Supporting Human Services Contracting through Cross-Sectoral Managerial Relationships

Background & Purpose: Despite the prevalence of public-nonprofit contracting in the human services, and the importance of cross-sector managerial relationships to the success of these contracts, there has been limited attention in the contracting literature to the relational strategies employed by managers (Bertelli & Smith, 2009). Managerial relationships strengthen and support the formal contractual agreement, yet scholarship has generally emphasized the formal as opposed to the informal ways managers support contract accountability. In particular, few studies have illuminated how managers work together to implement complex human services contracts (Romzek, LeRoux & Blackmar, 2012). Drawing on a survey of managers in 5 county human service organizations (HSO) and the private HSOs with which they contract, this qualitative study examines the strategies that experienced contract managers use to build positive relationships in support of effective contracts.

Methods: An online survey of managers and executives in five Bay Area (CA) county and 186 private HSOs was conducted in July-November 2015. Of the private agencies, 89% were nonprofit; all private agencies had at least one contract with one or more of these county agencies, and respondents were chosen based on contracting knowledge. 193 of 295 (65%) county staff and 483 of 592 (82%) private agency staff completed the survey. Survey questions concerned: 1) activities with and perceptions of one’s contract counterpart; 2) performance monitoring; and 3) perceptions of contract effectiveness. This analysis examined data from open-ended questions related to 1) addressing performance measurement challenges, and 2) addressing cross-sectoral relationship challenges. The analysis was carried out using manual coding methods, integrating descriptive and process coding (Corbin & Strauss, 2008).

Results: Three themes were identified as shaping managerial relationships: 1) power and control; 2) knowledge; and 3) communication. While county and private agency managers recognized the power that county agencies could exercise in their role as funders, they also noted the power nonprofits possess as providers of critical services, and the policy mandates constraining county managers. Respondents viewed balancing power in the relationship as important, with key strategies including expression of respect, provision of help (e.g., technical assistance) rather than imposition of sanctions, and collaborative engagement in service planning. Individual knowledge and expertise were cited as contributing substantially to effective managerial relationships, including knowledge of the contracting process, performance measurement processes and service delivery models. In this regard, respondents noted strategies related to addressing staff turnover and internal information-sharing. Respondents viewed communication as essential to building positive relationships, emphasizing transparency, frequency, timeliness, and specificity.

Conclusion: Study findings highlight the importance of developing organizational supports to provide continuity among contract managers and ensure they possess the requisite knowledge and skills to facilitate engagement in contract-based dialogue. Technical assistance to HSOs is important for promoting contractual relationships and public-private partnerships, requiring that managers achieve a balance between providing help and ensuring accountability. Important questions for research include the influence of cross-sector contract-based relationships on perceptions of contract effectiveness, as well as the effect of positive managerial relationships on client outcomes in the context of complex human services contracting.