I'm new to this field, but I often hear the term, "Milestone," yet I cannot find it in the FAR or DFAR's. What's up with that??

By Anon on Friday, May 17, 2002 - 02:31 pm:

Milestones are normally locally promulgated, you may limit yourself to just a few such as PR acceptance, solicitatiion issue, receipt of offers, award...or you may have many, synopsis date, solicitation issue, receipt of offers, conclusion of initial evaluations, start discussion, receive revised offers, final source selection decision, etc, etc.

By Eric Ottinger on Friday, May 17, 2002 - 02:38 pm:

Ophelia,

Think of a milestone as a small deadline on the road to the final deadline.

For instance, if you are building a house, "Completing the foundation" would be a milestone.

Eric

By Ophelia on Friday, May 17, 2002 - 02:47 pm:

Thanks, Anon and Eric for the information. I sort of understand the term, but I'm wondering why the term is not in the FAR? It seems to be widely used.

Anon, we recently won a contract and attempted to have a milestone called "contract award." The customer would not accept it as a legitimate milestone.

Another question: is a contractor obligated to agree to milestones?

Thanks again.

By Eric Ottinger on Friday, May 17, 2002 - 03:02 pm:

Ophelia,

It is more of an industrial engineering or program management term than a contract term.

However, there has recently been a push to use "milestone billings" in preference to "progress payments."

"Milestone" is one of those words that everyone uses and no one thinks about very much.

There are some contract clauses that may require the contractor to systematically track progress on the contract. In this sense, the contractor may be obligated to agree to milestones.

Eric

By Ophelia on Friday, May 17, 2002 - 03:08 pm:

Thanks, Eric.

By joel hoffman on Friday, May 17, 2002 - 03:44 pm:

Ophelia, a contractor is only obligated to agree to comply with the terms of the contract. If a milestone is a contract condition, the Contractor must meet the milestone.

On the other hand, if you are negotiating a new contract, technically the other party is an offeror, and no - they don't have to agree to the milestone; they can try to negotiate. However, eventually, the owner and offeror must mutually agree on the contract terms, in order to seal the deal and award the contract. happy sails! joel hoffman

By Ophelia on Monday, May 20, 2002 - 01:21 pm:

Thanks, Joel.

By Vern Edwards on Tuesday, May 21, 2002 - 10:20 pm:

Ophelia:

The term milestone does appear in the FAR. See FAR § 32.904(d)(1)(i). Also, see FAR Subpart 32.10, Performance-Based Payments, specifically, FAR § 32.1004(a)(1), which describes a milestone as a "specifically described" event. The term appears in DFARS, too. See DFARS § 207.105(a)(1)(C) and (D).

By AnonymousMe on Thursday, May 23, 2002 - 10:16 am:

FAR Part 7.105 also includes a list of milestones for the acquisition cycle.

By Anonymous on Friday, May 24, 2002 - 09:56 am:

Ophelia is apparently a contractor ("we recently won a contract and attempted to have a milestone called 'contract award.' The customer would not accept it as a legitimate milestone.").

The FAR § 7.105 milestones are largely internal government milestones that may be transparent to the contractor. The milestones mentioned in § 32.904 with reference to payment are more likely to be imposed on the contractor through Departmental, agency policy or program management, not the FAR. A few, such as weapon system live fire test requirements, are imposed by law.

Joel is correct. A contractor is only obligated to follow the contract requirements. I'd expand on that a bit from my perspective as a program office type. Some milestone activity will be imposed through the contract (shame on the PMO if not) while others may remain internal. A contractor must perform as specified for those directly imposed; however, I think a wise contractor will also stay tuned to internal milestones they know about.

Milestones are essentially decision points. Do events at this milestone measurement warrant a particular action? Do we continue this contract? Do we move to production? Do we install? Do we decide this is a lost cause and wind down? Even if not a contractor-government milestone they will often have an effect on the contractor's well being. It is to a contractor's benefit to be aware of these decision points and make the outcome positive.

Ophelia does not say, but I suspect she is involved in a contract that is asking the contractor's input on effective milestone definition and scheduling. Before the reforms of the early 1990s the effective tool of milestone use had become so formalized and ritualized that they were being identified with waste as often as effective program management. They were dog and pony shows often attended by executives on a road trip. They tended to be ritualized with dress up, "head tables," very formal schedules, luncheons and predictable outcomes. Some milestones were making little sense.

One reform effort that made sense was to involve the contractor in defining logical milestone content and scheduling. I saw that work well. I also saw it "captured" by those used to the old way and made into what was legitimately associated with useless waste. A contracting shop may not be fully aware of programmatic milestones. They will differ somewhat depending on what is being done. For example, software development milestones may have no bearing at all on another type of development. The company's program manager and staff had better be fully up on appropriate milestones for the program type. Failure to do so will likely result in those decision points resulting in negatives all around.