Management & Operating (M&O) Contracts
Office of Science Management and Operating (M&O) Contracts
The Office of Science (SC) national laboratories are Federally Funded Research and Development Centers operated by private sector organizations under sponsoring agreements known as management and operating (M&O) contracts. The M&O contract model, which dates back to World War II and the Corps of Engineers’ Manhattan Engineer District (MED), was designed to ensure the recruitment of world-leading scientific and technical talent, and the successful completion of the mission at hand—to win the War.
In recognition of the MED contractors’ success in that endeavor, Congress, via the Atomic Energy Act of 1946, carried the M&O model forward into the organization of the Atomic Energy Commission and its predecessor agencies, including the DOE. The legislation “permits management contracts for the operation of Government-owned plants so as to gain the full advantage of the skill and experience of American industry.” The unique M&O contract relationship enables the Government to establish objectives for the laboratories’ research programs and to exercise controls necessary to assure security, safety, and the prudent use of public funds, while allowing private sector organizations selected for the technical ability and managerial expertise to carry out the laboratories’ day-to-day operations.
M&O contracts are characterized by their special purpose and the close relationship they create between the Department of Energy (DOE) and the contractor. The work performed under M&O contracts is intimately related to DOE’s mission, is of a long-term and continuing nature, and, among other things, includes special requirements for work direction, safety, security, cost controls, and site management.
The Office of Laboratory Policy develops, manages, and ensures the implementation of DOE procurement policies and procedures to strengthen the SC M&O contract system and to support comprehensive acquisition planning and robust contractor performance management.