The administration proposes a constitutional amendment to expand the circumstances in which the state can contract with private entities. We provide guidelines the Legislature may want to consider as it evaluates the administration's proposal. We refer to a report published in our 1996 Perspectives and Issues in which we found that carefully managed privatization can, under the right circumstances, provide specialized expertise, save money, and/or result in improved service delivery. Poorly managed privatization, or privatization under the wrong circumstances, however, can lose money and result in poor service delivery.