Overview
This section establishes the specific criteria and characteristics used to identify a Management and Operating (M&O) contract, focusing on the use of Government facilities and the creation of a unique, long-term relationship between the Government and the contractor.
Key Rules
- Facility Requirements: The contract must involve Government-owned or -controlled facilities, utilized for national defense, mission necessity, or cases where private enterprise is unable to provide its own facilities.
- Special Relationship: The Government must maintain a "special, close relationship" with the contractor, exercising high levels of oversight in areas such as safety, security, cost control, and site conditions.
- Organizational Separation: The work performed under the contract must be substantially or wholly separate from the contractor’s other commercial business activities.
- Mission Continuity: The work must be long-term and mission-critical, requiring specific protections to ensure the orderly transition of personnel and operations if the contractor changes.
Practical Implications
- High Oversight: Contractors must be prepared for much more intrusive Government involvement in daily operations than is found in standard service or supply contracts.
- Operational Segregation: Companies winning these contracts often need to establish dedicated business units or subsidiaries to ensure the work remains distinct from their other commercial ventures.