Management and Operating Contracts
FAR Subpart 17.6 ensures that management and operating contracts are used only when necessary, with strict oversight and compliance requirements to safeguard government interests.
Overview
FAR Subpart 17.6 addresses the use, definition, policy, limitations, identification, and procedures for awarding, renewing, and extending Management and Operating (M&O) contracts. These contracts are typically used by federal agencies, especially the Department of Energy, to manage and operate government-owned facilities, such as laboratories or production plants. The subpart establishes when and how M&O contracts should be used, sets forth the criteria for their application, and outlines the responsibilities of contracting officers and contractors. It also provides guidance on identifying M&O contracts and the requirements for their award, renewal, or extension, ensuring that such contracts are only used when necessary and in accordance with federal policy and oversight requirements.
Key Rules
- Scope and Definition
- Defines what constitutes a management and operating contract and the types of activities covered.
- Policy and Limitations
- Establishes federal policy on the use of M&O contracts and sets limitations to prevent misuse or overreliance.
- Identification and Award Procedures
- Provides criteria for identifying M&O contracts and prescribes procedures for their award, renewal, and extension.
Responsibilities
- Contracting Officers: Must ensure M&O contracts are used appropriately, follow identification and award procedures, and comply with policy and limitations.
- Contractors: Must understand the unique requirements and obligations of M&O contracts, including performance and reporting.
- Agencies: Responsible for oversight, justification, and ensuring compliance with federal policy regarding M&O contracts.
Practical Implications
- This subpart exists to ensure that M&O contracts are only used when necessary and managed with proper oversight.
- It impacts daily contracting by requiring careful justification, documentation, and adherence to specific procedures for M&O contracts.
- Common pitfalls include misidentifying contracts as M&O, failing to justify their use, or not following renewal/extension procedures.