Contracting with for-profit firms is one of the new organizational arrangements to emerge in public education in the nineties. Fueled by millions of new investment dollars and by demand for education management services from the burgeoning charter school movement, education contracting is growing. The Edison Project, for example, opened its first four schools in 1995 and now operates 77 schools serving approximately 37,000 students in twelve states. Contracting, like vouchers and charter schools, is a market-based reform presumed to promote improved performance through new accountability mechanisms and exploiting competition.
School districts have long contracted for building maintenance, transportation, and food services. Districts have even contracted for educational services, but typically only for specialized services for a small number of children with handicaps or other special needs. What is happening now is different: school districts are contracting for regular educational services, the very services they are organized to provide.
This issue of CPRE Policy Briefs describes key features of education services contracts between school districts and forprofit firms and discusses some management issues raised by these contracts. The information is based on the terms of 11 contracts and interviews with the officials who shaped these contracts. The contracts were intentionally selected to be diverse. They include contracts from 1990 to 1998 and contracts with school districts as well as with charter boards. One contract established external management control of an entire school district; other contracts focused on school-level management; while still others provided a limited set of educational services. A few of the contracts ended contentiously; others have been in force for some years without dispute. This Policy Brief does not evaluate particular contracts from an educational or legal perspective, but uses the set of contracts to analyze contracting as a management tool in education.