The topic of the article is the application of in-house procurement by municipalities in municipal services management. The essence of in-house contracts, also known as direct contracts, is a specific relation between the contracting authority and the economic operator. The contracting authority, which is a body governed by public law, exercises control over the economic operator, which is legally separated from its structure, similarly to the control it exercises over its own departments. Moreover, the economic operator is obliged not only to submit to this control, but also to carry out a principal part of its activities for the controlling contracting authority. It was often argued in the literature that awarding services, supplies, or works to one’s own subsidiaries without following a tendering or design contest procedure may adversely affect certain economic sectors, in particular by reducing competition or deteriorating the quality of provided services. The aim of this publication is to answer the question so formulated. To do so, one has to examine how in-house contracts have been regulated in the act currently in force.