Faced with continually escalating prison and jail populations, State and local governments are searching for alternatives to the traditional ways of meeting needs for prisoner housing. Some governments are turning to the private sector for access to various lease financing alternatives for prison and jail construction. Most widely discussed are lease contracts, in the form of lease/purchase agreements, which are used to purchase a facility over time. Depending on the length and type of lease, prevailing interest rates, and other factors, leasing may be less expensive than bond financing, but its most significant advantage is the ability to evade debt limits by insisting on an annually renewable lease subject to nonappropriation. Confinement service contracts are another way of expanding corrections capacity, without assuming ownership of the required facilities. In these arrangements, vendors are responsible for locating a suitable site, leasing or constructing an appropriate building, and providing the staff and services necessary to operate the facility. Three Federal agencies have elected to develop contracted facilities to house illegal alien populations: the Immigration and Naturalization Service, the U.S. Marshal's Service, and the Federal Bureau of Prisons. Political issues in facility management contracting concern the propriety of delegating social control, the effects of public policy, staff resistance, management opposition, and public attitudes. Technical issues center on legal factors (authority, liability, security, and contract specificity) and financial matters (efficiency, profitability, and visibility). Possible advantages of private-sector participation in corrections are rapid mobilization of resources, experimentation, decentralization, specialization, and regionalization. One figure and two tables are provided.