Services are provided by another government, such as a national government. Services are provided by a private, non-profit agency, with financing by the city government. Services are provided by a for-profit company under contract to the government. Services are provided by a for-profit company with some regulation over fees charged or services provided. Government Contracting is one of the most difficult methods of privatization, because writing and monitoring contracts require so much skill.
Many governments act as if their job is done once they have signed a contract.
As a result, too many private contractors fail to deliver what they provide. Cities often spend 20 percent of the cost of the service on contract management. The service is something that the private sector already provides. The service is something in which the government is less efficient than the private firm. The service is clearly defined and residents needing the service are easily identified.