Perhaps the most prevalent form of privatization, in terms of incidents of its use, is contracting out for services. This is especially true in state departments of transportation (DOTs), which have seen a rapidly growing reliance on contracted professional services in recent years. With this growth has come a variety of managerial issues that speak to the efficacy of this mode of service production. In this article we identify and analyze these issues by first reviewing the literature on managing contracted professional services, with a focus on the experiences of DOTs. We complement the review with an in-depth, multicase examination of the experiences of one state DOT over the span of a decade, to better understand their changing conditions, motives, and impacts of large-scale contracting out. We conclude that problems associated with contracting out could be avoided with planned changes in procedures, organizational structures, and human resource demands.
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