Government Owned/Contractor Operated (GOCO) vs. Private Contractors (M&O)

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When you think about government contracting, or being involved in government contracting, you may not know that there is more than one way to be involved. You can work as a private contractor, i.e. your own business the contracts out to the government, or work with a government-owned/contractor-operated (GOCO) business.

GOCO
With government-owned/contractor operated partnerships, you have a break down of a project into smaller operations. Private contractors implement smaller portions of the project. The Department of Energy, for example, has always been managed by other organizations, such as industrial, academic or nonprofit sectors.

One of the advantages of a GOCO model is that private businesses have less bureaucratic restrictions than they would as Management and Operating (M&O) contractors.

The Differences
There are several differences between government owned/contractor-operated contracts and management and operation contracts. Below are just a few:

Pricing: With government owned/contractor-operated contracts, there is a fixed price, unlike M&O contracts. However, M&O contracts allow cost reimbursement, while GOCO contracts don’t.

Type of work: GOCO contracts are firmly defined in what can be done, while M&O contracts are less rigid. For instance, GOCO contractors might perform routine production, or use tools and processes that have been tested. M&O contractors, however, can operating testing establishments, conduct research and development, or perform nuclear production.

Conflicts of Interest: Those contractors that work at a government owned/contractor-operated facility can compete in the private, commercial sector, while management and operation contractors can’t.

Depending on how you would like to run your business, or if you’d like to be a single contractor with no team, should be a deciding factor when choosing which type of contract or facility to work with. Each has its pros and cons.

If you want more freedom of job choice, for instance, you might choose management and operating contractors. However, if you like having a fixed price, government owned/contractor-operated facilities are probably better.

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