Understanding the language of procurement and acquisition is crucial for anyone involved in government contracting, whether you’re a seasoned professional or just starting out. The Federal Acquisition Regulation (FAR) is the primary source for these definitions, and navigating its terminology can feel like learning a new language. In essence, we’re talking about Money In Other Words – how financial concepts and transactions are precisely defined and regulated within the federal acquisition process. This guide breaks down key terms from the FAR, offering clear, concise explanations to help you master the financial vocabulary of federal contracting and ensure you’re speaking the same language as the government.
Acquisition
In the realm of federal procurement, “acquisition” isn’t just about getting something; it’s a meticulously defined process. It signifies obtaining supplies or services through contracts, utilizing appropriated funds. This encompasses everything from purchasing goods to leasing facilities, and even construction projects. The critical element is that the federal government is acquiring these items or services by and for its own use. The definition extends beyond a simple transaction; it’s a lifecycle that begins when an agency identifies a need. This starting point triggers a series of actions: defining requirements, seeking and selecting sources, awarding contracts, managing finances, overseeing performance, administering the contract, and handling all related technical and managerial tasks until the agency’s needs are fully met through the contract. Think of “acquisition” as the government’s structured method for spending money in other words – taxpayer dollars – to fulfill its operational requirements.
Acquisition planning
Effective acquisition doesn’t happen by chance; it requires careful planning. “Acquisition planning” is the process of coordinating and integrating the efforts of everyone involved in an acquisition. It’s about creating a comprehensive roadmap to ensure agency needs are met efficiently, in a timely manner, and at a reasonable cost. This planning phase involves developing an overarching strategy to manage the entire acquisition process. It’s where agencies strategize how to best use their allocated money in other words to achieve their objectives, considering factors like market conditions, potential risks, and available resources.
Activity Address Code (AAC)
The “Activity Address Code (AAC)” is a six-character identifier, a unique combination of letters and numbers. It serves as a digital fingerprint for specific agency offices, units, activities, or organizations. Assigned by the General Services Administration (GSA) for civilian agencies and the Department of Defense for defense agencies, the AAC ensures that each entity within the vast federal apparatus can be precisely located and identified in procurement systems. In essence, it’s part of the system that tracks where government money in other words is being directed and managed within different parts of the bureaucracy.
Adequate evidence
In a regulatory context, decisions often hinge on proof. “Adequate evidence” refers to information that is substantial enough to support a reasonable belief that a particular act or omission has occurred. It’s not about absolute certainty, but rather a level of information that would convince a reasonable person that something is likely true. In procurement, “adequate evidence” might be required to justify contract actions, address disputes, or investigate potential misconduct related to the expenditure of government money in other words.
Advisory and assistance services
The government frequently relies on external expertise to enhance its operations. “Advisory and assistance services” encompass a wide range of contractual services from non-governmental sources aimed at supporting or improving various aspects of government functions. These services can include organizational policy development, decision-making processes, management and administration, program and project management, and even research and development activities. Essentially, it’s about bringing in outside expertise to improve the effectiveness of federal management processes. The outputs of these services can take many forms: information, advice, opinions, analyses, evaluations, recommendations, training, and even day-to-day support personnel. These services are categorized into:
(1) Management and professional support services: These services focus on improving the efficiency and effectiveness of government organizations, operations, and systems. They are intrinsically linked to the core responsibilities of the agency requiring the service and can include support for program management, logistics, project monitoring, data collection, budgeting, accounting, and administrative support for training programs. This is how the government strategically invests money in other words to optimize its internal workings.
(2) Studies, analyses and evaluations: This category involves contracted services that provide organized and analytical assessments to support policy development, decision-making, management, or administration. This includes studies related to R&D, as well as the acquisition of models, methodologies, and software that aid in these analytical endeavors. It’s about using money in other words to fund the intellectual horsepower needed for informed governance.
(3) Engineering and technical services: These services directly support program offices during the acquisition cycle. They include systems engineering and technical direction to ensure the effective operation and maintenance of complex systems, particularly weapon systems or major systems. This is a crucial investment of money in other words to ensure the operational readiness and effectiveness of critical government assets.
Affiliates
The concept of “affiliates” is important in determining business relationships, particularly concerning control and influence. “Affiliates” are defined as associated business concerns or individuals where one party controls or can control another, or a third party controls or can control both. This definition helps prevent conflicts of interest and ensures fair competition in government contracting. Understanding affiliate relationships is vital when assessing eligibility for small business programs or determining responsibility in financial transactions involving government money in other words.
Agency head or “head of the agency“
The “Agency head” or “head of the agency” is the top official of an executive agency. This could be a Secretary, Attorney General, Administrator, Governor, Chairperson, or other chief official. This definition also extends to any deputy or assistant chief official. The agency head is ultimately responsible for the agency’s operations, including how it spends and manages government money in other words.
Alternate
In legal and contractual language, precision is paramount. “Alternate” refers to a significant variation of a standard provision or clause that is used in specific situations. An alternate changes the wording of a basic provision by adding, deleting, or substituting specific text. These alternates are documented in regulations like 52.105(a). Alternates ensure that standard contract language can be adapted to fit unique circumstances, while still adhering to the overall regulatory framework governing the use of government money in other words.
Architect-engineer services
“Architect-engineer services,” as legally defined in 40 U.S.C. 1102, encompass professional services of an architectural or engineering nature. These are services that, by state law, must be performed or approved by a licensed, registered, or certified professional. This definition extends to services associated with research, planning, development, design, construction, alteration, or repair of real property. It also includes incidental services that architectural and engineering professionals logically perform, such as studies, investigations, surveying, mapping, tests, evaluations, consultations, planning, program management, conceptual designs, specifications, value engineering, construction phase services, and related tasks. Government money in other words is often invested in these services to ensure the safety, functionality, and aesthetic quality of public infrastructure and buildings.
Assignment of claims
Contractors sometimes need financing to fulfill government contracts. “Assignment of claims” is the legal transfer of a contractor’s right to receive payment from the government to a financial institution, like a bank or trust company. This assignment serves as security for a loan to the contractor, allowing them to access capital needed for contract performance. This mechanism facilitates the flow of private money in other words into government projects, backed by the assurance of future government payments.
Assisted acquisition
When one government agency helps another with procurement, it’s called “assisted acquisition.” This type of interagency acquisition occurs when a servicing agency performs acquisition activities on behalf of a requesting agency. This could involve awarding and managing contracts, task orders, or delivery orders. “Assisted acquisition” promotes efficiency by leveraging the procurement expertise of one agency to benefit another, streamlining the process of spending government money in other words.
Basic research
“Basic research” is fundamental scientific inquiry. It’s research directed towards expanding knowledge in science, driven by curiosity and the pursuit of understanding. The primary goal is to gain a deeper knowledge of a subject, rather than to develop practical applications immediately. Government funding for basic research represents an investment of money in other words in the long-term advancement of science and technology, with potential future benefits that may not be immediately apparent.
Best value
Government procurement aims to achieve “best value.” This concept means selecting an offer that, in the government’s judgment, provides the greatest overall benefit in response to a requirement. “Best value” isn’t solely about the lowest price; it’s a holistic assessment that considers factors like technical merit, past performance, and cost. It represents the government’s commitment to using taxpayer money in other words wisely, to maximize the return on investment in terms of quality, efficiency, and effectiveness.
Bid sample
To ensure that offered products meet specific needs, a bid sample may be required. A bid sample is a product sample submitted by an offeror to demonstrate characteristics that cannot be adequately described in specifications or purchase descriptions. This might include aspects like balance, ease of use, or pattern. Requiring bid samples helps the government make informed decisions, ensuring that taxpayer money in other words is spent on products that truly meet their requirements.
Biobased product
In line with sustainability goals, the government prioritizes “biobased products.” A “biobased product” is defined by the U.S. Department of Agriculture as a commercial product or industrial product (excluding food or feed) that is composed, wholly or significantly, of biological products, renewable agricultural materials, or forestry materials. This includes intermediate ingredients and feedstocks. For forestry materials, it includes forest products meeting biobased content requirements. By purchasing biobased products, the government directs money in other words towards environmentally friendly and sustainable options, supporting domestic agriculture and reducing reliance on fossil fuels.
Broad agency announcement
For research and development, the government uses “broad agency announcements.” A “broad agency announcement” is a public notice of an agency’s research interests. It outlines criteria for proposal selection and invites participation from all capable offerors. This approach promotes open competition and encourages innovation in government-funded research. It’s a mechanism for channeling government money in other words into cutting-edge research by tapping into the broadest possible pool of expertise and ideas.
Building or work
The term “building or work” defines the scope of construction activities in government contracts. It encompasses a wide range of construction projects, including buildings, structures, improvements, bridges, dams, highways, and infrastructure. It specifically excludes manufacturing, material furnishing, or routine servicing and maintenance, unless these activities are directly connected to and performed at the construction site. Understanding this definition is crucial for applying labor laws and regulations related to government-funded construction and the significant amount of money in other words invested in these projects.
Bundling
“Bundling” is a procurement strategy that combines multiple smaller requirements into a larger single contract. It’s a subset of consolidation where previously separate contracts for supplies or services are combined into a single solicitation. This bundling can sometimes make it difficult for small businesses to compete, especially if the bundled contract is too large, diverse, or specialized. While bundling can offer economies of scale, it’s important to consider its potential impact on small businesses and ensure fair access to government money in other words.
Business unit
For accounting and organizational purposes, the concept of a “business unit” is important. A “business unit” is any segment of an organization, or an entire business organization if it’s not divided into segments. Business units are often used as cost accounting units for government contracts, helping to track and manage the flow of money in other words within complex organizational structures.
Certified cost or pricing data
Transparency and accountability are key in government contracting, especially when it comes to money in other words. “Certified cost or pricing data” refers to cost or pricing data that contractors are required to submit and certify as accurate, complete, and current. This certification is a legal assurance that the data provided for price negotiations is reliable. It’s a critical component of ensuring fair and reasonable pricing in government contracts and preventing overpayment of taxpayer money in other words.
Change-of-name agreement
Businesses evolve, and names can change. A “change-of-name agreement” is a legal document executed by the contractor and the government to formally recognize a legal name change of the contractor without altering the original contract terms and obligations. This administrative process ensures that contracts remain valid and enforceable even when a contractor’s name changes, maintaining the integrity of financial agreements involving government money in other words.
Change order
Contracts sometimes need to be modified as circumstances evolve. A “change order” is a written directive from the contracting officer instructing the contractor to make a change authorized by the contract’s Changes clause, without requiring the contractor’s consent. Change orders are a mechanism for the government to adjust contract requirements, potentially impacting costs and schedules, and thus the flow of government money in other words.
Chief Acquisition Officer
To oversee the government’s vast acquisition activities, each agency has a “Chief Acquisition Officer.” This executive-level official is responsible for the agency’s overall acquisition performance and programs, as mandated by 41 U.S.C. 1702. The Chief Acquisition Officer plays a critical role in ensuring that government money in other words is spent effectively and efficiently across the agency.
Chief of mission
In international contexts, the “Chief of mission” is the principal officer in charge of a U.S. diplomatic mission or office abroad. This individual, designated by the Secretary of State, has diplomatic authority and responsibility for the mission’s activities, including any contracting or financial matters involving government money in other words in their area of responsibility.
Claim
Disagreements can arise in contracts, and “claim” defines a formal demand for resolution. A “claim” is a written demand by one of the contracting parties seeking payment of money, contract adjustments, or other relief related to the contract. For contractor claims exceeding $100,000, specific certification requirements apply under 41 U.S.C. chapter 71. Routine payment requests are not considered claims unless disputed or not acted upon in a timely manner. The claim process is the formal mechanism for resolving financial or contractual disputes involving government money in other words.
Classified acquisition
Some government acquisitions involve sensitive information. “Classified acquisition” refers to an acquisition where offerors require access to classified information to participate effectively. This could be necessary for proposal submission, understanding requirements, or contract performance. Strict security protocols and handling procedures are in place for classified acquisitions to protect sensitive government money in other words and national security interests.
Classified contract
Similarly, a “classified contract” is any contract where the contractor or its employees must have access to classified information during performance. The contract itself may be unclassified, but the nature of the work requires access to sensitive data. “Classified contracts” necessitate stringent security measures to safeguard government money in other words and protect national security.
Classified information
“Classified information” is any knowledge or material, regardless of form, that is owned by, produced for, or controlled by the U.S. Government and must be protected from unauthorized disclosure according to Executive Order 12958 or the Atomic Energy Act of 1954. Protecting classified information is paramount in government contracting, especially when contracts involve significant government money in other words and national security implications.
Cognizant Federal agency
For contractors working with multiple federal agencies, a “Cognizant Federal agency” is assigned. This agency, on behalf of all Federal agencies, is responsible for establishing final indirect cost rates and forward pricing rates, and administering cost accounting standards for all contracts within a business unit. This centralized oversight ensures consistency and efficiency in managing indirect costs associated with government money in other words.
Combatant commander
In a military context, the “Combatant commander” is the leader of a unified or specified combatant command, established under 10 U.S.C. 161. Combatant commanders are responsible for military operations within their assigned commands, which can involve significant procurement and expenditure of government money in other words to support military objectives.
Commercial and Government Entity (CAGE) code
The “Commercial and Government Entity (CAGE) code” is a five-character ID used to identify commercial or government entities at specific locations. It’s assigned by the Defense Logistics Agency (DLA) in the U.S. and by NATO or NSPA for entities outside the U.S. The CAGE code is a standard identifier used across government systems, including procurement and payment systems, to accurately track entities involved in transactions involving government money in other words.
Commercial component
In manufacturing and procurement, a “commercial component” is any component that is also a commercial product. This distinction is relevant for applying specific acquisition regulations and preferences for commercial items, which can impact pricing and the flow of government money in other words.
Commercial computer software
“Commercial computer software” is any computer software that qualifies as a commercial product or commercial service. The acquisition of commercial computer software is often subject to streamlined procurement procedures and commercial terms, reflecting the government’s preference for leveraging readily available commercial solutions and efficiently spending money in other words.
Commercial product
The definition of “commercial product” is central to commercial item acquisition. A “commercial product” is a product, other than real property, that is of a type commonly sold to the general public or non-governmental entities for non-governmental purposes. It must have been either sold, leased, or licensed to the public, or offered for such purposes. The definition also includes products that evolve from commercial products and are expected to become commercially available. Acquiring commercial products allows the government to leverage the efficiencies of the commercial marketplace and potentially save money in other words.
Commercial service
Similarly, “commercial service” defines services commonly offered in the commercial marketplace. This includes installation, maintenance, repair, training, and other services that support a commercial product and are offered to both the government and the general public under similar terms. It also includes services offered competitively based on catalog or market prices under standard commercial terms. Acquiring commercial services enables the government to benefit from competitive commercial pricing and efficient service delivery, optimizing the use of money in other words.
Commercially available off-the-shelf (COTS) item
“Commercially available off-the-shelf (COTS) item” takes the commercial concept further. A COTS item is a commercial product that is sold in substantial quantities in the commercial marketplace and offered to the government without modifications, in the same form as sold commercially. COTS items represent the most readily available commercial solutions and are often acquired using simplified procedures, maximizing efficiency and value for government money in other words.
Common item
In the context of quality control and contractor accountability, a “common item” is material common to both a government contract and the contractor’s other work. This definition is important for clauses like 52.246-26, which address contractor responsibility for defects in common items and the potential financial implications for government money in other words.
Component
A “component” is any item supplied to the government as part of an end item or another component. Understanding what constitutes a component is crucial for various regulations, including those related to domestic preferences (like the Buy American Act) and restrictions on acquiring certain foreign products, all of which impact how government money in other words is spent.
Computer database or “database”
“Computer database” or “database” is a collection of recorded information organized for computer storage and processing. It specifically excludes computer software. This distinction is relevant for intellectual property rights and data rights in government contracts, which can have significant financial implications regarding the ownership and use of data generated or acquired with government money in other words.
Computer software
“Computer software” encompasses computer programs (instructions that cause a computer to perform specific operations) and recorded information that enables the creation or compilation of computer programs (source code, algorithms, etc.). It excludes computer databases and computer software documentation. The acquisition and licensing of computer software by the government involves substantial investment of money in other words, and the terms of these acquisitions are carefully regulated to protect government interests and ensure appropriate use of taxpayer funds.
Computer software documentation
“Computer software documentation” includes manuals and instructions that explain computer software capabilities and usage. It’s distinct from computer software itself and computer databases. Proper documentation is essential for effective use of computer software acquired with government money in other words, and contracts often specify requirements for documentation delivery and quality.
Consent to subcontract
In certain contracts, contractors may need to subcontract portions of the work. “Consent to subcontract” is the contracting officer‘s written approval for a prime contractor to enter into a specific subcontract. This control mechanism allows the government to oversee subcontracting arrangements and ensure that taxpayer money in other words is being used responsibly and effectively at all tiers of the contracting structure.
Consolidation or consolidated requirement
“Consolidation or consolidated requirement” refers to combining multiple agency requirements into a single solicitation. This can be for supplies or services previously acquired under separate contracts, or for construction projects at multiple sites. Consolidation can lead to larger contracts that may offer economies of scale but also potentially limit opportunities for smaller businesses to compete for government money in other words.
Construction
“Construction” in government contracting has a broad definition. It includes construction, alteration, or repair of buildings, structures, or other real property, including activities like dredging, excavating, and painting. The definition covers a wide range of infrastructure projects, from buildings and bridges to highways and utilities. Government investment in construction represents a significant portion of public spending, making it crucial to have clear definitions and regulations governing the use of money in other words in this sector.
Contiguous United States (CONUS)
“Contiguous United States” (CONUS) refers to the 48 adjoining states and the District of Columbia. This geographical definition is often used in contract clauses related to delivery, pricing, and labor regulations, as costs and regulations can vary significantly outside of CONUS. Understanding CONUS is important for accurate pricing and contract administration involving government money in other words.
Contingency operation
A “contingency operation” (10 U.S.C. 101(a)(13)) is a military operation designated by the Secretary of Defense where armed forces may be involved in hostilities, or that results in the call to active duty of uniformed service members during emergencies. Contingency operations often require rapid and substantial procurement of supplies and services, with streamlined acquisition procedures and potentially higher spending thresholds for government money in other words in support of urgent military needs.
Contract
The fundamental agreement in procurement is the “contract.” A contract is a legally binding agreement where the seller commits to provide supplies or services (construction included) and the buyer (government) agrees to pay. It’s a commitment of appropriated funds and generally must be in writing. Contracts are the legal instruments that govern the exchange of government money in other words for goods and services, and they come in various forms, from purchase orders to complex agreements.
Contract administration office
After a contract is awarded, a “contract administration office” may be responsible for post-award administration functions. This office handles tasks like monitoring contractor performance, processing payments, and resolving contract issues. The contract administration office plays a critical role in ensuring that government money in other words is properly managed and that contractors fulfill their obligations.
Contract clause or “clause”
“Contract clause” or “clause” refers to a specific term or condition used in solicitations and contracts. Clauses define the rights and obligations of both parties, and they are essential for establishing clear and legally sound agreements. Many clauses have financial implications, outlining payment terms, allowable costs, and other financial responsibilities related to government money in other words.
Contract modification
“Contract modification” is any written change to the terms of a contract (43.103). Contract modifications are used to adjust contract scope, price, schedule, or other terms as needed during performance. Contract modifications directly impact the financial aspects of a contract, increasing or decreasing the amount of government money in other words being spent.
Contracting
“Contracting” is the overarching process of obtaining supplies or services from non-federal sources. It encompasses all stages, from defining requirements to contract administration, but excludes grants and cooperative agreements. “Contracting” is the government’s primary mechanism for spending money in other words to acquire the goods and services needed to operate.
Contracting activity
A “contracting activity” is a designated element within an agency with broad delegated authority for acquisition functions. Contracting activities are responsible for executing procurement actions on behalf of the agency, managing the expenditure of government money in other words within their designated areas of responsibility.
Contracting office
The “contracting office” is the specific office within a contracting activity that awards and manages contracts. It’s responsible for the day-to-day procurement actions, from solicitation to award and post-award administration (unless these functions are assigned to a contract administration office). The contracting office is the operational unit directly involved in committing and managing government money in other words through contracts.
Contracting officer
The “contracting officer” is a central figure in federal procurement. This individual has the authority to enter into, administer, and terminate contracts, and make related determinations and findings. The contracting officer is the government’s authorized representative in contractual matters, with the power to legally bind the government to financial obligations and manage the expenditure of government money in other words.
Contracting officer’s representative (COR)
The “Contracting officer’s representative (COR)” assists the contracting officer in overseeing contract performance. The COR, designated in writing by the contracting officer, performs specific technical or administrative functions. While the COR does not have contracting authority, they play a vital role in monitoring contractor performance and ensuring that government money in other words is being used effectively to achieve contract objectives.
Conviction
“Conviction” refers to a judgment of guilt for a criminal offense by a court of law, whether based on a verdict or a plea, including a plea of nolo contendere. A conviction can have significant implications for contractor responsibility and eligibility for government contracts, potentially impacting their ability to receive government money in other words in the future.
Cost or pricing data
“Cost or pricing data” (10 U.S.C. 3701(1) and 41 U.S.C. chapter 35) are factual data that prudent buyers and sellers would reasonably expect to significantly affect price negotiations. These data are factual and verifiable, not judgmental estimates. They form the basis for assessing the reasonableness of proposed prices and ensuring that government money in other words is being spent fairly and transparently. Cost or pricing data include vendor quotes, nonrecurring costs, production changes, business projections, unit-cost trends, make-or-buy decisions, resource estimates, and management decisions impacting costs.
Cost realism
“Cost realism” is an evaluation standard for contractor proposals. It means that proposed costs are realistic for the work, reflect a clear understanding of requirements, and are consistent with the technical proposal. Assessing cost realism helps the government determine if proposed prices are achievable and reasonable, safeguarding government money in other words from unrealistic or inflated bids.
Cost sharing
“Cost sharing” is an arrangement where the contractor bears a portion of the contract costs. This can be a requirement in certain types of contracts, particularly research and development agreements, where the government seeks to partner with contractors and share the financial burden and risks. Cost sharing can reduce the government’s overall expenditure of money in other words and incentivize contractor investment.
Customs territory of the United States
“Customs territory of the United States” includes the 50 states, District of Columbia, and Puerto Rico. This definition is relevant for trade agreements and regulations impacting government procurement of foreign products, as well as for determining applicable tariffs and duties, which can affect the overall cost to the government and the use of money in other words.
Covered territory business
A “Covered territory business” (15 U.S.C. 632(ff) and 13 CFR 125.1) is a small business concern with its principal office in U.S. territories like the Virgin Islands, American Samoa, Guam, or the Northern Mariana Islands. The government provides procurement preferences for covered territory businesses, directing money in other words to support economic development in these regions.
Data other than certified cost or pricing data
“Data other than certified cost or pricing data” includes pricing data, cost data, and judgmental information that the contracting officer may need to determine fair and reasonable prices or cost realism, but without the formal certification required for certified cost or pricing data. This data can include sales information, estimating processes, and contingency factors. It provides the contracting officer with valuable insights for price analysis and negotiation, ensuring responsible spending of government money in other words.
Day
For contract performance and deadlines, “day” generally means a calendar day, unless otherwise specified in the contract. Understanding the definition of “day” is crucial for adhering to contract schedules and avoiding potential delays or penalties that could impact project costs and the efficient use of government money in other words.
Debarment
“Debarment” is a serious action taken by a government official to exclude a contractor from future government contracting and subcontracting for a specified period (9.406). Debarment is typically based on contractor misconduct or violations of regulations. Debarred contractors are ineligible to receive government contracts and therefore cannot access government money in other words for new business.
Delivery order
A “delivery order” is used to procure supplies under established contracts or from government sources. Delivery orders are common under indefinite-delivery contracts, allowing agencies to quickly and efficiently order needed supplies as requirements arise. Delivery orders streamline the process of spending government money in other words for recurring supply needs.
Depreciation
“Depreciation” is an accounting concept that distributes the cost of a tangible asset over its useful life. It’s a charge to current operations, not a valuation process. Depreciation is relevant for cost accounting in government contracts, particularly for determining allowable costs for contractor-owned assets used in contract performance. Understanding depreciation is important for accurate cost accounting and proper allocation of government money in other words.
Descriptive literature
“Descriptive literature” is information provided by an offeror that illustrates product characteristics or construction and explains operation, such as brochures and drawings. It’s used to evaluate product acceptability. Descriptive literature helps the government assess whether offered products meet technical requirements, ensuring that government money in other words is spent on suitable goods.
Design-to-cost
“Design-to-cost” is a management concept that establishes cost as a key design parameter. It aims to balance lifecycle cost, performance, and schedule. Under this approach, cost is a constraint during design and development and a management discipline throughout acquisition and operation. “Design-to-cost” emphasizes cost-effectiveness and value engineering from the outset of a project, aiming to optimize the use of government money in other words over the entire lifecycle of a system or equipment.
Designated operational area
A “designated operational area” is a geographic area defined by a combatant commander for military operations or support. This term is relevant for contingency contracting and deployment of resources in support of military operations, which often involve significant and rapid expenditure of government money in other words in specific geographic locations.
Direct acquisition
“Direct acquisition” is a type of interagency acquisition where a requesting agency places an order directly against a servicing agency‘s indefinite-delivery contract. The servicing agency manages the contract but does not participate in order placement or administration. Direct acquisition simplifies interagency procurement for certain types of contracts, streamlining the process of spending government money in other words across agencies.
Direct cost
“Direct cost” is any cost specifically identified with a particular final cost objective, such as a contract. Direct costs are directly attributable to a specific project or contract and are easily allocable. Understanding direct costs is fundamental for cost accounting in government contracts and for accurately tracking how government money in other words is being spent on specific projects.
Disaster Response Registry
The “Disaster Response Registry” is a voluntary registry of contractors willing to perform disaster relief activities like debris removal and supplies distribution. Established under 6 U.S.C. 796, it helps the government quickly identify and engage contractors during emergencies. The Registry facilitates rapid mobilization of resources and efficient spending of government money in other words for disaster relief efforts.
Drug-free workplace
“Drug-free workplace” refers to the site(s) where contract work is performed and where contractor employees are prohibited from unlawful drug-related activities. Maintaining a drug-free workplace is a requirement in many government contracts, reflecting the government’s commitment to safety and responsible use of taxpayer money in other words by ensuring a productive and safe workforce.
Earned value management system
“Earned value management system” is a project management tool that integrates project scope, cost, schedule, and performance. It’s used for project planning and control, particularly in complex contracts. An earned value management system helps track project progress against planned budgets and schedules, enabling better cost control and ensuring that government money in other words is being used effectively and efficiently.
Economically disadvantaged women-owned small business (EDWOSB) concern
An “economically disadvantaged women-owned small business (EDWOSB) concern” is a type of small business eligible for specific government contracting preferences under the Women-Owned Small Business (WOSB) Program. The government aims to direct a portion of its procurement money in other words to EDWOSB concerns to promote economic opportunity and diversity in federal contracting.
Effective date of termination
“Effective date of termination” is the date when a contractor is required to stop work under a terminated contract. This date is crucial for determining contractor rights and obligations after termination, including cost recovery and settlement, which directly impact the final expenditure of government money in other words on the terminated contract.
Electronic commerce
“Electronic commerce” encompasses electronic methods for business transactions, including email, web technology, purchase cards, and electronic funds transfer. The government promotes electronic commerce to streamline procurement processes, reduce administrative costs, and improve efficiency in the flow of government money in other words.
Electronic data interchange (EDI)
“Electronic data interchange (EDI)” is a technique for electronically transferring formatted information between computers using standard formats and codes. EDI facilitates automated data exchange in procurement and financial transactions, improving speed and accuracy in processing government money in other words.
Electronic Funds Transfer (EFT)
“Electronic Funds Transfer (EFT)” is any electronic transfer of funds, excluding cash or check transactions. It includes ACH transfers, wire transfers, and point-of-sale transactions. The government mandates EFT for payments to contractors, promoting efficiency, security, and cost savings in disbursing government money in other words.
Electronic Funds Transfer (EFT) indicator
The “Electronic Funds Transfer (EFT) indicator” is a suffix to the unique entity identifier, used to establish additional SAM records for alternative EFT accounts. This allows entities to manage multiple bank accounts for receiving government payments via EFT, providing flexibility in managing government money in other words.
Emergency
“Emergency” (42 U.S.C. 5122) refers to situations where federal assistance is needed to supplement state and local efforts to save lives, protect property and public health, or avert a catastrophe. In emergencies, streamlined procurement procedures and higher spending thresholds may be authorized to facilitate rapid response and effective use of government money in other words for urgent needs.
End product
“End product” refers to supplies delivered under a contract line item. This definition is important for determining country of origin for trade preference programs and for inspection and acceptance purposes, ensuring that government money in other words is being spent on compliant and acceptable goods.
Energy-efficient product
“Energy-efficient product” is a product that meets Energy Star or FEMP efficiency criteria. The government prioritizes acquiring energy-efficient products to reduce energy consumption and costs, promoting sustainability and responsible use of taxpayer money in other words.
Energy-efficient standby power devices
“Energy-efficient standby power devices” are products designed to minimize electricity consumption in standby mode. Acquiring these devices supports energy conservation and reduces government operating costs, saving money in other words and promoting environmental responsibility.
Energy savings performance contract
An “energy savings performance contract” (42 U.S.C. 8287 and 10 CFR 436.31) is a contract where a contractor implements energy conservation measures, finances the project, and is paid a share of the resulting energy savings. This innovative contracting approach leverages private sector investment to improve energy efficiency in government facilities and reduce long-term energy costs, saving government money in other words.
Environmentally preferable
“Environmentally preferable” describes products or services with a reduced impact on human health and the environment compared to competing options. The government prioritizes acquiring environmentally preferable products and services to promote sustainability and responsible environmental stewardship in government spending of money in other words.
Excess personal property
“Excess personal property” is personal property under federal agency control that the agency head determines is not needed. Agencies are required to screen and reuse excess personal property before making new purchases, maximizing the utilization of existing government assets and reducing unnecessary spending of money in other words.
Executive agency
“Executive agency” includes executive departments, military departments, independent establishments, and wholly owned government corporations (5 U.S.C.101, 102, and 104(1), and 31 U.S.C. 9101). Executive agencies are the primary entities responsible for federal procurement and expenditure of government money in other words.
Facilities capital cost of money
“Facilities capital cost of money” is the cost of capital associated with facilities used in contract performance. It’s an allowable cost under specific Cost Accounting Standards (CAS) and represents a return on investment for contractor-owned facilities used for government work. Understanding facilities capital cost of money is important for accurate cost accounting and fair pricing in government contracts involving significant contractor-owned facilities and investment of money in other words.
Federal agency
“Federal agency” encompasses executive agencies and independent establishments in the legislative or judicial branches (excluding Congress and related entities). Federal agencies are the entities that conduct government procurement and spend government money in other words to fulfill their missions.
Federally-controlled facilities
“Federally-controlled facilities” include federally-owned or leased buildings, government-owned contractor-operated facilities, and facilities under management and operating contracts. These facilities are subject to specific security and management requirements, which can impact contract costs and the overall expenditure of government money in other words related to facility operations.
Federally-controlled information system
“Federally-controlled information system” is an information system used or operated by a Federal agency or on its behalf. These systems are subject to stringent security requirements to protect government data and assets, and contracts involving these systems often include specific cybersecurity clauses and costs associated with protecting government money in other words and sensitive information.
Federally Funded Research and Development Centers (FFRDC’s)
“Federally Funded Research and Development Centers (FFRDC’s)” are research institutions sponsored by government agencies to conduct basic or applied research. FFRDCs receive significant government funding and have long-term relationships with sponsoring agencies. Government funding of FFRDCs represents a substantial investment of money in other words in long-term research and development capabilities.
Final indirect cost rate
“Final indirect cost rate” is the indirect cost rate established and agreed upon by the government and contractor as fixed and not subject to change, typically after the contractor’s fiscal year end. Final indirect cost rates are used to allocate indirect costs to government contracts and determine final contract costs, ensuring accurate accounting and appropriate use of government money in other words.
First article
“First article” is a preproduction sample for testing and evaluation before full production begins. First articles are used to verify that a contractor can meet contract requirements before committing to large-scale production, reducing the risk of defects and ensuring that government money in other words is spent on products that meet specifications.
First article testing
“First article testing” is the process of testing and evaluating the first article to ensure it meets contract requirements before or during initial production. First article testing helps identify and resolve potential production issues early, preventing costly rework or rejection of large quantities of supplies and safeguarding government money in other words.
F.o.b.
“F.o.b.” (free on board) is a shipping term that defines responsibility for freight charges and point of title transfer. “F.o.b. destination” means the seller is responsible for delivery to the destination, while “F.o.b. origin” means the buyer is responsible from the origin point. F.o.b. terms directly impact shipping costs and risk allocation in government contracts, affecting the overall cost and management of government money in other words related to transportation.
Forward pricing rate agreement
“Forward pricing rate agreement” is a written agreement between a contractor and the government establishing rates for specific costs to be used in pricing future contracts or modifications during a specified period. These rates are projections for costs that are difficult to estimate for specific contracts, such as labor or indirect costs. Forward pricing rate agreements provide certainty and efficiency in price negotiations, streamlining the process of determining fair prices and managing government money in other words.
Forward pricing rate recommendation
“Forward pricing rate recommendation” is a rate set unilaterally by the administrative contracting officer when a forward pricing rate agreement cannot be reached. It’s used by the government in negotiations or contract actions. Forward pricing rate recommendations provide a basis for government price negotiations when agreements with contractors are not possible, ensuring that government money in other words is spent reasonably and fairly.
Freight
“Freight” refers to supplies, goods, and transportable property. Freight costs are a significant component of overall procurement expenses, and contract terms related to freight directly impact the government’s expenditure of money in other words for transportation and logistics.
Full and open competition
“Full and open competition” is a fundamental principle of federal procurement, meaning that all responsible sources are allowed to compete for government contracts. Promoting full and open competition is intended to ensure fair and transparent procurement processes, maximize taxpayer value, and prevent favoritism in the spending of government money in other words.
General and administrative (G&A) expense
“General and administrative (G&A) expense” includes management, financial, and other general expenses incurred by a business unit for its overall management and administration. G&A expenses are typically indirect costs allocated across multiple contracts. Understanding G&A expense is crucial for cost accounting in government contracts and for determining fair and reasonable prices that include appropriate allocations of indirect overhead costs, ensuring responsible use of government money in other words.
Governmentwide acquisition contract (GWAC)
“Governmentwide acquisition contract (GWAC)” is a task-order or delivery-order contract for information technology established by one agency for government-wide use. GWACs streamline the procurement of IT supplies and services across the federal government, offering pre-competed contract vehicles and efficient access to IT solutions, optimizing the use of government money in other words for technology acquisition.
Governmentwide point of entry (GPE)
The “Governmentwide point of entry (GPE)” is the official website (https://www.sam.gov) where government business opportunities over $25,000 are publicly posted, including solicitations and related information. The GPE promotes transparency and access to government procurement opportunities for businesses, ensuring open competition for government money in other words.
Head of the agency
“Head of the agency” (see “agency head“).
Head of the contracting activity
“Head of the contracting activity” is the official responsible for overall management of the contracting activity. This individual has leadership oversight for procurement operations within their organization, ensuring effective and compliant spending of government money in other words.
Historically black college or university
“Historically black college or university” is defined by the Secretary of Education based on specific criteria (34 CFR 608.2). The government has programs to support HBCUs and encourages their participation in federal contracting, directing government money in other words to these institutions to promote educational opportunity and diversity.
HUBZone
“HUBZone” is a historically underutilized business zone, defined by geographic areas meeting specific economic criteria (13 CFR 126.103). The government’s HUBZone program provides procurement preferences for businesses located in HUBZones, channeling government money in other words to economically distressed areas to stimulate economic development and job creation.
HUBZone contract
“HUBZone contract” is a contract awarded to a certified “HUBZone small business concern” through various procurement methods, including sole-source awards, set-asides, and price evaluation preferences. HUBZone contracts are a mechanism for directing government money in other words to businesses in historically underutilized business zones, supporting economic revitalization in these communities.
HUBZone small business concern
“HUBZone small business concern” is a small business certified by the SBA as meeting HUBZone requirements (13 CFR 126.200 and 13 CFR 126.103). HUBZone small business concerns are eligible for preferences in government contracting, giving them increased access to government money in other words.
Humanitarian or peacekeeping operation
“Humanitarian or peacekeeping operation” is a military operation supporting humanitarian aid, disaster assistance, or peacekeeping under the UN Charter (10 U.S.C. 3015(2) and 41 U.S.C. 153(2)). These operations often require rapid procurement of supplies and services in challenging environments, with streamlined acquisition procedures and potentially higher spending thresholds for government money in other words to address urgent humanitarian needs.
In writing, “writing,” or “written”
“In writing, “writing,” or “written”” includes any form of recorded expression that can be read and communicated, including electronic transmissions. This definition recognizes the validity of electronic documents in government contracting and facilitates efficient communication and record-keeping in transactions involving government money in other words.
Indirect cost
“Indirect cost” is any cost not directly identified with a single final cost objective, but associated with multiple cost objectives or at least one intermediate cost objective. Indirect costs are overhead expenses that support overall business operations and are allocated to contracts. Understanding indirect costs is essential for cost accounting in government contracts and for determining fair and reasonable prices that include appropriate allocations of these shared expenses, ensuring responsible use of government money in other words.
Indirect cost rate
“Indirect cost rate” is the ratio of indirect expenses to a direct cost base (like direct labor cost). It’s used to allocate indirect costs to contracts. Accurate indirect cost rates are crucial for fair pricing and cost reimbursement in government contracts, ensuring that contractors are appropriately compensated for their overhead expenses and that government money in other words is allocated accurately.
Ineligible
“Ineligible” means excluded from government contracting due to statutory, executive order, or regulatory authorities other than the FAR (e.g., wage rate violations, environmental violations). Ineligible contractors are barred from receiving government contracts and therefore cannot access government money in other words for new business.
Information and communication technology (ICT)
“Information and communication technology (ICT)” encompasses information technology and related equipment, systems, technologies, and processes for electronic data creation, manipulation, storage, display, receipt, or transmission. ICT is a broad category that includes computers, software, websites, and telecommunications equipment. Government acquisition of ICT represents a significant investment of money in other words in modernizing government operations and services.
Information security
“Information security” is protecting information systems from unauthorized access, use, disclosure, disruption, modification, or destruction to ensure integrity, confidentiality, and availability of information. Information security is paramount in government operations, and contracts involving sensitive government information or systems often include stringent security requirements and costs associated with protecting government money in other words and data assets.
Information technology
“Information technology” is broadly defined as equipment or interconnected systems used for automatic data acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception. IT includes computers, software, and related services. Government investment in information technology is substantial and critical for modernizing government operations and delivering efficient services to citizens, representing a significant expenditure of government money in other words.
Inherently governmental function
“Inherently governmental function” is a function so closely linked to the public interest that it must be performed by government employees. These functions involve discretionary government authority or value judgments in decision-making. Inherently governmental functions cannot be contracted out to private sector contractors, ensuring that core government responsibilities and authority are exercised directly by government employees and that government money in other words for these functions is used to support the government workforce.
Inspection
“Inspection” is the process of examining and testing supplies or services to determine if they meet contract requirements. Inspection is a critical quality assurance function in government contracting, ensuring that government money in other words is spent on goods and services that meet specified standards and are fit for their intended purpose.
Insurance
“Insurance” is a contract where one party (insurer) indemnifies another (insured) against loss from an unknown event for a premium. Insurance is often required in government contracts to protect against various risks, and insurance costs are typically allowable contract costs, representing a necessary expenditure of government money in other words to mitigate potential liabilities.
Interagency acquisition
“Interagency acquisition” is when one government agency (requesting agency) obtains supplies or services from another agency (servicing agency). Interagency acquisitions promote efficiency and cost savings by leveraging existing government resources and expertise, streamlining the use of government money in other words across agencies.
Invoice
“Invoice” is a contractor’s bill or payment request for supplies delivered or services performed under a contract. Invoices are the primary mechanism for contractors to receive payment for their work under government contracts, representing the flow of government money in other words to contractors.
Irrevocable letter of credit
“Irrevocable letter of credit” is a financial instrument from a federally insured institution guaranteeing payment of a stated amount upon government demand until the letter’s expiration. It cannot be revoked or conditioned by the financial institution or contractor. Irrevocable letters of credit provide financial security to the government in certain contracts, ensuring payment obligations are met and safeguarding government money in other words.
Labor surplus area
“Labor surplus area” is a geographic area identified by the Department of Labor as having high unemployment (20 CFR part 654, subpart A). The government provides procurement preferences for businesses that perform work in labor surplus areas, directing government money in other words to stimulate employment and economic activity in these regions.
Labor surplus area concern
“Labor surplus area concern” is a business that will perform substantially in labor surplus areas. These businesses receive procurement preferences, channeling government money in other words to support employment and economic development in areas with high unemployment.
Latent defect
“Latent defect” is a defect existing at acceptance but not discoverable by reasonable inspection. Contractors are typically responsible for latent defects even after acceptance, and the government may seek remedies for costs incurred due to latent defects, protecting government money in other words from losses due to hidden flaws.
Line item
“Line item” is the basic structural element in a procurement instrument that describes and organizes required products or services for pricing, delivery, inspection, and payment. Line items provide a detailed breakdown of contract requirements and associated costs, facilitating contract administration and payment processing and ensuring accountability in the use of government money in other words.
Line item number
“Line item number” is a numeric or alphanumeric identifier for a line item. Line item numbers are used for clear referencing and tracking of specific requirements within a contract, simplifying contract management and payment processes and ensuring accurate allocation of government money in other words.
Major disaster
“Major disaster” (42 U.S.C. 5122) is a natural catastrophe or other event causing damage of sufficient severity to warrant major disaster assistance under the Stafford Act. In major disasters, streamlined procurement procedures and higher spending thresholds may be authorized to facilitate rapid response and effective use of government money in other words for disaster relief and recovery efforts.
Major system
“Major system” is a combination of elements fulfilling a mission need, potentially including hardware, software, and equipment, but excluding construction. A system is considered major if it exceeds certain cost thresholds (10 U.S.C. 3041 and 41 U.S.C. 109). Major system acquisitions are subject to enhanced oversight and reporting requirements due to their significant cost and importance to government missions, ensuring careful management of government money in other words.
Make-or-buy program
“Make-or-buy program” is a contractor’s plan identifying items to be produced in-house versus subcontracted. Make-or-buy programs are reviewed by the government to ensure cost-effectiveness and alignment with government policies, influencing how government money in other words is distributed across the prime contractor and subcontractors.
Manufactured end product
“Manufactured end product” is defined by specific product and service codes (PSC 1000-9999), excluding certain categories like lumber, agricultural supplies, and raw materials. This definition is relevant for applying domestic preference requirements like the Buy American Act to manufactured end products acquired by the government, influencing how government money in other words is spent on domestic versus foreign goods.
Market research
“Market research” is collecting and analyzing information about market capabilities to meet agency needs. Market research is essential for effective procurement planning, helping agencies understand available solutions, identify potential sources, and develop appropriate acquisition strategies to maximize value and efficient use of government money in other words.
Master solicitation
“Master solicitation” is a document containing standard clauses and provisions for repetitive acquisitions of specific supplies or services. Master solicitations streamline repetitive procurements, reducing administrative burden and improving efficiency in spending government money in other words on recurring needs.
May
“May” denotes permissive action, indicating discretion or optionality. However, “no person may…” indicates prohibition. Understanding the nuances of “may” and “shall” (imperative) is crucial for interpreting contract language and determining required actions and allowable discretion in matters involving government money in other words.
Micro-purchase
“Micro-purchase” is a simplified acquisition method for small purchases below the micro-purchase threshold. Micro-purchases are designed for speed and efficiency, allowing government buyers to quickly acquire low-value items and services with minimal administrative burden, streamlining the spending of government money in other words for routine needs.
Micro-purchase threshold
“Micro-purchase threshold” is currently $10,000 (with exceptions for construction, service contracts, and emergency acquisitions). Purchases below the micro-purchase threshold can be made using simplified acquisition procedures with reduced competition and documentation requirements, streamlining small-value purchases of government money in other words.
Minority Institution
“Minority Institution” is a higher education institution meeting specific criteria (20 U.S.C. 1067k). The government has programs to support Minority Institutions and encourages their participation in federal contracting, directing government money in other words to these institutions to promote educational opportunity and diversity.
Multi-agency contract (MAC)
“Multi-agency contract (MAC)” is a task-order or delivery-order contract established by one agency for use by multiple government agencies. MACs streamline procurement across government, offering pre-competed contract vehicles and leveraging economies of scale to reduce costs and improve efficiency in spending government money in other words across multiple agencies.
Multiple-award contract
“Multiple-award contract” includes GSA Schedule contracts, multiple-award task-order or delivery-order contracts, and other indefinite-delivery contracts awarded to multiple sources. Multiple-award contracts provide government agencies with a range of pre-competed contract options, streamlining procurement and offering flexibility in sourcing supplies and services while promoting competition and efficient use of government money in other words.
Must
“Must” (see “shall“).
National defense
“National defense” encompasses activities related to military programs, atomic energy, military assistance, stockpiling, or space programs. National defense acquisitions are often subject to specific regulations and priorities, and represent a significant portion of government spending of money in other words to support national security.
Neutral person
“Neutral person” is an impartial third party who assists in dispute resolution through mediation, fact-finding, or arbitration (5 U.S.C. 583). Using a neutral person can be a cost-effective way to resolve contract disputes and avoid lengthy and expensive litigation, saving government money in other words and preserving productive contractor relationships.
Nondevelopmental item
“Nondevelopmental item” includes previously developed items used by government entities, items requiring only minor modifications, or items in production but not yet in use. Acquiring nondevelopmental items can reduce development costs and lead times, offering cost savings and efficient use of government money in other words by leveraging existing solutions.
Novation agreement
“Novation agreement” is a legal instrument recognizing the transfer of a contract from one contractor (transferor) to a successor (transferee) due to a business transfer. Novation agreements ensure contract continuity and legal recognition of the new contractor, maintaining the government’s contractual relationship and ensuring continued performance and responsible use of government money in other words.
Offer
“Offer” is a response to a solicitation that, if accepted, would bind the offeror to a contract. Bids in sealed bidding and proposals in negotiation are offers. Offers represent the willingness of contractors to provide supplies or services to the government at a proposed price, and the evaluation of offers is central to the government’s procurement process and decision-making on how to spend government money in other words.
Offeror
“Offeror” means offeror or bidder, the entity submitting an offer in response to a government solicitation. Offerors are businesses or individuals seeking to contract with the government and receive government money in other words for providing supplies or services.
Office of Small and Disadvantaged Business Utilization
“Office of Small and Disadvantaged Business Utilization” is the Office of Small Business Programs in the Department of Defense. These offices are responsible for advocating for small businesses and ensuring their participation in federal contracting, promoting small business access to government money in other words.
OMB Uniform Guidance at 2 CFR part 200
“OMB Uniform Guidance at 2 CFR part 200” is a consolidated set of federal regulations for administrative requirements, cost principles, and audit requirements for federal awards. The Uniform Guidance provides consistent rules for managing federal grants and contracts, ensuring accountability and proper use of government money in other words across federal programs.
Option
“Option” is a unilateral right in a contract for the government to purchase additional supplies or services or extend the contract term. Options provide flexibility for the government to adjust contract quantities or durations as needs change, and exercising options commits additional government money in other words under the contract.
Organizational conflict of interest
“Organizational conflict of interest” (OCI) exists when a contractor’s other activities or relationships could impair impartiality in advising the government, affect objectivity in contract work, or create an unfair competitive advantage. OCI regulations aim to prevent conflicts of interest in government contracting and ensure fair competition and unbiased advice, safeguarding government money in other words from potential misuse or undue influence.
Outlying areas
“Outlying areas” include Puerto Rico, Northern Mariana Islands, American Samoa, Guam, U.S. Virgin Islands, and certain minor outlying islands. Procurement from outlying areas may be subject to specific regulations and preferences, and understanding this definition is relevant for contracts involving these regions and the flow of government money in other words to these areas.
Overtime
“Overtime” is time worked by a contractor employee beyond their normal workweek. Overtime labor is typically more expensive than regular time, and contract costs may include overtime premiums, representing an increased expenditure of government money in other words for labor.
Overtime premium
“Overtime premium” is the difference between the regular pay rate and the higher overtime rate. Overtime premiums increase labor costs on government contracts and are subject to allowability rules, impacting the overall cost to the government and the use of money in other words.
Partial termination
“Partial termination” is terminating part, but not all, of the work under a contract. Partial terminations can reduce the total contract value and the amount of government money in other words ultimately spent, while still allowing the government to acquire the needed portion of the contracted work.
Past performance
“Past performance” is an offeror‘s or contractor’s track record on previous contracts. Past performance is a key evaluation factor in government source selections, as it provides insights into a contractor’s reliability and ability to successfully perform contracts, helping the government make informed decisions on how to best spend government money in other words.
Performance-based acquisition (PBA)
“Performance-based acquisition (PBA)” structures acquisitions around desired results rather than specific work methods. PBA emphasizes clear, measurable performance outcomes and contractor flexibility in achieving those outcomes. PBA aims to improve contract performance and value for government money in other words by focusing on results and incentivizing contractor innovation.
Performance Work Statement (PWS)
“Performance Work Statement (PWS)” is a statement of work used in PBA that describes required results in clear, objective, and measurable terms. The PWS is a key document in PBA, defining the performance expectations and metrics against which contractor success will be evaluated, ensuring accountability for the government’s investment of money in other words.
Personal property
“Personal property” is property of any kind except real property, federal records, and certain naval vessels. Personal property includes a wide range of tangible items, from equipment and supplies to intellectual property. Government acquisition, management, and disposal of personal property involves significant processes and regulations, impacting the lifecycle management of government assets and the efficient use of government money in other words.
Personal services contract
“Personal services contract” is a contract that creates an employer-employee relationship between the government and contractor personnel (37.104). Personal services contracts are generally restricted, as government work is typically performed by government employees, and using contracts to create de facto government employment can raise legal and ethical concerns regarding the appropriate use of government money in other words for personnel services.
Plant clearance officer
“Plant clearance officer” is a contracting officer representative responsible for managing contractor inventory at a contractor’s plant or work site, including screening, redistribution, and disposal. Plant clearance officers play a role in managing government property in contractor possession and ensuring proper disposition of assets when contracts are completed or terminated, contributing to responsible asset management and efficient use of government money in other words.
Pollution prevention
“Pollution prevention” is any practice that reduces or eliminates pollution at the source, through waste reduction, increased efficiency, or conservation of resources. The government promotes pollution prevention in its operations and contracting, encouraging environmentally responsible practices and potentially reducing long-term environmental costs and liabilities associated with government activities and the use of government money in other words.
Power of attorney
“Power of attorney” is legal authorization for one person or corporation to act on behalf of another. In corporate suretyship, it’s used to authorize an attorney-in-fact to sign bonds on behalf of a surety company (28.001). Powers of attorney are important legal instruments in government contracting, particularly in bonding and financial guarantee arrangements, ensuring legal enforceability of financial commitments related to government money in other words.
Preaward survey
“Preaward survey” is an evaluation of a prospective contractor’s capability to perform a proposed contract. Preaward surveys help the government assess contractor responsibility and reduce the risk of contract failure, ensuring that government money in other words is awarded to capable and reliable contractors.
Preponderance of the evidence
“Preponderance of the evidence” is a standard of proof meaning that the evidence suggests the fact at issue is more likely true than not. This standard is used in various government contract disputes and legal proceedings, representing a lower burden of proof than “clear and convincing evidence” or “beyond a reasonable doubt,” and is relevant for resolving issues involving government money in other words.
Pricing
“Pricing” is the process of establishing a reasonable payment amount for supplies or services. Pricing is a core aspect of government procurement, and regulations and procedures for pricing are designed to ensure fair and reasonable prices, protect taxpayer interests, and ensure responsible spending of government money in other words.
Principal
“Principal” refers to a key individual within a business entity, such as an officer, director, owner, partner, or senior manager. Identifying principals is important for contractor responsibility determinations and for ensuring ethical conduct in government contracting, safeguarding government money in other words from potential fraud or abuse.
Procurement
“Procurement” (see “acquisition“).
Procuring activity
“Procuring activity” is a component of an executive agency with significant acquisition functions. “Procuring activity” is often synonymous with “contracting activity.” Procuring activities are organizational units within government agencies responsible for conducting procurement actions and spending government money in other words.
Products
“Products” has the same meaning as “supplies.”
Projected average loss
“Projected average loss” is the estimated long-term average loss per period for comparable risk exposure. This term is relevant for government risk management and insurance considerations, particularly in large or complex contracts, and helps in assessing potential financial risks and liabilities associated with government projects and the use of government money in other words.
Proper invoice
“Proper invoice” is an invoice that meets minimum standards for government payment processing (32.905(b)). Submitting a proper invoice is essential for contractors to receive timely payment from the government for contract performance, ensuring efficient flow of government money in other words to contractors.
Purchase order
“Purchase order” is a government offer to buy supplies or services using simplified acquisition procedures. Purchase orders are streamlined contracting instruments for low-value acquisitions, facilitating efficient and rapid procurement of routine needs and simplifying the spending of government money in other words for smaller purchases.
Qualification requirement
“Qualification requirement” is a government requirement for testing or quality assurance that must be met before contract award. Qualification requirements ensure that only qualified sources are awarded contracts for certain supplies or services, reducing risks and protecting government money in other words from being spent on unqualified contractors or products.
Qualified products list (QPL)
“Qualified products list (QPL)” is a list of products that have met all applicable qualification requirements. QPLs streamline procurement for certain items by pre-qualifying products, reducing the need for repeated testing and evaluation and facilitating efficient acquisition of compliant supplies, ensuring that government money in other words is spent on pre-approved and reliable products.
Qualifying offeror
“Qualifying offeror” (13.106-1 and 15.304) is a responsible source with a technically acceptable proposal and reasonably expected fair and reasonable pricing. Identifying qualifying offerors is a key step in government source selection, ensuring that contracts are awarded to capable and responsible contractors offering good value for government money in other words.
Receiving report
“Receiving report” is written evidence of government acceptance of delivered supplies or services (46.6). Receiving reports are essential for payment processing, documenting government acceptance and triggering contractor payment for satisfactory contract performance, ensuring accountability in the disbursement of government money in other words.
Recovered material
“Recovered material” is waste material diverted from solid waste, excluding materials reused within the original manufacturing process (42 U.S.C. 6903). The government prioritizes purchasing products containing recovered material to promote recycling and resource conservation, directing government money in other words towards environmentally sustainable products.
Registered in the System for Award Management (SAM)
“Registered in the System for Award Management (SAM)” means a contractor has completed required registration steps in SAM, including providing unique entity identifier, EFT information, CAGE code, and annual representations and certifications, and the government has validated the registration. SAM registration is mandatory for contractors doing business with the government, and accurate SAM registration is essential for receiving government contracts and payments, ensuring proper flow of government money in other words to registered and validated contractors.
Requesting agency
“Requesting agency” is the agency with the requirement in an interagency acquisition. The requesting agency initiates the procurement process and ultimately benefits from the supplies or services acquired through interagency acquisition, utilizing government money in other words to meet its needs.
Residual value
“Residual value” is the estimated net proceeds from disposing of a tangible asset at the end of its useful life. Residual value is considered in depreciation calculations and asset lifecycle cost analysis, influencing decisions about asset acquisition and disposal and the long-term cost-effectiveness of government investments of money in other words in capital assets.
Responsible audit agency
“Responsible audit agency” is the agency responsible for performing contract audit services for a business unit. Responsible audit agencies provide independent oversight of contractor costs and financial practices, helping to ensure accountability and proper use of government money in other words.
Responsible prospective contractor
“Responsible prospective contractor” is a contractor meeting standards of business integrity, capability, and performance (9.104). The government awards contracts only to responsible prospective contractors, ensuring that government money in other words is entrusted to capable and ethical businesses.
Reverse auction
“Reverse auction” is a pricing process using electronic tools where offerors see competing prices (anonymously) and can submit lower bids until the auction closes. Reverse auctions are used to drive down prices in competitive procurements, maximizing taxpayer value and achieving cost savings in government spending of money in other words.
Scrap
“Scrap” is personal property with value only for its basic material content. Government disposal of scrap generates revenue and reduces waste, contributing to responsible asset management and potential recoupment of some government money in other words from surplus materials.
Segment
“Segment” is a division or subdivision of an organization reporting to a home office, typically with profit responsibility. Segments are used for organizational and cost accounting purposes, particularly in large businesses with government contracts, facilitating cost allocation and financial reporting for complex organizational structures involved in government work and the use of government money in other words.
Self-insurance
“Self-insurance” is a contractor’s assumption of risk of loss, including deductibles in purchased insurance. Self-insurance decisions impact contractor risk management and cost structures, which can be considered in government contract pricing and cost allowability determinations, influencing the overall financial arrangements in government contracts and the expenditure of government money in other words.
Senior procurement executive
“Senior procurement executive” is the official responsible for managing an executive agency‘s acquisition system (41 U.S.C. 1702(c). Senior procurement executives provide leadership and direction for agency procurement activities, ensuring effective and compliant spending of government money in other words across the agency.
Service-disabled veteran-owned small business (SDVOSB) concern
“Service-disabled veteran-owned small business (SDVOSB) concern” is a small business owned and controlled by service-disabled veterans (38 U.S.C. 101(2) and 38 U.S.C. 101(16)). The government has programs to support SDVOSB concerns and encourages their participation in federal contracting, directing government money in other words to these businesses as a matter of social and economic policy.
*Service-disabled veteran-owned small business (SDVOSB) concern eligible under the SDVOSB Program**
“Service-disabled veteran-owned small business (SDVOSB) concern eligible under the SDVOSB Program” refers to SDVOSB concerns certified by the SBA or meeting specific application criteria. These SDVOSB concerns are eligible for set-asides and sole-source awards in government contracting, providing them preferential access to government money in other words.
Service-disabled veteran-owned small business (SDVOSB) Program
“Service-disabled veteran-owned small business (SDVOSB) Program” authorizes contracting officers to set aside contracts for SDVOSB concerns, including sole-source awards. The SDVOSB program is a key mechanism for directing government money in other words to businesses owned and controlled by service-disabled veterans, fulfilling socio-economic contracting goals.
Servicing agency
“Servicing agency” is the agency conducting an assisted acquisition on behalf of a requesting agency. The servicing agency provides procurement support and expertise to the requesting agency, facilitating efficient and effective use of government money in other words in interagency procurements.
Shall
“Shall” denotes the imperative, indicating a mandatory requirement. “Shall” and “must” are used to express legally binding obligations in government contracts and regulations, requiring specific actions and compliance in matters related to government money in other words.
Shipment
“Shipment” means freight being transported or to be transported. Shipment terms and costs are important aspects of government contracts involving physical supplies, impacting logistics planning and the overall expenditure of government money in other words for transportation.
Shop drawings
“Shop drawings” are detailed drawings submitted by construction contractors or subcontractors showing fabrication and installation details for structural elements, materials, or equipment. Shop drawings are essential for ensuring proper construction and contract compliance in government building and infrastructure projects, contributing to quality control and responsible use of government money in other words in construction.
Should
“Should” indicates an expected course of action or policy, to be followed unless inappropriate for a particular situation. “Should” suggests recommended practices or guidelines in government contracting and regulations, providing direction but allowing for flexibility in specific circumstances involving government money in other words.
Signature or “signed”
“Signature” or “signed” is a verifiable symbol indicating intent to authenticate a writing, including electronic symbols. Valid signatures are essential for legally binding contracts and agreements in government procurement, ensuring enforceability of commitments related to government money in other words.
Simplified acquisition procedures
“Simplified acquisition procedures” are streamlined procurement methods for purchases below the simplified acquisition threshold ([part 13](
