Many States contract out for correctional services. One advantage of contracting is that it frees agencies to evaluate programs in a way that could not be done with their own direct operations. Because correctional system goals are to deter, punish, and rehabilitate, it is not surprising that the trend toward service privatization includes human service elements in addition to the more concrete areas of construction, maintenance, and management. There are three points in the correctional process where an offender may come under the jurisdiction of the private sector: when rehabilitation is seen as an alternative to incarceration; while in prison to prepare the offender for the outside world and decrease repetitive criminal behavior; and when rehabilitation is offered as a condition of release and/or parole. The significant increase in private participation in correctional services is a function of the growth in available community alternatives. A key factor in private sector participation is whether low-cost, high-quality, efficient rehabilitation services are provided. Further, the private sector may act on behalf of the criminal justice system, but it lacks the authority to completely replace it or to mandate participation. The weight of opinion is that privatization of corrections cannot include the dispensing of ultimate accountability to the private sector. Pros and cons of privatization and expanding correctional treatment services through contracting are discussed. 16 references.