Our research bears on two critical issues for contemporary Russia: federal-regional power relations; and whether Moscow can modernize institutions and address dissatisfaction with social service delivery, a major political issue. It is the first comprehensive study of a major 2015 reform that ended the state monopoly over service provision and initiated outsourcing (contracting out) to socially oriented non-profits (SONPOs) and other non-state organizations. We find substantial interregional variation. Statistical tests of economic, political, and institutional explanations show that only the economic helps to explain variation across Russia's regions. We rely on comparisons of six regions, drawing on semi-structured interviews to gain a contextualized understanding of their varied implementation strategies. Key findings are that regional leaders demonstrated agency in crafting diverse strategies, while the Center showed flexibility. Whether Moscow can modernize public services remains unclear, though there is some evidence of improvement since the beginning of the outsourcing reform.