CONTRACTING FOR PUBLIC SERVIES IS A COMMON PRACTICE FOR SUCH SERVICES AS SANITATION AND STREET MAINTENANCE. INJECTING COMPETITION INTO THE PROVISION OF SERVICES YIELDS IMPORTANT ECONOMIC ADVANTAGES, AS CONTRASTED WITH LOCAL GOVERNMENTAL MONOPOLIES. ALSO, AS ECONOMIES OF SCALE ARE INTRODUCED, CONTRACTING FROM A LARGE-SCALE PROVIDER PERMITS GOVERNMENT OVERSIGHT OF COST-EFFECTIVE OPERATIONS. IN THE LAKEWOOD PLAN OF INTERGOVERNMENTAL CONTRACTING, LOS ANGELES COUNTY HAS CONTRACTED TO PROVIDE POLICE SERVICES TO 30 OTHER MUNICIPALITIES. THE SCALE ECONOMICS OF PRIVATE CONTRACTING MAY BE WEAKER OR ABSENT IN AN INTERGOVERNMENTAL CONTRACT SYSTEM SUCH AS LAKEWOOD, WHICH RELIES ON A COSTLY COUNTY BUREAUCRACY. HOWEVER, THE LAKEWOOD SYSTEM DOES RESULT IN DTANDARDIZATION OF ARREST POLICIES AND PATROL POLICIES. DATA ON POLICE SERVICES, ESPECIALLY ON THE RATE OF MAJOR OFFENSES REPORTED, INDICATE THAT CONTRACT CITIES EXPERIENCE A SIGNIFICANTLY HIGHER VIOLENT CRIME RATE DO INDEPENDENT CITIES, AND THAT COST PER OFFICER IS HIGHER IN CONTRACT CITIES. A REGRESSION MODEL FOR POLICE SERVICES REVEALS THAT CONTRACT CITIES HAVE SIGNIFICANTLY LOWER PATROL MANPOWER LEVELS THAN DO INDEPENDENT CITIES. HOWEVER, WITH THE ABSENCE OF A RELIABLE POLICING STANDARD, IT IS DIFFICULT TO DETERMINE WHETHER CONTRACT CITIES ARE 'UNDERPOLICED' OR INDEPENDENT CITIES ARE 'OVERPOLICED'. ALTHOUGH TAX BENEFITS MAY ACCRUE TO CITIES USING CONTRACTING, THE CORRESPONDINGLY HIGHER CRIME RATE MAY MAKE THE CONTRACTING LESS BENEFICIAL. AN APPENDIX, FOOTNOTES, AND REFERENCES ARE PROVIDED. (TWK)