Authority/Reference(s) Texas Human Resources Code §40.0563 and §40.058
Revision Date March 1, 2018


Performance based contracting is the approach to contracting that focuses monitoring efforts on specified results and outcomes, while giving considerable latitude in determining the manner or means of achieving those outcomes and the resources required in the process.  These types of contracts tie regular payments, financial incentives, and financial remedies to a contractor’s measured performance.

DFPS must monitor a performance based contract to ensure:

  • the objectives of a contract are accomplished,
  • the contractor meets its contracted responsibilities,
  • the contractor is in compliance with applicable state and federal regulations, and
  • the contractor is in compliance with DFPS policies and procedures.

Significant or repeated noncompliance could result in failure to provide adequate services or possible harm to clients and could also be an indicator of an inappropriate diversion of resources.

DFPS requires a contractor to maintain sufficient records that adequately account for the use of awarded funds and to provide reasonable evidence that the service delivery complies with contract provisions.