In 2001, Edison Schools Inc. came into Philadelphia promising to manage struggling schools and deliver better student performance for less money – all while making a profit. The company was awarded contracts to manage 20 low-performing schools, but it never came close to delivering on its promises. Nine years went by, with millions of dollars down the tubes, before the not-very-nimble District ended that experiment.
The staffing firm Source4Teachers made a similar promise to the District this year – that it could deliver more substitute teachers at a lower cost. The company was hired for the pretty sum of $17 million a year to increase the fill rate to 90 percent. It’s been a stunning failure, and the substitute shortfall got the year off to a chaotic start, even at schools with no history of staffing problems.
The District has not responded swiftly or strongly enough to this massive failure. Officials say they have to wait till January before imposing penalties; we can’t verify that because they haven’t disclosed the firm’s contract.
Contracting out can seem like a silver bullet – hand off your challenging task to a company with a track record; if it doesn’t work, try another one. But in the case of Source4Teachers, experience in cities one-fifth Philadelphia’s size has not translated into success here. And it’s not clear whether there were other viable companies.
Contracting out is not a solution to limited management capacity. A low-capacity organization is at risk of making a poor hiring decision, accepting flawed contract language, and ending up stuck with a bad deal like this one. Having replaced its own staff with outside contractors, it ends up with even less internal capacity than it had before.
We challenge the District to demonstrate that it can be nimble by admitting its mistake, rebuilding its capacity to manage a substitute workforce, and canceling the Source4Teachers contract as soon as possible.