
Overview: Program Management in the Department of Defense • 21
the cost-sharing concept. Oen times, these incentives
have limits, so that the ultimate cost to the buyer is capped.
Woe to the PM who manages a program that exceeds the
protection!
• T&M—is type of contract is best suited to programs where it is
not possible to accurately estimate the amount of work needed to
complete a work scope. Research work, in which it may not be clear
that a particular problem even can be solved, would be an excellent
candidate for a T&M contract. Here, the customer is actually buy-
ing work (“time”), usually in terms of engineering hours and pro-
toty