The Windows Time service in Windows Server 2003 does not synchronize time with a time server if the precision value of the NTP response is less than -30

http://blogs.mcbsys.com/mark/post/Hotfix-Lets-W32time-Sync-with-Very-High-Precision-NTP-Servers.aspx

If you are seeing a recurring amount of W32Time errors in your server’s System log, it might be due to a recent change at the time server itself whereby it became a “high precision” server and your server’s Windows time client piece isn’t that precise to communicate with it.

SYMPTOMS

In Windows Server 2003, the Windows Time service does not synchronize time with a time server if the precision value of the Network Time Protocol (NTP) response is less than -30. Instead, the Windows Time service discards the response. For example, this problem occurs when the precision value of the NTP response is -31.
When this problem occurs, the Windows Server 2003-based computer may be unable to use the time server that has the best precision.

CAUSE

This problem occurs because the Windows Time service in Windows Server 2003 supports only precision values from -30 through -3. If the Windows Time service receives an NTP response whose precision value is outside this range, the service discards the response.

Hotfix availabe read about it here:

The Windows Time service in Windows Server 2003 does not synchronize time with a time server if the precision value of the NTP response is less than -30

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