Revised Proposal: Data Validator in Support of the SkillSource Group, Inc. Pay for Performance Project

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1 Revised Proposal: Data Validator in Support of the SkillSource Group, Inc. Pay for Performance Project The SkillSource Group, Inc. Northern Virginia Workforce System Revised: February 27, 2018 Prepared for: David A. Hunn President and CEO 8300 Boone Blvd., Suite 450 Vienna, VA Phone: (703) This document does not constitute an offer to provide services. Instead it is a proposal to enter into negotiations on the terms described herein. There is no binding contract until each party signs a mutually agreed upon consulting agreement. BOSTON SAN FRANCISCO WASHINGTON DC

2 Table of Contents BOSTON SAN FRANCISCO WASHINGTON DC Statement of interest... 2 About Third Sector Capital Partners, Inc Knowledge and Experience in Administering Pay for Performance Projects... 2 Expertise in Federal Workforce Innovation and Opportunity Act (WIOA) Policies and Programs... 2 Expertise Relevant to Data Validator Scope of Work... 3 Proposed Scope of Work... 4 Proposed Cost Structure and Budget Estimate... 5 Timeline... 5 Staffing... 5 Budget... 5 References... 6 Third Sector Capital Partners, Inc. 1

3 STATEMENT OF INTEREST Third Sector Capital Partners, Inc. ( Third Sector ) is uniquely positioned to partner with the SkillSource Group, Inc. ( SkillSource ) as the Data Validator for the WIOA Youth Pay for Performance ( P4P ) Initiative in Northern Virginia. In accordance with federal WIOA guidelines, SkillSource completed a feasibility assessment, with technical assistance from Third Sector, to determine its suitability for a WIOA P4P project. Ultimately, SkillSource and Third Sector secured approval from the project s Steering Committee and the Northern Virginia Workforce Development Board for a P4P contracting strategy in June 2017 and moved forward with implementation. Third Sector s previous work developing this initiative combined with its deep expertise and proven track record in advising and project managing launched Pay for Success and P4P-style contracts makes us wellprepared to serve as Data Validator. Our understanding of the project s construction and relationships with key stakeholders will add significant value over the life of the project. We are excited by the opportunity to work with the SkillSource team to implement this first-in-the-nation WIOA P4P contract. While the focus of our work together would be serving as Data Validator, our ultimate goal is to measurably improve the lives of the young adults being serviced by this project. ABOUT THIRD SECTOR CAPITAL PARTNERS, INC. Knowledge and Experience in Administering Pay for Performance Projects Third Sector is a 501(c)3 nonprofit consulting firm that advises governments, community organizations, and funders on how to unlock public sector innovation to solve pressing challenges such as economic mobility for all and the well-being of our children. Our proven approach is to collaborate with our clients to define impact, draw actionable insights from data, and implement outcomes-oriented contracting. In the past six years, we have worked with over 40 communities that embrace the challenge of becoming more effective, efficient and transparent with taxpayer dollars. Together with our partners, we have transitioned more than $300 million in public funding to programs that measurably improve lives. Third Sector has structured Pay for Success (PFS) projects and other outcomes-oriented contracts across a variety of issues areas in the Commonwealth of Massachusetts; Cuyahoga County, OH; Santa Clara County, CA; Salt Lake County, UT; King County, WA; and Los Angeles County, CA. Third Sector has been awarded three federal Social Innovation Fund grants giving us crucial capacity to lead communities in exploring and developing outcomes-oriented contracts and data systems. Third Sector provides a variety of services including project management, technical analysis, stakeholder engagement, ongoing advisory support, and capacity-building. Third Sector is funded by philanthropic and government sources and has offices in Boston, MA; San Francisco, CA; and Washington, DC. Expertise in Federal Workforce Innovation and Opportunity Act (WIOA) Policies and Programs Third Sector is the leading firm implementing P4P projects enabled by the federal Workforce Innovation and Opportunity Act (WIOA). As a grantee of the Corporation for National and Community Service s (CNCS) Social Innovation Fund (SIF), Third Sector has recently completed delivery of intensive technical assistance to five workforce boards to strengthen their youth workforce development programs through Third Sector Capital Partners, Inc. 2

4 P4P initiatives. Third Sector led workforce boards in Austin, Boston, Denver, Northern Virginia, and San Diego in exploring how the P4P provisions of WIOA could strengthen their programming and develop replicable models to inform and scale outcomes-based contracting across the nation. Work with each community included target population analysis, data and outcomes assessments, stakeholder engagement and referral pathways, project economics, and contracting strategies. Three of the workforce boards have launched P4P projects, including the first-in-the-nation project in Northern Virginia. Through our work with these communities, Third Sector has developed a comprehensive understanding of how to leverage WIOA P4P provisions to: 1) focus on the achievement of long-term outcomes in addition to shortterm impact by providing the flexibility to set aside up to ten percent of WIOA dollars as no-year funds for P4P strategies; 2) include bonus payments to service providers under WIOA contracts for capacity building; and 3) develop P4P contracting strategies, which mandates the completion of a feasibility study. In Northern Virginia, Third Sector worked closely with SkillSource to complete a feasibility and ultimately launch the first P4P WIOA contract in the nation. Our history of work with SkillSource and other key stakeholders combined with our knowledge of WIOA P4P makes us well-qualified to serve as Data Validator for the project. Expertise Relevant to Data Validator Scope of Work In addition to our broader outcomes contracting work and WIOA P4P expertise, Third Sector has a demonstrated track record of serving as a partner in launched contracts. Our involvement with multiple PFS projects post-launch gives us a unique understanding of the potential challenges that can arise. These insights will add substantial value beyond our specific role. Since January 2014, we have served as the Project Manager and Financial Intermediary for the seven-year, $28 million Massachusetts Juvenile Justice project (MAJJ), including management of the project s special purpose vehicle (SPV). MAJJ is one of the first and largest PFS projects in the US. With nine stakeholders, MAJJ has required significant hands-on management of complex financial transactions. Third Sector is also preparing to serve as Project Manager for the Alameda County, CA Justice Restoration Project (ACJRP). This PFS project aims to invest in a community-based approach to reentry service pathways for a population at high risk of recidivating. For ACJRP, we have supported intervention implementation and management and are currently completing PFS Contract terms with the County and potential funders, planning contract financial flows, and finalizing funding for the full Project. Third Sector will be the central coordinating point for contracts between Project Partners through. We will have a direct contracting relationship with the County and be responsible for coordinating with all members of the Project. Specific post-launch activities and experience includes: Post-Launch Project Management: Third Sector manages all cash flows, has full accounting responsibilities, and maintains comprehensive financial records for the MAJJ SPV. Additional responsibilities include managing an internet-based accounting system and preparing ACH payments. Third Sector coordinates and shares information between all project stakeholders through: Excel-based project management tools; reporting templates and facilitation materials; a dynamic financial model; and program performance and payment milestones. This experience makes us well-prepared to fulfill the scope of data validator. Contracting: Third Sector ensures grant and contract management compliance for all contracts for funding or services for MAJJ. We were responsible for driving the contracting process, raising upfront capital, Third Sector Capital Partners, Inc. 3

5 managing project development, and serving as project manager for the duration of the project. This experience will be valuable in our role as data validator where a deep understanding of the contracts involved is required for completing key activities of the scope of work. Project Committees: Third Sector has a deep understanding of the governance committee structures required to coordinate between project funders and other stakeholders. We regularly participate in governance committee meetings for more than six launched PFS projects. Reporting: Third Sector prepares and distributes quarterly reports on project financial information including SPV budget to actuals reconciliations, account balances, expenditures, and deposits. Third Sector prepares financial statements for the SPV and works directly with external auditors to complete audit and preparation of the SPV s 990. The SPV has received Unqualified Audits for the past three years. This aptitude for reporting will be a significant asset in the data validator role. PROPOSED SCOPE OF WORK The proposed scope of work is based on Third Sector s understanding of the Validation Process and goals of the project. Third Sector is uniquely equipped to serve as Data Validator given its role in advising the development and launch of this P4P contract. Third Sector s scope of work would include: 1. Report and Material Development (April 1, 2018-July 31, 2018) Development of validation report templates and procedures Complete detailed step-by-step description for validation process i. Revised timeline and graphic ii. Checklist of tasks iii. Reporting guidelines and procedures 2. Validation of NVTI WIOA Youth Bonus Milestones (January 2020-March 2023) Review lists of State ID numbers of NVTI participants and the de-identified VCCS WIOA Youth Outcomes Report from SkillSource bi-annually (January and July) Confirm that WIOA Youth in the NVTI program are in fact foster care and/or justice involved and meet any other eligibility criteria Determine the number of youth that have met each of the four outcome measures/bonus Milestones, including tracking NVTI program participants achievement of Bonus Milestones by their State ID number and ensuring that each youth in the NVTI program only earns a maximum of one Bonus Payment per Bonus Milestone Within 30 days of receiving the WIOA Youth Outcomes report and participant State ID numbers, issue a certificate (memo) with the total Bonus Payment amount for the Validation Period to SkillSource and the County Resolve any discrepancies with SkillSource and the County as needed Upon request of the Steering Committee, participate virtually in quarterly project update meetings and answer questions on the certification of Bonus Payments Third Sector Capital Partners, Inc. 4

6 The scope outlined above does not include any broader project management or advisory role by Third Sector during the course of the project. Supplemental Services Not Included in Scope or Budget Third Sector recognizes SkillSource may request supplementary services related to the Data Validator role but not part of the core scope of work listed above. Scopes and costs for these supplementary services would be determined as needed. We imagine that funding for supplementary services may be secured through funding streams beyond the budget of this project. We would welcome the conversation with SkillSource about how to collaboratively pursue additional funding should supplemental services be requested. 1. Ongoing Bonus Payment and Outcome Metrics Tracking (August 2018-March 2023) Track number of NVTI young adults that have achieved WIOA outcomes during observation window Track amount expended from Bonus Payment pool (per outcome and per youth), including percent of Bonus Payment pool expended and percent of youth who have achieved WIOA outcomes Provide overview of bonus financing and enrollment on bi-annual basis and distribute project reports and visualizations to project stakeholders 2. Steering Committee Supplemental Reporting and Participation (April 2018-March 2023) Additional reporting, modeling, visualizations, presentations outside of board, ad hoc data requests, etc. for the Steering Committee. Presentation and discussion of supplemental reporting with Steering Committee. PROPOSED COST STRUCTURE AND BUDGET ESTIMATE Timeline If SkillSource decided to move forward, Third Sector would work with SkillSource to determine the appropriate timing for engagement launch. Most engagements commence within 8-12 weeks of contract signing in order to mobilize key stakeholders and align Third Sector resources to engagement needs. Staffing Third Sector will dedicate approximately 342 hours over 124 months to deliver the services required for the scope outlined above. Staffing will include: 1. A Director who will serve as the Relationship Manager and Senior Project Resource 2. A Manager who will serve as the Project Lead Budget The standard cost for completing the engagement is $100,000. Third Sector will reduce the budget to $65,000 by offering a discount of approximately 35% on our standard rates. Third Sector will also limit travel and participate virtually to control costs. The budget and contract would be based on a set number of hours (approximately 342). Third Sector has a rigorous, federally compliant process for tracking and Third Sector Capital Partners, Inc. 5

7 reporting hours. We would provide a report on hours expended and progress on deliverables to the SkillSource. If, due to circumstances outside of our control or due to complications unforeseen when generating this cost estimate, Third Sector significantly deviates (greater than 20%) from this allocation of time, we will notify the SkillSource team, produce an interim report and determine together whether to seek additional funding. Figure 1: Budget Estimate Year 1 (4/1/18-7/31/18) Year 2 (7/1/20-6/30/21) Year 3 (7/1/21-6/30/22) Year 4 (7/1/22-6/30/23) Hours Hourly $185 $192 $192 $192 Monthly $5,000 $1,250 $1,250 $1,250 Yearly $20,000 $15,000 $15,000 $15,000 $65,000 TOTAL REFERENCES Organization Reference/Title Phone Roca, Inc. Cuyahoga County, Ohio Office of Job and Family Services San Diego Workforce Partnership Lili Elkins, Chief Strategy Officer David Merriman, Administrator of Job and Family Services Andy Hall, Chief Operating Officer Third Sector Capital Partners, Inc. 6

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