Contracting for public services (e.g., social services, administrative functions, maintenance services, and health and security) is an attractive alternative for communities which could potentially undergo the boom/bust cycle of energy development. Typical communities surrounding new or proposed energy development projects (especially in the western United States) have extremely low population densities and often are located considerable distances from a metropolitan center. The labor force for the new development has to migrate into the area, which creates severe dislocations for communities and residents. A community's ability to supply services is influenced by a variety of factors; frequently, in energy development communities, these factors are unknown and changing rapidly. In these circumstances there are at last four potential advantages to private contracting: there is an incentive for entrepreneurial efficiency; local governments can take advantage of economies of specialization and scale; it is often difficult to establish the minimum cost of goods or services provided by the public sector; and there is the potential for increased government responsiveness to public preferences. Many communities are utilizing the private contracting system, but communities considering contracting for service delivery should investigate the details of writing and letting contracts, as well as the means of service evaluation and enforcement. (BRR)