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Contracting services in the public sector with private for-profit and non-profit firms is one of the most prevalent types of alternative service-delivering arrangements. Concerning the positive potential of contracting, the relevant literature proposes that contracting may, but need not, improve individual choice, cost-effectiveness and the quality of delivery, equity and to some extent also expenditure control. On the other hand, many authors provide important arguments describing weak points of contracting and some risks connected with contracting services in the public sector. The main “internal” reason why contracting does not produce the expected results and even creates perverse effects in the effectiveness and quality of contracted services, is the improper implementation of contract management. This paper seeks to answer the question of what factors account for success in contracting for services in the public sector by testing the relationship between contracting performance and selected factors connected with contract management such as competition, exante evaluation of bidders, contract monitoring, contract duration, contract payment and joint problem solving and communication between the principal and the agent. This study uses a quantitative approach to investigate the research question and to analyze the original collected survey data from our own research.