Overview
This section defines a "management and operating contract" (M&O) as a specialized agreement where a contractor operates, maintains, or supports a government-owned or controlled facility dedicated to a federal agency's major programs.
Key Rules
- Government Control: The contract must involve a facility that is either owned by the Government or under its direct control.
- Functional Scope: The facility must be primarily used for research, development, special production, or testing activities.
- Agency Mission: The establishment must be wholly or principally devoted to one or more major programs of the contracting federal agency.
- Contractor Role: The agreement focuses on the comprehensive operation, maintenance, or support of the facility on behalf of the Government.
Practical Implications
- M&O contracts are typically high-value, long-term partnerships—most commonly used by the Department of Energy (DOE)—where the contractor acts as an agent-like manager of critical national infrastructure.
- Because the contractor manages government-owned assets and major programs, these contracts carry unique regulatory requirements regarding liability, property management, and specialized cost principles.