House Bill 1686 aims to establish a performance-based contracting program within the Tennessee Department of Correction. The bill introduces a new part to the Tennessee Code Annotated, defining key terms such as "contractor," "department," and "evaluator." The program is designed to incentivize contractors to improve performance and outcomes related to correctional services provided to inmates. It mandates that the department develop the program within six months of the bill's enactment and includes provisions for quarterly audits by the division of state audit to ensure compliance. The bill specifies that only the primary contractor will be held accountable for performance outcomes, while subcontractors will not bear the same risks.

The program will condition the release of 25% of the total funds appropriated to contractors on their performance improvements across various metrics, including staff turnover rates, offender health care visits, and recidivism rates. The department is required to collect and maintain relevant data to monitor these performance measures and collaborate with other agencies to obtain necessary information. Additionally, the bill outlines accountability measures, including quarterly reporting to the comptroller and the fiscal review committee, as well as independent evaluations of the program's effectiveness. The program is set to take effect upon becoming law, emphasizing the importance of improving correctional outcomes for inmates in Tennessee.