Contracting Terminology

A | B | C | D | E | F | G | H | I | L | M | N | O | P | R | S | T | U | V | W

A

Acceptance

Acceptance of offer: The act of accepting an officer i.e. awarding a contract based on an offer under a request for proposal
Acceptance of work: The act of an authorized representative of the Government assumes ownership of existing identified supplied tendered or approves specific services rendered as partial or complete performance of the contract

Acquisition

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

Affiliates

According to the SBA, affiliation exists when one business controls or has the power to control another or when a third party (or parties) controls or has the power to control both businesses. Control may arise through ownership, management, or other relationships or interactions between the parties.

Ammendment

A change in a solicitation prior to contract award

Auction

A public sale of goods to the highest bidder.

B

Bargaining

Persuasion, alteration of assumptions and positions, give-and-take, that may apply to price, schedule, technical requirement, type of contract, or other terms of a proposed contract.

Basic Ordering Agreement (BOA)

A basic ordering agreement is not a contract. A Basic Ordering Agreement is a written instrument of understanding, negotiated between an agency, contracting activity, or contracting office and a contractor.
BOA contains (1) terms and clauses applying to future contracts (orders) between the parties during its term, (2) a description, as specific as practicable, of supplies or services to be provided, and (3) methods for pricing, issuing, and delivering future orders under the basic ordering agreement.

Blanket Purchase Agreement (BPA)

A simplified method of filling anticipated repetitive needs for services and products. BPAs are “charge accounts” that ordering offices establish with GSA Schedule contractors to provide themselves with an easy ordering tool.

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.

C

CAGE Code

The Commercial And Government Entity, CAGE code, is a five-character ID number that identifies government contractors. Although originated by the Department of Defense, CAGE codes are now also used by the Department of Transportation and NASA, among other federal government agencies.

Capabilities Statement

A one or two page document summarizing a company’s background, certifications, experience, capabilities, expertise, past performance and pertinent codes such as DUNS, CAGE, etc.

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 business 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.

Change Order

A written order, signed by the Contracting Officer, directing the contractor to make a change that the Changes clause authorizes the Contracting Officer to order without the contractor’s consent.

Claim

A written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.

Classified Contract

Any contract that requires, or will require, access to classified information (confidential, secret, or top secret) by the contractor or its employees in the performance of the contract.

Continental United States (CONUS)

The 48 contiguous states and the District of Columbia

Contingency

A possible future event or condition arising from presently known or unknown causes, the outcome of which is inderteminable at the present time.

Contract

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

Contracting

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 (CO)

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

Contractor

Entity that performs the service mandated by a contract with a federal agency.

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.

Cost Plus Fixed Fee (CPFF)

A cost-reimbursement contract that provides payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract. This contract type permits contracting for efforts that might otherwise present too great a risk to contractors, but provides the contractor only a minimum incentive to control costs. (FAR 16.306)

Cost Sharing

An explicit arrangement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract cost.

Cost-Benefit Analysis

Also referred to as a benefit-cost analysis. A systematic quantitative method of assessing the desirability of Government projects or policies when it is importatnt to take a long view of future effects and broad view of possible side-effects

Cost-Reimbursement Contract

A contract that provides for payment of allowable incurred costs, to the extent prescribed in the contrat. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceiling that the contract may not exceed (except at its own risk) without the approval of the Contracting Officer.

Covered Area

The geographical area described in a solicitation for a contract.

Customs Territory of The United States

The States, the District of Clumbia, and Puerto Rico

D

Data Universal Numbering System (DUNS):

The Data Universal Numbering System (DUNS) number is a unique nine-character identification number provided to entities interested in contracting with the federal government. The numbers are distributed by the private company Dun & Bradstreet (D&B).

Debar/Debarment/Debarred

To exclude a contractor from Government contracting and Government-approved subcontracting for a reasonable, specified time period.

Default

Failure by a party to a contract to comply with contractual requirements.

Defect

Any condition or characteristic in any supplies or services furnished by the Contractor under the contract that is not in compliance with the requirements of the contract.

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.

Delivery Order Contract

A contract for supplies that does not procure or specify a firm quality of supplies (other than a minimum or maximum quanitity) and that provides for the issuance of orders for the delivery of supplies during the period of the contract.

Deviation

Any issuance or use of a policy, procedure, solicitation provision, contract clause, method, or practice of conducting acquisition actions of any kind at any stage of the acquisition process that is inconsistent with the FAR.

Direct Payments:

A classification of federal assistance spending in USAspending.gov. This classification of spending contains two types of payments – “specified use” and “unrestricted use.”
Specified use: Financial assistance from the federal government provided directly to individuals, private firms, and other private institutions to encourage or subsidize a particular activity by conditioning the receipt of the assistance on a particular performance by the recipient. This does not include solicited contracts for the procurement of goods and services for the federal government.
Unrestricted use: Financial assistance from the federal government provided directly to beneficiaries who satisfy federal eligibility requirements with no restrictions being imposed on the recipient as to how the money is spent. Included are payments under retirement, pension, and compensatory programs.

Domestic Services

Services performed in the United States.

E

Electronic Data Interchange

Transmission of information between computers using highly standardized electronic versions of common business documents.

Equity

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.

Execution

The final consummation of a contract action including all formalities (eg signature and any necessary approvals) needed to complete the action.

Executive Agreement

A government-to-government agreement, including agreements with international organizations, to which the US is a party.

F

Facility

Any building, plant, installation, structure, mine, vessel or other floating craft, location, or site of operations, owned, leased, or supervised by a Contractor or subcontractor, used in the performance of a contract or subcontract.

Fair Market Price

A price based on reasonable costs under normal competitive conditions and not on
lowest possible cost.

Federal Acquisition Regulation (FAR)

The body of regulations, which is the primary source of authority governing the government procurement process. The FAR is prepared, issued, and maintained under the joint auspices of the Secretary of Defense, the Administrator of GSA, and the Administrator of the NASA.

Federal Acquisition Service (FAS)

The FAS provides federal customers with the products, services, and programs to meet their supply, service, procurement, vehicle purchasing and leasing, travel and transportation, and personal property management requirements.

Federal Fiscal Year

The federal government operates on a fiscal year that begins on October 1 and ends the following September 30. Fiscal years are notated with FYXXXX or FYXX. The year notates the calendar year when the fiscal year will end.

Federal Supply Schedule

Publications issued by the GSA schedule contracting office containing the information for placing delivery or task orders under indefinite delivery contracts (including requirements contracts) established with commercial firms to obtain commonly used commercial supplies and services associated with volume buying. Ordering offices issue delivery or task orders directly to the schedule contractors.

Fixed Cost

Costs that remain constant as production volume varies in the relevant range of production. Fixed cost per unit decreases as total fixed cost is spread over an increasing number of units.

Fixed-Price Contract

A contract that provides for a firm price or, in appropriate cases, an adjustable price. Fixed-price contracts providing for an adjustable price may include a ceiling price, a target price, or both. Unless otherwise specified in the contract, the ceiling price or target price is subject to adjustment only by operation of contract clauses providing for an equitable adjustment or other revision of the contract price under stated circumstances.

Forbearance

The act of refraining or abstaining from action. In negotiation it allows both parties to agree to disagree and move on to the next issue without making a commitment one way or another.

Freedom of Information Act (FOIA)

Specifies, among other things, how agencies must make their records available upon public request, imposes strict time standards for agency responses, and exempts certain records from public disclosure.

Freight

Supplies, goods, and transportable property.

Full and Open Competition

With respect to a contract action, “full and open” competition means that all responsible sources are permitted to compete.

The GSA is a centralized federal procurement and property management agency created by Congress to improve government efficiency and help federal agencies better serve the public. It acquires, on behalf of federal agencies, office space, equipment, telecommunications, information technology, supplies and services.

Government Contract

Any agreement or modification thereof between a Government contracting agency and any person for the furnishing of supplies or services, or for the use of real or personal property including lease arrangements.

Governmentwide Acquisition Contracts (GWACs)

GWACs are defined in the Federal Acquisition Regulation (FAR) as task orders or delivery order contracts for information technology (IT) established by one agency for governmentwide use.

Grant

An award of financial assistance in the form of money, or property in lieu of money, by a funding agency. The grant is usually advertised through an RFA. The grantee is required to account for spending the money in the manner specified by the grantor.

GSA Advantage

An on-line shopping service that enables ordering offices to search product information, review delivery options, place orders directly with contractors (or ask GSA to place orders on the agency’s behalf), and pay contractors for orders using the Governmentwide commercial purchase card. The service can be accessed through the GSA Federal Supply Service Home Page

GSA Schedule

A GSA schedule is an unfunded, long-term contract that lists the prices the federal government has agreed to pay for a product or service provider’s commercial goods and services. There are 41 categories of products and services from which GSA buys; those are known as “Schedules”.

H

High-Value Item

A contract end item that: a. Has a high unit cost (normally exceeding $100,000 per unit), such as an aircraft, an aircraft engine, a communication system, a computer system, a missile, or a ship, and b. Is designated by the Contracting Officer as a high-value item.

Higher-Tier Subcontractor

A subcontractor with at least one subcontract.

Household Goods

Personal property that belongs to a person and that person’s immediate family and includes, but is not limited to household furnishings, equipment and appliances, furniture, clothing, books, and similar property.

Historically Underutilized Business Zone (HUBZone)

The HUBZone Empowerment Contracting program provides federal contracting opportunities for qualified small businesses located in distressed areas.

I

Indefinite Delivery

The exact times and/or exact quantities of future deliveries are not known at the time of contract award.

Indefinite Quantity

Stated limits (minimum and maximum) of supplies or services to be furnished during a fixed period, with deliveries or performance to be scheduled by placing orders with the contractor.

Indirect Cost

Also referred to as burden. Any cost not directly identified with a single, final cost objective, but identified with two or more final cost objectives or an intermediate cost objective. An indirect cost must not be allocated to a final cost objective if other costs incurred for the same purpose in like circumstances have been included as a direct cost of that or any other final cost objective.

Information Technology

Any equipment, or interconnected system(s) or subsystem(s) of equipment, that is used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the agency.

Inspection

Examining and testing supplies or services (including, when appropriate, raw materials, components, and intermediate assemblies) to determine whether they conform to contract requirements.

Invitation For Bid (IFB)

A solicitation for offers under sealed bidding.

L

Leasing

Also referred to as rent or hire. Acquisition from private or commercial sources other than by purchase.

Legitimacy

The state or condition of complying with established rules and standards. Negotiators often rely on commonly accepted standards (e.g., past practice, official policy, or written documents) to support a negotiation position. Win/lose negotiators might use questionable or nonexistent standards to support their negotiation position.

Life-Cycle Cost

The total cost or sum of all costs over the lifetime of the contract pertaining to both products and services
1. The total cost to the Government of acquiring, operating, supporting, and (if applicable) disposing of the items being acquired.
2. The sum of all costs over the useful life of a building, system or product. It includes the cost of design, construction, acquisition, operation, maintenance, and salvage (resale) value, if any.
3. The overall estimated cost for a particular program alternative over the time period corresponding to the life of the program, including direct and indirect initial costs plus any periodic or continuing

Limited Authority

When large organizations are involved, most negotiators have limited authority. For example, Government negotiator authority is limited by the funds available and any required management approvals. However, negotiators using this tactic claim they have very little or no authority to negotiate a key issue or issues. Win/lose negotiators use limited authority to identify your negotiation limits without making any commitment or divulging any information themselves.

Liquidated Damages

stipulation in a contract on monetary amount that must be paid by the contractor if the contractor fails to deliver supplies or perform services as specified in the contract or any modification. Payments are in lieu of actual damages related to the failure. The rate (e.g., dollars per day of delay) is fixed in the contract and must be reasonable considering probable actual damages related to any failure in contract performance.

Loss

A situation that exists when cost is greater than revenue (e.g., contract price). Profit is negative.

M

Manufacturer

Any business that, or person who, manufactures a consumer product.

Market Research

Collecting and analyzing information about capabilities within the market to satisfy agency needs.

Master Plan

A subcontracting plan that contains all the required elements of an individual contract plan, except goals, and may be incorporated into individual contract plans, provided the master plan has been approved.

Material

Property that may be incorporated into or attached to a deliverable end item or that may be consumed or expended in performing a contract. It includes assemblies, components, parts, raw and processed materials, and small tools and supplies that may be consumed in normal use in performing a contract.

Mentor

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

Micro-Purchase

An acquisition of supplies or services (except construction), the aggregate amount of which does not exceed $2,500 (micro-purchase threshold), except that in the case of construction, the limit is $2,000.

Multiple Award

Contracts awarded to more than one supplier for comparable supplies and services. Awards are made for the same generic types of items at various prices.

N

Negotiations

Exchanges, in either a competitive or sole source environment, between the Government and offerors, that are undertaken with the intent of allowing the offeror to revise its proposal.

North American Industry Classification Code (NAICS code)

The NAICS (pronounced Nakes) is a unique industry classification system used by the statistical agencies of the United States.

Notice of Award

In construction, a notice to the contractor of contract award that includes:
a. Identification of the invitation for bids;
b. Identification of the contractor’s bid;
c. The award price;
d. Advice to the contractor that any required payment and performance bonds must be promptly executed and returned to the Contracting Officer;
e. The date of commencement of work, or advise that a notice to proceed will be issued.

Notice of Termination

A written notice to the contractor that the contract is being terminated for convenience or default.

Novation Agreement

legal instrument executed by the Contractor (transferor), Successor in interest (transferee), and Government, by which, among other things, the transferor guarantees performance of the contract, the transferee assumes all obligations under the contract, and the Government recognizes the transfer of the contract and related assets.

O

Offer

A response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. A response to an invitation for bids or a request for proposals is an offer. A response to a request for quotations is a quote not an offer.

Office of Small and Disadvantaged Business Utilization (OSDBU)

Office at all federal agencies that serve as small business advocates within the agency. OSDBU’s main responsibility is to ensure procurement opportunities for small businesses, small disadvantaged businesses, women-owned small businesses, HUBZone businesses, and businesses owned by service-disabled veterans.

Option

A unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.

Overhead

Indirect costs other than those related to general and administrative expense and selling expenses. A general term often used to identify any indirect cost.

P

Past Performance Information

Relevant information, for future source selection purposes, regarding a contractor’s actions under previously awarded contracts. It includes, for example, the contractor’s record of conforming to contract requirements and to standards of good workmanship; the contractor’s record of forecasting and controlling costs; the contractor’s adherence to contract schedules, including the administrative aspects of performance; the contractor’s history of reasonable and cooperative behavior and commitment to customer satisfaction; and generally, the contractor’s business-like concern for the interest of the customer.

Place of Performance

The Place of Performance shows the geographic area where the majority of the work was done under the award or contract. The Place of Performance location is not necessarily the same as the address of the contractor/recipient.

Postaward Conference

Meeting between Government and contractor representatives after award of a contract and prior to commencement of work to discuss significant elements of administering the contract including any unusual or significant contract requirements (e.g., labor clause requirements).

Power of Attorney

The authority given one person or corporation to act for and obligate another, as specified in the instrument creating the power; in corporate suretyship, an instrument under seal which appoints an attorney-in-fact to act in behalf of a surety company in signing bonds.

Preconstruction Orientation

A contract awarded directly by the Federal government.

Prime Contract

A conference or letter to inform the successful construction contract offeror of significant matters of interest related to the contract, including: a. Statutory matters such as labor standards and subcontracting plan requirements; and b. Other matters of significant interest, including who has authority to decide matters such as contractual, administrative (e.g., security, safety, and fire and environmental protection), and construction responsibilities.

Presolicitation Notice

A notice sent to concerns on the solicitation mailing list, in lieu of initially forwarding complete bid sets. Use is at the discretion of the Contracting Officer, but is particularly suitable when invitations for bids and solicitation mailing lists are lengthy. It must:
1. Specify the final date for receipt of requests for a complete bid set,
2. Briefly describe the requirement and furnish other essential information to enable concerns to determine whether they have an interest in the invitation, and
3. Notify concerns that, if no bid is to be submitted, they should advise the issuing office in writing if future invitations are desired for the type of supplies or services involved. Drawings, plans, and specifications normally will not be furnished with the presolicitation notice. The return date of the notice must be sufficiently in advance of the mailing date of the invitation for bids to permit an accurate estimate of the number of bid sets required. Bid sets must be sent to concerns that request them in response to the notice.
A notice sent to prospective bidders about a construction requirement sufficiently in advance of the invitation for bids to stimulate the interest of the greatest number of prospective bidders. Such notices must:
1. Describe the proposed work in sufficient detail to disclose the nature and volume of work (in terms of physical characteristics and estimated price range);
2. State the location of the work;
3. Include tentative dates for issuing invitations, opening bids, and completing contract performance;
4. State where plans will be available for inspection without charge;
5. Specify a date by which requests for the invitation for bids should be submitted;
6. Notify recipients that if they do not submit a bid they should advise the issuing office as to whether they want to receive future presolicitation notices;
7. State whether award is restricted to small businesses;
8. Specify any amount to be charged for solicitation documents; and
9. Be publicized in the Commerce Business Daily.

Price Analysis

The process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit.

Prime Contractor

A person who has entered into a prime contract with the United States.
Any person who holds, or has held, a Government contract subject to E.O. 11246.

Prime Contract Award

A legally binding agreement executed by a Department or an Agency to obtain supplies or services.

Procurement

All stages involved in the process of acquiring supplies or services, beginning with the determination of a need for supplies of services and ending with contract completion or closeout.

Program Manager

The Program Manager is usually not involved in contracting, but they are typically the “end- user”. They are the people who use your products or services in the process of doing their job. While they do not buy the products and services they do influence the specifications and choices.

Proposal

An offer in response to a request for proposals.
Any offer or other submission used as a basis for pricing a contract, contract modification, or termination settlement or for securing payments thereunder.
Means: a. A final indirect cost rate proposal submitted by the Contractor after the expiration of its fiscal year which: (1) Relates to any payment made on the basis of billing rates; or (2) Will be used in negotiating the final contract price; or b. The final statement of costs incurred and estimated to be incurred under the Incentive Price Revision clause, which is used to establish the final contract price.

Proposal Modification

A change made to a proposal before the solicitation closing date and time, or made in response to an amendment, or made to correct a mistake at any time before award.

Proposal Revision

A change to a proposal made after the solicitation closing date, at the request of or as allowed by a Contracting Officer as the result of negotiations.

Purchase Order

An offer by the Government to buy supplies or services, including construction and
research and development, upon specified terms and conditions, using simplified acquisition procedures.

R

Ratification

The act of approving an unauthorized commitment by an official who has the authority to do so.

Reasonableness

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business.

Recipient

Includes the contractor and all subcontractors. This term excludes Indian tribes, tribal organizations, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.

Request for Information (RFI)

A document used to obtain price, delivery, other market information, or capabilities for planning purposes when the Government does not presently intend to issue a solicitation.

Request for Proposal (RFP)

A solicitation for offers under negotiation procedures.

Request for Quote (RFQ)

A solicitation for quotes. Commonly used under simplified acquisition procedures.

Retainage

A percentage of a progress payment withheld based on unsatisfactory contract progress under a construction contract. The percentage withheld must not exceed 10 percent of the approved estimated amount of progress under the terms of the contract and may be adjusted as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors. Upon contract completion of all contract requirements, retained amounts must be paid promptly.

S

Screened Bidding

A method of contracting that employs competitive bids, public bid opening, and awards. Award is made to that responsible bidder whose bid, conforming to the invitation for bids, will be most advantageous to the Government consider only price and price-related factors included in the invitation.

Senior Procurement Executive

Also referred to as procurement executive. The appointed individual responsible for management direction of the acquisition system of the executive agency, including implementation of the unique acquisition policies, regulations, and standards of the executive agency.

Service-Disabled Veteran

Veteran with a disability that is service-connected.

Service Disabled Veteran-Owned Business (SDVOB)

A small business that is at least 51% owned and controlled by a service-disabled veteran of the military. The service-connected disability can be 0% compensation.

Set-Aside for Small Business

The reserving of an acquisition exclusively for participation by small business concerns. A set-aside may be open to all small businesses. A set-aside of a single acquisition or a class of acquisitions may be total or partial.

Simplified Acquisition Procedures (SAP)

May be used for contracts up to $150,000. Methods prescribed for making purchases of supplies or services using imprest funds, purchase orders, blanket purchase agreements, Government wide commercial purchase cards, or any other appropriate authorized methods.

Simplified Acquisition Threshold

$100,000, except that in the case of any contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation or a humanitarian or peacekeeping operation, the term means $200,000.

Size Standard

A maximum level of average employment or annual revenue at which a firm can qualify as a small business.

Small Business

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

Small Business Administration (SBA)

The SBA if a federal government agency which has grown in terms of total assistance provided and its array of programs tailored to encourage small enterprises in all areas. SBA programs now include financial and federal contract procurement assistance, management assistance, and specialized outreach to women, minorities and armed forces veterans.

Small Disadvantaged Businesses

Includes: Women Owned Businesses (WOBs), Service Disabled Veteran Owned Businesses (SDVOBs), Veteran Owned Businesses (VOBs), Historically Underutilized Business Zoned Businesses (HUB Zone), Historically Black Colleges and Universities (HBCUs) and other minority institutions (OMIs).

Sole Source Acquisition

A contract for the purchase of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only one source.

Solicitation

A document sent to prospective contractors by a Government agency requesting submission of an offer, quote, or information.
The process of issuing a document requesting submission of an offer, quote, or information and obtaining responses.

Sources Sought Notice

The process is used to communicate upcoming procurement opportunities and to request responses from interested vendors to determine if small business set-asides or sole source contracts may be possible.

Statement of work (SOW)

A document that defines service contract requirements in clear, concise language identifying specific work to be accomplished. It must be individually tailored to consider the period of performance, deliverable items, if any, and the desired degree of performance. In the case of task order contracts, the statement of work for the basic contract need only define the scope of the overall contract. Individual task orders must define specific task requirements.

Subcont

A contract or contractual action entered into by a prime contractor or subcontractor for the purpose of obtaining supplies, materials, equipment, or services of any kind under a prime contract.

Subcontractor

Any person, other than the prime contractor, who offers to furnish or furnishes any supplies, materials, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract. The term includes any person who offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor.

Suspension

Action taken by a suspending official to disqualify a contractor temporarily from Government contracting and Government-approved subcontracting; a contractor so disqualified is suspended.

Suspension of Work

Under construction or architect-engineer contracts, a contract clause permits the Contracting Officer to order the contractor to suspend work for a reasonable period of time. If the suspension is unreasonable, the contractor may submit a written claim for increases in the cost of performance, excluding profit.

T

Target Fee

The fee initially negotiated on the assumption that a contract would be performed for a cost equal to the estimated cost initially negotiated, adjusted for any change in contract requirements.

Task Order

An order for services placed against an established contract or with Government sources.

Term Form

A form of cost-plus-fixed-fee contract that describes the scope of work in general terms and obligates the contractor to devote a specified level of effort for a stated time period. If contract performance is considered satisfactory by the Government, the fixed-fee is payable at the expiration of the agreed-upon period, upon contractor statement that the level-of-effort specified in the contract has been expended in performing the contract work. Renewal for further periods of performance is a new acquisition that involves new cost and fee arrangements.

Tradeoff Process

In a negotiated acquisition, a procedure that permits consideration of tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal must merit the additional cost and the rationale must for tradeoffs must be documented in the contract file.

U

Unilateral Modification

A contract modification that is signed only by the Contracting Officer. Unilateral modifications are used, for example, to -a.
Make administrative changes; b. Issue change orders; c. Make changes authorized by clauses other than a changes clause (e.g., Property clause, Options clause, Suspension of Work clause, etc.); and d. Issue termination notices.

Unsettled Contract Change

Any contract change or contract term for which a definitive modification is required but has not been executed.

Unsolicited Proposal

A written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the Government, and that is not in response to a request for proposals, Broad Agency Announcement, Small Business Innovation Research topic, Small Business Technology Transfer Research topic, Program Research and Development Announcement, or any other Government-initiated solicitation or program.

V

Variable Cost

In cost-volume-profit analysis, costs of each unit that remain constant no matter how many units are made in the relevant range of production. Total variable cost increases as the total number of units produced increases.

Veteran Owned Small Business

A small business that is at least 51% owned by a US Veteran of the armed forces and certified by the SBA.

W

Wage Determination

A determination of minimum wages or fringe benefits made under the Service Contract Act applicable to the employment in a given locality of one or more classes of service employees.

Warranty

A promise or affirmation given by a contractor to the Government regarding the nature, usefulness, or condition of the supplies or performance of services furnished under the contract.

Woman-Owned Small Business (WOSB)

A small business that is at least 51% owned and controlled by a woman and certified by the SBA.

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