This paper discusses a two-part study undertaken to find out what midsized and smaller systems know about capacity development and what they need in order to comply with Safe Drinking Water Act requirements. Three contradictions were found: capacity development provisions bring both more risk and more opportunity; the provisions take more time but also save time;and, the provisions allow states flexibility while requiring them, as a conditon of receiving 100 percent of their Drinking Water State Revolving Fund allotment, to help systems acquire and maintain capacity. Suggested steps to resolve these paradoxes are presented for consideration by state primacy agencies and other groups. Includes 8 references,.