State Contractor Pulls Out of Foster Care Redesign

The private contractor leading the state’s foster care redesign initiative has voluntarily terminated its contract with the Texas Department of Family and Protective Services.

Providence Service Corporation of Texas has notified DFPS of its intention to terminate the contract through which it was caring for 1,100 foster children in 60 counties in North and West Texas as part of the state’s foster care redesign initiative. An increased reliance on private contractors is pivotal to the department's redesign initiative to streamline the foster care placement process and keep children closer to home.

In an email obtained by The Texas Tribune, DFPS Commissioner John Specia on Friday morning informed constituent groups and stakeholders working with the state to implement the redesign initiative, that the contract was terminated.

In a statement sent out later Friday morning, the department announced that it would take over services previously performed by Providence, which used the opt-out clause included in its contract with the state.

"We have learned a great deal through this initial contract, and will build upon that in our ongoing redesign efforts," Specia said in the statement. "Providence made a good-faith effort, but progress was slow, and we believe this change will enable the state to step back and re-evaluate how we proceed on Foster Care Redesign in this area of the state."

Mike Fidgeon, Providence's CEO, said that several factors contributed to the decision to terminate the contract, including unanticipated transportation costs to care for children in the expansive, rural region where the company was working.

Through the contract, Providence had received $8.3 million from the state for foster care services, according to DFPS. The five-year contract was worth $30 million a year, and it began in 2013.

But Fidgeon said the contract was created using financial data from the already underfunded Child Protective Services system in Texas, which led to challenges in obtaining additional funding as Providence incurred unexpected costs related to caring for the foster children.

"Obviously, we are disappointed, and both DFPS and Providence believe that this course that we're taking is the most responsible way to address the number of complexities that have risen with the contract," Fidgeon said.

He applauded the state's use of privatization to improve the foster care system. But he said that the Legislature should move toward a "more adequately funded" foster care system to avoid similar contractual issues.

"The intention of the state's plan is a good one," Fidgeon said. 

DFPS had recently notified Providence that it had missed “performance targets on key goals,” including its inability to keep siblings and children closer to home, according to the agency. The department also said that Providence had failed to develop staff and a network of providers to care for children in an expedited manner and that it was “unable to develop a full array of services” to care for foster children.

In his letter to stakeholders, Specia said Providence’s contract termination would take place during a 30-day transition period that will begin immediately, but he said foster care services would not be interrupted.

The state’s foster care redesign initiative has been scrutinized by child advocates who have long called for increased oversight of state contractors.

Following the contract termination, Ashley Harris, child welfare policy associate for Texans Care for Children, said its concerns were not specific to Providence’s performance but instead focused on the state’s attempt to “put a new model in place” while not sufficiently funding Child Protective Services.

“This news confirms it's time to stop expanding privatization and start adequately funding child protection, reducing caseloads for overwhelmed CPS staff, and establishing basic safety and training standards for foster parents,” Harris said.

Providence’s contract termination comes as the state is gearing up for a wide implementation of foster care redesign, including a second rollout in Tarrant County to be overseen by ACH Child and Family Services. The state’s contract with ACH Child and Family Services will remain in effect, according to DFPS.

Despite the contract termination, Specia said he remains committed to the redesign initiative.

“It reinforces our intent to focus on performance and to continuously evaluate and refine Foster Care Redesign,” Specia wrote in his letter.