SecProbe.io

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                        BARRETT BUSINESS SERVICES, INC.
                             4724 SW Macadam Avenue
                             Portland, Oregon 97239
                                  503.220.0988
                                  800.494.5669
                                Fax 503.220.0987
                            www.barrettbusiness.com

May 12, 2005

Filed via EDGAR

Mr. Larry Spirgel
Assistant Director
Division of Corporation Finance
United States Securities and Exchange Commission
Mail Stop 0407
450 Fifth Street, NW
Washington, D.C.  20549

Re:   Barrett Business Services, Inc. ("BBSI" or the "Company")
      Form 10-K for the fiscal year ended 12/31/04
      File No. 33-61804

Dear  Mr. Spirgel:

            Thank you for the extension of five-business  days from May 6 to May
13 to prepare and file our response.

            In response to your letter  dated as of April 22,  2005,  management
has  carefully  reviewed  the Staff's  questions  and  comments and provides the
following  responses  for your  review  and  consideration.  As  requested,  the
Company's responses have been directly aligned with the Staff's comments.

Item 1.    Business

     Workers' Compensation Claims Experience and Reserves, page 8.

     1.  Tell us in more detail how you measure "future adverse loss development
         in excess of initial case reserves".

The Company  measures the total estimated  "future  adverse loss  development in
excess of initial  case  reserves"  by the  difference  between the  independent
third-party claims  administrators'  total projected future claims costs and the
total  projected  future  claims  costs  as  actuarially   determined  with  the
assistance of the Company's independent actuary,  Milliman,  Inc. As an integral
part of the  preparation  of the  Company's  annual  financial  statements,  the
Company  engages  Milliman  to  perform  an  annual  actuarial  analysis  of the
Company's  self-insured  workers'  compensation losses.  Management monitors the
development  of new and  existing  claims  costs on a weekly  basis  against its
expectations of the total projected future claims costs,  evaluates the adequacy
of the Company's accrual for workers'  compensation costs on a monthly basis and
adjusts the related accruals  accordingly.

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 2

Item 7.    Management's  Discussion  and  Analysis of  Financial  Condition  and
           Results of Operations

     Overview, page 15.

Supplemental  Advisory  Information  Regarding  Staff  Comments  2, 3 and 4 - We
believe the Company's financial accounting for its PEO business is in accordance
with accounting  principles  generally  accepted in the United States (GAAP) and
was extensively discussed with the Staff in February and March of 2003, (Mr. J.J
Matthews).  Mr.  Matthews  advised me that his guidance to the Company was based
upon his then-contemporaneous  consultations with the Office of Chief Accountant
("OCA"). The Staff's prior detailed comments on the Company's accounting for the
PEO business  and the  Company's  responses  thereto  were  memorialized  in the
Company's  response  letters to Mr.  Matthews dated March 16, 2003 and March 25,
2003. The conclusions drawn therein were based upon the collective  weighting of
the indicators  within EITF 99-19.  Please advise if you do not have  convenient
access to this correspondence; such letters were filed via EDGAR.

     2.    Tell us your basis for  netting  safety  incentive  cost  against PEO
           revenue.

The Company's  determination  to net safety incentive costs against PEO revenues
is based upon  guidance set out in EITF 01-9,  paragraphs  2 and 9.  Paragraph 2
cites  rebates  and  paragraph  9 states,  in part:  "The Task  Force  reached a
consensus  that cash  consideration  (including  a sales  incentive)  given by a
vendor to a customer is presumed to be a reduction of the selling  prices of the
vendor's  products or  services  and  therefore,  should be  characterized  as a
reduction of revenue when recognized in the vendor's income statement."

The Task Force's  analysis and fact pattern matches that of the Company's safety
incentive  program  with its PEO  customers.  If the PEO  customer  achieves its
targeted  workers'  compensation  claims loss  objectives for the contract year,
then the Company  remits a cash  incentive  payment back to the PEO customer and
therefore  such amount  should be netted  against  the PEO revenue as  discussed
above.

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 3

     Results of Operations, pages 18-20.

     3.    Tell us in more detail of the nature of your  relationship  with your
           customers  relating  to PEO  services.  Also,  tell  us why  you  are
           considered a co employer under your contracts for these services.

In our PEO services arrangement,  the Company enters into a contract to become a
co-employer of the customer's existing workforce. Pursuant to this contract, the
Company assumes  responsibility for some or all of the human resource management
responsibilities, including payroll and payroll taxes, employee benefits, health
insurance, workers' compensation coverage, workplace safety programs, compliance
with  federal  and  state  employment  laws,  labor  and  workplace   regulatory
requirements and related  administrative  responsibilities.  The Company has the
right  to hire  and  fire  its PEO  employees,  although  the  customer  remains
responsible  for day-to-day  assignments,  supervision and training and, in most
cases recruiting.

Pursuant  to our PEO  services  contract,  the  Company  becomes  the  statutory
employer  for all  payroll,  payroll  tax  withholding,  remittance  and  filing
purposes, and the statutory requirements for providing  state-mandated  workers'
compensation  coverage.  Under the contract, the customer retains responsibility
and  liability  for all worksite  related  activities  and the  rendering of the
business services of the customer,  i.e., the customer is the primary obligor of
the delivery of services to its customers.

     4.    Tell us why your "net"  presentation  of PEO service  fees appears to
           exclude   payroll   taxes  and   benefits   related   to  PEO  staff.
           Additionally,  tell  us in  detail  why  you  allocated  most  of the
           workers' compensation costs to the staffing service business, despite
           the fact that most of the  revenue  growth was  generated  by the PEO
           business.

The Company does not net PEO payroll taxes  (arising  from PEO payroll)  against
PEO  service  fees  because  the  Company is the  statutory  employer or primary
obligor in terms of calculating  and remitting the taxes.  Such taxes affect the
pricing  or  mark-up  for each PEO  customer  and  contribute,  in part,  to the
Company's  profitability.  This is consistent with the analyses set forth by the
Company in its written responses to Mr.

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 4

Matthews  dated March 16, 2003 and March 25,  2003.  In addition,  Mr.  Matthews
confirmed to the Company on March 17, 2003,  during a telephone  discussion that
commenced at 12:30 pm PT (the second such telephonic  conference with management
of the day),  that,  based upon his  consultations  with the OCA, the Commission
"would not object" to the Company's  accounting for PEO related payroll taxes as
proposed.  The Company  believes its accounting is consistent with guidance from
the SEC.

Consistent  with the  Company's  prior  responses,  the Company nets PEO related
benefits against PEO service fees  (revenues),  as it is simply a "pass through"
item for BBSI between the benefit provider and the PEO customer,  as the Company
more fully discussed in its letter to Mr. Matthews dated March 25, 2003.

In connection  with workers'  compensation  costs,  the Company did not allocate
most of the workers'  compensation  costs to its staffing service business.  The
workers'  compensation  costs  in the cost of  revenues  section  of the  income
statement  represents the total of such costs for both staffing services and PEO
services.  Based  upon the  Company's  comprehensive  analysis  of EITF 99-19 in
connection with the accounting for workers'  compensation  costs, such costs and
related revenues are properly  accounted for in the Company's income statements.
Please refer to the Company's letter to Mr. Matthews dated as of March 25, 2003.
The only  component of workers'  compensation  costs that is netted  against PEO
revenues is the safety  incentive  costs.  Safety incentive is netted as it is a
rebate and not an incremental  company cost, as discussed in response to comment
2 above.

Notes to Consolidated Financial Statements.

1. Summary of Operations and Significant Accounting Policies.

     Nature of Operations, page F-6.

     5.    Addressing SFAS 131, tell us how you concluded that you only have one
           reportable  segment.  If  you  aggregated  operating  segments  under
           paragraph 17 of SFAS 131, tell us your basis for aggregation.

The  marketing  and  delivery of  staffing  and PEO  services  to the  Company's
customers  are  handled  by the same  branch  office and  management  personnel.
Profitability  and  accountability  are

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 5

measured by the branch office and its manager. Many elements of cost of revenues
and selling,  general and administrative  expenses are commingled or not readily
allocable to a specific human resource management service.  Therefore, it is not
practicable for the Company to maintain separate discrete financial  information
with respect to costs and expenses  (other than direct  payroll  costs,  payroll
taxes and benefits and safety incentive  costs) and assets and liabilities,  for
its staffing and its PEO services.  Moreover,  pursuant to the  requirements  of
paragraph  10  of  SFAS  131,  there  is  no  measure  of   profitability  at  a
disaggregated  level and the Company's chief  operating  decision maker does not
receive any lower level of  profitability  analysis  on a  disaggregated  basis,
other than certain "exception  reports" for certain minimum operating metrics on
a customer basis.

     Revision in classification, page F-10.

     6.    Tell us the nature and magnitude of workers' compensation liabilities
           that are in excess of the  deductible  limits of insurance  coverage.
           What circumstances caused you to exceed the insurance limits?

The Company incurred two workers' compensation claims that exceeded its $350,000
self-insured  retention (or  deductible),  which was in place at the date of the
respective  incidents.  One claim liability is related to an employee's  injury,
which resulted in a quadriplegic  condition,  and the second claim  liability is
related to an employee's  injury,  which has created a complex medical condition
of constant  pain.  The  majority of the  approximate  $4.4  million of recorded
liabilities are related to the two foregoing severe claims.

7. Workers' Compensation Claims, page F-15.

     7.    Tell us when the CNA  insurance  receivable  is  collectible.  Please
           describe  the  nature  of  the  insurance  arrangement,   why  it  is
           classified as long-term in the financial statements,  and whether you
           considered  a  valuation  allowance  as of the  balance  sheet  date.
           Additionally,  we note that you referred to CNA Financial Corporation
           as your prior excess workers'  compensation insurer. Tell us who your
           current  insurer  is and why your CNA  insurance

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 6

           receivable was not settled prior to any change in insurers.

The CNA insurance  receivables are collectible  over the life of the claims as a
regular  reimbursement  to the Company for costs it pays that have  exceeded the
$350,000  self-insured  retention (or  deductible).  The  Company's  third-party
claims  administrator  requests  and  receives  reimbursements  from  CNA  on  a
quarterly basis. These claims will likely remain open for 20 to 25 years.

The nature of the insurance arrangement is a standard, traditional annual excess
workers'  compensation  insurance  policy whereby the insurer (CNA), in exchange
for an insurance  premium,  agrees to assume the  financial  risk for all claims
that exceed a specified  retention  level or  deductible  under the terms of the
policy.

The  Company's   liability  to  the  claimant  and  the  related   reimbursement
receivables  from  CNA  are  classified,  in  part,  as  long-term  because  the
"transactional  amounts" are only paid and reimbursed as the underlying  medical
costs are incurred by the claimant  over the  estimated  remaining  lives of the
injured claimant.

The Company did consider a valuation  allowance as of the balance sheet date and
it was concluded none was warranted.

The  Company  currently  has a  standard,  traditional  annual  excess  workers'
compensation insurance policy with National Union, an AIG company.

The CNA insurance  receivable  was not  "settled"  prior to changing to National
Union because  National Union simply insures against such losses  beginning with
the date of its specific policy; it is not a party to obligations  incurred by a
predecessor  insurer during a prior policy term. The liabilities  related to the
prior claims remain the obligation of CNA and the Company,  and, as noted above,
payments  under those  claims are made as the costs are  incurred by the injured
claimants.

            In connection with the preceding  responses to the Staff's comments,
the Company acknowledges that:

<PAGE>

Mr. Larry Spirgel
United States Securities and Exchange Commission
May 12, 2005
Page 7

      o     the Company is  responsible  for the  adequacy  and  accuracy of the
            disclosure in its filings with the Commission;

      o     staff  comments  or  changes  to  disclosure  in  response  to staff
            comments do not foreclose the Commission from taking any action with
            respect to any such filing; and

      o     staff  comments  may not be asserted as a defense in any  proceeding
            initiated  by  the  Commission  or  any  person  under  the  federal
            securities laws of the United States.

            Should the Commission require any additional supplemental discussion
regarding the foregoing responses, please contact the undersigned.

Very truly yours,

/s/ Michael D. Mulholland
-------------------------

Michael D. Mulholland
Vice President-Finance

MDM/jlb

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