District of Columbia Mayor’s Office of Budget and Finance
Statement of Work for Feasibility Study of Social Impact Bond Opportunity
SECTION B: SERVICE AND PRICE/COST
Scope
The District of Columbia Mayor’s Office of Budget and Finance (MOBF) is seeking a Firm with
demonstrated experience in the field of social impact investing and socially-conscious financing
mechanisms. The District seeks a vendor that has served as an intermediary of at least one Social
Impact Bond (SIB). The Contractor shall be responsible for the generation of a thorough
feasibility study to assist the District in determining the most appropriate content area to initiate a
SIB or PFS project, with identified investors for the SIB. MOBF seeks a Contractor from a firm
that has experience in the actual implementation of a SIB configuration and SIB deal, whether
within the United States or in other countries that have implemented SIBs (eg: United Kingdom).
Background
Mayor’s Office of Budget and Finance advises the Mayor on financial and budgetary operations of the
District government, assists the Mayor in the formulation of the annual operating and capital budgets for the
District government, and monitors agency budget performance during the fiscal year. Social Impact
Bonds offer local and state governments a unique opportunity to obtain private capital to pay, up
front, for certain evidence-based interventions that, in time, will scale to produce a larger positive
effect for the social problem. To most appropriately select the content area to initiate the SIB, it is
incumbent to identify a multitude of possible interventions and their relative costs and benefits in
the SIB structure. A feasibility study conducted by an independent third party, with experience in
serving as an intermediary for SIB deals, is the first step in the District’s SIB exploration.
Social Impact Bonds
Social Impact Bonds represent a fundamental shift in how the District would pay providers for
service delivery. Under the SIB model, rather than the District paying service providers based
simply on the services delivered, a service provider will be paid for performance outcomes
achieved that can be quantified in financial terms (the service provider is paid the upfront costs of
the service by an external investor). Under this financial mechanism, the District should experience
reduced costs over time, or increased revenues to the District, which result from the positive
outcomes of the service provider’s program.
Feasibility Study
In order to determine the most suitable service area to initiate a SIB, the District seeks a Contractor
to conduct a feasibility study. The feasibility study shall include: interviews with key stakeholders
(government, nonprofit, academic, investor, corporate, thought leader, etc.) to gauge content areas
of significant interest to initiate a SIB; a needs assessment of particular populations of the District
that may be most impacted by the positive effects of the SIB; a cost-benefit analysis of various
social programs and services which the District provides; an assessment of those programs which
represent the most significant and recurrent cost drivers in the District’s annual budget;
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recommendations regarding necessary additions, changes or augmentations to existing program
financing mechanisms to implement a SIB; final recommendation of 2-4 distinct content areas
including investors and funders, to provide the initial capital investment in the SIB. Given the
success of the Feasibility Study, the vendor may be retained as the primary financial intermediary
in the implementation of the SIB.
Definitions
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MOBF – Mayor’s Office of Budget and Finance
SIB – Social Impact Bond
Stakeholder – Member of a government office or agency, private foundation, company
or investment firm, nonprofit organization leader, with a stake in the success of the SIB
 Cost-Benefit Analysis – A financial analysis using risk factoring to determine expected
outcomes of particular interventions.
 Cost Driver Analysis – A financial analysis using financial modeling to determine the
scale and effect that certain social programs have on the District’s overall budget.
 Needs Assessment – An analysis of communities and demographics within the District
to determine areas of greatest social need (eg: health care, education, homelessness
intervention)
Requirements
The selected firm must complete the Feasibility Study no later than February 14, 2013.
Should the District assess that the Firm of the Feasibility Study is the most appropriate vendor to
serve as the intermediary of the Social Impact Bond, the following activities shall be undertaken by
the vendor in the first stages of the SIB:
The District may determine to retain the Firm of the feasibility study as the primary intermediary
for the SIB or PFS program. In this event, the Firm must be able to demonstrate the ability to
work closely with MOBF, other District agencies, service providers, providers of working capital,
and the many interested parties in the community who are seeking ways to improve the delivery of
SIB or PFS services. To accomplish this objective, MOBF may determine that the Firm, in
consultation with District agency partners and the District’s evaluation partner, must have the
capacity and experience in the following:
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Design and develop the Pay for Success or SIB program model
Determine likely or possible investor or financing partners
Monitor and track service providers’ outcomes
Arrange sources of working capital for service providers
Develop service provider RFP, contracts and schedule of payments
Manage provider performance, contracts, and payments
Participate in evaluation activities with the State’s evaluation partner
Design and develop the return on investment goal, methodology and calculation
Coordinate data collection
Administer other aspects of the pilot program
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The Firm shall establish an ongoing relationship with District agency partners in all areas of
program development to provide continuing analysis, consultation and advice. District agency
partners, and the oversight committee as appropriate, must approve program design, contracts,
return on investment criteria, provider payments, the sources of working capital, the evaluation
design, and other key areas of program management.
The Firm shall have:
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Actual experience serving as a financial or knowledge intermediary of a Social Impact
Bond;
Established partnerships with private and corporate partners interested in the SIB, Pay for
Success, or Impact Investing fields;
Preference will be given to vendors that have expert knowledge and experience working
across all sectors (including government, nonprofit, service provider, investment/funder)
in addition to expertise as a financial intermediary.
Specifically the Contractor shall do the following:
Phase 1 – Qualitative Data Gathering
 Interview key stakeholders (government, nonprofit, academic, investor, corporate, etc) to
gauge content areas of significant interest to initiate a SIB;
 Conduct a needs assessment of particular populations of the District that may be most
impacted by the positive effects of the SIB;
Phase 2 – Quantitative and Budget Analysis
 Conduct a cost-benefit analysis of various social programs and services which the District
provides;
 Provide an assessment of those programs which represent the most significant and
recurrent cost drivers in the District’s annual budget;
Phase 3 – Recommendations
 Present to MOBF and EOM in person all following recommendations:
 Provide recommendations regarding necessary additions, changes or augmentations to
existing program financing mechanisms to implement a SIB;
 Provide final recommendation of 2-4 distinct content areas to serve for the SIB (possible
areas could include education, human services, public safety, public health, etc).
o Included within these recommendations should be specific proposals for likely
investors or funders of the SIB, based on giving history and current interest in
Impact Investing.
Deliverables
The deliverables shall include but not limited to:
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Contractor shall provide written updates to Contract Administrator bi-weekly via email.
Report of stakeholder interviews in pdf of PowerPoint deck presentation, twenty (20) soft
copies format, and presentation
Report of needs assessment in pdf and twenty (20) soft copies, and presentation
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Physical copy of CBA and CDA, either in Excel or other quantitative analysis tool and
twenty (20) soft copies
Recommendations of both 1) SIB prospective content areas, and 2) prospective funders,
presented in person and via briefing book including twenty (20) soft copies
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