FAR 17.601—Definition.
Plain-English Summary
FAR 17.601 provides the definition of a "management and operating contract" (often called an M&O contract). This section identifies the type of arrangement in which the Government hires a contractor to operate, maintain, or support, on the Government’s behalf, a Government-owned or Government-controlled establishment that is devoted primarily to major agency programs. The definition covers four key elements: the work must be operation, maintenance, or support; it must be performed on behalf of the Government; the facility must be Government-owned or Government-controlled; and the establishment must be a research, development, special production, or testing site wholly or principally devoted to one or more major programs of the contracting agency. In practice, this definition matters because it distinguishes M&O contracts from ordinary service contracts, facility support contracts, and other forms of federal contracting, and it signals a special contracting environment often involving long-term performance, close Government oversight, and mission-critical operations. Understanding whether an arrangement fits this definition affects acquisition planning, contract structure, oversight expectations, and how agencies describe and manage the work.
Key Rules
Government-owned or controlled site
The contract must involve a facility or establishment that the Government owns or controls. If the Government does not own or control the site, the arrangement generally does not fit this definition.
Operation, maintenance, or support
The contractor’s role must be to operate, maintain, or support the establishment. The definition is broad enough to include day-to-day running of the site as well as related maintenance and support functions.
Performed on Government’s behalf
The contractor is not acting for its own commercial purposes; it is carrying out the work on behalf of the Government. This reflects a delegated operating role rather than a standard vendor relationship.
Research, development, production, or testing establishment
The site must be a research, development, special production, or testing establishment. Ordinary office space or general-purpose facilities do not meet this definition unless they are part of such an establishment.
Wholly or principally devoted to major programs
The establishment must be wholly or mainly dedicated to one or more major programs of the contracting agency. The focus on major programs shows that the contract is tied to significant mission work, not incidental support.
Responsibilities
Contracting Officer
Determine whether the contemplated arrangement fits the FAR definition of a management and operating contract and structure the acquisition accordingly. Ensure the contract description, scope, and oversight approach reflect the Government-owned or -controlled mission facility and the agency’s major program needs.
Agency Program Officials
Identify whether the facility or establishment is devoted wholly or principally to major agency programs and confirm the operational mission requirements. Provide the contracting officer with accurate information about the site, its purpose, and the level of Government control.
Contractor
Understand that the work is performed on the Government’s behalf at a Government-owned or -controlled mission facility and that the contract may involve broad operational, maintenance, and support responsibilities. Be prepared for close Government direction and performance expectations tied to the agency’s major programs.
Government Facility/Installation Management
Support the determination of whether the establishment is Government-owned or -controlled and whether it is a research, development, special production, or testing site. Coordinate operational details that affect how the contractor will manage, maintain, or support the facility.
Practical Implications
This definition is a threshold classification issue: if the arrangement is an M&O contract, the agency may need to use different acquisition planning, oversight, and management practices than it would for a standard service contract.
A common pitfall is assuming any large support contract at a Government site is an M&O contract; the facility must be a research, development, special production, or testing establishment and must be devoted wholly or principally to major programs.
Contractors should recognize that M&O work often involves broad responsibility and close Government involvement, so performance expectations may be more integrated with agency mission objectives than in ordinary commercial support contracts.
Contracting officers should document the basis for the classification early, because the definition affects how the contract is described, competed, and administered.
The phrase "on its behalf" is important in practice: it signals that the contractor is effectively operating a Government mission facility, which can affect oversight intensity, reporting, and the relationship between the agency and the contractor.
Official Regulatory Text
Management and operating contract means an agreement under which the Government contracts for the operation, maintenance, or support, on its behalf, of a Government-owned or -controlled research, development, special production, or testing establishment wholly or principally devoted to one or more major programs of the contracting Federal agency.