	Introduction

Head Start is a federal program that has provided comprehensive early childhood development services (e.g., education, health, nutrition, and social services) to low-income children and their families since 1965. These services are intended to promote the school readiness of children by enhancing their cognitive, social, and emotional development. At the federal level, the Head Start program is administered by the Office of Head Start (OHS) within the Administration for Children and Families (ACF) at the U.S. Department of Health and Human Services (HHS). HHS provides federal Head Start funds directly to local public and private non-profit and for-profit agencies (called "grantees"), rather than through states. Head Start programs are locally designed and are administered by roughly 1,600 grantees. Since the program's inception, Head Start grantees have generally been given grant awards for indefinite periods (i.e., awards with no end date). However, the 2007 Head Start reauthorization law ( P.L. 110-134 ) changed this by instituting a five-year designation period for Head Start grantees. Under the new law, at the end of its five-year designation period, a grantee must demonstrate that it is delivering high-quality and comprehensive services, or else the grant is to be opened for re-competition. The law refers to the process of identifying grantees for re-competition as the Designation Renewal System (DRS). HHS was tasked with establishing the DRS, based on certain parameters specified within the law. Section 641(c) of the amended Head Start Act tasked the Secretary of HHS (the Secretary) with developing the DRS, in consultation with a panel of experts, and specified that the DRS must base determinations of program quality on
annual budget and fiscal management data; program monitoring reviews (which must occur at least once every three years according to requirements set forth in Section 641A(c) of the Head Start Act); annual audits (as required by Section 647 of the Head Start Act); classroom quality (as measured under Section 641A(2)(F) of the Head Start Act, which calls for the use of a "valid and reliable research-based observational instrument, implemented by qualified individuals with demonstrated reliability, that assesses classroom quality, including assessing multiple dimensions of teacher-child interactions that are linked to positive child development and later achievement"); and Program Information Reports (annual reports submitted by all Head Start grantees and delegate grantees, which provide comprehensive data on staff and services, as well as children and families served). To this end, the Secretary chartered an advisory committee in January 2008. Twelve months later, in December 2008, the advisory committee released a report with formal recommendations for implementing the DRS. Notice of Proposed Rulemaking

In September 2010, HHS released a Notice of Proposed Rulemaking (NPRM) on designation renewal and re-competition based, in part, on the advisory committee's recommendations. During that time, HHS received approximately 16,000 comments on the NPRM from Head Start grantees, parents, teachers, state associations, national organizations, academic institutions, and legal entities. HHS took these comments into consideration before publishing a final rule on the DRS in November 2011. DRS Final Rule

HHS published the DRS final rule on November 9, 2011. Indicators/Triggers

The final rule established seven indicators for identifying programs that are not providing "high-quality and comprehensive services." Any Head Start grantee that fails to meet the minimum quality standards established by one or more of the seven indicators listed below (and described in greater detail in Table 3 at the end of this report) is automatically required to compete for continued funding.
Head Start is a federal program that has provided comprehensive early childhood development services (e.g., education, health, nutrition, and social services) to low-income children and their families since 1965. These services are intended to promote the school readiness of children by enhancing their cognitive, social, and emotional development. At the federal level, Head Start is administered by the Office of Head Start within the Administration for Children and Families at the U.S. Department of Health and Human Services (HHS). Federal Head Start funds are provided directly to local public and private nonprofit and for-profit agencies (called "grantees"), rather than through states. At this time, programs are administered by roughly 1,600 grantees.
Since the program's inception, Head Start grantees have generally been given grant awards for indefinite periods (i.e., awards with no end date). However, the 2007 Head Start reauthorization law (P.L. 110-134) changed this by instituting a five-year designation period for Head Start grantees. Under this law, at the end of its five-year designation period, a grantee must demonstrate that it is delivering high-quality and comprehensive services, or else the grant is to be opened for re-competition. The law refers to the process of identifying grantees for re-competition as the Designation Renewal System (DRS). The law tasked HHS with establishing the DRS in consultation with a panel of experts and based on parameters specified in the law.
In January 2008, HHS convened an Advisory Committee on Re-designation of Head Start Grantees. Twelve months later, the advisory committee released a report with formal recommendations for implementing the DRS. In September 2010, HHS published a Notice of Proposed Rulemaking (NPRM) on the DRS based, in part, on the advisory committee's recommendations. HHS received approximately 16,000 comments on the proposed rule from Head Start grantees, parents, teachers, state associations, national organizations, academic institutions, and legal entities. HHS took all comments into consideration before publishing a final rule on the DRS in November 2011.
The DRS final rule established seven indicators for identifying Head Start grantees that are not providing "high-quality and comprehensive services." The indicators address various aspects of program quality, licensing and operations, and fiscal and internal controls. Any grantee that fails to meet the minimum quality standards set by one or more of the seven indicators will automatically be required to compete for continued funding.
Under the terms of the final rule, the DRS became effective on December 9, 2011. That month, HHS announced the first cohort of grantees required to re-compete. A second cohort of grantees designated for re-competition was announced in January 2013. DRS competitions began in 2012. As of July 2013, HHS had awarded roughly 153 grants through DRS competitions.