program remain. I question its overemphasis on reading and math. True, they are easily measured. (How do you measure feeling? What is the worth of a random thought? Of silence? What is the annual cost of imagination?) . . . .

Above all, I question education as a commodity to be bought and sold for profit. It is not a product; it is a process. It is seeking something that may never be found; something that will beckon when the last of the Sullivan books is put away and the TV set is dark and the movie is over and the school doors are closed. It demands thinking and arriving at one's own conclusions, which may be way off the national norm.

Yes, but the fact remains. Statistics show. Better than nothing. Spelling before creativity.

37