Government Contracting Glossary

Dictionary of select procurement terms, acronyms, and phrases used by government contractors, vendors, suppliers, contracting officers, program office staff, and acquisition personnel. Definitions provided without warranty. Compiled from internal and public domain sources.

NOTE: If you are looking for an acronym you did not find here, try The Acronym Finder. For a listing of some more in-depth references on this subject, see our Books, CDs, and tapes page.

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OMB Circular A-76; mandates that any time an agency can save more than 10% by outsourcing an eligible activity to private industry, they must do so. Things like aiming nuclear missiles are not considered eligible, but things like mopping the men's room floor are. A-76 applies to both civilian and defense agencies, but the military has been quicker to embrace the concept.


Accounts Receivable


AMARC Business System


Automated Business Services System


Automated Civil Engineering System-Operations


Automated Civil Engineering System-Real Property


The act of an authorized representative of the Government by which the Government, for itself or as agent of another, assumes ownership of existing identified supplies tendered, or approves specific services rendered as partial or complete performance of the contract. (FAR 46.101 and 46.5)

accounts payable


Amounts owed to others based on invoices or other evidence of receipt of goods or services, i.e., the amount due for goods or services which have been received but for which payment has not been made. (FMM 9021-4)

accounts receivable


Amounts owed by others for goods furnished or services rendered. Such amounts include reimbursements earned and refunds receivable. (FMM 9021-4)

accrual benefit cost method


An actuarial cost method where revenues and expenses are identified with specific periods of time and are recorded as incurred without regard to the date of receipt or payment of cash. (FAR 31.001 and FMM 9021-4)

accumulating costs

The collecting of cost data in an organized manner, such as through a system of accounts. (FAR 31.001)


Automated Clearing House; a national payment system that uses electronic means to transfer payment data and funds from an originator to a recipient's account at a receiving financial institution.


The acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when Agency needs are established. (FAR 2.101)

acquisition planning

The process by which the efforts of all personnel responsible for an acquisition are coordinated and integrated through a comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost. (FAR 7.101)

actual cash value

The cost of replacing damaged property with other property of like kind and quality in the physical condition of the property immediately before the damage. (FAR 31.001)

actual costs

An amount sustained in fact on the basis of cost incurred as distinguished from forecasted or estimated costs. (FAR 31.301)

adequate price competition

When two or more responsible offerors, competing independently, submit priced offers that satisfy the Government's expressed requirements. (FAR 15.403)


Acquisition and Due-In System


Automated Disbursing System

administrative change

A unilateral contract change, in writing, that does not affect the substantive rights of the parties. (FAR 43.101)

Administrative Contracting Officer (ACO)

A Contracting Officer having responsibility for the administration of one or more particular contracts. (FAR 2.101)

advance agreement

An agreement negotiated in advance of the incurrence of a particular cost by a contractor specifying how that cost will be treated for purposes of determining its allowability (and thus its allocability) to Government contracts. An advance agreement may be negotiated before or during a contract (but before the incurrence of the subject cost), and must be in writing. For a given contractor, advance agreements may be specific to a particular contract, a group of contracts, or all the contracts of a contracting office, an agency or several agencies. (FAR 31.109)

advance payment

An advance of money made by the Government to a contractor prior to, in anticipation of, and for the purpose of performance under a contract or contracts. (FAR 32.4)

advisory and assistance services

Services provided by non-governmental sources to support or improve organizational policy development, decision-making, management and administration, program and/or project management and administration, or R&D activities. (FAR 37.201)

A/E services

Professional services of an architectural or engineering nature, as defined by State law, if applicable, which are required to be performed or approved by a person licensed, registered, or certified to provide such services.  (FAR 36.6)


Aircraft Engine Management System


Air Force Audit Agency


Air Force Accounting and Finance Office


Air Force Equipment Management System


Business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly, (a) either one has the power to control the other, or (b) a third party controls or has the power to control both. (FAR 2.101 and 9.403)

Affirmative Action program

A contractor's program that complies with Department of Labor regulations to assure equal opportunity in employment to minorities and women. (FAR 22.801)


One employed to transact business for another. To the extend that the agent acts within the authority given, these acts are binding on the principal.

aggregate sales

The total sales to the Government under a contract.  The basis for comparison of Government discounts with commercial discounts given on the basis of estimated or previous actual sales to commercial firms: e.g., national accounts.

allocable cost

A cost which is assignable or chargeable to one or more cost objectives in accordance with the relative benefits received or other equitable relationships defined or agreed to between contractual parties. (FAR 31.201-4)


To assign an item of cost, or a group of items of cost, to one or more cost objectives. Includes both direct assignment of cost and the reassignment of a share from an indirect cost pool. (FAR 31.001 and OMB A-21)

allowable cost

A cost which meets the tests of reasonableness and allocability, is in consonance with standards promulgated by the CAS Board (if applicable), or otherwise conforms to GAAP, specific limitations or exclusions set forth in FAR 31.201-2, or agreed-to terms between contractual parties.

Alternate Dispute Resolution (ADR)

Any type of procedure or combination of procedures voluntarily used to resolve issues in controversy quickly, creatively, and at less cost than established procedures. (FAR 33.201 and NPD 2010.2)


A change to a solicitation before contract award (not to be confused with modification, which occurs after contract award). See FAR 14.208 and 15.206.

annual funding

The current Congressional practice of limiting authorizations and appropriations to one fiscal year at a time. (FAR 17.101)

Anti-Deficiency Act

In accordance with the Act, no officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations, unless otherwise authorized by law. (FAR 32.702)

applied research

The effort that (a) normally follows basic research, but may not be severable from the related basic research; (b) attempts to determine and exploit the potential of scientific discoveries or improvements in technology, materials, processes, methods, devices, or techniques; and (c) attempts to advance the state of the art. (FAR 31.205-18 and 35.001)


Distribution by OMB of amounts available for obligation and outlay in an appropriation or fund account. The amounts may be available only for specified time periods, activities, functions, projects, objects, purposes, or combinations thereof. The specified amounts limit obligations to be incurred. (FMM 9021-4)


Statutory authority that allows Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriation usually follows enactment of authorizing legislation. (FMM 9021-4)


Accounts Receivable Management


The systematic examination of records and documents and/or the securing of other evidence by confirmation, physical inspection, or otherwise, for one or more of the following purposes: determining the propriety or legality of proposed or consummated transactions; ascertaining whether all transactions have been recorded and are reflected accurately in accounts; determining the existence of recorded assets and inclusiveness of recorded liabilities; determining the accuracy of financial or statistical statements or reports and the fairness of the facts they present; determining the degree of compliance with established policies and procedures relative to financial transactions and business management; and appraising an accounting system and making recommendations concerning it.  (FAR 42.1 and OMB A-133)


Occurs when the Contracting Officer has signed and distributed a contract to the contractor.


Best and Final Offer


Negotiations are exchanges with the aim of having an offeror revise the proposal.  It includes persuasion, alternation of assumptions and positions, give and take, and may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract.

basis of award

Per FAR 15.304, "basis of award" refers to award decision based on evaluation factors and significant subfactors that are tailored to the acquisition.


Business As Usual


Base Contracting Automated System

Best Value

The Best Value represents the overall "best" solution which is achieved by the ordering activity selecting the lowest overall price offered depending on the circumstances of the buy, e.g., the relative importance of cost or price, special features, the amount of performance risk, urgency, trade-in considerations, warranty, maintenance availability, etc.; that is all terms and conditions considered.


Blanket Order Agreement


A Blanket Purchase Agreement is a simplified method of filling anticipated repetitive needs for supplies by establishing "charge accounts" with qualified sources of supply.  When an agency uses an established schedule BPA, they save time and money—time because they are convenient, money because they reduce administrative costs and allow agencies to take advantage of higher level discounts.


Bidder's Mailing List


Short for Contract Award date


Cost-Benefit Analysis


Commerce Business Daily; daily Department of Commerce circular that publishes information on procurement opportunities, announcements of awards, and other related news.

CDICS A unique reference string used to identify a specific U.S. Government receivable. The acronym stands for "Contract Delivery Invoice CLIN Shipment" which is actually short for "Contract Number, Delivery Order, Invoice Number, CLIN, and Shipment Number". A CDICS reference string combines all of these fields, separated by hyphens, and uses a single zero as a placeholder for an empty field.

Commander's Emergency Response Program. Discretionary funds deployed by military in Iraq and Afghanistan, usually to assist the local population.


Centralized Mailing List Service


Contracting Officer or Commanding Officer


Contracting Officer's Technical Representative


Commercial Sales Practices


Defense Budgetary Operating Fund


Defense Federal Acquisition Regulations (DoD often has its own version of things; this is their version of the Federal Acquisition Regulations put out by GSA.


Defense Finance and Accounting Service


Defense Information Systems Agency


Delivery Order


Date of Award


Electronic Data Interchange


Electronic Funds Transfer


1Economic Price Adjustment
2Environmental Protection Agency


A person or firm that factors, or purchases invoices.


Functional Economic Analysis

Fiscal Year

The new year for Government bean counters starts October 1st.


Freight on Board (used in conjunction with "Destination" or "Origin" to denote where goods and/or services are to be delivered [i.e. onsite or offsite]). Alternately, FOB sometimes is defined as "Free on Board".


Federal Supply Class


Federal Supply Service


Short for Fiscal Year 19nn or 20nn, as in FY99


Originally a DoD term for Military Intelligence, this is now widely used as a synonym for inside information.


General Services Administration


General Services Administration Acquisition Regulation


Indefinite Delivery, Indefinite Quantity Contracts


Invitation for Bid


The Industrial Funding Fee (IFF) is a fee paid by the ordering activity to fund the cost of operating the Schedules program.  Ordering activities pay this fee when they purchase items from a Federal Supply Schedule vendor with a contract containing industrial funding provisions.  The fee is included in the price of the item and not as a separate line item, because the Contracting Officer and the offeror negotiated the industrial funding fee into the contract price before award was made.

incidental item

For administrative convenience, open market (non-contract) items may be added to a Federal Supply Schedule BPA or the individual task/delivery order if the items are clearly labeled as such on the order, all applicable acquisition regulations have been followed, and price reasonableness has been determined by the ordering activity for the open market items.  These can be referred to as a non-schedule item or as an open market item; as such these are minor items that are needed, and cannot be easily or reasonably separated from the Federal Supply Schedule item.


Introduction of New Products


Multiple Award Schedule


Most Efficient Organization


Maximum Order Threshold


Refers to the GSA FSS Management, Organizational, and Business Improvement Services MAS.


Maximum Order Limitation; the highest dollar figure commitment that may be made under a given contract. The streamlining of procurement procedures and regulations over the past few years has raised typical MOLs and oftentimes they are irrelevant now completely or may be waived at the discretion of the Contracting Officer.


Negotiations are exchanges between the Government and offerors undertaken with the intent of allowing an offeror to revise their proposal (FAR 43.002).


A contract or contract line item that is immune (usually by virtue of the funding source) to the end of the Fiscal Year.


Payment Office Monitoring Service


A revision is the offeror's opportunity to clarify and document understandings reached during negotiations. Rather than having an offeror continually update the proposal, the Contracting Officer can maintain control and be more efficient by covering all issues, then calling for the submission of a proposal revision.  With the revised proposal in hand, the Contracting Officer will have a complete picture of the offer, evaluate its relative merit and be assured that all significant issues are covered and understood.  Revisions should be submitted only at the request or permission of the CO (FAR 15.307).


Request for Bid


Request for Information (watch out for these non-committal fact finding missions!)


Request for Proposal


Request for Quotation


Single Award Schedule


A contract or contract line item that is bound to the end of the Fiscal Year.


Special Item Number. SINs in multiple award schedules represent groups of generically similar (but not identical) products that are intended to serve the same general purpose.  These products normally compete in the market place for the same customer's business, although they may provide various methods or techniques for accomplishing a particular task.


Small Business Administration


Small Business Centers


Small Business Set-Aside


Small Business Technical Advisor


1Special Order Program
2Standard Operating Procedure


Uniform Automated Data Processing System-Inventory Control Point


Uniform Automated Data Processing System-Stock Point

unliquidated damages

Damages not established either as to liability or amount.


U. S. Army Corps of Engineers


Under Secretary of Defense (Comptroller)


United States Government Standard General Ledger

variable cost

A cost that varies in direct proportion to changes in volume, but which is uniform for each unit. In practice, some variable costs are difficult to distinguish from fixed costs; it has been said that all costs are fixed in the short run and variable in the long run.


The difference between a pre-established measure and an actual measure. (FAR 31.001)

voluntary standard

A standard established by a private sector body and available for public use. (FAR 10.001)


Washington Headquarters Service Allotment Accounting System


Washington Headquarters Service Allotment Accounting System-Modification

Walsh-Healy Act

A public law designed to prevent the practice of "bid brokering", i.e., the practice of buying items and then reselling them to the Government without the adding of any value to the item by the reseller. The Act provides that contracts subject to its provisions (generally contracts over $10,000) may be awarded only to "manufacturers" or "regular dealers", as defined. (FAR 22.6)



As used in FAR 46.701, 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.


Worldwide Ammunition and Reporting System-New Technology

weighted guidelines

A Government technique for developing fee and profit negotiation objectives, within percentage ranges established by regulation. (NFS 1815.404-2 and NF 634)


Washington Headquarters Services


Work Information Management Systems


Wholesale Logistics Modernization Program

women-owned small business concern

A small business concern which is at least 51% owned by and whose management and daily business operations are controlled by one or more women. (FAR 19.001)

Work Breakdown Structure (WBS)

A product-oriented, hierarchical division tree of deliverable items and associated services that related the elements of work to each other and to the end item. The WBS is developed by starting with the end objective required and successively subdividing it into manageable components in terms of size and complexity. (NPG 7120.5)


Workyear equivalents computed by dividing total hours compensated (includes regular hours, annual leave, sick leave, compensatory time used, and overtime, and excludes leave without pay) by 2,087 hours. (FMM 9021-4)


Wholesale and Retail Receiving/Shipping System


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