Government contracting glossary
Plain-English definitions of the terms you’ll run into when bidding on government contracts — from RFP and set-aside to IDIQ and UEI.
- 8(a) Business Development Program
- An SBA program that reserves certain federal contracts for small businesses owned by socially and economically disadvantaged individuals. Participation lasts up to nine years.
- Amendment
- An official change to a solicitation before bids are due — revising the scope, requirements, dates, or answering vendor questions. Bidders usually must acknowledge each amendment.
- Award Notice
- A public notice announcing who won a contract and, often, the amount. It marks the end of a procurement's competitive phase.
- Best Value
- An evaluation approach where the government may pay more for a higher-quality or lower-risk proposal, weighing price against technical merit and past performance — the opposite of a strict low-bid award.
- Bid Bond
- A guarantee (often 5–10% of the bid) that a bidder will honor its bid and sign the contract if selected. Common on construction solicitations.
- BPA (Blanket Purchase Agreement)
- A simplified arrangement for recurring purchases from a supplier at pre-negotiated terms, so agencies can order repeatedly without a new contract each time.
- CAGE Code
- The Commercial and Government Entity code — a five-character ID assigned to your business during SAM.gov registration, used to identify you across federal systems.
- Capability Statement
- A one-page marketing document summarizing what your company does, your differentiators, past performance, and codes (NAICS, UEI, CAGE) — the government's version of a resume.
- CLIN (Contract Line Item Number)
- A numbered line in a contract or solicitation identifying a specific deliverable, quantity, and price. Proposals are often priced CLIN by CLIN.
- Contracting Officer (CO)
- The government official with legal authority to enter into, administer, and terminate contracts on behalf of the agency.
- COR (Contracting Officer's Representative)
- A government employee delegated by the CO to monitor a contractor's technical performance day to day, but without authority to change the contract.
- Firm-Fixed-Price (FFP)
- A contract type where the price is set and does not change regardless of the contractor's actual costs — the contractor bears the risk of cost overruns.
- FAR (Federal Acquisition Regulation)
- The primary rulebook governing how U.S. federal agencies buy goods and services. Solicitations cite FAR clauses that become part of the contract.
- Full and Open Competition
- A procurement open to any qualified vendor, not restricted to a set-aside category or a single source.
- GSA Schedule (MAS)
- The GSA Multiple Award Schedule — long-term, government-wide contracts with commercial vendors at pre-negotiated pricing, so agencies can buy directly off the schedule.
- GWAC (Government-Wide Acquisition Contract)
- A pre-competed, multiple-award IT contract vehicle that any federal agency can order from (e.g., Alliant, 8(a) STARS).
- HUBZone
- An SBA program that gives contracting preferences to small businesses located in and employing people from Historically Underutilized Business Zones.
- IDIQ (Indefinite Delivery / Indefinite Quantity)
- A contract that sets terms and a ceiling but not exact quantities; the government issues task or delivery orders against it over time.
- IFB (Invitation for Bid)
- A solicitation used for sealed bidding, awarded to the lowest responsive, responsible bidder — typically for well-defined goods or construction where price is the deciding factor.
- LPTA (Lowest Price Technically Acceptable)
- An evaluation method that awards to the cheapest proposal that meets all the minimum technical requirements — no extra credit for exceeding them.
- Micro-purchase
- A very small purchase (under the micro-purchase threshold) that agencies can make with minimal competition, often on a government purchase card.
- Modification
- A change to a contract after award — adjusting scope, funding, period of performance, or terms. Distinct from an amendment, which changes a solicitation before award.
- NAICS Code
- A North American Industry Classification System code that categorizes a business by industry. It drives which small-business size standard and set-asides apply to a contract.
- Past Performance
- Your track record on previous contracts — quality, timeliness, and cost control. It is a common, heavily weighted evaluation factor.
- Performance Bond
- A surety guarantee that the contractor will complete the work as specified; if they default, the surety covers the cost to finish.
- Period of Performance
- The window during which the contractor must deliver the goods or services — the contract's start and end dates, including any option periods.
- Place of Performance
- Where the work will actually be done or delivered. It is how many state and local opportunities are geographically targeted.
- Presolicitation
- An early public notice that a solicitation is coming, giving vendors time to prepare before the formal RFP or IFB is released.
- Prime Contractor
- The company that holds the contract directly with the government and is responsible for delivery — it may hire subcontractors to perform parts of the work.
- Protest
- A formal challenge to how a solicitation was run or a contract awarded, filed with the agency, GAO, or the courts by an interested party.
- PSC (Product Service Code)
- A federal code classifying what is being bought (a product or a service), complementing the NAICS code that classifies the industry.
- PWS (Performance Work Statement)
- A statement of work written in terms of measurable outcomes and standards rather than prescriptive steps, letting the contractor decide how to meet them.
- RFI (Request for Information)
- A market-research request where the government asks vendors for information or capabilities, with no award — used to shape a future solicitation.
- RFP (Request for Proposal)
- A solicitation for complex needs where vendors submit technical and price proposals, evaluated on best value rather than price alone.
- RFQ (Request for Quotation)
- A request for pricing on defined goods or services, typically for simpler or smaller buys; a quote is an offer the government may accept.
- SAM.gov (System for Award Management)
- The official U.S. government site where businesses register to do federal business and where federal contract opportunities and awards are posted.
- Set-aside
- A contract reserved for a specific category of business — most commonly small businesses or subcategories like WOSB, SDVOSB, HUBZone, or 8(a).
- Simplified Acquisition (SAP)
- Streamlined procedures for purchases below the Simplified Acquisition Threshold, with less paperwork and faster award than full FAR procedures.
- Sole Source
- An award made to a single vendor without competition, justified when only one source can meet the need (or under certain set-aside authorities).
- Sources Sought
- A notice asking which businesses can perform a requirement, used for market research — often to decide whether to set the contract aside for small business.
- SOW (Statement of Work)
- The section of a solicitation that defines the tasks, deliverables, and requirements the contractor must fulfill.
- Subcontractor
- A company hired by the prime contractor to perform part of the work; subcontractors do not hold the contract with the government directly.
- Task Order
- An individual order for work issued under an IDIQ or other multiple-award contract, specifying the scope, price, and schedule for that piece.
- Teaming Agreement
- An arrangement where a prime and one or more other firms agree to pursue and perform a contract together, defining roles and work share.
- Time and Materials (T&M)
- A contract type that pays for labor at fixed hourly rates plus the cost of materials — used when the scope can't be estimated precisely up front.
- UEI (Unique Entity Identifier)
- The 12-character ID assigned to your business in SAM.gov, which replaced the DUNS number in 2022 as the government's standard entity identifier.