Commission and operate: a third path beyond build versus buy.

A small but increasing share of the regulated enterprises we advise have, in the last 18 months, settled on a procurement structure that does not fit cleanly into either the build column or the buy column of the historical framework. The structure commissions the architecture from a partner, transfers the resulting asset to your own balance sheet, and retains the partner under a separate operating mandate to run the asset for a defined period. We refer to the structure as commission-and-operate. This article describes where the structure came from, what it looks like in practice, and why institutions that have adopted it have done so.

01Where the structure came from

The commission-and-operate structure did not emerge from a deliberate procurement innovation. It emerged from the practical observation, made independently by several institutions during 2024 and 2025, that the wedge architecture described in our March 2026 briefing did not have a clean precedent in either of the two procurement frameworks institutions had previously used. The wedge was too specialized to buy as a vendor product. It was too operationally demanding to build with internal talent. It required a partner who had built and operated wedges before, who could transfer the asset to your balance sheet, and who could continue to operate the asset under a contracted mandate.

The structure was, in each case we have studied, arrived at independently. The convergence is structural rather than imitative. The wedge architecture imposes operating requirements that the historical procurement framework cannot satisfy through either of its two existing options, and the third option emerged because the architecture required it.

02What the structure looks like

The structure has three components. The first is a commissioning agreement under which the partner builds the wedge to your specifications, on your infrastructure, and transfers the asset to you at a defined milestone. The second is an operating agreement, separately executed, under which the partner retains the operating mandate on the asset for a defined period. The third is a transition agreement, drafted at commissioning and triggered at the end of the operating period, that specifies the conditions under which the operating mandate transfers to you or to a third party.

03Contract form

The contract form is, across the engagements we have run, still evolving. The convergent practice has the commissioning agreement structured as a fixed-fee professional services engagement against a defined deliverable, the operating agreement structured as a managed-services engagement with a written service-level commitment, and the transition agreement structured as a contingent-rights instrument that activates on a defined trigger. The three are usually executed simultaneously, with the operating and transition agreements pre-negotiated and signed at the moment the commissioning is approved.

The pre-negotiation of the operating and transition agreements is the structural feature that distinguishes commission-and-operate from a sequence of two unrelated engagements. It is the pre-negotiation that prevents you from finding itself, at the close of the commissioning, in a position where the operating agreement has to be negotiated against an asset the partner is the only party qualified to operate.

04Operating economics

The operating economics of the structure compare favorably to either of the two alternatives in the cases we have studied. Compared to a pure build, the structure removes the cost of recruiting and retaining a team capable of building and operating the wedge, and removes the time-to-production penalty associated with building from a standing start. Compared to a pure buy, the structure removes the vendor lock-in associated with running the wedge on a vendor-owned substrate, and removes the renegotiation penalty associated with the next workload composition shift.

We did not have the talent to build the wedge. We did not have the procurement category to buy it. We had a partner who had built three of them, and a balance sheet that could carry the asset. The contract structure followed from those three facts. Chief Information Officer, regulated services portfolio, third quarter 2025

05Where the structure fits

The structure fits institutions that meet three conditions. The first is regulatory or strategic preference for asset ownership on your own balance sheet. The second is an internal talent posture that does not include the deep wedge-building expertise the structure requires. The third is a willingness to enter a multi-year operating relationship with a partner under a written set of operating metrics. Institutions that do not meet all three conditions are, in our experience, better served by either a pure build or a pure buy depending on which condition is binding.

06Where it does not

The structure does not fit institutions whose strategic posture requires that the operating remit sit, from the moment of stand-up, with internal staff. The structure does not fit institutions whose procurement category does not have a managed-services vehicle. And the structure does not fit institutions whose balance sheet does not have a clean home for an asset of this class. Each of the three constraints can be addressed, but the addressing is itself a strategic decision that you should make before, not after, commissioning the architecture.

The structure is not a universal answer. It is the answer that a growing share of regulated enterprises are converging on because the architectural posture they are now operating against does not fit the two answers the historical framework offered, and the third answer is the answer the architecture is asking them for.