Build your federal contracting vocabulary with the most important terms every government contractor needs to know.

Success in government contracting requires fluency in specialized terminology. This comprehensive A-Z guide defines 100 essential government contracting terms and acronyms that you encounter throughout the federal procurement process. Master these definitions to communicate effectively and compete successfully for government contracts.

Acronyms 

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q

A

1. ACH – Automated Clearing House
   Electronic payment system used by the government for contractor payments and financial transfers.
2. ACO – Administrative Contracting Officer
   Government official responsible for contract administration activities after contract award.
3. ADP – Automatic Data Processing
   Computer-based systems and equipment used for data processing in government operations.
4. AOR – Authorized Organization Representative
   Individual authorized to submit applications and reports on behalf of an organization in government systems.
5. API – Application Programming Interface
   Technical specifications that allow different software applications to communicate with government systems.
6. ATO – Authority to Operate
   Official authorization for information systems to operate in government environments.

B

7. BAFO – Best and Final Offer
   Contractor’s final proposal submission following negotiation discussions with the government.
8. BLS – Bureau of Labor Statistics
   Federal agency providing economic data used in government contracting wage determinations.
9. BOA – Basic Ordering Agreement
   Written understanding between agencies and contractors for future contract terms, but not itself a contract.
10. BOP – Basic Option Period
    Initial contract option period that may be exercised at the government’s discretion.
11. BPA – Blanket Purchase Agreement
    Simplified contracting method for repetitive purchases, like “charge accounts” with approved vendors.
12. BWS – Business and Workforce Solutions
    GSA program providing consulting and professional services to federal agencies.

C

13. CAC – Common Access Card
    Standard identification card for active duty military personnel and government contractors requiring system access.
14. CAF – Contract Access Fee
    Fee paid by GSA Schedule contractors, typically 0.75% of sales under the contract.
15. CAGE – Commercial And Government Entity
    Five-character identifier assigned to businesses doing work with the federal government.
16. CAP – Contract Administration Plan
    Document outlining how contract performance will be monitored and managed.
17. CAS – Cost Accounting Standards
    Standards ensuring uniformity in cost accounting for government contracts over certain thresholds.
18. CAV – Contractor Assistance Visits
    Site visits by government personnel to assist contractors with compliance and performance.
19. CCR – Central Contractor Registration
    Former system for vendor registration, now integrated into SAM.gov.
20. CFDA – Catalog of Federal Domestic Assistance
    Database of federal programs providing funding to organizations and individuals.
21. CFR – Code of Federal Regulations
    Compilation of federal administrative law, including contracting regulations.
22. CLIN – Contract Line Item Number
    Specific contract line with distinct pricing, delivery, and performance requirements.
23. CO – Contracting Officer
    Government official with authority to enter into, administer, and terminate contracts.
24. CONUS – Contiguous United States
    48 adjoining U.S. states plus the District of Columbia, excluding Alaska and Hawaii.
25. COP – Contract Ordering Period
    Time frame during which orders can be placed under indefinite delivery contracts.
26. COR – Contracting Officer Representative
    Government employee designated to assist with contract administration and technical oversight.
27. COTS – Commercial Off-The-Shelf
    Products available in the commercial marketplace without modification.
28. COTR – Contracting Officer Technical Representative
    Government technical expert responsible for monitoring contractor performance.
29. CPAF – Cost Plus Award Fee
    Contract type combining cost reimbursement with performance-based award fees.
30. CPARS – Contractor Performance Assessment Reporting System
    System for documenting contractor performance evaluations.
31. CPFF – Cost Plus Fixed Fee
    Contract type providing cost reimbursement plus a negotiated fixed fee.
32. CPIF – Cost Plus Incentive Fee
    Contract type with cost reimbursement and performance-based incentive fees.
33. CVE – Center for Verification and Evaluation
    VA office responsible for verifying veteran-owned and service-disabled veteran-owned businesses.

D

34. DAR – Defense Acquisition Regulations
    Former DoD contracting regulations, now incorporated into DFARS.
35. DB – Davis-Bacon Act
    Federal law requiring prevailing wages on government construction contracts over $2,000.
36. DCAA – Defense Contract Audit Agency
    DoD agency responsible for contract audits and financial advisory services.
37. DCMA – Defense Contract Management Agency
    DoD agency providing contract management services across the defense acquisition lifecycle.
38. DFARS – Defense Federal Acquisition Regulation Supplement
    DoD supplement to the FAR containing defense-specific contracting requirements.
39. DHHS – Department of Health and Human Services
    Federal department often abbreviated as HHS in contracting contexts.
40. DISA – Defense Information Systems Agency
    DoD agency providing IT and communications support to warfighters worldwide.
41. DoD – Department of Defense
    Executive department responsible for national defense and the largest federal contracting agency.
42. DOL – Department of Labor
    Federal department responsible for occupational safety, wage standards, and employment statistics.
43. DPA – Delegation of Procurement Authority
    Authorization given to contracting personnel to make procurement decisions.
44. DUNS – Data Universal Numbering System
    Nine-digit identifier for businesses, being phased out in favor of UEI.
45. DVBE – Disabled Veteran Business Enterprise
    State-level certification for businesses owned by disabled veterans.

E

46. EA – Executive Agent
    DoD organization assigned responsibility for common supplies or services.
47. ECI – Employment Cost Index
    Bureau of Labor Statistics measure used for contract price adjustments.
48. EDWOSB – Economically Disadvantaged Women-Owned Small Business
    WOSB certification category for businesses meeting economic disadvantage criteria.
49. EFT – Electronic Funds Transfer
    Electronic payment method used for government contractor payments.
50. EPA – Environmental Protection Agency
    Federal agency regulating environmental compliance in government contracting.
51. EPEAT – Electronic Products Environmental Assessment Tool
    System for evaluating environmental attributes of electronic products.

F

52. FAR – Federal Acquisition Regulation
    Primary regulation governing federal procurement processes and procedures.
53. FAS – Federal Acquisition Service
    GSA service providing products and services to federal agencies.
54. FBO – Federal Business Opportunities
    Former procurement opportunity website, now part of SAM.gov.
55. FFP – Firm Fixed Price
    Contract type with a fixed price that doesn’t change regardless of contractor costs.
56. FIPS – Federal Information Processing Standards
    Standards for information processing in federal systems.
57. FISMA – Federal Information Security Management Act
    Law establishing cybersecurity requirements for federal systems and contractors.
58. FP – Fixed Price
    Contract pricing arrangement where price is predetermined and fixed.
59. FPDS – Federal Procurement Data System
    Government database containing information on federal contract actions.
60. FSC – Federal Supply Classification
    System for categorizing supplies and services purchased by the government.
61. FSS – Federal Supply Schedule
    GSA program providing pre-negotiated contracts for commercial products and services.

G

62. GAO – Government Accountability Office
    Congressional agency that audits government programs and handles bid protests.
63. GFE – Government Furnished Equipment
    Equipment provided by the government for contractor use in performance.
64. GFI – Government Furnished Information
    Information provided by the government to support contract performance.
65. GSA – General Services Administration
    Federal agency providing centralized procurement and property management services.
66. GWAC – Government-wide Acquisition Contract
    Contract established by one agency for use across the entire federal government.

H

67. HCA – Head of Contracting Activity
    Senior contracting official responsible for managing contracting operations.
68. HHS – Health and Human Services
    Federal department responsible for health and social services programs.
69. HSPD – Homeland Security Presidential Directive
    Presidential directives related to homeland security requirements.
70. HUBZone – Historically Underutilized Business Zone
    SBA program for small businesses located in economically distressed areas.

I

71. IA – Information Assurance
    Measures protecting and defending information and information systems.
72. IDIQ – Indefinite Delivery, Indefinite Quantity
    Contract type providing for indefinite quantities over fixed periods.
73. IFB – Invitation for Bid
    Solicitation method used for sealed bidding procurements.
74. IG – Inspector General
    Independent office responsible for audits and investigations within agencies.
75. IOA – Industrial Operations Analyst
    Professional responsible for analyzing industrial operations and processes.
76. IT – Information Technology
    Technology involving computers, software, networks, and electronic systems.
77. ITAR – International Traffic in Arms Regulations
    Export control regulations for defense articles and services.

J-K

78. JV – Joint Venture
    Business arrangement where parties retain separate identities while working together.
79. KO – Contracting Officer
    Alternative abbreviation for Contracting Officer (CO).

L

80. LH – Labor Hour
    Contract type similar to Time and Materials but without materials component.
81. LPTA – Lowest Price Technically Acceptable
    Source selection method awarding to lowest-priced technically acceptable offer.

M

82. MA – Multiple Award
    Contracting strategy awarding contracts to multiple vendors for similar requirements.
83. MAP – Marketing Action Plan
    Plan developed by contractors to promote their GSA Schedule contracts.
84. MAS – Multiple Award Schedule
    GSA contracting vehicle providing multiple vendors for similar products/services.
85. MCS – Minimum Contract Sales
    Minimum sales amount required under certain GSA Schedule contracts.
86. MPIN – Marketing Partner Identification Number
    Identifier used in GSA’s eBuy system for partner identification.

N

87. NAICS – North American Industry Classification System
    System for classifying business establishments by economic activity.
88. NASA – National Aeronautics and Space Administration
    Federal agency responsible for civilian space program and aeronautics research.
89. NDAA – National Defense Authorization Act
    Annual legislation specifying defense programs and policies.
90. NDA – Non-Disclosure Agreement
    Legal contract protecting confidential information sharing.

O

91. OCO – Ordering Contracting Officer
    Official authorized to place orders under indefinite delivery contracts.
92. OMB – Office of Management and Budget
    Executive office providing budget and management guidance to federal agencies.
93. OSDBU – Office of Small and Disadvantaged Business Utilization
    Office at each agency advocating for small business contracting opportunities.

P-Q

94. PCO – Procuring Contracting Officer
    Official responsible for contract formation and pre-award activities.
95. PGC – Pricing Guideline Coefficients
    Factors used in price analysis and contract pricing decisions.
96. PII – Personally Identifiable Information
    Information that can identify specific individuals, requiring protection.
97. PKI – Public Key Infrastructure
    Framework for managing digital certificates and public-key encryption.
98. PoP – Period of Performance
    Time frame during which contract work must be completed.
99. PPIRS – Past Performance Information Retrieval System
    System for retrieving contractor past performance information.
100. PWS – Performance Work Statement
     Document describing performance requirements in performance-based contracts.

Contracting Terms 

A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T

A

1. Acquisition
   The process of obtaining supplies, services, or construction using appropriated funds through purchase, lease, or other contractual arrangements.
2. Administrative Contracting Officer
   Government official responsible for contract administration functions after award, including monitoring performance and processing modifications.
3. Affiliate
   Business entity that controls, is controlled by, or is under common control with another business, affecting small business size determinations.
4. Allowable Cost
   Cost that is reasonable, allocable, and complies with contract terms and applicable cost principles.
5. Appeal
   Formal request for review of a contracting officer’s decision, typically filed with an agency board or court.
6. Audit
   Systematic examination of records, documents, and activities to verify compliance with contract requirements.
7. Award
   Government’s acceptance of a contractor’s offer, creating a binding contractual relationship.

B

8. Best and Final Offer
   Contractor’s revised proposal submitted after discussions, representing their final terms for contract award.
9. Best Value
   Source selection approach considering factors beyond price, including technical merit and past performance.
10. Bid
    Offer submitted in response to an Invitation for Bid, typically in sealed bidding procedures.
11. Bid Protest
    Formal objection to solicitation terms or award decision, filed with the agency, GAO, or Court of Federal Claims.
12. Bidder
    Individual or organization submitting a bid in response to a government solicitation.
13. Blanket Purchase Agreement
    Simplified acquisition method establishing “charge accounts” with contractors for repetitive purchases.
14. Brand Name or Equal
    Specification method allowing specific brand names while permitting equivalent alternatives.

C

15. Capability
    Contractor’s ability to satisfactorily perform required work based on past performance, resources, and expertise.
16. Capability Statement
    Marketing document summarizing company qualifications, certifications, experience, and contact information.
17. Ceiling Price
    Maximum price payable under cost-reimbursement or incentive contracts, providing cost control.
18. Certificate of Competency
    SBA certification that a small business has the capability to perform a specific contract.
19. Closeout
    Administrative process completing all contract requirements and settling final payment issues.
20. Commercial Item
    Product or service of a type customarily used by the general public or non-governmental entities.
21. Competitive Proposal
    Procurement method using requests for proposals when conditions aren’t appropriate for sealed bidding.
22. Consideration
    Something of value exchanged between parties, required for valid contract formation.
23. Contract
    Mutually binding legal agreement between the government and contractor for supplies, services, or construction.
24. Contract Administration
    Post-award activities ensuring contractor compliance with contract terms and government requirements.
25. Contract Modification
    Written change to contract terms, signed by the contracting officer and contractor when required.
26. Contracting Officer
    Government official with authority to enter into, administer, modify, or terminate contracts.
27. Contractor
    Individual or organization entering into a contract with the government to provide goods or services.

D

28. Debarment
    Exclusion of contractors from government contracting for specific periods due to misconduct or poor performance.
29. Default
    Contractor’s failure to perform contract requirements, potentially leading to termination or other remedies.
30. Defective Pricing
    Submission of inaccurate, incomplete, or noncurrent cost or pricing data affecting contract prices.
31. Deliverable
    Specific item, report, or result that must be provided under contract terms.
32. Delivery Order
    Order for supplies placed against an established contract or agreement.
33. Discussions
    Negotiations between government and offerors to clarify proposals and improve understanding.

E

34. Electronic Data Interchange
    Computer-to-computer exchange of structured business documents using standardized formats.
35. Equitable Adjustment
    Modification to contract price, delivery schedule, or other terms due to changed conditions.
36. Evaluation Criteria
    Standards used to assess and compare proposals or bids for source selection.
37. Evaluation Factor
    Element considered in proposal evaluation, such as technical approach or past performance.
38. Excusable Delay
    Delay in contract performance caused by unforeseeable circumstances beyond contractor control.

F

39. Fair and Reasonable Price
    Price that represents good value considering quality, delivery, and other relevant factors.
40. Federal Acquisition Regulation
    Primary regulation governing federal procurement processes and procedures across all agencies.
41. Final Payment
    Last payment made after contract completion and resolution of all outstanding issues.
42. Firm-Fixed-Price Contract
    Contract type providing maximum cost certainty with predetermined price regardless of actual costs.
43. Full and Open Competition
    Procurement process permitting all responsible sources to compete for contract awards.

G

44. Government Furnished Equipment
    Equipment provided by the government for contractor use in performing contract requirements.
45. Government Furnished Property
    Any property provided by the government to contractors, including equipment, materials, or facilities.
46. Grant
    Financial assistance instrument providing money to accomplish public purposes without acquiring goods or services.

H

47. HUBZone Certification
    SBA certification for small businesses located in historically underutilized business zones.
48. HUBZone Contract
    Contract awarded under the HUBZone program to qualified small businesses in designated areas.

I

49. Incentive Contract
    Contract type providing performance incentives through variable fees or prices based on achievement.
50. Indefinite Delivery Contract
    Contract providing for delivery of indefinite quantities during a fixed period.
51. Independent Government Estimate
    Government’s estimate of costs for comparison with contractor proposals during evaluation.
52. Inspection
    Government examination of contractor work to determine compliance with contract requirements.
53. Invitation for Bid
    Solicitation document used in sealed bidding, requesting bids for specific requirements.

J

54. Joint Venture
    Business arrangement between two or more parties to pursue specific projects or contracts.

L

55. Late Bid
    Bid received after the specified submission deadline, generally not considered for award.
56. Letter Contract
    Written preliminary contractual instrument authorizing contractor to begin work immediately.
57. Liquidated Damages
    Predetermined monetary compensation for specific breaches, typically late delivery.
58. Lowest Price Technically Acceptable
    Source selection method awarding contracts to the lowest-priced technically acceptable offeror.

M

59. Major System
    Combination of equipment, skills, and techniques forming a complete operational unit.
60. Market Research
    Process of collecting information about capabilities available in the marketplace.
61. Mentor-Protégé Program
    SBA program pairing large businesses with small businesses to enhance capabilities.
62. Milestone
    Significant event or achievement point in contract performance used for progress measurement.
63. Minor Breach
    Contract violation that doesn’t go to the essence of the contract or justify termination.
64. Multiple Award
    Award of contracts to more than one contractor for similar supplies or services.

N

65. Negotiation
    Process of bargaining to reach mutually acceptable contract terms between parties.
66. Noncompetitive Proposal
    Procurement method where proposals are solicited from only one source.
67. Notice to Proceed
    Written communication directing contractor to begin contract work or specific phases.

O

68. Offer
    Response to solicitation that, if accepted, would bind the offeror to perform contract requirements.
69. Offeror
    Individual or organization submitting an offer in response to a government solicitation.
70. Option
    Unilateral right to purchase additional supplies, services, or extend contract performance periods.
71. Order of Precedence
    Contractual clause establishing priority when contract documents contain conflicting requirements.

P

72. Past Performance
    Contractor’s record of performance on previous contracts, used in source selection evaluations.
73. Performance-Based Contract
    Contract focusing on desired outcomes rather than specific methods of performance.
74. Performance Bond
    Surety bond guaranteeing contractor performance according to contract terms.
75. Performance Work Statement
    Document describing performance objectives and standards rather than specific methods.
76. Period of Performance
    Time during which contract work is authorized and must be completed.
77. Pre-Award Survey
    Government evaluation of prospective contractor’s capability to perform proposed contract.
78. Price Analysis
    Process of examining prices without evaluating separate cost elements and profit.
79. Prime Contract
    Contract awarded directly by the government to a contractor.
80. Progress Payment
    Interim payment made during contract performance based on work completed.
81. Proposal
    Offer submitted in response to a request for proposals, including technical and price elements.

Q

82. Quality Assurance
    Systematic actions ensuring contract performance meets specified requirements and standards.

R

83. Request for Information
    Government request for information about industry capabilities or potential solutions.
84. Request for Proposal
    Solicitation method seeking proposals for complex requirements involving negotiations.
85. Request for Quotation
    Solicitation seeking price quotes for specified requirements, typically simplified acquisitions.
86. Responsible Bidder
    Bidder possessing capability, integrity, and reliability necessary for contract performance.
87. Responsive Bid
    Bid conforming to solicitation requirements without material deviation or reservation.

S

88. Sealed Bidding
    Method of contracting involving public opening of bids and award to lowest responsible bidder.
89. Service Contract
    Contract for services rather than supplies, subject to specific labor standards.
90. Set-Aside
    Procurement reserved exclusively for small businesses or other designated business categories.
91. Small Business
    Business meeting SBA size standards for its primary industry classification.
92. Sole Source
    Procurement from only one contractor due to unique capability or emergency circumstances.
93. Statement of Work
    Narrative description of work required, including specifications and performance requirements.
94. Subcontract
    Contract between prime contractor and another party for portions of prime contract work.
95. Subcontractor
    Individual or organization having a direct contract with the prime contractor.
96. Suspension
    Temporary exclusion of contractors from government contracting pending investigation or legal proceedings.

T

97. Task Order
    Order for services placed against an established contract or agreement.
98. Technical Evaluation
    Assessment of proposals’ technical merit and feasibility during source selection.
99. Termination for Convenience
    Government’s right to terminate contracts when it is in its best interest, not due to contractor fault.
100. Termination for Default
     Contract termination due to the contractor’s failure to perform according to contract terms.

How to Use This Guide:

1. Study Systematically: Review terms relevant to your current contracting activities
2. Reference Regularly: Keep this guide handy during proposal development and contract performance
3. Stay Current: Government contracting terminology evolves, so review updates periodically
4. Apply Practically: Use proper terminology in communications with government personnel

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