Government Contracting Glossary: Key Terms in Plain English

Government contracting terms for registration and identity

These are the terms you meet first, while setting up your business to sell to the government. Our SAM.gov registration guide walks through them in order.

• SAM.gov (System for Award Management). The General Services Administration’s official site where businesses register to work with the federal government and where agencies post contract opportunities. You sign in to it through Login.gov.
• Entity registration. Your business’s record in SAM.gov, covering its legal details, tax ID, banking, industry codes and representations. You need an active registration to bid as a prime contractor, it’s free, and it must be renewed every 365 days.
• UEI (Unique Entity ID). The 12-character letters-and-numbers identifier SAM.gov assigns to every registered entity. It replaced the nine-digit DUNS number on April 4, 2022, and it doesn’t expire.
• CAGE code. A five-character Commercial and Government Entity code that identifies your business at a specific location. The Defense Logistics Agency assigns one to U.S. businesses during SAM.gov registration; foreign businesses get an NCAGE code instead.
• TIN and EIN. Your Taxpayer Identification Number, usually an Employer Identification Number from the IRS. SAM.gov checks that your business name and TIN match IRS records exactly.
• Representations and certifications (reps and certs). Formal, legally binding statements you make in SAM.gov about your business, such as its size, ownership and any debarment or delinquent federal taxes. SAM.gov modernized this section in March 2026, and the FAR overhaul proposes moving purchase-specific statements into individual solicitations.
• NAICS code. A six-digit industry code from the North American Industry Classification System. You list the codes for your work in SAM.gov, and each solicitation carries one code that sets its size standard. See how to choose NAICS codes.
• PSC (Product and Service Code). A four-character code describing what the government is buying, such as a type of IT service or a class of equipment. Agencies record PSCs on contract actions; listing them in SAM.gov is optional.
• Small Business Search (SBS). SBA’s searchable database of small business profiles, formerly called the Dynamic Small Business Search (DSBS). Contracting officers use it for market research, so a complete profile helps you get found.
• MySBA Certifications. SBA’s online portal for applying to its contracting certification programs: 8(a), women-owned (WOSB and EDWOSB), HUBZone, and veteran-owned (VetCert).

Business size and set-aside terms

These terms decide which contracts you can compete for. For the full picture, read how small business set-asides work and our guide to SBA certifications.

• Small business concern. A for-profit business, independently owned and operated, not dominant in its field, that operates mainly in the U.S. and meets SBA’s size standard for the relevant NAICS code.
• Size standard. The largest a business can be, together with its affiliates, and still count as small for a given NAICS code. It is measured either in average annual receipts over the last five completed fiscal years or in average employees over the last 24 months.
• Affiliation. SBA’s rule that businesses under common control are counted together when measuring size. Control can come from ownership, management or contracts, whether or not it is used.
• Set-aside. A contract, or part of one, that only certain small businesses can compete for. A total set-aside reserves the whole requirement; a partial set-aside reserves a portion. Set-asides can be limited further to 8(a), HUBZone, service-disabled veteran-owned or women-owned small businesses.
• Rule of two. The test for setting a contract aside: if the contracting officer reasonably expects offers from at least two responsible small businesses that are competitive on price, quality and delivery, a contract above the micro-purchase threshold must be set aside for small business. It now appears in the overhauled FAR Part 19.
• Sole-source award. A contract awarded to one company without competition. Small businesses in the 8(a), HUBZone, SDVOSB and WOSB programs can receive sole-source awards under conditions and dollar limits set by regulation.
• 8(a) Business Development Program. SBA’s nine-year program for small businesses owned and controlled by socially and economically disadvantaged individuals, offering set-asides, sole-source awards and mentoring. Under a rule effective September 10, 2026, individually owned applicants must show evidence of social disadvantage rather than rely on a presumption tied to group membership.
• Small disadvantaged business (SDB). A small business at least 51% owned and controlled by socially and economically disadvantaged individuals. Businesses represent SDB status in SAM.gov, and 8(a) participants qualify automatically.
• WOSB and EDWOSB. Women-owned small business and economically disadvantaged women-owned small business. A WOSB is at least 51% owned and controlled by women who are U.S. citizens; it must be certified to compete for WOSB set-asides, which are limited to industries where women-owned businesses are underrepresented.
• HUBZone. A Historically Underutilized Business Zone. A certified HUBZone business has its principal office in a HUBZone and at least 35% of its employees living in one. It can compete for HUBZone set-asides and gets a 10% price evaluation preference in full and open competitions.
• SDVOSB, VOSB and VetCert. Service-disabled veteran-owned and veteran-owned small businesses. Since January 1, 2024, these firms generally need SBA certification through the VetCert program to compete for veteran set-asides; self-certification no longer qualifies.
• Limitations on subcontracting. Limits on how much of a set-aside contract you can pass to subcontractors that aren’t similarly situated small businesses. On services contracts, you can’t pay them more than 50% of what the government pays you; construction contracts allow a larger share.
• Nonmanufacturer rule. The rule that lets a small business supply products it didn’t make on a small business set-aside. Generally the business can have no more than 500 employees and must supply products made in the U.S. by small manufacturers, unless SBA has waived the rule for that product.
• Mentor-Protégé Program. SBA’s program pairing a small business (the protégé) with an experienced company (the mentor) for business help. The two can form a joint venture that competes for set-asides as a small business.
• Small business goals. Targets for the share of federal contract dollars going to small businesses: at least 23% governmentwide, with smaller goals for disadvantaged, women-owned, HUBZone and service-disabled veteran-owned businesses. SBA grades agencies against them each year.
• Subcontracting plan. A plan large prime contractors must submit for contracts above $900,000 ($2 million for construction), setting goals for work subcontracted to small businesses. It is one reason primes look for small business partners.

Solicitation and notice terms: RFP, RFQ, sources sought and more

Most notices you’ll see in SAM.gov Contract Opportunities fall into a handful of types. Knowing which one you’re reading tells you whether the agency wants information, a quote or a full proposal.

• Solicitation. Any document asking businesses to submit an offer or quote, whether it is called an RFP, RFQ or IFB.
• RFI (request for information). A market research request. The agency wants information about capabilities, prices or approaches, and nothing is awarded from it.
• Sources sought notice. A market research notice asking capable businesses to identify themselves, often so the contracting officer can apply the rule of two and decide on a set-aside. Answering with a short, specific capability statement can help shape whether the work is set aside.
• Presolicitation notice. Advance notice that a solicitation is coming, usually with a summary, expected dates and the NAICS code.
• RFP (request for proposals). A solicitation for a negotiated contract. You submit a proposal, which is a binding offer, and the agency evaluates it against stated factors such as technical approach, past performance and price.
• RFQ (request for quotations). A request for prices and basic information, common in simplified acquisitions and orders under existing contracts. A quotation is not an offer, so the government’s order becomes the offer, which you accept.
• IFB (invitation for bids). A sealed bidding solicitation. Bids are opened publicly, there are no discussions, and the award goes to the lowest-priced bid that is responsive and responsible.
• Combined synopsis/solicitation. A single notice that announces the requirement and serves as the solicitation, common for commercial products and services.
• Amendment. A formal change to a solicitation, such as a new due date, answers to questions or a revised requirement. You usually must acknowledge every amendment in your submission.
• SOW, PWS and SOO. Three ways to describe the work. A statement of work says what to do and often how; a performance work statement describes the results and how they’ll be measured; a statement of objectives lists goals and asks you to propose the approach.
• Micro-purchase threshold. The dollar level below which agencies can buy without competition, often with a government purchase card. It has been $15,000 for most purchases since October 1, 2025, with lower limits for some construction and service work.
• Simplified acquisition threshold. The ceiling for simplified, faster buying procedures, $350,000 for most purchases since October 1, 2025. Purchases under it use shorter solicitations and fewer clauses, which makes them a common starting point for new contractors.

Contract types and contract vehicles, including IDIQ

The contract type decides who carries the cost risk. The contract vehicle decides how the agency buys: through a one-time contract or through orders placed under an existing agreement.

• Firm-fixed-price (FFP). You’re paid the agreed price no matter what the work costs you. It is the most common type for small businesses, and the cost risk is yours.
• Cost-reimbursement. The government pays your allowable costs plus a fee. It is used when costs can’t be estimated well in advance, and it requires an accounting system that can track costs by contract.
• Time-and-materials (T&M) and labor-hour.You bill fixed hourly rates for the hours worked, plus materials at cost on a T&M contract, up to a ceiling price.
• IDIQ contract. An indefinite-delivery, indefinite-quantity contract sets the terms, a minimum and a maximum, and a period of performance, then the agency buys through orders as needs arise. An IDIQ can go to one company or to several; on a multiple-award IDIQ, the holders compete for each order.
• Task order and delivery order. Orders placed under an IDIQ or similar contract: task orders for services, delivery orders for supplies.
• BPA (blanket purchase agreement). A standing arrangement with prenegotiated terms for repeat purchases. It isn’t a contract by itself; each call or order placed under it is.
• GSA Multiple Award Schedule (MAS). GSA’s long-running program of contracts with commercial companies at prenegotiated prices, which federal agencies, and in some cases state and local governments, can order from. Getting on a schedule doesn’t guarantee orders.
• GWAC (governmentwide acquisition contract). A multiple-award IDIQ for information technology that any federal agency can use. Some GWACs are reserved for small businesses or 8(a) participants.
• Base period and option periods. A contract often runs a base year followed by option years that the government may exercise, at its choice, to extend the work.
• Commercial products and commercial services. Items and services of a type sold to the general public, bought under streamlined rules with fewer government-unique clauses.

Proposal and evaluation terms

These terms describe how you respond and how you’re judged. Our guide on how to write a government proposal puts them to work.

• Section L and Section M. In solicitations that follow the uniform contract format, Section L holds the instructions for preparing your proposal (volumes, page limits, fonts) and Section M lists the evaluation factors and how they’ll be weighed. Other solicitations put the same content under headings such as “instructions to offerors” and “evaluation criteria.”
• Compliance matrix. A table that lists every requirement from the instructions, evaluation factors and work statement and shows where your proposal answers each one. Proposal teams build it first and check against it last; tools such as BidForge build one from Sections L and M and recheck the draft as it changes.
• Evaluation factors. The criteria the agency scores, such as technical approach, management, past performance and price, along with their relative importance.
• Best-value tradeoff. An evaluation method that lets the agency pick a higher-rated proposal over a cheaper one when the extra benefit is worth the price difference.
• LPTA (lowest price technically acceptable). An evaluation method where every proposal is rated acceptable or unacceptable, and the lowest-priced acceptable one wins.
• Past performance. Your record on similar contracts, judged on relevance and quality. Under long-standing FAR rules, a business with no relevant record isn’t rated favorably or unfavorably on this factor, and relevant commercial or subcontract work often counts. Check how each solicitation handles it.
• CPARS. The Contractor Performance Assessment Reporting System, where agencies record evaluations of contractors’ performance. Evaluators in later competitions read them, and you can comment on yours.
• Capability statement. A one- or two-page summary of your business: core capabilities, past performance, differentiators, NAICS codes, UEI, CAGE code and certifications. It’s what you send in response to sources sought notices and hand out at industry events.
• Responsive and responsible. A responsive bid conforms to the solicitation’s essential requirements. A responsible contractor has the money, capacity, record and integrity to perform. If a contracting officer finds a small business not responsible, SBA can review that finding through its Certificate of Competency process.
• Competitive range and discussions. In a negotiated procurement, the agency may narrow the field to the most highly rated proposals and hold discussions that let those offerors revise. Many awards are made without discussions, so your first submission should be your best.
• Debriefing. An explanation from the agency of how your proposal was evaluated and why the award went where it did. Request one in writing right away, because the deadlines are short.
• Bid protest. A formal challenge to a solicitation or award, filed with the agency, the Government Accountability Office or the U.S. Court of Federal Claims. Filing deadlines are strict and often measured in days.

Players and roles: prime contractors, contracting officers and more

These are the people and organizations you’ll deal with before, during and after an award.

• Contracting officer (CO or KO). The government official with a warrant, the legal authority to sign, change and end contracts. Only the contracting officer can bind the government, so get direction that changes your contract from them, in writing.
• Contracting officer’s representative (COR). A person the contracting officer designates to monitor technical performance day to day. A COR can’t change the contract’s terms, price or scope.
• Prime contractor. The company that holds the contract directly with the government and is responsible for all of the work, including what its subcontractors do. Our guide to winning your first federal prime contract covers the path from subcontractor to prime.
• Subcontractor. A company hired by the prime to perform part of the work. A subcontractor’s contract is with the prime, not the government.
• Teaming agreement. An agreement between companies to pursue a contract together, usually as a prime and subcontractor or as a joint venture, signed before the proposal goes in.
• OSDBU and small business specialists. Each agency’s Office of Small and Disadvantaged Business Utilization (the Office of Small Business Programs at the Department of Defense) advocates for small businesses and is a good first contact. SBA also places procurement center representatives in buying offices to review acquisition plans and push for set-asides.
• APEX Accelerators. Free, government-funded counseling centers, formerly called Procurement Technical Assistance Centers (PTACs), that help businesses register, find opportunities and prepare bids. Small Business Development Centers offer related free help. See free government contracting help.
• FAR and the Revolutionary FAR Overhaul. The Federal Acquisition Regulation is the main rulebook for federal buying. Since 2025 it has been rewritten in plainer language under the Revolutionary FAR Overhaul; many agencies follow the overhauled text through class deviations while the formal rule changes go through public comment, so section numbers you see quoted may differ from older guides.
• DFARS and CMMC. The Defense Federal Acquisition Regulation Supplement adds Department of Defense rules to the FAR. One of them, the Cybersecurity Maturity Model Certification, began appearing as a condition of award in DoD contracts on November 10, 2025, and is being phased in over several years.

Frequently asked questions