Approximately one-third of school districts contract for student transportation services. Unfortunately, a significant portion of those districts have no mechanisms in place to manage or oversee those contracts.
Often times, contracting is seen as a way for a school district to get out from underneath the requirement to manage transportation. This is an unfortunate mindset for both the school district and the contractor. Given the continuing need to manage costs and the increasing expectations for service delivery, it is time to rethink how school districts approach contract management.
Within every transportation contract, and really any contract, there are two key concerns that must be managed. The first concern is compliance with terms and conditions of the contract. The second requirement is an assessment of overall performance. Effective contract management programs are designed to address both of these concerns.
The majority of contract requirements are binary in nature, where the contractor is either performing the required activities of they are not. Compliance monitoring focuses on ensuring these requirements are met. School districts must also recognize that they are a party to the agreement and have responsibilities. Compliance monitoring involves identifying the responsibilities of each party, clearly articulating milestone dates and tracking whether or not these designated items have been completed.
Contract performance measurement is fundamentally different than compliance monitoring in that it focuses on collaborating with the contractor to improve the efficiency and effectiveness of the district's services. In designing a performance measurement structure it is critical to ensure that three principles are fully addressed. The first is that the measures chosen must address outcomes not inputs. The second consideration is that adequate, objective data sources must exist to measure performance. The final principle is that the measures must eliminate external forces not within the control of the contractor.
An example of a commonly misapplied indicator is on-time arrival. The desired outcome is clear enough to be valid. The availability of adequate and objective data is often more difficult. Defining "on-time" is challenging but possible especially with the use of technologies such as AVL or with regular employee monitoring. Removing external forces is the most challenging concern. For this to be a valid measure of operator performance, the district must ensure that the route is accurate as designed and that there are no other external factors, such as traffic, that can influence the results.
This is a difficult standard to meet, and largely negates the utility of this as a measure of operator performance. However, it can be a very valuable indicator of district performance. In this one example, we see the care and forethought that must be applied to any valid and effective contract management program.
Effectively managing contracted transportation is about much more than processing invoices and prosecuting performance. The goal of an effective contract management should be to create a relationship that focuses on partnership, clearly articulates expectations and encourages accountability for both parties. Using a combination of compliance monitoring and performance management makes it more likely that both parties will realize the benefits they expected from the contractual relationship.