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How to Find a Competent Developer?

My company has a long history with a small software development firm offshore (.net desktop app), but their quality and ability to deliver on time is deteriorating.  I need to find a new developer and could really use some advice on where to get started with this search.  Where can I look for the best quality versus cost?  All suggestions would be much appreciated!
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Thank you for the excellent suggestions.  I am looking in to the user groups and doing as much networking as possible in the development community.  You response was most helpful!