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What are Performance Partnership Pilots?

Performance Partnership Pilots offer a unique opportunity to test innovative, cost-effective, and outcome-focused strategies for improving results for disconnected youth. The Consolidated Appropriations Act, 2014 (the Act, see Section 526 of Division H of the linked PDF) provides authority to the Departments of Education, Labor, and Health and Human Services, along with the Corporation for National and Community Service and the Institute of Museum and Library Sciences, to enter into a total of up to ten Performance Partnership agreements with States, localities, or Tribes that give these grantees additional flexibility in using discretionary funds across multiple Federal programs. Entities that seek to participate in these pilots will commit to achieve significant improvements for disconnected youth in exchange for this new flexibility. In the Act, “to improve outcomes for disconnected youth means to increase the rate at which individuals between the ages of 14 and 24 (who are low income and either homeless, in foster care, involved in the juvenile justice system, unemployed, or not enrolled in or at risk of dropping out of an educational institution) achieve success in meeting educational, employment, or other key goals.”

Blending funds.

Under Performance Partnerships, States, localities, and Tribes may blend fiscal year 2014 discretionary funds—formula and competitive grants—from the specified Federal agencies in order to implement outcome-focused strategies for serving disconnected youth. When funds are blended, individual funding streams, or portions thereof, are merged under one cooperative agreement that is governed by a single set of reporting and other requirements. This single set of requirements may differ from the various requirements associated with each of the original, individual funding streams. Before an agency can supply funding or otherwise participate in a pilot, the respective agency head must determine that such action (1) will not result in denying or restricting the eligibility of any individual for any of the services that (in whole or in part) are funded by the agency’s programs and Federal discretionary funds that are involved in the Pilot, and (2) based on the best available information, will not otherwise adversely affect vulnerable populations that receive such services.

In general, the pilots are designed to facilitate flexible use of existing funding streams that were made available under the Act. While the Act did not appropriate specific new funds to support pilots for fiscal year 2014, agencies plan to combine a small amount of 2014 funding to support start-up grants that will likely be several hundred thousand dollars each. These grants will help to support pilot start-up costs, such as activities related to planning, governance, and coordination. Applicants will propose how they would improve outcomes for disconnected youth by blending this start-up money with other funds that members of their partnership already receive under eligible programs. Blending funds should enhance sites’ capacity to effectively use resources from multiple Federal, State, tribal, local, and philanthropic funding streams, such as by enabling pilot sites to align outcomes, measurement strategies, and reporting.


In order to establish the most effective and appropriate set of requirements for each pilot, Federal agencies may waive requirements associated with individual programs contributing funds. Performance Partnership authority enables heads of affected Federal agencies not only to exercise any existing waiver authority but also to waive any statutory, regulatory, or administrative requirement that they are otherwise not authorized to waive, as long as the waiver is in keeping with important safeguards. Specifically, waivers must be consistent with the statutory purposes of the Federal program and necessary to achieve the pilot’s outcomes. In addition, requirements related to nondiscrimination, wage and labor standards, and allocations of funds to state and sub-state levels cannot be waived.

In practice, Performance Partnership waiver authority should enable applicants to take a more youth-centric approach to services by first identifying the target population, then determining the most effective strategies for serving that population, next selecting funding streams appropriate to support the approach, and lastly clarifying which program rules and requirements would need to be waived in order to implement the strategy. The waiver authority will allow communities and the Federal government to tailor the allowable activities, eligible youth, and reporting requirements so that they support and accurately reflect the goals and objectives of the pilot.

Performance agreements.

Each pilot will be governed by a performance agreement between a lead Federal agency, which will be designated by the Office of Management and Budget and will act on behalf of all participating Federal agencies, and the respective representatives of all of the State, local, or tribal governments participating in the agreement.

Some key items that each Performance Partnership agreement will include are:1

  • the length of the agreement;
  • the Federal programs and federally funded services involved;
  • the Federal and non-Federal funds being used;
  • the State, local, or tribal programs involved;
  • the populations to be served;
  • cost‐effective Federal oversight procedures as well as State, local, or tribal oversight procedures to maintain accountability for the use of Federal funds;
  • the outcome (or outcomes) that the pilot is designed to achieve;
  • the outcome‐measurement methodology; and
  • where a pilot is not achieving specified outcomes, specific consequences with respect to funds being used in the pilot and corrective actions to increase the likelihood that the pilot will achieve such outcomes.


The Act does not provide authority for Performance Partnership Pilots to blend funding or waive provisions of programs funded with mandatory appropriations (e.g., Temporary Assistance for Needy Families, Medicaid), but the performance agreements must note any mandatory program barriers that the pilot sites identify. Pilots also do not extend to programs funded outside of the Labor - HHS - Education Appropriations Act, such as those administered by the Department of Justice and the Department of Housing and Urban Development. However, pilot jurisdictions can seek waivers or administrative flexibility already authorized under these other programs in order to improve their coordination and alignment with the pilot project.

Looking ahead.

The 2015 President’s Budget proposes to Congress language that would allow pilots approved to blend fiscal year 2014 funds to incorporate fiscal year 2015 funds as well. The 2015 Budget also seeks authority for ten additional Performance Partnership Pilots for disconnected youth and extends the authority to include the Department of Justice. If authority is provided, the next round of pilots could support promising projects that may not be ready for the initial 2014 round. Pilots designated in fiscal year 2014 shall not extend beyond September 30, 2018. Congressional action is required before pilots may incorporate funding expected in future fiscal years.

1 See Division H, Section 526(c)(2) of the Act for a list of items that Performance Partnership agreements must address at a minimum.