Glossary
Definitions of common federal acquisition and government contracting terminology.
8(a) Business Development Program
SBA's 9-year program for socially and economically disadvantaged small businesses, providing sole-source access and mentoring.
The 8(a) program is the most powerful small business certification. It provides access to sole-source contracts up to $4.5M for services ($7M for manufacturing), competitive set-asides, and the SBA Mentor-Protege program. The application takes 3-6+ months and requires extensive personal financial disclosure. The program lasts 9 years — there is no renewal.
Best Value
An evaluation method where the government weighs quality factors against price to find the best overall proposal.
Best value means the government can pay more for a better proposal. Technical approach, past performance, and management are weighed against price. This is where strong proposals win even if they're not the cheapest. If you see "best value" or "tradeoff" in the evaluation criteria, invest in your technical volume.
BPA (Blanket Purchase Agreement)
A simplified agreement for recurring purchases — often used under the Simplified Acquisition Threshold.
A BPA is an agreement with a vendor for recurring needs. Instead of running a new competition each time, the agency places orders against the BPA. BPAs under the SAT ($350K) are easier to win, faster to set up, and build past performance. They're an underrated entry point for new contractors.
Capability Statement
A one-to-two page marketing document summarizing what your company does, for whom, and why you're qualified.
Your capability statement is your govcon resume. Agency staff, primes, and OSDBUs expect to see one. It should include your core competencies, past performance highlights, differentiators, certifications, NAICS codes, and DUNS/UEI. The "6-second rule" applies — a reader will glance at it for 6 seconds before deciding whether to read more.
CLIN (Contract Line Item Number)
Individual priced items within a contract — each has its own description, quantity, and price.
CLINs are the pricing structure of a contract. Each CLIN represents a distinct deliverable or service with its own unit price and quantity. Your cost volume is organized by CLINs. Getting the CLIN structure wrong in your proposal — misallocating costs or missing a CLIN — can result in elimination or an unbalanced price evaluation.
CMMC (Cybersecurity Maturity Model Certification)
The DoD's cybersecurity certification framework — required for contractors handling certain information.
CMMC has three levels. Level 1 (self-assessment, 15 practices) is required for all DoD contractors. Level 2 (110 practices from NIST 800-171) is required if you handle CUI. Level 3 (expert assessment) is for the most sensitive programs. Realistic cost for Level 2 compliance is $30K-$200K+ depending on your IT environment.
Compliance Matrix
A spreadsheet mapping every RFP requirement to where your proposal addresses it.
Evaluators use compliance matrices to verify nothing was missed. Building one is the first step after reading the RFP — it becomes the skeleton of your proposal. You go through the solicitation line by line, pull out every "shall," "must," and "will," and create a row for each. Then you map each requirement to the section of your proposal that addresses it.
COR (Contracting Officer's Representative)
The government employee who manages day-to-day contract performance on behalf of the Contracting Officer.
The COR is your primary point of contact during contract execution. They monitor performance, review deliverables, and report to the CO. Critical distinction — the COR cannot authorize changes to the contract, modify scope, or approve additional costs. Only the Contracting Officer (CO) can do that. Following COR direction that exceeds their authority is a common and costly mistake.
CPARS (Contractor Performance Assessment Reporting System)
The government's official database of contractor performance evaluations — your permanent govcon record.
After each contract period, your contracting officer rates your performance in CPARS on a scale from Exceptional to Unsatisfactory. These ratings follow you into every future proposal. You have the right to review and respond to ratings before they're finalized. Proactively managing your CPARS is one of the most important things you can do as a contractor.
CUI (Controlled Unclassified Information)
Government information that requires safeguarding but isn't classified — triggers CMMC Level 2.
CUI includes technical data, export-controlled information, privacy data, law enforcement sensitive, and many other categories. If a contract involves CUI (check the DD Form 254 or contract clauses), you need CMMC Level 2 and a System Security Plan. Many contracts involve CUI without explicitly saying so — look for DFARS 252.204-7012.
DCAA (Defense Contract Audit Agency)
The federal agency that audits contractor accounting systems and costs on government contracts.
DCAA reviews your accounting practices to ensure costs charged to the government are allowable, allocable, and reasonable. Most small businesses on fixed-price contracts under $2M won't face a full DCAA audit. But if you pursue cost-type contracts or grow above certain thresholds, your accounting system needs to meet DCAA standards.
Facility Clearance (FCL)
Authorization for a company to access classified information — you cannot apply for one yourself.
A facility clearance must be sponsored by a government agency or cleared contractor who needs you to access classified information. You cannot self-initiate the process. It requires a DD Form 254, key management personnel clearances, and a physical security infrastructure. The process takes 6-18 months.
FAR (Federal Acquisition Regulation)
The primary set of rules governing how the federal government buys goods and services.
The FAR is the rulebook for federal procurement. It covers everything from how solicitations are written to how contracts are awarded and managed. You don't need to memorize it, but you need to know it exists and how to look things up when a solicitation references specific FAR clauses.
Fringe Benefits
Employee benefit costs (health insurance, retirement, payroll taxes) expressed as a percentage of salary.
Fringe includes FICA, Medicare, health insurance, retirement contributions, PTO, and other benefits. For a small business, fringe rates typically run 25%-40% of base salary. This is the most straightforward indirect rate to calculate and the one DCAA cares about most.
G&A (General and Administrative)
Costs of running your business that aren't tied to any specific contract — management, accounting, BD.
G&A includes executive compensation, accounting, legal, business development, office space, and other costs of staying in business. It's expressed as a percentage of total costs or revenue. For small businesses, G&A rates of 15%-30% are common. Keeping G&A low is one of the biggest competitive advantages a small business has.
GSA Schedule (Multiple Award Schedule)
A long-term contract with GSA that gives agencies a pre-approved catalog to buy from you.
A GSA Schedule puts your products or services on a government-approved price list. Agencies can buy from you without running a full competitive procurement. Getting on Schedule costs $5K-$15K in effort (or consultant fees), takes 3-6 months, and guarantees zero revenue. But for IT and professional services, many agencies prefer to buy through Schedule, making it a valuable door-opener.
GWAC (Government-Wide Acquisition Contract)
An IDIQ contract available for use by multiple federal agencies — the largest contract vehicles in govcon.
GWACs are massive IDIQ vehicles that any federal agency can use. Major ones include OASIS+ (professional services), Alliant 3 (IT), CIO-SP4 (health IT), and SEWP VI (IT products). Getting on a GWAC means access to billions in potential task orders. The competition to win a GWAC seat is intense, but once you're on, you compete against a smaller pool.
HUBZone (Historically Underutilized Business Zone)
A certification for businesses with principal offices and at least 35% of employees in qualifying geographic areas.
HUBZone certification gives you access to set-aside and sole-source contracts (up to $4.5M services, $7M manufacturing). The catch is maintaining 35% employee residency in qualifying zones — if employees move, you can lose certification. The program is underutilized relative to its potential, which means less competition on HUBZone set-asides.
IDIQ (Indefinite Delivery/Indefinite Quantity)
A contract vehicle that establishes ceiling prices and terms, with work awarded through individual task orders.
An IDIQ is like getting on an approved vendor list. Winning the IDIQ itself doesn't guarantee any work — you then compete for individual task orders against other IDIQ holders. The advantage is a smaller competition pool. Major government-wide IDIQs include OASIS, Alliant, and CIO-SP3.
Indirect Rates
Overhead costs that can't be charged directly to a single contract — spread across all your work.
Indirect rates include fringe benefits, overhead (office space, equipment, IT), and G&A (general and administrative — executives, accounting, business development). Most small businesses need only two pools — fringe and G&A. Your indirect rates determine your wrap rate, which determines whether your pricing is competitive.
Industry Day
An event hosted by an agency before a major procurement to brief potential contractors and answer questions.
Industry days are your chance to learn about upcoming procurements directly from the agency, ask questions, and network with potential teaming partners. Attendance is usually free. Bring business cards and capability statements. The real value is the hallway conversations — introduce yourself to the contracting officer, program manager, and OSDBU staff.
Joint Venture (JV)
A formal partnership between two or more companies to pursue specific government contracts together.
A govcon joint venture must register in SAM.gov as its own entity, have a JV agreement, and comply with the 3-in-2 rule (the JV must receive at least 3 contracts within 2 years of its first award or be dissolved). JVs formed under the Mentor-Protege program get an exception from size standard affiliation rules.
LPTA (Lowest Price Technically Acceptable)
An evaluation method where the lowest-priced proposal that meets all technical requirements wins.
Under LPTA, the government sets a technical bar and every proposal that clears it is considered equal — then the cheapest one wins. There's no reward for exceeding requirements. If you see LPTA in the evaluation criteria, your strategy should be to meet every requirement at minimum cost, not to write the most impressive technical volume.
Mentor-Protege Program
SBA program pairing experienced contractors with small businesses for capability development and joint ventures.
The SBA Mentor-Protege program lets a large or experienced small business mentor a protege firm. The key benefit is the ability to form joint ventures that can compete for set-aside contracts using the protege's small business status while leveraging the mentor's capabilities. The mentor can own up to 40% of the JV.
NAICS Code
North American Industry Classification System — codes that categorize what your business does.
NAICS codes are six-digit numbers that describe your business type. The government uses them to determine which size standard applies to your company and to set aside contracts for small businesses. You can list multiple NAICS codes in your SAM.gov registration. Picking the right ones matters because they determine whether you qualify as "small" for a given opportunity.
NIST 800-171
The cybersecurity standard with 110 security requirements — the basis for CMMC Level 2.
NIST Special Publication 800-171 defines how to protect CUI in non-federal systems. It covers 14 families of requirements including access control, incident response, system integrity, and audit logging. You don't need to implement all 110 on day one — but you need a Plan of Action and Milestones (POA&M) for anything not yet implemented.
OSDBU (Office of Small and Disadvantaged Business Utilization)
Every major agency's office dedicated to helping small businesses get federal work.
OSDBUs are your advocates inside federal agencies. Their job is to ensure the agency meets its small business contracting goals. They host industry days, answer questions about upcoming procurements, connect you with contracting officers, and review subcontracting plans. Meeting with your target agency's OSDBU is one of the highest-value free activities in govcon.
Past Performance
Your track record of delivering on previous contracts — one of the most important evaluation factors.
Most federal proposals require past performance references showing you've done similar work successfully. This is the biggest barrier for new entrants. Strategies for building past performance include subcontracting, state/local government work, GSA Schedule contracts, and commercial work that's relevant to the federal requirement.
Procurement Forecast
An annual list of planned procurements published by each major federal agency — free and public.
Every major agency publishes a procurement forecast showing what they plan to buy in the next 1-2 years. These forecasts include estimated dollar values, NAICS codes, set-aside status, and expected solicitation dates. Most small businesses don't know they exist. They are the single best free tool for building a pipeline 12+ months ahead of solicitations.
Request for Proposal (RFP)
A formal solicitation where the government asks companies to submit detailed proposals for evaluation.
An RFP is the government's way of saying "we need something — show us your best plan." Unlike simplified acquisitions, RFPs require detailed technical and management proposals that are scored by evaluation teams. Section L tells you what to submit; Section M tells you how they'll score it.
SAM.gov
The System for Award Management — the federal government's official registration system for contractors.
Every company that wants to do business with the federal government must register on SAM.gov. Registration is free but involves gathering your DUNS/UEI number, NAICS codes, banking information, and business details. It takes 2-4 weeks to process and must be renewed annually.
SAT (Simplified Acquisition Threshold)
Currently $350,000 — below this amount, procurement has fewer requirements and faster timelines.
The Simplified Acquisition Threshold is the dollar line below which the government can use streamlined purchasing procedures. Contracts under $350K have fewer proposal requirements, faster award timelines, and less competition. For new contractors, this is the sweet spot — complex enough to build past performance, simple enough to actually win.
SDVOSB (Service-Disabled Veteran-Owned Small Business)
Federal certification for businesses at least 51% owned by service-disabled veterans.
SDVOSB certification provides sole-source authority up to $4.5M for services and access to set-aside competitions. Certification is now managed by SBA (previously VA-verified for VA contracts only). The service-connected disability must be documented by the VA.
Section L
The part of a solicitation that tells you what to submit and how to format your proposal.
Section L (Instructions to Offerors) is where you find page limits, format requirements, what volumes to include, and submission deadlines. Always read Section L before writing anything. It tells you exactly what the government wants to see and in what order.
Section M
The part of a solicitation that tells you how your proposal will be evaluated and scored.
Section M (Evaluation Criteria) lists the factors the government will score you on and their relative importance. If Technical Approach is "significantly more important than price," that tells you where to focus your effort. The ranking also reveals what the agency is worried about.
Set-Aside
A contract reserved exclusively for certain categories of small businesses.
The government sets aside contracts for small businesses, woman-owned small businesses (WOSB), HUBZone firms, service-disabled veteran-owned small businesses (SDVOSB), and 8(a) firms. Set-asides mean only qualifying companies can compete, which dramatically reduces competition. Understanding which set-asides you qualify for is one of the most important early decisions.
Size Standard
The SBA threshold (revenue or employee count) that determines whether you qualify as "small" under a specific NAICS code.
Size standards vary by NAICS code. A company with $30M in revenue might be "small" under one code and "large" under another. The SBA publishes a size standard table. Your primary NAICS code determines your default size standard, which affects which set-aside contracts you can compete for. Getting this wrong can disqualify you from opportunities.
Sole-Source Contract
A contract awarded to a single company without competition — available through certain certifications.
Sole-source contracts skip the competitive process entirely. Certain small business certifications unlock sole-source authority at specific dollar thresholds — $4.5M for services and $7M for manufacturing under 8(a), SDVOSB, WOSB, and HUBZone programs. Getting a sole-source contract requires a relationship with the agency and a contracting officer willing to justify the award.
Sources Sought Notice
A pre-solicitation notice where the government asks industry if qualified companies exist before structuring the competition.
A Sources Sought notice is the government doing market research. They're asking "who can do this?" before deciding whether to set the contract aside for small businesses. Responding costs almost nothing — usually a capability statement and brief write-up — and it puts you on the agency's radar. It can also influence how the solicitation is structured.
SOW (Statement of Work)
The section of a solicitation that describes what the contractor must deliver.
The SOW (or PWS — Performance Work Statement) is usually Section C of a solicitation. It defines the scope, deliverables, performance standards, and work requirements. A SOW tells you HOW to do the work; a PWS tells you WHAT results to achieve. Understanding the difference affects how you write your technical approach.
SSP (System Security Plan)
A document describing your IT security controls — required for CMMC compliance.
The SSP documents how your organization meets each of the 110 NIST 800-171 requirements. It describes your IT environment, security boundaries, and the controls in place. You can write one yourself using NIST templates, but it requires honest assessment of your actual practices, not aspirational statements.
Subcontracting Plan
A required plan showing how a large business prime will use small business subcontractors — filed on contracts over $750K.
Federal contracts over $750K to large businesses require a subcontracting plan with specific goals for small business categories (SB, SDB, WOSB, HUBZone, SDVOSB). These plans are public and are a goldmine for small businesses looking for subcontracting opportunities. The prime is rated on whether they meet their plan goals.
Task Order
An individual order placed against an IDIQ or GWAC — each one is its own mini-competition.
Winning an IDIQ seat doesn't mean you've won work — it means you can compete for task orders against other seat holders. Each task order has its own requirements, evaluation criteria, and often very short turnaround times (5-10 business days). This is where the real revenue comes from, and where pipeline management becomes critical.
Teaming Agreement
A contract between companies agreeing to pursue a specific opportunity together — one as prime, one as sub.
A teaming agreement outlines who will be prime, who will sub, the expected workshare, pricing approach, and terms for the partnership. Key negotiation points include exclusivity (can the sub team with other primes?), workshare percentage, and what happens if you win. Get it in writing before the proposal starts.
UEI (Unique Entity Identifier)
The unique number assigned to your business entity in SAM.gov — replaced the DUNS number.
Every entity registered in SAM.gov gets a UEI, which replaced the old DUNS number system. You get your UEI through SAM.gov itself during registration. It's free, but validation can take days if your business name or address doesn't exactly match IRS records.
Unallowable Costs
Expenses you cannot charge to a government contract — entertainment, alcohol, lobbying, fines, bad debts.
FAR Part 31 defines costs the government won't pay for. Charging unallowable costs is one of the fastest ways to get in trouble. Common traps include entertainment, alcohol, lobbying, advertising (with exceptions), interest on borrowing, fines and penalties, and donations. You can still incur these costs — you just can't bill them to the government.
WOSB (Woman-Owned Small Business)
Federal certification for businesses at least 51% owned and controlled by women.
WOSB certification provides access to set-aside contracts in industries where women are underrepresented. As of 2024, self-certification is no longer accepted — you must certify through SBA's MySBA platform. EDWOSB (Economically Disadvantaged) provides additional sole-source authority up to $4.5M for services.
Wrap Rate
Your fully burdened labor rate — base salary plus all indirect costs and profit.
The wrap rate is what you actually charge per hour. It includes the employee's base pay plus fringe, overhead, G&A, and fee/profit. A common wrap rate multiplier for small businesses is 1.8x-2.5x the base hourly rate. If your wrap rate is too high, you lose on price. If it's too low, you lose money.