17.602 Policy
Source: FAR 17.602 on acquisition.gov
Only agency heads with statutory authority can authorize management and operating contracts, and agencies must rigorously review and document these contracts for compliance.
Overview
FAR 17.602 establishes the policy framework for authorizing, entering into, and reviewing management and operating (M&O) contracts within federal agencies. It requires that only heads of agencies with statutory authority may authorize such contracts, and this authority cannot be delegated. Each contract must clearly display its authorization. Agencies must ensure that M&O contracts are consistent with both the guidance in this subpart and the specific situations outlined in FAR 17.604. Additionally, agencies are required to review existing contracts within two years of the regulation's effective date to identify, modify, authorize, or terminate contracts as appropriate, with exceptions for contracts nearing expiration unless renewed or substantially renegotiated.
Key Rules
- Written Authorization by Agency Heads
- Only agency heads with statutory authority can authorize M&O contracts, and this cannot be delegated. Authorization must be documented and shown on the contract.
- Consistency with Guidance and Situations
- M&O contracts must align with the guidance in Subpart 17.6 and the situations described in FAR 17.604.
- Review of Existing Contracts
- Agencies must review and, if necessary, modify or terminate existing contracts within two years, except for those with less than four years remaining unless renewed or renegotiated.
Responsibilities
- Contracting Officers: Must ensure M&O contracts are properly authorized and display the authorization.
- Contractors: Should be aware that their contracts may be reviewed, modified, or terminated based on compliance with this policy.
- Agencies: Must conduct timely reviews, ensure compliance with statutory and regulatory requirements, and document authorizations.
Practical Implications
- This policy ensures that M&O contracts are only used when appropriate and with proper oversight.
- Agencies must maintain rigorous documentation and review processes, impacting contract renewals and modifications.
- Contractors may face contract changes or terminations if their agreements do not meet current policy requirements.
(a) Heads of agencies, with requisite statutory authority, may determine in writing to authorize contracting officers to enter into or renew any management and operating contract in accordance with the agency’s statutory authority, or http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter33&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 33, and the agency’s regulations governing such contracts. This authority shall not be delegated. Every contract so authorized shall show its authorization upon its face.
(b) Agencies may authorize management and operating contracts only in a manner consistent with the guidance of this subpart and only if they are consistent with the situations described in 17.604.
(c) Within 2 years of the effective date of this regulation, agencies shall review their current contractual arrangements in the light of the guidance of this subpart, in order to-
(1) Identify, modify as necessary, and authorize management and operating contracts; and
(2) Modify as necessary or terminate contracts not so identified and authorized, except that any contract with less than 4 years remaining as of the effective date of this regulation need not be terminated, nor need it be identified, modified, or authorized unless it is renewed or its terms are substantially renegotiated.