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NPS ARCHIVE 1997 MULLIN, D. NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS A DICTIONARY OF ACQUISITION AND CONTRACTING TERMS by Drew K. Mullin June 1997 ThesisAdvisor: David V. Lamm Thesis M8945 Approved for public release; distribution is unlimited. OXLIBRARY POSTGRADUATESCHOOL I REPORT DOCUMENTATION PAGE FonnApprovedOMBNo.0704-0188 Publicreportingburdenforthiscollectionofinformationisestimatedtoaverage1hoarperresponse,includingthetimeforreviewinginstruction,searchingexisting datasources,gatheringandmaintainingthedataneeded,andcompletingandreviewingthecollectionofinformation.Sendcommentsregardingthisburdenestimateor anyotheraspectofthiscollectionofinformation,includingsuggestionsforreducingthisburden,toWashingtonHeadquartersServices,DirectorateforInformation OperationsandReports,1215JeffersonDavisHighway,Suite1204,Arlington,VA22202-4302,andtotheOfficeofManagementandBudget,PaperworkReduction Project(0704-0188)WashingtonDC20503. 1. AGENCYUSEONLY 2. REPORTDATE REPORTTYPEANDDATESCOVERED June 1997 Master's Thesis 4. TITLEANDSUBTITLE FUNDINGNUMBERS : A DICTIONARY OF ACQUISITION AND CONTRACTING TERMS 6. author(S) Mullin, Drew K. 7. PERFORMINGORGANIZATIONNAME(S)ANDADDRESS(ES) PERFORMINGORGANIZATION Naval Postgraduate School REPORTNUMBER Monterey CA 93943-5000 9. SPONSORING/MONITORINGAGENCYNAME(S)ANDADDRESS(ES) 10. SPONSORING/MONITORING AGENCYREPORTNUMBER 11. SUPPLEMENTARYNOTES: Theviews expressedinthisthesis arethoseofthe authoranddonot reflectthe officialpolicyorposition ofthe DepartmentofDefense orthe U.S. Government. 12a. DISTRIBUTION/AVAILABILITYSTATEMENT 12b. DISTRIBUTIONCODE Approved forpublic release; distribution is unlimited. 13. ABSTRACT (maximum200words) This thesis effort is a continuance ofresearchto determine, through a consensus ofopinion among contracting professionals, a definitionforcurrentcontracting terminology. This researchwas first initiated by Lieutenant Commander Daniel L. Ryan, SupplyCorps, United States Navyand was later accomplished byothers at both the Naval Postgraduate School, Monterey, California, and attheAir Force Instituteof Technology, Wright-PattersonAir Force Base, Ohio. Aswith the previous efforts, thisthesis examined literarysources forthecurrentdefinitions and usageofthe chosen terms. Adefinition for each oftwenty- fivetermswas synthesized, incorporated inan open ended survey, and sentto contracting professionals affiliated withthe National Contract ManagementAssociation. Respondentcomments wereanalyzed, and, when appropriate, incorporated inthefinal, proposed definitions. 14. SUBJECTTERMS: DictionaryofContractingTerms 15. NUMBEROFPAGES 192 16. PRICECODE 17. SECURITYCLASSIFICA- 18. SECURITYCLASSIFI- 19. SECURITY 20. LIMITATIONOFABSTRACT TIONOFREPORT CATIONOFSTHISPAGE CLASSIFICATION UL Unclassified Unclassified OFABSTRACT Unclassified NSN7540-01-280-5500 StandardForm298(Rev. 2-89) PrescribedbyANSIStd.239-18298-102 Approved for public release; distribution is unlimited. A DICTIONARY OF ACQUISITION AND CONTRACTING TERMS Drew K. Mullin (/ Lieutenant Commander, Supply Corps, United States Navy B.S., Arizona State University, 1979 M.A., Webster University, 1986 Submitted in partial fulfillment ofthe requirements for the degree of MASTER OF SCIENCE IN MANAGEMENT from the NAVAL POSTGRADUATE SCHOOL June 1997 OXLIBRARY POSTGRADUATESCHOOL CA ^043^101 ABSTRACT This thesis effort is a continuance of research to determine, through a consensus of opinion among contracting professionals, a definition for current contracting terminology. This research was first initiated by Lieutenant Commander Daniel L. Ryan, Supply Corps, United States Navy and was later accomplished by others at both the Naval Postgraduate School, Monterey, California, and at the Air Force Institute ofTechnology, Wright-Patterson Air Force Base, Ohio. As with the previous efforts, this thesis examined literary sources for the current definitions and usage ofthe chosen terms. A definition for each oftwenty-five terms was synthesized, incorporated in an open ended survey, and sent to contracting professionals affiliated with the National Contract ManagementAssociation. Respondent comments were analyzed, and, when appropriate, incorporated in the final, proposed definitions. VI . TABLE OF CONTENTS INTRODUCTION I. 1 BACKGROUND A. 1 B. SCOPE, ASSUMPTIONS, AND LIMITATIONS 3 1. Scope 3 2. Assumptions 3 3. Limitations 3 C. RESEARCH QUESTIONS AND BENEFITS 4 Research Questions 4 1. 2. Benefits 4 D. ORGANIZATION OF STUDY 5 METHODOLOGY E. 5 1. Generation ofaList ofCandidate Terms and Term Selection 6 2. Performance ofaLiteratureReview ofEach Selected Term 7 . 3. Synthesis ofInitial DefinitionsBasedUpon theLiterature Review 4. Survey of Procurement Professionals 8 5. Analysis and Incorporation ofRespondent Comments into a Final Definition 9 SUMMARY F. 10 H. DEVELOPMENT OF INITIAL PROPOSED DEFINITIONS 11 . . A. INTRODUCTION 11 TERMS B. 11 1. Alternative Dispute Resolution (ADR) 11 2. Arm'sLength Relationship 13 3. Auctioning 14 4. Bidder 15 5. Boilerplate 16 6. Buy-In 17 7. Buyer-SellerRelationship 19 vu 8. Commercial Item 20 9. Contracting Officer's Technical Representative (COTR) 22 . 10. Delinquency 24 11. Equitable Adjustment 25 12. Fact Finding 27 13. Fee 28 14. Improvement Curve 30 15. Market Research 32 16. Mediation 34 17. Memorandum ofAgreement (MoA) 35 18. Negotiation 36 19. PerformanceBased Contracting 38 20. Privity ofContract 40 21. Procurement Lead Time (PLT) 41 22. Reasonableness 42 23. Single Process Initiative 44 24. Source Selection 45 25. Unallowable Cost 46 SUMMARY C. 47 m. ANALYSIS OF SURVEY RESPONSES 49 A. INTRODUCTION 49 B. TERMS 50 1. Alternative Dispute Resolution (ADR) 50 2. Arm's Length Relationship 53 3. Auctioning 56 4. Bidder 59 5. Boilerplate 63 6. Buy-In 65 7. Buyer-SellerRelationship 69 8. Commercial Item 73 9. Contracting Officer's Technical Representative (COTR) 77 . 10. Delinquency 81 11. Equitable Adjustment 84 12. Fact Finding 89 13. Fee 93 14. Improvement Curve 97 15. Market Research 100 16. Mediation 103 17. Memorandum ofAgreement (MoA) 107 18. Negotiation 110 VUl