Government Contracting Glossary: Acronyms & Terms A to Z

8(a) 8(a) Business Development Program: An SBA program that helps small businesses owned by socially and economically disadvantaged people grow through set-aside and sole-source contracts. Participation lasts up to nine years.
APEX Accelerator: A free, government-funded counseling office that helps businesses learn to sell to federal, state and local governments. APEX Accelerators were formerly called Procurement Technical Assistance Centers, or PTACs.
Award: The government's decision to give a contract or order to a company. The award notice and signed contract tell the winner the price, terms and start date.
Base period: The first, guaranteed period of a contract before any option periods. Many service contracts have a one-year base period followed by option years.
Best value: An approach where the agency weighs price together with factors such as technical approach and past performance. It allows the agency to pay more for a stronger proposal.
Bid bond: A surety bond submitted with a bid that promises the bidder will sign the contract and provide the other required bonds if it wins. Federal bids that require a performance bond also require a bid guarantee of at least 20 percent of the bid price, up to $3 million.
Bid protest: A formal challenge to a solicitation or contract award by an interested bidder. Protests can be filed with the agency, the Government Accountability Office or the U.S. Court of Federal Claims.
BPA Blanket Purchase Agreement: A simplified arrangement for filling repeat needs with a trusted supplier, often set up under a GSA Schedule contract. Orders are placed against the BPA as needs come up.
CAGE code Commercial and Government Entity code: A five-character code that identifies a business for federal contracting. It is assigned automatically when you register in SAM.gov.
Capability statement: A one- or two-page summary of what your company does, its NAICS codes, certifications, past performance and contact details. Businesses share it with agencies and prime contractors.
CO Contracting Officer: The government official with legal authority to sign, change and end contracts. Only the CO can commit the government to spend money or change contract terms.
Commercial product or service: An item or service of a type sold to the general public, as defined in the FAR. Buying commercial items uses simpler procedures and fewer special clauses.
Cooperative purchasing: A contract awarded by one government or purchasing group that other public agencies can also use. It saves buyers from running a separate competition.
COR Contracting Officer's Representative: A government employee named by the contracting officer to monitor day-to-day contract performance. The COR cannot change the price, scope or terms of the contract.
Cost-reimbursement contract: A contract that pays the contractor's allowable costs plus a fee, up to a set ceiling. It requires an accounting system that can track costs by contract.
CPARS Contractor Performance Assessment Reporting System: The system where agencies rate contractor performance on a five-level scale. Contractors have up to 14 calendar days to comment on each evaluation.
CPFF Cost-Plus-Fixed-Fee: A cost-reimbursement contract that pays allowable costs plus a fee set at the start. By law the fee is capped at 10 percent of estimated cost, or 15 percent for research and development.
Davis-Bacon Act: A law requiring contractors on federal construction contracts over $2,000 to pay workers at least the local prevailing wages and fringe benefits. The rates appear in a wage determination in the contract.
Debriefing: A meeting or written explanation from the agency about how your proposal was evaluated and why the award was made. You request it in writing within three days after notice of the award or of your exclusion.
DFARS Defense Federal Acquisition Regulation Supplement: The Defense Department's additions to the FAR. It applies to contracts with DoD agencies such as the Army, Navy and Air Force.
eBuy: GSA's online system where agencies post requests for quotes to GSA Schedule holders. Only schedule contractors in the matching categories can see and answer the requests.
EDWOSB Economically Disadvantaged Women-Owned Small Business: A women-owned small business whose owners also meet SBA's economic disadvantage limits. EDWOSBs can compete for set-asides in more industries than other women-owned firms.
eSRS Electronic Subcontracting Reporting System: The government system where large prime contractors report progress toward their small business subcontracting goals. Reports are filed twice a year and once a year depending on the report type.
FAR Federal Acquisition Regulation: The main set of rules that federal agencies follow when buying goods and services. It is published on acquisition.gov and is being rewritten through the Revolutionary FAR Overhaul that began in 2025.
FFP Firm-Fixed-Price: A contract with one set price that does not change based on the contractor's actual costs. It is the most common contract type for commercial products and well-defined services.
FPDS Federal Procurement Data System: The government's database of federal contract awards and modifications. Its data feeds USAspending.gov and award searches on SAM.gov.
GAO Government Accountability Office: An independent agency of Congress that, among other duties, decides bid protests. A GAO protest costs $500 to file and is decided within 100 days.
GSA General Services Administration: The federal agency that manages government buildings, vehicles and governmentwide buying programs. It runs the Multiple Award Schedule and several large contract vehicles.
GSA Advantage: GSA's online store where agencies search and buy from GSA Schedule contractors. Schedule holders upload their approved products, services and prices as a catalog.
GWAC Governmentwide Acquisition Contract: A multiple-award IT contract that any federal agency can use to place orders. GWACs are run by agencies such as GSA and NASA.
HUBZone Historically Underutilized Business Zone: An SBA program for small businesses located in and employing people from economically distressed areas. Certified firms can compete for HUBZone set-asides and receive a price preference in full and open competitions.
IDIQ Indefinite Delivery, Indefinite Quantity: A contract that sets prices or rates for a period of years and a guaranteed minimum, with the exact amount ordered later. Work is issued through task orders or delivery orders.
IFB Invitation for Bids: A solicitation used in sealed bidding, where award goes to the lowest-priced responsive and responsible bidder. Bids are opened publicly at a set time.
IFF Industrial Funding Fee: The fee that funds GSA's Multiple Award Schedule program. It is currently 0.75 percent of schedule sales and is built into the contractor's prices.
Indirect rate: A percentage that spreads shared business costs, such as fringe benefits, overhead and general and administrative expense, across contracts. It is added on top of direct costs when pricing a bid.
Interested party: An actual or prospective bidder whose direct economic interest would be affected by an award. Only an interested party can file a bid protest.
IPP Invoice Processing Platform: A free, web-based Treasury system that many civilian agencies use to receive invoices and send payment information. Vendors are enrolled by the agency they work with.
J&A Justification and Approval: A document an agency prepares to explain why it is buying without full and open competition. It is usually posted publicly after award.
Joint venture: Two or more companies that join to bid on and perform a contract together under a written agreement. A mentor-protege joint venture approved by SBA can compete for set-asides the protege qualifies for.
Limitations on subcontracting: SBA rules that limit how much a small business prime on a set-aside may pay to firms that are not similarly situated. The limit is 50 percent for services and supplies, 85 percent for general construction and 75 percent for specialty trade construction.
LPTA Lowest Price Technically Acceptable: An evaluation method where the award goes to the lowest-priced proposal that meets the minimum technical requirements. Extra features above the minimum earn no added credit.
Market research: The work an agency does before buying to learn what is available and who can supply it. Sources Sought notices and RFIs are common market research tools.
MAS Multiple Award Schedule: GSA's long-term governmentwide contract program, also called the GSA Schedule. Contracts have a five-year base period and three five-year options.
Mentor-protege: An SBA program that pairs a small business with an experienced company for training and support. Agreements last up to six years, and the pair may form a joint venture to bid on set-asides.
Micro-purchase: A small purchase at or below the micro-purchase threshold that agencies can make with little or no competition. Most are paid with a government purchase card.
Miller Act: The federal law requiring performance and payment bonds on federal construction contracts over $150,000. Contracts over $35,000 up to $150,000 require other payment protection.
Modification: A written change to an existing contract, such as adding work, extending dates or exercising an option. Only the contracting officer can sign a modification.
MPT Micro-Purchase Threshold: The dollar limit for micro-purchases, $15,000 in most cases since October 1, 2025. Lower limits apply to construction covered by Davis-Bacon ($2,000) and services covered by the Service Contract Act ($2,500).
NAICS code North American Industry Classification System code: A six-digit code that describes a type of business activity. Each solicitation lists one NAICS code, which sets the size standard for that buy.
Option year: An added period of performance, usually one year, that the government may choose to exercise after the base period. The government is not required to exercise an option.
Past performance: A record of how well a company has done on earlier, similar work. Agencies use it to judge how likely a bidder is to succeed on a new contract.
Payment bond: A surety bond that guarantees a prime contractor will pay its subcontractors and suppliers. On federal construction over $150,000 it is normally 100 percent of the contract price.
Performance bond: A surety bond that guarantees the contractor will complete the work as required. On federal construction over $150,000 it is normally 100 percent of the contract price.
Period of performance: The time span during which the contractor must do the work. It includes the base period and any option periods the government exercises.
PIEE Procurement Integrated Enterprise Environment: The Defense Department's online system for contracting tasks, including invoicing through Wide Area Workflow. DoD contractors use it instead of IPP.
Prime contractor: The company that holds the contract directly with the government. It is responsible for all the work, including work it hands to subcontractors.
Prompt Payment Act: The law requiring agencies to pay proper invoices on time, generally within 30 days. Late payments earn interest at the Treasury rate, which is 4.75 percent for July through December 2026.
PSC Product and Service Code: A four-character code that describes what the government is buying. It is used with the NAICS code to classify contract actions.
PWS Performance Work Statement: A document that describes the results the government wants rather than how to do the work. It is used in performance-based service contracts.
RFI Request for Information: A notice an agency uses to gather information from industry before it buys. Responding is optional and does not create a contract.
RFP Request for Proposals: A solicitation for negotiated contracts where the agency weighs price and other factors. Offerors submit written proposals by a set deadline.
RFQ Request for Quotations: A solicitation, often used for simplified acquisitions and GSA Schedule orders, that asks vendors for price quotes. A quote is not an offer until the government places an order.
Rule of two: The rule that an agency sets aside a purchase for small businesses when it expects offers from at least two capable small firms at fair prices. It is the main basis for small business set-asides.
SAM System for Award Management: The official federal website, SAM.gov, where businesses register to do business with the government. Registration is free and must be renewed every year.
SAT Simplified Acquisition Threshold: The dollar limit, $350,000 since October 1, 2025, under which agencies can use simpler buying procedures. Most purchases above the micro-purchase threshold and under the SAT are reserved for small businesses.
SBA Small Business Administration: The federal agency that supports small businesses through loans, counseling and contracting programs. It runs the 8(a), HUBZone, women-owned and veteran small business certification programs.
SCA Service Contract Act: A law requiring contractors on most federal service contracts over $2,500 to pay at least the local prevailing wages and fringe benefits. The rates appear in a wage determination in the contract.
SDVOSB Service-Disabled Veteran-Owned Small Business: A small business at least 51 percent owned and controlled by one or more service-disabled veterans. SBA certifies SDVOSBs through its Veteran Small Business Certification program.
Sealed bidding: A buying method where bids are submitted sealed, opened publicly and awarded to the lowest responsive and responsible bidder. It uses an Invitation for Bids.
Set-aside: A contract or order reserved for small businesses or for a group such as 8(a), HUBZone, WOSB or SDVOSB firms. Only qualifying businesses can compete.
Size standard: SBA's limit, based on average annual receipts or number of employees, for a business to count as small in a given NAICS code. Each NAICS code has its own size standard.
Sole source: A contract awarded to one company without competition. It requires a legal basis, such as an 8(a) award or a written justification.
Solicitation: The document an agency issues to ask for bids, proposals or quotes. It includes the requirement, instructions, evaluation factors and contract terms.
Sources Sought: A market research notice asking capable companies to describe their abilities. Agencies use the answers to decide whether to set aside the purchase for small businesses.
SOW Statement of Work: The part of a contract that describes the work to be done, the deliverables and the schedule. It is the main guide for both pricing and performance.
Subcontracting plan: A plan with small business subcontracting goals that large primes need for contracts over $900,000, or over $2 million for construction. It becomes part of the contract.
SubNet SBA Subcontracting Network: An SBA website where prime contractors post subcontracting opportunities. Small businesses can search the listings for free.
Synopsis: A public notice on SAM.gov announcing a planned purchase or an award. It gives businesses time to prepare and respond.
T&M Time-and-Materials: A contract that pays fixed hourly labor rates plus the actual cost of materials, up to a ceiling price. The hourly rates include wages, overhead and profit.
Task order: An order for services placed under an existing IDIQ contract. An order for supplies is called a delivery order.
Teaming agreement: A written agreement between companies to work together on a bid, usually as a prime and subcontractor. Each company keeps its own identity, and only the prime signs the government contract.
TINA Truthful Cost or Pricing Data Act: The law requiring certified cost or pricing data on negotiated contracts above a threshold unless an exception applies. The threshold has been $2.5 million since October 1, 2025.
UEI Unique Entity ID: A 12-character ID that the government assigns to every business registered in SAM.gov. It replaced the DUNS number in April 2022.
USAspending: A free public website, USAspending.gov, that shows how federal money is spent, including contract awards. Businesses use it to research agencies, competitors and prime contractors.
VOSB Veteran-Owned Small Business: A small business at least 51 percent owned and controlled by one or more veterans. SBA certifies VOSBs through its Veteran Small Business Certification program.
Wage determination: A Department of Labor list of minimum wages and fringe benefits for job types in a specific area. It is part of contracts covered by the Service Contract Act or Davis-Bacon Act and is posted free on SAM.gov.
WAWF Wide Area Workflow: The Defense Department's system for submitting invoices and receiving reports. It is part of the PIEE system.
WOSB Women-Owned Small Business: A small business at least 51 percent owned and controlled by women who are U.S. citizens. SBA certifies WOSBs, and certified firms can compete for WOSB set-asides in eligible industries.

Government contracting glossary