Frequently Asked Questions

Pay for success (PFS) is an innovative contracting and financing model that aims to test and advance promising and proven interventions while paying only for successful outcomes or impacts for families, individuals, and communities.  Through a PFS project, a government (or other) entity enters into a contract with an Investor¹ to pay for the achievement of concrete, measurable outcomes for specific people or communities.  Service providers deliver interventions to achieve these outcomes.  Payments, known as Outcomes Payments, are made only if the intervention achieves those outcomes agreed upon in advance.  The government (or other) entity makes Outcomes Payments to repay Investors for the costs of services (and sometimes other projects costs) plus a modest return.   Ideally, Outcomes Payments amount to a fraction of the short- and long-term cost savings to the government (or other) entity resulting from the successful outcomes. A Feasibility Study is typically the first step in exploring a PFS project.

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The Preschool PFS Feasibility Pilot is a grant program funded under the Preschool Development Grant national activities. The purpose of the Preschool PFS Feasibility Pilot is to explore the viability of using PFS for preschool models designed to effectively serve a Target Population; identify a broad range of potential Outcome Measures designed to both demonstrate improved student outcomes and result in potential cost savings to school districts, Local Governments, and States, as well as provide more general benefits to society; and establish safeguards to protect the rights of Children with Disabilities in the design and implementation of preschool PFS projects. The Department hopes that the pilot will encourage implementation of PFS models in the field.

The Department must obligate all funds to grantees no later than December 31, 2016. Grantees must expend all grant funds within the grant period, which may be up to 30 months.

To be eligible to receive an award an applicant must be a State, Local Government, or Tribal Government. Local Government as defined in CFR 200.64 and the NIA means any unit of government within a State, including a county; borough; municipality; city; town; township; parish; local public authority, including any public housing agency under the United States Housing Act of 1937; special district; school district; intrastate district; council of governments, whether or not incorporated as a nonprofit corporation under State law; and any other agency or instrumentality of a multi-, regional, or intra-State or local government. Tribal Government as defined in the NIA means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any native village as defined in Section 3 of the Alaska Native Claims Settlement Act, 43 U.S.C. 1602(c)) certified by the Secretary of the Interior as eligible for the special programs and services provided through the Bureau of Indian Affairs. The maximum grant award is $400,000. We will reject an application that proposes a budget exceeding $400,000 for a single budget period of up to 30 months.

The Preschool PFS Feasibility Pilot Grants competition uses the definition of a State under the ESEA definitions in effect for 2016 in 20 USC 7801. The term “State” means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and each of the outlying areas.

Yes, under 34 CFR 75.127, eligible entities may apply as a group, consortium, joint applicants, etc. If a group decides to do so, it must meet the requirements in 34 CFR 75.127-129. The consortium must consist of only eligible entities.

Tribal Governments are eligible to apply. BIE schools are eligible to apply if they meet the definition of Local Government in 2 CFR 200.64. For example, if a BIE school is a local educational agency (LEA), then it meets the definition of Local Government. Please refer to the definition of a Tribal Government provided in the NIA and in B-1 above.

No. Eligible entities are States, Local Governments, and Tribal Governments, and only these organizations can submit an application. However, an eligible entity may contract with an intermediary organization under Preschool PFS Feasibility Pilot Grants.

The deadline for application submission is October 6, 2016. Applications received by Grants.gov are date and time stamped. Your application must be fully uploaded and submitted and must be date and time stamped by the Grants.gov system no later than 4:30:00 p.m., Washington, DC time, on the application deadline date. Except as otherwise noted in the application submission section in the NIA, we will not accept your application if it is received–>>that is, date and time stamped by the Grants.gov system–>>after 4:30:00 p.m., Washington, DC time, on the application deadline date. We do not consider an application that does not comply with the deadline requirements. Please note applicants must have an active registration in the System for Award Management (SAM) system prior to submitting an application. The SAM registration process can take approximately seven business days, but may take upwards of several weeks. More information about SAM can be found in section IV (6) of the NIA and at www.SAM.gov.

When using Grants.gov early registration is important. Grants.gov registration is a one-time process that may take five or more business days to complete. The document “Grants.gov Submission Procedures and Tips for Applicants” in the application package provides important submission procedures and references to further instructions for using Grants.gov, including: 1) REGISTER EARLY – Grants.gov registration may take five or more business days to complete. You may begin working on your application while completing the registration process, but you cannot submit an application until all of the registration steps are complete. For detailed information on the registration steps, please go to: www.grants.gov/web/grants.register.html. Note: Your organization will need to update its System for Award Management registration annually. 2) SUBMIT EARLY – We strongly recommend that you do not wait until the last day to submit your application. Grants.gov will put a date/time stamp on your application and then process it after it is fully uploaded. The time it takes to upload an application will vary depending on a number of factors, including the size of the application and the speed of your Internet connection, and the time it takes Grants.gov to process the application will vary as well.

Expert external peer reviewers will evaluate applications and make recommendations to the Department. Independent peer reviewers will be chosen from a pool of qualified educators, scholars, employees of Federal agencies, and other individuals knowledgeable in early learning and PFS. The Department will require potential peer reviewers to indicate their degree of expertise or experience in areas such as: early learning and development policy and practice, PFS knowledge and expertise, and critical analysis and writing skills. The Department will thoroughly screen all reviewers for conflicts of interest to ensure a fair and impartial review process.

No. All letters of support must be included as part of your formal grant application.

No. An applicant should not include hyperlinks to Web sites in its application. Peer reviewers will be instructed not to open or follow such hyperlinks. We understand that hyperlinks can be a convenient way to provide information. However, to ensure the integrity and fairness of the competitive process, the peer reviewers will consider only information submitted as part of an application, by the application deadline. Because hyperlinks can be updated after the deadline for submitting applications, we will not consider them to be part of an application.

We recommend that applicants format their applications in black and white as we will print the applications in black and white for peer reviewers.

No. But keep in mind, from a reviewer’s point of view, clarity matters and brevity will be appreciated.

If a consortium of eligible entities applies for a grant, the members of the consortium must either designate one member to apply for the grant on behalf of the consortium or establish a separate eligible legal entity to apply for the grant. See 34 CFR 75.128(a). The consortium must consist of only eligible entities. Each member of a consortium must enter into a binding agreement that: (1) details the activities that each member of the consortium plans to perform; and (2) binds each member of the consortium to every statement and assurance made by the applicant in its application. See 34 CFR 75.128(b). It is important to note that the binding agreement must be between the eligible entity that would serve as the fiscal agent for the grant and each other eligible entity in the consortium. The applicant for the group is legally responsible for the use of all grant funds and ensuring that the project is carried out by the consortium in accordance with Federal requirements. Each other member of a consortium is legally responsible for carrying out the activities it agrees to perform and using the funds that it receives under the agreement in accordance with all applicable Federal requirements. 34 CFR 75.129.

In order to receive a Preschool PFS Feasibility Pilot Grant, an applicant must address in its application the absolute priority described below. The Department will find that an applicant has met the absolute priority if a majority of the reviewers determine so. Only applications that meet the absolute priority will be considered for funding. An eligible applicant should address this priority throughout the application narrative. Absolute Priority-Feasibility Study To meet the Absolute Priority, the applicant must propose a Feasibility Study that will determine the viability of using a PFS approach to expand or improve a preschool program for a Target Population, and describe the potential Outcome Measures the applicant proposes to identify and evaluate for appropriateness for PFS. Any applicant that includes a Feasibility Study for a PFS project that proposes to reduce the need for special education and related services as an Outcome Measure must also include at least one other meaningful and substantive Outcome Measure of short-, medium-, or long-term student achievement, such as kindergarten readiness, reading and math growth or achievement, and improved social and emotional skills.

To meet the competitive preference priority described below, applicants must complete the narrative section identified in the application for the priority. Peer reviewers will consider the quality of those responses and award up to 5 additional points depending on how well applicants addressed the competitive preference priority. Competitive Preference Priority—Outcome Measures Across Various Domains The Department is interested in the exploration and development of Outcome Measures for PFS projects that implement preschool services for the Target Population across various developmental domains. Therefore, the Department will award up to an additional 5 points for projects that propose a Feasibility Study that would examine social and emotional well-being or Executive Functioning Outcome Measures. These Outcome Measures may be predictive of future school success, cost savings, cost avoidance, and other societal benefits and may be appropriate to include in a PFS project. To meet this priority, an applicant must propose exploring social and emotional or executive functioning Outcome Measures, or both.

Application requirements are the information that must be included within an application. As outlined in section I of the NIA an application for a Preschool PFS Feasibility Pilot must include the following: (a) A project statement of need for the Target Population that includes—(1) A definition of the Target Population to be served, based on data and analysis demonstrating the need for services within the relevant geographic area; and (2) Data demonstrating how the Target Population lags behind other groups in achieving key outcomes that a future PFS project will seek to achieve. (b) A description of the preschool program, which must include an explanation of how the design of the program ensures it is high-quality, including evidence supporting its design and policies to ensure, at a minimum: (1) An evidence-based curriculum; (2) High-quality professional development for all staff; (3) High Qualifications for Teachers; (4) A child-to-instructional staff ratio of no more than 10 to 1; (5) Inclusion of Children with Disabilities; and (6) Inclusion of at-risk children and children representing other high-needs populations, such as homeless children and English Learners. (c) A description of—(1) How the preschool program is likely to improve student outcomes in the short-, medium-, and long-term, based on quantitative, qualitative, or theoretical evidence (e.g., prior research base or with a logic model); (2) The goals, objectives, and outcomes to be achieved bythe preschool program which are clearly specified and measurable and will demonstrate student success; and (3) How the intervention is appropriate for, and will successfully address, the needs of the Target Population. (d) An explanation for why PFS may be an appropriate financing strategy and how existing funding resources preclude serving this population or administering this program. (e) A description of the Preschool PFS Partnership or, if a Preschool PFS Partnership does not already exist, a plan for developing a Preschool PFS Partnership, that includes a government entity that will serve as the outcomes payor and an Independent Evaluator, and may include an Intermediary. (f) A description of potential Outcome Measures to be evaluated in the proposed Feasibility Study. Ifone of the identified Outcome Measures is the reduction in special education placement, the applicant must include at least one other meaningful and substantive Outcome Measures of student achievement such as kindergarten readiness, reading and math growth or achievement, or improved social and emotional skills. Applicants may also propose to include other longer-term measures such as reduced interactions with law enforcement and increased high school graduation rates. While these measures may not occur within the time frame of a PFS project, the Department is interested in workable, research-based, and data driven analytical approaches to capturing these benefits based on short and intermediate term indicators.

The selection criteria for this program are set forth in section V(1) of the NIA. Eligible applicants may receive up to 100 points based on the extent to which their applications address the selection criteria. The number of points that may be awarded for each criterion is indicated in parentheses next to the criterion. (a) Need for Project (up to 10 points). (b) Quality of the Preschool Program Design (up to 25 points). (c) Quality of the Preschool PFS Partnership (up to 25 points). (d) Quality of the Work Plan (up to 25 points). (e) Quality of the Project Leadership and Team (up to 5 points). (f) Adequacy of Resources (up to 10 points).

A Cost-Benefit Analysis is an analysis that compares the costs of an intervention with the Benefits that will result from achieving the Outcome Measures, including a framework and description of the process used for estimating Benefits that would result from implementation of the intervention. For example, a Cost-Benefit Analysis of a preschool program may include the costs and Benefits of the initial program, later education, earnings, criminal behavior, tax payments, participation in public welfare, and health outcomes.

Benefit means fiscal and other value to the public and society as a result of achieving the Outcome Measures through the implementation of the intervention for the Target Population. Benefits may include cost savings, cost avoidance, cost-effectiveness, and positive societal benefits.

Cost savings, cost avoidance, and societal benefit are different types of Benefits that may be considered in conducting a Cost-Benefit analysis. Cost avoidance refers to future costs that may be avoided as a result of achieving the Outcome Measures. Many of the Benefits associated with providing access to preschool accrue in K-12 and in adulthood. An example of cost avoidance is the reduction in the need for remedial services. When children are ready for kindergarten they will be on track for proficiency in reading and math. In addition to the shorter-term Benefits associated with access to preschool, there are longer-term Benefits to society as a whole that may be more difficult to quantify, but should also be considered. These societal Benefits may include a projected increase in high school graduation and enrollment in higher education, which would lead to increases in earnings and a decrease in the need for public assistance. In addition, access to preschool can result in reductions in juvenile and adult crime, resulting in longer-term cost avoidance to State and Local Government and society.² For preschool, the Benefits are typically cost-avoidance and societal benefit.

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The maximum grant award is $400,000. We will reject an application that proposes a budget exceeding $400,000 for a single budget period of up to 30 months.

Applicants are required to submit a budget narrative and ED 524 form. Applicants are required to include in their budget narrative how the budget will adequately support program activities and achieve desired outcomes, including any philanthropic or other resources that may be contributed toward the project. Applicants should identify which costs will be funded by the Preschool PFS Feasibility Pilot Grant and identify any other sources of funds to support project activities.

Yes. States, Local Governments, and Tribal Governments may include indirect costs in their Preschool PFS Feasibility Pilot Grant application, subject to the limitations of applicable Federal, State, Local, and Tribal Governments rules regarding indirect costs. If a recipient or subrecipient of Preschool PFS Feasibility Pilot Grant funds is an LEA, it may charge indirect costs to its Preschool PFS Feasibility Pilot Grants award under the LEA’s indirect cost rate, which is generally approved annually by its State educational agency (SEA). If a subrecipient other than an LEA has an indirect cost rate approved by the cognizant Federal agency or approved by the State under a delegation agreement between the State and the cognizant Federal agency, then it must apply the approved rate. If a subrecipient does not have an approved indirect cost rate, the State, Local Government, or Tribal Government must ensure that the indirect costs the subrecipient proposes to charge are reasonable and necessary to the subrecipient’s performance under the Preschool PFS Feasibility Pilot Grant, and comply with all applicable Federal, State, Local Government, and Tribal Government rules. States, Local Governments, or Tribal Governments are responsible for ensuring that each Preschool PFS Feasibility Pilot Grant subrecipient (e.g. contractor) charges only reasonable and allowable indirect costs to the Preschool PFS Feasibility Pilot Grants. Please note that although the approved rate is the maximum rate that a subrecipient may apply, a subrecipient may choose to apply a lesser rate. The Department expects the grantee to regularly monitor subrecipients charging indirect costs to the grant to ensure that the costs charged are reasonable and necessary to perform under the grant. Please note that the grantee and subrecipients may apply their approved or recognized indirect cost rate only against the first $25,000 of any contract, and only under circumstances that require meaningful administrative support in distributing and handling the contracted or subgranted funds.

No. We advise that, because grantees must use appropriate procurement procedures to select contractors, applicants should not include information in their grant applications about specific contractors that may be used to provide services or goods for the proposed project if a grant is awarded. However, an applicant may include such information if it has already completed a procurement, consistent with applicable Federal, State and local procurement laws, regulations, and guidance.

The grantee must have an effective system for managing the flow of funds that ensures funds may be drawn down as needed to pay program costs and that also minimizes the time that elapses between the transfer of the funds and their disbursement by the grantee in accordance with 31 CFR 205 (for States) and 2 CFR 200.305 (for non-Federal entities other than States). When advances are made by letter of credit or electronic transfer of funds, the grantee must make drawdowns of grant funds as close as possible to the time of disbursement. Additionally, as required by 2 CFR 200.430(a)(3) and (i), a grantee must keep adequate records of all salaries and wages charged to the grant. The Department will take appropriate actions against grantees and subrecipients that fail to comply with these requirements.

Consistent with 2 CFR 200.302 each grantee must expend and account for grant funds in accordance with State laws and procedures and, among other things, must maintain fiscal control and accounting procedures sufficient to permit the tracing of grant funds to a level of expenditures adequate to establish that such funds have been used for allowable costs. Similarly, each grantee must ensure that any subrecipient adheres to this same standard and that all grant and subrecipient costs incurred using grant funds are necessary and reasonable. As such, a grantee must not commingle grant funds with other funds under control of the grantee, even if such other funds are used for similar purposes. Allowable activities may be funded from multiple funding sources; however, grantees must ensure that funds are accounted for separately. In this context, “commingling” means combining funds without maintaining separate accounting records for each funding source. The burden of proof is on the grantee to establish that any grant costs incurred are necessary and reasonable.