Performance Contracting: A Forgotten Experiment in School Privatization.

During the early 1970s, more than 150 school districts and several states contracted with private companies to deliver instruction, and the Republican Administration put into motion a vast field experiment in privatization. With a new wave of interest in that approach now sweeping the land, Ms. Ascher teases out some lessons from those experiences of two decades ago. The early 1970s call up images of a very different time - of anti-Vietnam protests and of a belief in government activism on the domestic front. Yet, like today, the Nixon years were a time when faith surged in the ability of the private sector to improve public education. In fact, during the early 1970s, more than 150 school districts around the country and several states contracted with private companies to deliver instruction in reading, mathematics, and other subjects, and the Republican Administration was responsible for a vast field experiment in privatization called "performance contracting. " As the term suggests, the contracts stipulated that school districts pay for-profit firms based on their performance in improving student achievement. With inflated promises - and dire predictions - concerning privatization now sweeping the country, these experiences in performance contracting can enrich the national discussion with sobering historical insights. Indeed, what is odd is not that privatization is returning as a solution for improving public schools, but that so little serious attention has been paid to the details of this earlier experience. The Idea of Performance Contracting Performance contracting emerged in the Department of Defense during the Vietnam War as a way of gaining greater control over the skyrocketing costs of military products. In education circles, the idea had its champions in the U.S. Office of Education, which was funding a variety of programs through Head Start, the Elementary and Secondary Education Act of 1965 (ESEA), and other initiatives. "Contracts for federal funds, wherever possible, should be performance contracts," wrote Leon Lessinger, associate commissioner of education, and Dwight Allen, dean of the School of Education at the University of Massachusetts, in a 1969 issue of the Kappan. (1) Lessinger, an engineer, had come to the Office of Education from the Aerospace Foundation, and he was shocked to find that there was no accountability for productivity or quality in his new field. Since performance contracting demanded that companies sign "a contractual agreement to perform a service . according to agreed-upon terms, within an established time period, and with a stipulated use of resources and performance standards," Lessinger believed it would ensure accountability in public education. (2) The Texarkana Story Through the influence of Lessinger and others in Washington, performance contracting in education made its debut in Texarkana, a small town on the border between Arkansas and Texas. (3) Texarkana's population of 60,000 was about 75% white and 25% African American. The school district was merging several previously all-black and all-white schools. The problem, as some saw it, was that the African American students needed rapid remediation before being placed alongside their white peers. With a grant provided by ESEA and guidance from Washington, the district hired Dorsett Educational Systems, Inc., of Norman, Oklahoma, a small firm that produced audiovisual equipment. Dorsett was to instruct approximately 350 students, both African American and white, who had been identified as being two years or more behind grade level. The contract called for the students to gain one grade level in both reading and math after 80 hours of instruction, for which Dorsett would earn a base payment. If the students gained more than a grade level or reached grade level in less than 80 hours, Dorsett would earn extra payment. In addition, Texarkana promised to buy Dorsett's learning technology at the end of the performance contract. …