In support of the purchase-of-services concept, proponents cite a number of arguments: greater flexibility, ease of the development of new programs, greater diversity and innovation of new programs, increased private sector support for community corrections, the avoidance of civil service requirements and other bureaucratic problems, and lower than State-supported program costs. Criticism has focused on the screening out of children most in need of service by agencies wanting a high percentage of successes and the bureaucratization of well-established private agencies. While the quality of service is usually the same in a purchase-of-services system and in a State-operated system, the weaknesses in State-operated programs tend to be inherent and irresolvable; those in State-funded programs are more open to amelioration. The OYC purchases services in the areas of education, employment, job preparation, day treatment, mental health, outreach, and a variety of out-of-home placements from more than 100 agencies. Approximately 90 percent are nonprofit and the balance are city or county operated. The OYC has identified elements of a successful system, which include an efficient fiscal system that pays service providers in a timely manner; public support through the publishing of promotional materials; and help for providers of services in training staff. In addition, specialists in each of OYC's regional office provide technical assistance and ensure contract compliance; standards have been developed for the various types of programs; research into program effectiveness has been conducted; and a diversity of providers has been maintained. Present complaints of OYC and providers concerning each other are reviewed, and future directions are briefly outlined. Footnotes with references are included.