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Can "Not To Exceed (NTE)" be used on CPFF Contracts?
By Vern Edwards on Friday, February 21, 2003 - 10:21 am:

I don't know what to say about this exchange. What do you think of the professor's "rationale"?

Not To Exceed (NTE) on Cost Plus Fixed Fee Contracts

Posted to Pre-Award Procurement and Contracting on 1/30/2003 by Clyde Reid

The Scenario:

I'm in the middle of a dispute between contractor and the Buying Command. The PCO has placed "Not To Exceed (NTE)" limits on Material/Travel/Repairs in support of various Clins. The contractor says that the three items in question still need to be negotiated. The buying commands say no, it doesn't. We need to determine who's right on this issue and what FAR/DFAR guidance to quote.

The Question:

Can "Not To Exceed (NTE)" be used on CPFF Contracts? If so, under what circumstances?

The Answer:

A telephone call was made to find out more about the background of this question and it was discovered that one or more of the contractor’s accountants of a Fortune 500 Company (meaning a large business) were apparently unfamiliar with CPFF type contracts and much more used to dealing with Firm Fixed Price contracts. The accountants viewed the CPFF contract as an undefinitized contract since they were not certain what the final price on the contract was going to be. They raised the question and the Contract Administrator had limited exposure to CPFF contracts also. That was where this question came from. It was explained in the telephone call that the Contracting Officer that made the award of the CPFF contract had reasons to add in the additional not to exceed limits on material, travel and repairs due to previous experience on other contracts with this contractor.
Answer: Yes it can and under whatever circumstances that the Contracting Officer feels it is justified to protect the Government’s best interests.

Rationale: There is no exact FAR or DFARS reference for this. It is simply one more tool in the Contracting Officer’s Contracting tool bag to be utilized when it is felt appropriate by the Contracting Officer to help limit the liability of the Government.

Do any of the people managing cost-reimbursement contracts for our government have a clue about what they are doing?

By Tricia on Friday, February 21, 2003 - 11:06 am:

Apparently not in your opinion.

By formerfed on Friday, February 21, 2003 - 11:26 am:

Good title for this thread. I can see how a contractor doesn't understand, although it's hard to figure out how they won the award especially if this is a significant one. But there's no excuse for an answer like this from the "professor." Government people look to the professor for expert guidance. I wonder how many people walk away from this and similar responses with the wrong impression?

By Anonymous on Friday, February 21, 2003 - 11:42 am:


Are you saying that the contracting officer can't put an NTE on a CPFF line item.

Why not?

By Vern Edwards on Friday, February 21, 2003 - 11:53 am:

Here's the answer that the professor should have given:

Yes, the parties to a cost-reimbursement contract can agree on a "not to exceed" or "ceiling" amount for some particular element of cost. See FAR § 31.109, which discusses advance agreements on cost. Perhaps the most common such agreements are "caps" on indirect cost rates.

But the professor should have pointed out that in this case the question is: What is the contractual implication of the "not to exceed" agreement? What does it mean? Does "not to exceed" mean that the contractor is not obligated to spend more than that amount, or does it mean that the contractor must spend whatever is necessary but that the government will not reimburse it for more than that amount? What did the parties intend by "not to exceed"? Is the "not to exceed" agreement a limitation on the contractor's obligation or is it an agreement to share costs?

Only the parties know for sure. Or maybe they don't know.

By Anonymous on Friday, February 21, 2003 - 12:10 pm:


Can you cite an instance where there was a “Not to Exceed” and the contractor was contractually bound to spend more.

By Vern Edwards on Friday, February 21, 2003 - 01:13 pm:


Yes, I can provide an example.

My favorite example is a contract between General Dynamics and the Federal Aviation Administration for radar sets. The parties had negotiated a fixed-price-incentive (firm target) contract that went badly. They negotiated a conversion to a cost-reimbursement contract with a "ceiling price." Things continued to go badly and the FAA terminated the contract for default before the ceiling price was reached. The FAA refused to reimburse the contractor for its costs and the contractor appealed to the Department of Transportation Contract Appeals Board. The Board held for the contractor. See: General Dynamics Corporation, DOTCAB No. 76-9A, 78-2 BCA ¶ 13,281 (April 7, 1978). The FAA refused to comply with the Board's order to pay up and the contractor appealed to the U.S. Claims Court, which upheld the Board's decision. See: General Dynamics Corp. v. U.S., 229 Ct.Cl. 399 (Feb. 10, 1982). The court held that if the contractor had reached the ceiling it would have had to complete the work at no additional cost to the government and pay the government damages in the event of default. In other words, at the ceiling the contract effectively would have converted from cost-reimbursement to fixed-price.

See, too, Cost-Reimbursement Contracting, 2d ed., by Cibinic and Nash, pp. 24 - 27. The authors point out, first: "One major problem [with cost ceilings] is determining whether the ceiling operates to deny the contractor's right to stop work when the ceiling is reached." The authors, say: "A precisely drafted ceiling will operate both to deprive the contractor or additional funding and require the contractor to complete performance within the stipulated amount." But they point out: "The Court of Claims has stated that overall cost ceilings will be strictly construed against the Government in the event of ambiguities, [citation omitted]. It is thus incumbent upon the Government to exercise careful draftsmanship in preparing such provisions."

By Anonymous on Friday, February 21, 2003 - 01:24 pm:


You are equating “Not to Exceed” with “Ceiling.” I would assume that “Not to Exceed” means “exceed at your own risk” while “ceiling” means “you may have to spend more, but this is all you are going to recover.” Again, can you cite an instance where there was a “Not to Exceed” and the contractor was contractually bound to spend more.

By Vern Edwards on Friday, February 21, 2003 - 01:38 pm:


Yes, I am equating "not to exceed" with "ceiling." On what do you base your assumption as to the differences that you ascribe to the meanings of the two terms? Are you reading from some official definitions? From some court-imposed definitions?

By Anonymous on Friday, February 21, 2003 - 02:03 pm:


The FAR “LIMITATION OF GOVERNMENT LIABILITY” clause for a letter clause reads as follows,” the contractor is not authorized to make expenditures or incur obligations exceeding ….”

Unless, you have an authoritative usage for "NTE" which is different from this, I would say the Professor wins this round.

By dave on Friday, February 21, 2003 - 02:06 pm:

Years ago when acquiring R&D on a CPFF basis, we quite commonly used ceilings on indirect costs, I don't see why we can't put a ceiling on travel, etc. Of course these ceilings were always negotiated with the offeror to reach preaward agreement.

By formerfed on Friday, February 21, 2003 - 02:24 pm:

Another thing about the professor's reply is that it didn't address the contractor's misunderstanding. It states "...the contractor’s accountants of a Fortune 500 Company (meaning a large business) were apparently unfamiliar with CPFF type contracts and much more used to dealing with Firm Fixed Price contracts. The accountants viewed the CPFF contract as an undefinitized contract since they were not certain what the final price on the contract was going to be...." So with this understanding, the contractor viewed the NTE as a ceiling on an non-definitized letter contract. If he led in with some explantion as well as Vern's suggestion, things are clear.

By Eric Ottinger on Friday, February 21, 2003 - 02:34 pm:


Iniitally, I thought the Professor was talking about an "NTE" on a separate ODC (Other Direct Cost) CLIN, which makes perfect sense to me.

Treating travel, repairs, etc. as cost elements under a larger CLIN and then asking the contractor to segregate these costs to keep them under some NTE or ceiling strikes me a as a nonstandard and rather painful approach to the problem.


By Eric Ottinger on Friday, February 21, 2003 - 02:44 pm:

The above should have been addressed to Formerfed, not Eric.

By Charlie Dan on Friday, February 21, 2003 - 03:30 pm:

In response to the post of 2/21 by Anonymous:

The Limitation of Government Liability clause from FAR 52.216-24 doesn't exactly define the term "not to exceed." Further, the guidance for letter contracts in FAR 16.603 includes a requirement to "include an overall price ceiling in the letter contract." Seems to use the terms "not-to-exceed" and "ceiling" interchangeably. In my experience, these terms are synonymous in everyday use.

I probably wouldn't be as blunt as Vern, but it concerns me that the contractor and the federal agency on this contract seem to be inexperienced with cost reimbursement contracting.

By Anonymous on Friday, February 21, 2003 - 03:54 pm:


It is apparent that that Letter contracts or other UCAs were the context the company accountants had in mind.

Are you sure that you are looking at the same FAR 16.603 that I am. I don't see the word "ceiling."

By Vern Edwards on Friday, February 21, 2003 - 07:15 pm:

Anonymous of 2:03 p.m.:

What do you mean, "the Professor wins this round"?

You better go back and read again, the professor's comments and mine. The only thing the professor said was that it is okay to use a not to exceed in a cost-reimbursement contract. I agreed with the professor's answer.

My complaint about the professor is not that his answer was wrong, but that he didn't do what a good professor does -- explain and clear up the questioner's confusion. All he did was clarify the scenario and then give a half-baked answer.

The professor should have referred the questioner to FAR § 31.109, as I did, and explain that not-to-exceeds are used in cost-reimbursement contracts all the time, as I did. (I did a Westlaw search for court and BCA decisions in which the terms "cost-reimbursement" and "not to exceed" occur and got 185 hits.) He should have explained that the term has no generally accepted meaning, as I did. Then, as I did, he should have referred the questioner to the Cibinic and Nash discussion of ceilings, pointing out some of the pitfalls of such agreements.

But the professor did none of those things.

Your point appears to be that there is a distinction between the terms "not to exceed" and "ceiling." Is that right? As you said: "I would assume that 'Not to Exceed' means 'exceed at your own risk' while 'ceiling' means 'you may have to spend more, but this is all you are going to recover.'"

How about this sentence from McDonnell Douglas Corp. v. U.S., 39 Fed. Cl. 665 (Dec. 5, 1997): "The [Incentive Price Revision} clause was designed to establish the total final contract price not to exceed the contract ceiling price."

Or this one, from CACI, Inc. v. General Services Administration, GSBCA No. 15,588, Dec. 13, 2002: "Appellant was to be paid an hourly rate not to exceed a ceiling contained in a repair order for services rendered."

Or this one, from Vehicle Research Corp., ASBCA No. 26,581, July 19, 1983: "The contract contained the standard Armed Services Procurement Regulation (ASPR) clauses including Allowable Costs, Fixed Fee and Payment (1968 Sep) and Limitation of Cost (1966 Oct). The contract also provided that appellant would be paid an overhead rate not to exceed a ceiling of 100% of direct costs. The final overhead rate for the contract was to be determined by Government audit subject to the 100% ceiling."

My point is that there is no clear distinction between a "not-to-exceed" amount and a "ceiling" such that we can discern the contractual implications from the terms alone. To the extent that you believe that there is such a distinction, I disagree.

By Anon2U on Friday, February 21, 2003 - 09:25 pm:

I have worked at my civilian agency for 5 years and I have never seen a cost plus fixed fee contract, let alone any fancier type. The only place I have discussed them is in the school house. Therefore, I may be a GS-14 soon and have zero experience with CP contracts. In discussion with several of the supervisors, they have almost no experience either. The exception is probably in our construction division. Main reason: Cost plus contracts are administratively burdensome and we no longer have the manpower to monitor them. Our usual contracts are IDIQ labor hour and delivery orders against GSA FSS.

So yes, the government has lost most of its experience and skill in the various contracts.

That is why I read this column, the court/protest decisions, and go to every class they will let me attend. I am trying to learn but nothing replaces real experience that few COs have anymore. I think we may have to specialize more just like doctors do.

By Eric Ottinger on Saturday, February 22, 2003 - 09:18 am


You fault the professor for not discussing advance agreements, but there is no evidence that the contractor is aware of this hypothetical Part 31 agreement. Clearly the contractor is confused, but there is nothing in the scenario to suggest that the contractor is totally oblivious.

In any case, advance agreements should be clearly spelled out in an “H” clause or attached to the contract. That leaves very little room for the confusion that we see in the professor’s scenario, unless we posit that both the contract administrator and the contractor’s accountants are both incapable of reading the contract. More likely, there is nothing but “NTE” or “Not to Exceed” in Section B and both are trying to intuit what this means.

Advance agreements are bilateral. However, the scenario clearly indicates a unilateral action on the part of the PCO, “The PCO HAS PLACED "Not To Exceed (NTE)" limits on Material/Travel/Repairs in support of various Clins.”

Travel, repairs and sometimes materials are typically categorized as ODCs (Other Direct Costs). It isn’t uncommon for the government to put controls on such expenditures, particularly travel. Note that the scenario states that the PCO has done this because of experience that he has had with the contractor in the past. I would infer that the contractor sent twenty people to a meeting when no more than five were needed.

It is conceivable that the contractor has previously allocated too much of the total budget to “Material/Travel/Repairs.” If the PCO doesn’t want to spend any more than $50,000 for repairs, the sensible thing to do is to establish a separate cost/no fee ODC CLIN for repairs with an estimated cost of $50,000. This is simple. Negotiating an advance agreement on the repairs cost element in a larger CLIN is the hard way to do it. In any case, I have a hard time imagining the government setting absolute limits for cost elements like material and repairs. This would be the worst kind of micro-management.

All and all, this looks more like technical direction than a Part 31 advance agreement. The contractor seems to understand that this is a temporary limit. Specifically, it appears that the contractor thinks that this is the usual 50% limit, which would not be raised until the contract is fully negotiated.

More likely, this is technical direction to the effect that the contractor should not expend more than the NTE amount on these ODC costs at this stage in the contract. When more funding is available, these NTE limits will be adjusted upward.

The professor does not get an “A” for clarity or detail. On the other hand, there is no need to read in an approach which is inconsistent with the scenario, cumbersome and administratively costly.

If either the PCO or the professor advised imposing an advance agreement on an element of cost (i.e. materials) for a commercially oriented firm, with accountants who find government contracting confusing, that would merit some comment. That would be really dumb.


By Vern Edwards on Saturday, February 22, 2003 - 10:51 am:


I think you read too much into "the CO has placed." What can that mean?

Are you aware of any standard FAR clause that gives a CO authority to unilaterally add a CLIN or place limits on costs incurred after a contract has been formed? I can't think of any off hand and I don't think it can be done under the Changes clause. If I'm correct, then I think that the proper interpretation of "the CO has placed" is that the parties negotiated a contract that includes an NTE provision that the contracting officer wanted to establish. This was nothing more than an advance agreement on costs as contemplated by FAR § 31.109.

FAR does not prescribe any format for advance agreements on cost. An advance agreement can be included in a Section H clause, in a CLIN, or in an attachment to the contract. I negotiated many, many NTE advance agreements, and many of them were written into the CLIN description:

"Nothwithstanding any other provision of this contract, including the Allowable Cost and Payment clause, the Contractor shall not be entitled to reimbursement for more than a total of $50,000.00 for material cost, as defined in FAR § 31.205-26(a), regardless of the Contractor's incurred allowable cost for the materials required to complete the performance of this contract. All material cost incurred in excess of $50,000.00 shall be expressly unallowable under this contract."

Maybe that should have appeared in Section H, but what difference does it make? If incorporated into the contract at the time of formation that language satisfies every requirement of FAR § 31.109. Two sentences. What is so cumbersome and administratively costly about that?

As I recall, you are in the weapons acquisition business. I negotiated several complex advance agreements on cost with General Electric, Lockheed, Rockwell and other weapons contractors that dealt with complex allowability issues and that were several pages long. However, not all advance agreements are like that.

There would be no problem had the contracting officer drafted the agreement in the contract more carefully. The professor could and should have explained all that to the questioner.


By Vern Edwards on Saturday, February 22, 2003 - 12:41 pm:


I need to say something. I know why you wrote in today -- you think that my criticisms of AAP are harsh and you are seeking justice for the professor. I understand that.

What I want you to understand is that I want DAU to be the best institution of its type anywhere in the world. I like the very idea of DAU and I want to be proud of it. But I cannot be proud of it now, because the quality of its output at AAP is consistently poor.

I would like DAU to improve the AAP site so I can brag about that institution and refer it to others. I have written to DAU about the site, but to no avail, so I am using Wifcon. I must admit that it doesn't seem to be working -- no matter how much I and others here criticize AAP, DAU doesn't take corrective measures. In fact, I'm not sure that anybody in DAU is keeping track of the site or checking the quality of the answers provided there. Maybe they don't have the staff. It I was running DAU I would rather drop AAP than manage it poorly.

Quality is not just a matter of accuracy, although that is essential. Quality is also a matter of pedagogical effectiveness. It is, after all, called "Ask A Professor," i.e., Ask A Teacher. I'm a teacher. I like to answer questions and explain things to people, and it drives me crazy to see so many inaccurate and incomplete answers coming from the "professors" at AAP.

It seems to me that the response to a question should be somewhat like: "Boy, I'm glad you asked that! Here, sit down, grab a cup of coffee and let me tell you all about it." The professor should recognize any underlying confusion on the part of the questioner and go beyond a bare-bones response. A professor should be driven by the need to teach, to pass useful knowledge on to others.

I guess I'm becoming bitter. I want excellence in all things in acquisition, and it seems clearer to me every day that I have little hope of getting any satisfaction in that regard. Many of my teaching collegues feel the same way. Perhaps I should stop taking potshots at AAP and even drop out of Wifcon Chat. I've thought about it a lot, lately. Goodness knows, I've got other things to do. I've signed up to take a class in elephant management at a wildlife sanctuary this summer. I'm very excited. I've always wanted to be Toomai of the Elephants. I won't think about contracting once.


By cherokee21 on Saturday, February 22, 2003 - 06:48 pm


Hope you don't go away to raise those "pink elephants". I get cranky too. Suspect that I have been involved in contracting almost as long as you but have not had the time to study it the way you do. Do respect your opinion highly, so maybe you can help out in the next thread I intend to post "The dreaded CPIF/CPAF combo" which really worries me with my client.

By longtimer on Saturday, February 22, 2003 - 09:45 pm:

Vern, I've sometimes disagreed with your opinions. By opinions I mean only certain conclusions extending beyond FAR and case law discussions. Those I've always found to be truly excellent. In trying to argue with you I've found I've been driven to learn and research in detail--usually to conclude myself you are correct in those points. You did much the same on the old Water Cooler.

I'm afraid if you go away the board will degenerate into pretty half baked chat. You tend to force rigor. In the matter of explicit advice and reference I don't think anyone compares.

The elephants sound great and I wish I could join. Have a great time and stay with this herd too.

By cherokee21 on Saturday, February 22, 2003 - 11:48 pm:

I'm not sure what "long timer" is trying to say, but guess he/she thinks highly of you. As I do. I will post that "DREADED CPAF/CPIF contract tomorrow. Really need an opinion-. Thanks 05B

By Eric Ottinger on Sunday, February 23, 2003 - 09:40 am:


I am not concerned about the Professor’s honor. Nobody is going to be challenging me or the professor to a duel. I’ve already stated that his response lacks clarity and detail. If he put that answer in the bluebook, he wouldn’t pass the final exam.

I have no problem with Section B. If the PCO had put a paragraph in like you suggested, what is the probability that both the contract administrator and the contractor’s accountants would neglect to read such plain language. An advance agreement is, by the FAR definition, something clearly spelled out in writing. Since this is evidently not the case, I doubt there is an advance agreement.

I think there is nothing but a “Not to Exceed” or “NTE.” The commercially oriented “Fortune 500” company accountants, based on their limited experience with government contracts, have jumped to the conclusion that this is the kind of expenditure limit that is required for a CLIN which has not yet been fully negotiated.

It doesn’t make sense for the PCO to negotiate one amount and then set a permanent ceiling at 50% of the negotiated amount. Hence, I conclude that the PCO merely wants to limit expenditures for travel, materials and repairs for a period of time until more funding is available and the ceiling will be raised to the negotiated amount.

I would characterize this as “technical direction.” I could, and have, sent the same kind of direction in a letter. That doesn’t rule out the possibility that there was a bit of negotiation, if the contractor wasn’t comfortable with the ceiling. Program managers give this kind of direction all of the time, often will a lot less formality.

If I intend to have a cost element segregated, I would set up a separate CLIN. I assume that is what this PCO did, although that is not quite the scenario presented to the professor.

We are both making inferences. I find mine more credible.


I don’t think it is a good thing to be throwing rocks at other sites.

On the other hand, AAP is a rich source of discussion topics. It would be silly not to use this resource. Vern is doing something which I have been intending to do. So I commend him for it.

In my experience, some professors are excellent and some professors don’t know any more than what they have just read, preparing the lesson plan the night before. None of this is new.

I think there is a disconnect between the faith that the higher levels place in education and the quality education that is actually available. This is a point where Vern and I are probably in agreement. In the academic world, anything which is slack and poorly thought out will be attacked. Academics don’t waste a lot of energy on being polite. This isn’t very pretty, but it keeps everyone on their toes.

In the world of government procurement, a lot of slack, poorly informed stuff gets published. Until we have the kind of vigorous peer review process that you see in the academic world, I doubt we will have a body of knowledge worth teaching in school.

If you look at the archives, you will see that Vern, Joel, Formerfed, Ron and numerous others are creating a body of useful knowledge that the average working 1102 isn’t going to find anywhere else. It is not “excellent.” (I doubt any of us have time for that) but is unique and useful.

I try not to be rude to people who are obviously inexperienced. Also, I would think it bad form to attack someone who is not in a position to respond.

If I were counseling a young person I would say that if you want to express yourself in your professional life, like some people do on radio talk shows, that’s how people will categorize you. It is best to vent in private and among friends. I don’t waste my time giving such advice to people who are my age or older.

In any case, if you really want to zing an obnoxious contractor or whoever, polite understatement works much, much better.

All and all, I don’t think terms like “clueless” and “witless” are appropriate.

You will note that I am trying to stick to the middle and avoid being a hypocrite. If in fact the PCO asked this commercially oriented firm to segregate an element of cost in a way that the firm doesn’t normally segregate costs, I have characterized that choice as “dumb.” It also goes against policy that has been expressed many times at high levels. We shouldn’t be imposing government unique requirements on commercial firms unless there is a very good reason to do so.


By longtimer on Sunday, February 23, 2003 - 05:00 pm:

Cherokee21, I do have great respect for Vern. I differ at times with some of his rare opinions where they extend into what might be called "political" or into views of what influences rule making. In matters of what the FAR says, what court decisions apply and wise contractual action I give great weight to what Vern says as he does the research, has the experience and the exposure to real thinkers in the field. There have been occasions where I did question him in those areas. Usually upon investing time in the question I found he'd been there and done that.

Eric brings up a very good point in connection with DAU and AAP. In academic publications there is a brutal process of peer review. A real concern with AAP is that it is an authority by association, yet apparently no peer review process is in effect. I think it would be much more effective to require peer review there. It is a process that drives out the weak conclusion or simple mistake. To some degree this board has peer review in the manner in which what some characterize as "attacks" force defending one's argument. What is missing here is a final summation of the result. Threads tend to just taper off, sometimes without any conclusion seemingly reached. One often has to read and even study the full thread and then try to sift out the conclusion--if any. That is the nature of discussion boards. AAP should be different.

It is evident to me is that DAU and particularly AAP are operating without the kind of rigor a "university" should exhibit (This is an example of the sort of thing Vern and I may differ about.). My impression, when attending, was that there was a great deal of rotation and too little funding for what is needed. Again, Eric's post makes a point in saying "there is a disconnect between the faith that the higher levels place in education and the quality education that is actually available." It is not only DAU, it is our entire "educational" system that is producing credentialed people that are indeed clueless.

Unlike Eric, I am perfectly willing to use such words. I do where I'm face to face with people. One reason I am anonymous here is that I'm personally better able to stay more objective and even "walk away" before getting into an endless argument with someone I consider clueless. I have better things to do after 30+ years in government. I am both concerned with and fully understand Vern's last paragraph on February 22, 2003 at 12:41 pm:

I guess I'm becoming bitter. I want excellence in all things in acquisition, and it seems clearer to me every day that I have little hope of getting any satisfaction in that regard. Many of my teaching collegues feel the same way. Perhaps I should stop taking potshots at AAP and even drop out of Wifcon Chat. I've thought about it a lot, lately. Goodness knows, I've got other things to do.

Within my family and reasonably close acquaintances I have five cases of university professors who have abandoned teaching explicitly because the students have increasingly been both unprepared and opinionated. They have seen people who have not put in the disciplined effort they have challenging their teaching. We have, as a society, somehow placed uninformed opinion on a par with years of specific study. People have confused a theoretical "I'm as good as you" with demonstrable difference in knowledge. They have endowed themselves with the gain without any pain of study or experience.

We are not going to see excellence anywhere and may indeed reach third world status unless we stop allowing such idiocy. Maybe it is hopeless. If everyone who knows different through hard work abandons the field the shammers will win. Vern is a professional who devotes time here to force us all to do work if we want to stay on his playing field. It improves the discussion. I choose to use my name and face in other areas (What are we coming to when a significant number of people cannot identify the Pacific Ocean on a map!). Vern provides his identified expertise to us here. It is needed.

By cherokee21 on Sunday, February 23, 2003 - 06:53 pm:

Well said, "longtimer"!

By Eric Ottinger on Sunday, February 23, 2003 - 07:22 pm:


Nicely said.

I don't advocate peer review for AAP because, in my opinion, that would probably just kill it. This whole enterprise of discussing procurement topics on the Internet is pretty tenuous.

You singled out DAU. I will note that wasn't my intention.

Otherwise, total agreement.


By longtimer on Monday, February 24, 2003 - 06:02 pm:

Eric, I probably left an impression I was not impressed with DAU. On the contrary. I not only got benefit from some of their offerings, I enjoyed the time and association. Within their means I think they do very good things.

What does bother me is that their means and their influence does not seem commensurate with the need for research and education in the field. Neither does their funding appear right. Considering the number of dollars passed from taxpayer through contracting and the amounts wasted through poor contracting the entire system is underfunded. At least DoD has put this institution in place. Considering the DoD contract dollar flow I think DAU should be funded at a higher level and chartered to do true university level RD&E (for Research, Development and Education) in the field.

We seem to keep talking about effective contracting, educating the contracting work force and improvement without putting either the money or effort behind the talk. Again, considering the scale of the budget passed through contracting, something seems to be wrong here.

I'd like to see the system beefed up. For one thing a funded AAP staff that does peer review of answers. The last time I looked into the thing it was not much more formal than this chat. Someone posted a question and someone, when time and inclination allowed, got around to posting an answer. It was sort of an informal and ad-hoc system.

Improvement would take formal organization and some funding. Perhaps even specific staffing is needed just to do initial reference and research work, farm out the questions to the "professors" and coordinate review of answers. I strongly suspect the present format was part of the Internet/interactive craze. It does serve a purpose, but you do get what you pay for. I think AAP could use more formal resources and funding.

By joel hoffman on Monday, February 24, 2003 - 10:15 pm:

Other than the in-house "professors" , DAU doesn't pay for the other respondents' time. They answer questions as time allows. I believe the folks administering the site are contractor personnel.
happy sails! joel hoffman

By formerfed on Tuesday, February 25, 2003 - 08:59 am:


Your comments reminded me of a article I read. I just searched for it but can't locate it. Much of what you said was reflected in that article, albeit at a higher level.

The article said there is a need for systematic training throughout the government for everyone involved in the acquisition process. It recognized that the prescribed 1102 training is good, but that's only a starter. For example, there's a huge push on for use of performance-based contracting. While many 1102's received training in that, their program/technical counterparts do not. So how is an 1102 going to get program requirements stated in terms sufficient for a performance-based award?

The author recommended a complete assessment of all training needed throughout. Next sufficient money is provided. Then everyone is required to take it most likely through some FAI and/or DAU initiative. Finally there's a periodic assessment and re-evaluation of needs. The overall theme expressed is that so much is at stake in making and administering good contracts but a formal and funded government wide training program is needed.