The inclination to privatize public services has raised a number of challenges for practitioners and researchers alike. Although proponents of market reform continue to champion the promises of efficiency, a growing body of research would suggest that there is still much we do not know about privatization’s limitations. This article examines the legal challenges public managers may encounter when faced with the “make-or-buy” decision in human resource—related services. The analysis suggests that public managers have the potential both to reduce liability and to reinforce merit and equity by recognizing the need for expertise in constitutional, statutory, regulatory, and contract law and by working to use the outsourcing contract as a mechanism to integrate public values into private sector human resources production.
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