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Glossary of Common Government Terms

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Glossary of Common Government Terms 

The acquiring of supplies or services by the federal government with appropriated funds through purchase or lease.

Business concerns, organizations, or individuals that control each other or that are controlled by a third party. Control may include shared management or ownership; common use of facilities, equipment, and employees; or family interest.

Assignment of Claims: This is done through ITSS when payment address needs to be changed to a financial institution. It is stored electronically and goes to finance for fund certification after CO makes changes. The two components of this are:

  • Notice of Assignment
  • Instrument of Assignment

Best and Final Offer (BAFO):
For negotiated procurements, a contractor's final offer following the conclusion of discussions.

Best Value: The expected outcome of an acquisition that, in the Government's estimation, provides the greatest overall benefit in response to a requirement. A term applied to comparing proposals and ranking them from best to worst, not only on price but on all factors stated in the solicitation.

Business Information Centers (BICs):
One-stop locations for information, education, and training designed to help entrepreneurs start, operate, and grow their businesses. The centers provide free on-site counseling, training courses, and workshops and have resources for addressing a broad variety of business startup and development issues.

Certificate of Competency:
A certificate issued by the Small Business Administration (SBA) stating that the holder is "responsible" (in terms of capability, competency, capacity, credit, integrity, perseverance, and tenacity) for the purpose of receiving and performing a specific government contract.

Certified 8(a) Firm:
A firm owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts under the Small Business Administration’s 8(a) Business Development Program.

CFR: Code of Federal Regulations

A mutually binding legal relationship obligating the seller to furnish supplies or services (including construction) and the buyer to pay for them.

Purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes the description of supplies and services required, the selection and solicitation of sources, the preparation and award of contracts, and all phases of contract administration. It does not include grants or cooperative agreements.

Contracting Officer:
A person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings.

Contractor Team Arrangement:
An arrangement in which (a) two or more companies form a partnership or joint venture to act as potential prime contractor; or (b) an agreement by a potential prime contractor with one or more other companies to have them act as its subcontractors under a specified government contract or acquisition program.

Defense Acquisition Regulatory Council (DARC)
A group composed of representatives from each Military department, the Defense Logistics Agency, and the National Aeronautics and Space Administration and that is in charge of the Federal Acquisition Regulation (FAR) on a joint basis with the Civilian Agency Acquisition Council (CAAC).

Defense Contractor
Any person who enters into a contract with the United States for the production of material or for the performance of services for the national defense.

Determining the extent of Competition: Solicitation of three sources meets the requirement for maximum practicable competition for orders of $25,000 or less. Three is just a guideline. A list of sources should be maintained and continuously updated. The list should contain the status of each source (i.e. small business, veteran owned small business, small disadvantaged business, woman owned small business) to ensure that small businesses are afford opportunities to compete for simplified acquisitions. When using simplified acquisitions, maximum practical competition may be obtained without soliciting quotations or offers from sources outside the local trade area.

Direct Cite: Money does not go through the IT Fund. It is paid by the agency through DFAS. The vendor must go to DFAS to settle their account-it does not go through GSA. This money expires at the end of the fiscal year. Issued on a 1155 instead of GSA Form 300.

*Note: Not recommended to use unless IT Fund is low.

Electronic Data Interchange (EDI):
Transmission of information between computers using highly standardized electronic versions of common business documents.

Emerging Small Business
A small business concern whose size is no greater than 50 percent of the numerical size standard applicable to the Standard Industrial Classification code assigned to a contracting opportunity.

An accounting term used to describe the net investment of owners or stockholders in a business. Under the accounting equation, equity also represents the result of assets less liabilities.

Fair and Reasonable Price
A price that is fair to both parties, considering the agreed-upon conditions, promised quality, and timeliness of contract performance. "Fair and reasonable" price is subject to statutory and regulatory limitations.

Federal Acquisition Regulation (FAR)
The body of regulations which is the primary source of authority governing the government procurement process. The FAR, which is published as Chapter 1 of Title 48 of the Code of Federal Regulations, is prepared, issued, and maintained under the joint auspices of the Secretary of Defense, the Administrator of General Services Administration, and the Administrator of the National Aeronautics and Space Administration. Actual responsibility for maintenance and revision of the FAR is vested jointly in the Defense Acquisition Regulatory Council (DARC) and the Civilian Agency Acquisition Council (CAAC).

Full and Open Competition
With respect to a contract action, "full and open" competition means that all responsible sources are permitted to compete.

General Services Administration, the agency responsible for the Federal Supply Schedules and for buying and leasing office space on behalf of the Executive branch.

Incremental Funding:

Used if the total task order is awarded and the dollar amount of the work is more than the client has available as the desired start time. Pricing for the project is totaled and assigned on the contract, but the pricing is charged incrementally as it becomes available. The overall scope of work and pricing does not change from the original proposal. The incremental funds are added by modifications, but the modifications are not supposed to add on to the period of performance or to add money on to the full amount of the contract.

Intermediary Organization
Organizations that play a fundamental role in encouraging, promoting, and facilitating business-to-business linkages and mentor-protégé partnerships. These can include both nonprofit and for-profit organizations: chambers of commerce; trade associations; local, civic, and community groups; state and local governments; academic institutions; and private corporations.

IT Fund: A fund that is managed by the Government which agencies draw from to pay their costs. It is "no year money" meaning that it does not expire at the end of the fiscal year. It must be used to buy IT services and supplies.

Joint Venture
In the SBA Mentor-Protégé Program, an agreement between a certified 8(a) firm and a mentor firm to perform a specific federal contract.

Justification and Analysis

(over $100,000) Required for a sole source open market procurement that exceeds the simplified acquisition threshold. This J&A must have a statement from the client as to why the procurement is required to be sole source and a Justification from GSA must accompany this in the official file.

(over $500,000) If a client requests a sole source or a particular brand name, they must indicate why and document it. An internal document is prepared and signed by the Contract Specialist, Contracting Officer, Contracts Program Director, and Competition Advocate. A routing slip, internal document that circulates through GSA for signatures, is used as a cover sheet for this document and the attachments are as follows (copies of):

  • J&A
  • Quote
  • Funding document (MIPR)

Market Research:

Involves obtaining information specific to the item being purchased. The extent of market research will vary, depending on such factors as urgency, estimated dollar value, complexity of the requirement, and past experience. Some techniques for conducting market research may include any or all of the following:

  • Contracting experts regarding capabilities to meet requirements
  • Reviewing the results of recent market research undertaken to meet similar or identical requirements.
  • Publishing formal requests for information in appropriate technical and scientific journals
  • Querying Government date bases that provide information relevant to agency acquisitions
  • Participating in interactive, on-line communication among industry, acquisition personnel, and customers
  • Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources.

A business, usually large, or other organization that has created a specialized program to advance strategic relationships with small businesses.

MIPR (Military Interagency Purchase Request) - A funding source document accessed through ITSS for all branches of the military. Be sure to make sure the amount on the MIPR is more or the same as the contracted amount.

Modification: Authorized changes to a contract after contract award.

  • Administrative Change: A unilateral contract change that does not affect the contractual rights of the parties, e.g., a change in the paying office.
  • Change Order: A written order, signed by the CO, directing the contractor to make a change authorized by the "changes" clause. A change order is issued without the consent of the contractor.
  • Supplemental Agreement: A contract modification that is accomplished by the mutual action of both parties.

Bilateral Modification: a contract modification that is signed by the contractor and the CO. Used to make negotiated adjustments resulting from the issuance of a change order; definitive letter contracts; or reflect other agreements of the parties modifying the terms of contracts.

Unilateral Modification: A contract modification that is signed only by the CO. Used to make administrative changes; issue change orders; or make changes authorized by other than a "changes" clause.

Contracting through the use of either competitive or other-than-competitive proposals and discussions. Any contract awarded without using sealed bidding procedures is a negotiated contract.

NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS): The new term for the Standard Industrial Classification (SIC) system. It classifies establishments according to how they contuct their economic activity. Improved to accurately identify industries. Effective October 1, 2000. Can be found in the FAR 19.
NAICS code rundown:

  • Look at dollar amounts and employee size for that NAICS Category.
  • SUPPLIES: Look at dollar amounts for an average for the last 3 years.
  • SERVICES/MANUFACTURING: Look at number of employees for the past 12 months

One-Stop Capital Shops
OSCSs are the SBA’s contribution to the Empowerment Zones/Enterprise Communities Program, an interagency initiative that provides resources to economically distressed communities. The shops provide a full range of SBA lending and technical assistance programs.

Other Direct Costs (ODC's)/Supplemental Resources: ODC's are the costs of facilities, supplies and services provided by the contractor in support of task order performance, that would normally be provided by the government. The CSR shall determine that the proposed costs are necessary and the ACO, that the prices are fair and reasonable.


  • Delivery Order: work order against an existing contract for hardware/software.
  • Task Order: work order against an existing contract for services.

A mutually beneficial business-to-business relationship based on trust and commitment and that enhances the capabilities of both parties.

Price Analysis: To ensure "fair and reasonable" prices. The FAR addresses 2 methods of analysis: 1) Price and 2) cost. Price analysis is the more appropriate method when using simplified acquisition procedures b/c its less complex, less time consuming, and less expensive.

  • Competing offers
  • Est. catalog prices/market prices
  • Price set by law or policy/regulations
  • Previous contracts
  • Previous quotes
  • Prices of similar items
  • Government estimates
  • Visual analysis
  • Value analysis

Price Negotiation Memorandum:

This document is used if GSA enters negotiations and indicates the prices are fair and reasonable. Done with all 8(a)'s over $100,000.

Prime Contract
A contract awarded directly by the Federal government.

Procurement Plan: Completed for 8(a) businesses and provides an outline of actions for the contract. An internal document. Contract Specialist and a Contracting Officer sign-off on.

A firm in a developmental stage that aspires to increasing its capabilities through a mutually beneficial business-to-business relationship.

Purchase Order: should include:

  • Specific date for delivery of supplies or performance of services
  • Appropriate clauses
  • Trade and prompt payment discounts
  • Quantity of items or scope of services
  • Provisions for inspection & acceptance at destination
    ---If an offer is by the Government to supplier to buy certain supplies or services under specified terms or conditions:
  • Issued on fixed-price basis and can't be open market in excess of $100,000

PO Becomes a contract when:

  • Acceptance of the order in writing is obtained at the outset by the contractor
  • The contractor proceeds with the work to the point of substantial performance
  • The contractor furnishes the supplies or services

Request for Proposal (RFP)
A document outlining a government agency’s requirements and the criteria for the evaluation of offers.

The Service Corps of Retired Executives (SCORE) is a 12,400-member volunteer association sponsored by the SBA. SCORE matches volunteer business-management counselors with present prospective small business owners in need of expert advice.

SES: Senior Executive Service

SEWP CONTRACTS: NASA Contracts which have been pre-competed so no additional competition is required. NASA charges a .75% access fee.

Small Business
A business smaller than a given size as measured by its employment, business receipts, or business assets.

Small Business criteria:

  • Entire business entity is considered (including parent company)
  • The business does not dominate the fields it operates in.
  • Must be organized for profit.
  • Must be listed within the SBA to know NAICS (SIC) code standards that apply to them.
  • Must meet employee and income requirements to meet small business classification (NAICS codes)

Socially  Disadvantaged Business:

  • Must meet NAICS (SIC) code standards-size and income
  • More than 50% ownership must be: 1) African Americans; 2) Hispanic Americans; 3) Native Americans
  • Day to day operations must be run by a person in one of these groups

Small Business Development Centers (SBDC)
SBDCs offer a broad spectrum of business information and guidance as well as assistance in preparing loan applications.

Small Business Innovative Research (SBIR) Contract
A type of contract designed to foster technological innovation by small businesses with 500 or fewer employees. The SBIR contract program provides for a three-phased approach to research and development projects: technological feasibility and concept development; the primary research effort; and the conversion of the technology to a commercial application.

Small Disadvantaged Business Concern
A small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.

Spot Reductions: a small reduction form your regular GSA Schedule price for a specific agency, usually a one-time event.

Standard Industrial Classification (SIC) Code
A code representing a category within the Standard Industrial Classification System administered by the Statistical Policy Division of the U.S. Office of Management and Budget. The system was established to classify all industries in the US economy. A two-digit code designates each major industry group, which is coupled with a second two-digit code representing subcategories.

A contract between a prime contractor and a subcontractor to furnish supplies or services for the performance of a prime contract or subcontract.


  • Must meet NAICS codes
  • More than 50% ownership must be women
  • Day to day operations must be run by a woman