Government contracting glossary: over 100 terms in plain English

This glossary explains more than 100 words you will meet in government notices and contracts, in plain English. Each entry is short; follow the links to the full lessons, and check the official source named in a solicitation when a term decides what you must do.

Registration and identity

• SAM.gov: The System for Award Management, the federal site where businesses register to sell to the government and where federal opportunities are posted. SAM.gov registration is free.
• Entity registration: Your business's record in SAM.gov. It must be active when you submit most federal offers, and renewed every 365 days.
• UEI (Unique Entity ID): The 12-character ID SAM.gov assigns to your business. See UEI and CAGE codes.
• CAGE code: A five-character ID for your business location, assigned through the Defense Logistics Agency's CAGE program after you register.
• Login.gov: The government sign-in service SAM.gov uses. Keep your account and password to yourself.
• EIN: Employer Identification Number, the federal tax ID the IRS gives a business. It is free from the IRS.
• TIN: Taxpayer Identification Number, a general term that covers an EIN or a Social Security number.
• NAICS code: A six-digit code for an industry. Buyers label each notice with one, and it sets the size standard.
• PSC: Product and Service Code, a four-character code that describes what is being bought.
• Size standard: The SBA limit, in receipts or employees, under which a business counts as small for a NAICS code.
• Affiliation: A relationship, such as common ownership or control, that makes the SBA count two businesses together for size.
• Reps and certs: Representations and certifications, formal statements you make about your business in SAM.gov and in offers. Answer each one truthfully.
• APEX Accelerator: A local center, funded by the Department of Defense, that gives free help with government contracting.
• SBDC: Small Business Development Center, a free counseling office for small businesses.
• Vendor registration: The account a state or local buyer asks you to create on its own bid portal, separate from SAM.gov.

Notices and solicitations

• Notice: Any posting about a planned or completed buy, such as a solicitation, a Sources Sought or an award notice.
• Solicitation: A document that asks for offers. It can lead to a contract.
• RFP (Request for Proposals): A solicitation that asks for a proposal the buyer evaluates and may negotiate. See RFP, RFQ, IFB and RFI.
• RFQ (Request for Quotations): A request for a price quote, common in simplified buys.
• IFB (Invitation for Bids): A sealed bidding solicitation, usually awarded to the lowest priced bid that meets every requirement.
• RFI (Request for Information): Market research. The buyer asks questions and makes no award from the answers.
• Sources Sought: A market research notice asking who can do the work. Answering it can shape whether the work is set aside. See Sources Sought: why to answer them.
• Presolicitation notice: An early notice that a solicitation is coming.
• Combined synopsis and solicitation: A notice that is both the announcement and the solicitation itself, common for commercial items.
• Special notice: A notice about events, such as industry days or draft documents, rather than a buy.
• Award notice: A notice that names who won a contract and for how much.
• Amendment: A change to a solicitation, such as a new due date or a corrected requirement. Read every one.
• Statement of Work (SOW): The section that says what work must be done.
• Performance Work Statement (PWS): A work description that states the results the buyer wants, not how to get them.
• Statement of Objectives (SOO): A short list of goals that asks offerors to propose the work themselves.
• Section L: In many federal solicitations, the instructions that say what to submit and how.
• Section M: In many federal solicitations, the evaluation factors that say how offers are judged.
• Due date: The deadline for offers, with a time and a time zone. Late offers are usually rejected.
• Questions deadline: The last date to send questions to the contracting officer.
• Industry day: A meeting where a buyer explains an upcoming buy to interested companies.
• Forecast: An agency's list of planned future buys. A forecast is a lead, not a promise.

Small business programs and set-asides

• Set-aside: A buy reserved for a group of businesses, such as small businesses or a certified program. See Set-asides in plain words.
• Total small business set-aside: A buy open only to small businesses under the notice's size standard.
• Partial set-aside: Part of a buy reserved for small businesses while the rest is open.
• Rule of two: The rule that a buy is generally set aside for small businesses when the buyer expects offers from at least two capable small businesses at fair prices.
• 8(a): SBA's business development program for small businesses owned by people who meet its disadvantage tests.
• HUBZone: SBA's program for small businesses in Historically Underutilized Business Zones.
• WOSB: Women-Owned Small Business, an SBA program for small businesses at least 51% owned and controlled by women.
• EDWOSB: Economically Disadvantaged Women-Owned Small Business, the WOSB program with added economic tests.
• SDVOSB: Service-Disabled Veteran-Owned Small Business, certified through SBA's VetCert.
• VOSB: Veteran-Owned Small Business.
• Unrestricted: Also called full and open competition. Any responsible business may bid.
• Sole source: A planned award to one business without competition, which must be justified. See Sole-source notices and how to challenge one.
• Capability statement: A one-page summary of what your business does, sent to buyers and primes. See Write a one-page capability statement.
• Limitations on subcontracting: Rules that cap how much of a set-aside contract's money can go to companies that are not similarly situated.
• Similarly situated entity: A subcontractor that holds the same small business status as the prime on a set-aside.
• Mentor-protege: An SBA program where an established company helps a small business, and the two may bid together as a joint venture.
• Joint venture: Two or more businesses that bid together under one agreement.
• Teaming agreement: A contract between a prime and a subcontractor about bidding together. See Teaming and subcontracting.
• Prime contractor: The business that holds the contract with the government.
• Subcontractor: A business hired by the prime to do part of the work.
• Subcontracting plan: A plan large primes file showing how they will use small businesses on big contracts.

Evaluation and award

• Offer: A response that the buyer can accept to form a contract.
• Offeror: A business that submits an offer.
• Responsive: A bid that meets every material requirement of the solicitation.
• Responsible: A business the buyer judges able to perform, with the capacity, integrity and finances to do the work.
• Best value: The buyer's choice of the offer that gives the most benefit, as the evaluation factors define it.
• LPTA: Lowest Price Technically Acceptable. The award goes to the lowest priced offer that meets the technical bar.
• Tradeoff: An evaluation where the buyer may pay more for a better technical offer.
• Evaluation factors: The criteria the solicitation says it will judge, such as technical approach, past performance and price.
• Past performance: The record of how well you did similar work. See Past performance when you have none.
• Neutral rating: How past performance is treated for an offeror with no relevant record, under the rules for negotiated buys.
• Competitive range: The offers the buyer keeps for discussions in a negotiated buy.
• Discussions: Exchanges with offerors in the competitive range, after which they may revise their proposals.
• Clarifications: Limited exchanges to clear up minor points, without letting an offeror revise its proposal.
• Compliance matrix: Your table of every requirement and where your response meets it. See Build a compliance matrix.
• Proprietary legend: A marking that asks the government to protect your confidential data. See Mark your proposal proprietary.
• Debrief: An explanation from the buyer of how your offer was evaluated. Ask for one every time. See Debriefs: ask every time.
• Bid protest: A formal challenge to a solicitation or an award, filed with the agency, the GAO or the Court of Federal Claims.
• Contracting officer (CO): The government official with authority to sign and change contracts.
• Contracting officer's representative (COR): The person who watches the work day to day for the contracting officer.

Contract types and vehicles

• Firm fixed price (FFP): You agree to a set price, and you carry the risk if the work costs more.
• Time and materials (T&M): You are paid hourly rates plus the cost of materials, up to a ceiling.
• Cost reimbursement: You are paid allowable costs plus a fee. These need an approved accounting system.
• IDIQ: Indefinite Delivery, Indefinite Quantity. A contract with a range of work, ordered over time through task or delivery orders.
• Task order: An order for services under an IDIQ or another contract vehicle.
• Delivery order: An order for products under an existing contract.
• BPA: Blanket Purchase Agreement, a simple way for a buyer to place repeat orders with a supplier.
• GWAC: Governmentwide Acquisition Contract, a contract for information technology that many agencies can order from.
• Multiple-award contract: One solicitation that awards contracts to several companies, which then compete for orders.
• GSA Schedule: Also called the Multiple Award Schedule, a GSA contract vehicle that agencies use to order commercial products and services.
• Contract vehicle: Any existing contract, such as a schedule or an IDIQ, that buyers order through.
• Option period: A period the government may choose to add, such as an extra year, at its discretion.
• Base period: The first period of a contract, before any options.
• Commercial product or service: Something sold to the general public, which allows simpler buying rules.

Money, pricing and payment

• Micro-purchase threshold: The dollar line, $15,000 for most federal buys, under which a buyer can usually purchase without competing quotes.
• Simplified acquisition threshold: The dollar line, $350,000 for most federal buys, up to which simpler steps apply.
• Obligation: Money the government has committed to a contract. USAspending.gov shows obligations, not unit prices.
• Ceiling: The most that can be spent under a contract or order.
• Price realism: A check that a price is not too low to do the work.
• Price reasonableness: A check that a price is not too high.
• Wage determination: The minimum wages and benefits required for certain service and construction contracts.
• Invoice: Your bill to the government, sent through the system the contract names.
• Prompt payment: Rules that generally require federal buyers to pay a proper invoice within 30 days, with interest if late.
• EFT: Electronic funds transfer, how the government pays the bank account in your SAM.gov registration.
• Bond: A surety company's promise to pay if you fail to keep your bid or finish the work, such as a bid, performance or payment bond, often required on construction work.
• Retainage: Part of a payment held back until work is finished, common on construction.

After the award

• Kickoff meeting: The first meeting after award, where the buyer and contractor confirm how the work will run.
• Modification: A written change to a contract, signed by the contracting officer.
• Deliverable: A product, report or service the contract requires you to hand over.
• CPARS: The Contractor Performance Assessment Reporting System, where federal buyers rate your work on a contract.
• Closeout: The final steps that end a contract, such as last invoices and releases.
• Termination for convenience: The government's right to end a contract when it no longer needs the work, with payment for work done.
• Termination for default: Ending a contract because the contractor failed to perform.
• Records retention: How long you must keep contract records after final payment, as the contract says.

Security and compliance

• CMMC: The Cybersecurity Maturity Model Certification, the Department of Defense's program for protecting information on contractor systems. See CMMC Level 1 in plain words.
• FCI: Federal Contract Information, information about a contract that is not meant for the public.
• CUI: Controlled Unclassified Information, sensitive government information that needs extra safeguards.

Texas terms

• ESBD: The Electronic State Business Daily, where Texas state agencies post bids. See Texas state bids: the ESBD and the CMBL.
• CMBL: The Centralized Master Bidders List, the Texas list of vendors that state agencies use to send bids.
• VetHUB: The Texas program, once called HUB, for businesses owned by service-disabled veterans. See Texas HUB is now VetHUB.
• HSP: The Texas subcontracting plan required on many state solicitations of $100,000 and up.

Where do these definitions come from?

From the Federal Acquisition Regulation, SAM.gov, SBA and the Texas Comptroller. When a solicitation defines a term, its definition controls for that bid.

What if a term is not here?

Search Learn, or ask in Help. We add terms people ask about.