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Message: RE: Anyone know just exactly what BOW means by the word ``PARTNER``?

RE: Anyone know just exactly what BOW means by the word ``PARTNER``?

posted on Oct 17, 2005 08:05AM
Recall my novel from yesterday (non-techie business considerations, contract type, discovery ownership, etc.); I suspect they have a cost-plus type development contract, with the ``plus`` being fees, probably in the form of ``incentive fees`` for achieving preassigned performance milestones (sometimes called ``Award Fees``, though the ``award`` is actually a ``reward`` for achieving something). That`s how you get a ``best effort`` on an arms length development contract. Sometimes these things can be quite elaborate in such a contract. Think time line and an ``event``. As you move across the time line from left to right, the incentive fee for the event gets smaller and smaller (i.e., sooner is better) until, at some point, the fee becomes zero (so the contractor was merely performing to cover costs). They can even kick in penalties for late delivery of the ``event``; default of the contract for non-performance, or a structure where late achievemnet on a milestone affects/decreases the available fee for achieving the next milestone (though, since the next one is also on a time line, there is a possibility of recovery for very early achievement). You get the drift. Development contracts can get very complex, because by virtue of it being a ``development`` contract with no gaurantee of success, both parties (especially the buying party) want to include all kinds of things to protect their interests (and enable escape). An, in this case, enable a lot of control! LOL

Suffice to say, if Wencor knows how to write a good contract, Triad has an incentive for a best effort and bad things happen for anything less.

SGE

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