Pay for Success Initiative: Outcomes-based Contracting to Lower Homelessness

The Second Chance Act (SCA) Pay for Success Initiative: Outcomes-based Contracting (OBC) to Lower Homelessness provides assistance and funding to state, local, and tribal governments to price, write, negotiate, fund, and manage contracts that pay for these services in a way that ensures accountability of the contract service providers, and incentivizes improved performance over time. Contracted services that may be purchased with grant funds include reentry services which are tailored to individuals leaving incarceration who are at moderate to high risk for recidivism in the community and services available to individuals living in permanent supportive housing units.

Objectives and Deliverables


  • Enter into an outcomes-based contract to provide permanent supportive housing services for a specific subset of the community’s population who exceed identified thresholds for hospital and homeless system service use and jail bookings.
  • Manage the outcomes-based permanent supportive housing services contract, including data and report collection, regular metric and outcome reviews between governments and service providers, on and off-site monitoring, outcomes validation, and incentive payment approvals.
  • Ensure government staff and service providers have adequate training on SCA OBC procurement, permanent supportive housing service/intervention, data collection, and outcomes validation.


  • Analysis that demonstrates permanent supportive housing service needs, including the following data: (1) jail (booking and release dates, charging information, and unit/bed type), (2) homeless management information system (dates in shelter, services used, and location of last service), (3) health care system (utilization and dates, location, cost), and (4) other services (mental health and substance use disorder services, child welfare, and benefits access) to support the number and needs of the people to be served and ensure the intended target population is identified and provided with contracted services.
  • Analysis that demonstrates the outcomes selected for payment. Contracts must include appropriate functional outcomes, relevant system savings, and recidivism outcomes including jail bookings, length of stay, and charging information.
  • Analysis that demonstrates the grantee’s decision about the OBC structure, repayment strategy, and timing of payments.

See link to 2019 solicitation at:

See link to awards at: