Overview
FAR 17.602 establishes the high-level authority and mandatory procedures for agencies to enter into or renew management and operating (M&O) contracts. It ensures these unique, long-term agreements are authorized at the highest levels of agency leadership and remain consistent with specific statutory and regulatory criteria.
Key Rules
- Non-Delegable Authority: The determination to enter into or renew an M&O contract must be made in writing by the Head of the Agency and cannot be delegated to subordinate officials.
- Face-of-Contract Authorization: Every authorized M&O contract must explicitly state its authorization on the face of the document.
- Regulatory Consistency: Agencies may only authorize these contracts if they align with the guidance in FAR Subpart 17.6 and the specific situational criteria defined in FAR 17.604.
- Statutory Compliance: Contracts must be executed in accordance with the agency’s specific statutory authority or 41 U.S.C. chapter 33.
- Review Mandate: Agencies are required to periodically review and modify existing contractual arrangements to ensure they are correctly identified as M&O contracts or terminated if they do not meet the criteria.
Practical Implications
- High-Level Accountability: Because the authority is non-delegable, M&O contracts receive significantly more internal scrutiny and executive-level oversight than standard procurement actions.
- Strict Classification: Contracting officers must ensure that any contract labeled as "Management and Operating" strictly meets the situational requirements of the FAR, or they risk the contract being deemed unauthorized during agency reviews.