17.604 Identifying management and operating contracts
Source: FAR 17.604 on acquisition.gov
Management and operating contracts are defined by their use of government facilities, close government-contractor relationships, and alignment with agency missions, requiring special oversight and continuity provisions.
Overview
FAR 17.604 outlines the criteria for identifying management and operating (M&O) contracts, which are unique due to their purpose and the special relationship they establish between the government and the contractor. These contracts typically involve the use of government-owned or -controlled facilities, often for reasons related to national defense, agency mission requirements, or when private enterprise cannot or will not provide the necessary facilities. M&O contracts require a close, ongoing relationship between the government and contractor, particularly in areas such as safety, security, and cost control. The work performed under these contracts is usually distinct from the contractor’s other business activities and is closely tied to the agency’s mission, often requiring continuity and special provisions for transition between contractors.
A management and operating contract is characterized both by its purpose (see 17.601) and by the special relationship it creates between Government and contractor. The following criteria can generally be applied in identifying management and operating contracts:
(a) Government-owned or -controlled facilities must be utilized; for instance-
(1) In the interest of national defense or mobilization readiness;
(2) To perform the agency’s mission adequately; or
(3) Because private enterprise is unable or unwilling to use its own facilities for the work.
(b) Because of the nature of the work, or because it is to be performed in Government facilities, the Government must maintain a special, close relationship with the contractor and the contractor’s personnel in various important areas (e.g., safety, security, cost control, site conditions).
(c) The conduct of the work is wholly or at least substantially separate from the contractor’s other business, if any.
(d) The work is closely related to the agency’s mission and is of a long-term or continuing nature, and there is a need-
(1) To ensure its continuity; and
(2) For special protection covering the orderly transition of personnel and work in the event of a change in contractors.