Prisons serving special needs also have potential for contracting. Study data were gathered between November 1985 and September 1986. Information came from a literature review; a review of studies on correctional contracting in 22 States; and telephone and personal interviews with corrections agency personnel, contractor personnel, purchasing officials, legislators, and legislative staff. The analysis considered legal issues such as liability and authority, program and policy issues to be considered before deciding to contract, requests for proposals and contract issues, and contract monitoring and evaluation. The research concluded that States must set specific goals in contracting and ensure that inmates' rights are protected. They should also use a competitive bidding process and should explicitly define the type of inmate to be served and the fee structure. The State should also plan and carry out an effective contract monitoring system. Analysis and recommendations related to 22 individual issues, chapter notes, and 291 references.