Dictionary of Contracting Terms
Knowing and understanding the most commonly used terms in government contracting is a must when selling to the government. It affects everything from your government RFP to your teaming agreements to your relationship with key government officials.
We hope you find the following government-terminology dictionary helpful. For more insight into government terms, see our list of government acronyms.
Government Terms Used in Contracting
Government Terms - A
A&E aka A/E: Professional services of an architectural or engineering nature, as defined by state law (if applicable), that are required to be performed or approved by a person licensed, registered, or certified to provide such services.
Abstract Of Title: An outline history of the ownership of a parcel of land dating from the original grant, with changes in title and with a statement of all mortgages, liens, encumbrances, etc., affecting the property.
Acceptance Test: A test conducted by a purchaser (or his or her agent) to determine if the material, devices, or equipment delivered conforms to the purchase contract specifications or the product supplied by the vendor.
Acquisition: Process of purchasing goods and services (including construction) for the use of a governmental activity through purchase, rent, or lease. Includes the establishment of needs, description of requirements, selection of procurement method, selection of sources, solicitation of procurement, solicitation for offers, award of contract, financing, contraction administration, and related functions.
Addenda: Supplements to the bid or proposal form as originally issued, covering additions, corrections, or changes in the bidding conditions for the advertised work. Addenda are issued to prospective bidders prior to the date set for opening of proposals.
Additive Alternate: An alternate bid resulting in an addition to the same bidder's base bid. Same as alternate bid.
Advertisement for Bids: The published public notice soliciting bids for a construction or other public project. Most frequently used to conform to legal requirements pertaining to projects to be constructed under public authority, and usually published in newspapers of general circulation in those districts from which the public funds are derived.
Affirmative Action Program: A contractor's program that complies with Federal, state or local regulations to assure equal opportunity in employment to minorities and women.
Agency: An administrative branch of government.
AIA: American Institute of Architects.
Alternate Bid: The amount stated in the bid to be added to or deducted from the amount of the base bid if the corresponding change in project scope or alternate materials and/or methods of construction is accepted.
Amendment: A change to a solicitation before contract award (also see modification below, which occurs after contract award).
Appeal: Action taken by a bidder, offeror (actual or prospective) or vendor to seek a hearing before a disinterested person or panel or in an appropriate circuit court challenging a decision. (See Protest below.)
Application for Payment: A contractor's written request for payment of an amount due for completed portions of the work; may include, in the contract to provide, materials delivered and suitably stored pending their incorporation into the work.
Appraisal: An evaluation or estimate of the market or other value, cost, utility, or other attribute of land or other facilities.
Appropriation: Money from public funds set aside for a specific purpose.
Approved: Materials, devices, or construction accepted by a purchasing authority, due to tests or investigations conducted by it or by an agency satisfactory to the authority, or because of accepted principles or tests by national authorities or technical or scientific organizations.
Approved Equal: Materials, equipment, or method approved by the buying agency or authority for use in the work as being acceptable as an equivalent in essential attributes to the material, equipment, or method specified in the contract document.
Arbitration: The resolution of disputes by one or more neutral persons, as a substitute for judicial proceedings; may be invoked only by agreement of the parties to the dispute, but such agreement may be arrived at before there is an actual dispute, for example, through a clause in a contract.
Architect: A person trained and experienced in the design of buildings and coordination and supervision of all aspects of the construction of buildings.
Architect-Engineer: An individual or firm offering professional service as both architect and engineer.
Architect's Approval: The architect's written or imprinted acknowledgment that materials, equipment, or methods of construction are acceptable for use in the work.
Architect's Scale: A scale/ruler having graduations along its edges so that scale drawings can be measured directly in feet.
Army Corps of Engineers (COE): The Corps of Engineers is an agency of the U.S. Army that provides comprehensive engineering/construction, management and technical support to the Department of Defense, other agencies, and state and local governments.
Attorney-In-Fact: A person authorized to act for or in behalf of another person or organization, to the extent prescribed in a written instrument known as a power of attorney.
Authority having Jurisdiction: A federal, state, or local entity having statutory authority. In many instances, the delegated agent assumes the role of the authority having jurisdiction.
Authorization to Proceed (ATP): Official authority for the contractor to begin work. Usually issued by the procuring contracting officer.
Award: Any mechanism, signed by a contracting officer, providing government funds or other resources to an offeror that permits expenditure of such government funds or use of such government resources.
Award Package: Materials sent to the lowest responsible bidder after bid letting. The awards package may include: representations and certifications regarding information on human rights/certificate of compliance, certificate of current worker's compensation insurance form, copies of the authorized signature forms, withholding affidavit, request to sublet forms, and month-end trucking reports. Some items may need to be returned before the bid award is approved. (Return to top)
Base Bid: The amount of money stated in the bid as the sum for which the bidder offers to perform the work, not including that work for which alternate bids are also submitted.
Base Bid Specifications: The specifications listing or describing only those materials, equipment, and methods of construction upon which the base bid must be predicated, exclusive of any alternate bids.
Base Services: The services performed by an architect during the following five phases of a project: schematic design, design development, construction documents, bidding or negotiation, and contract administration.
Best and Final Offer (BAFO): For negotiated procurements, a contractor's final offer following the conclusion of discussions/negotiations.
Best Value: The overall "best" solution that 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.; i.e., all terms and conditions considered).
Bid: An offer to perform the work described in a contract at a specified cost. A complete and properly signed proposal to do the work. Competition for a job based on lowest cost to do the work. Government bids are generally cost-specific, based on the cost of labor, materials, profit, and overhead. Bids are normally not negotiated and cannot be changed once accepted by the owner. Bids are time sensitive and are generally good for 30 to 60 days after the bid opening.
Bid Bond: An insurance agreement in which a third party agrees to be liable to pay a certain amount of money in the event a selected bidder fails to accept the contract as bid.
Bid Date: The date established by the owner or the architect for the receipt of bids.
Bid Documents: The advertisement or invitation to bid, instructions to bidders, the bid form, and the proposed contract documents including any addenda issued prior to receipt of bids.
Bid Forms: A form furnished to a bidder to be filled out, signed, and submitted as his/her bid.
Bid Guarantee: Same as bid security.
Bid Letting: Same as bid opening.
Bid Opening: The opening and tabulation of bids submitted by the prescribed bid time and in conformity with the prearranged procedures.
Bid Price: The sum stated in the bid for which the bidder offers to perform the work.
Bid Security: The deposit of cash, certified check, cashier's check, bank draft, money order, or bid bond submitted with a bid and serving to guarantee to the owner that the bidder, if awarded the contract, will execute the contract in accordance with the bidding requirements and the contract documents.
Bid Set: A package of data that identifies the article to be purchased, the quantity and delivery, and includes designs, specifications, quality requirements and general conditions that will govern the contract resulting from acceptance of a bid.
Bid Time: The date and hour established by the owner for the receipt of bids.
Bidder: One who submits a bid for a prime contract with the owner, as distinct from a sub-bidder who submits a bid to a prime bidder. A bidder is not a contractor on a specific project until a contract exists between him and the owner.
Bidders' Conference: A meeting to discuss with potential bidders the technical, operational and performance specifications, and/or the full extent of financial, security and other contractual obligations related to a bid solicitation.(see Pre-Bid Conference below).
Bidders Results: List of bidders and their respective job-total bid amounts.
Bidding Period: The calendar period beginning at the time of issuance of bidding requirements and contract documents and ending at the prescribed bid time.
Bidding Requirements: Those documents providing information and establishing procedures and conditions for the submission of bids. They consist of the notice to bidders or advertisement for bids, instructions to bidders, invitation to bid, and sample forms.
Bill of Lading: A written receipt or contract, given by a carrier, showing a list of goods delivered to it for transportation. The straight bill of lading is a contract that provides for direct shipment to a consignee. The order bill of lading is negotiable; it enables a shipper to collect for a shipment before it reaches its destination (this is done by sending the original bill of lading with a draft drawn on the consignee through a bank). When the consignee receives the lading indicating that payment has been made, the lading will be surrendered to the carrier's agent, and the carrier will then ship the goods to the consignee, and the bill of lading will be surrendered to the carrier.
Blanket Purchase Order (BPO): Also called a Blanket Purchase Agreement. An arrangement under which a purchaser contracts with a vendor to provide the purchaser's requirements for an item(s) or a service, on an as-required and over-the-counter basis. Properly prepared, such an arrangement sets a limit on the period of time it is valid and the maximum amount of money that may be spent at one time or within a specified period and specifically identifies these persons authorized to accept goods.
Bona Fide Bid: A bid submitted in good faith, complete and in prescribed form that meets the conditions of the bidding requirements and is properly signed by someone legally authorized to sign such bid.
Bond: A financial guarantee by a surety company that work will be completed as described in a contract.
Bonding Capacity: An indication of a contractor's credit rating.
Bonus and Penalty Clause: A provision in a contract for payment of a bonus to the contractor for completing the work prior to a stipulated date, and a charge against the contractor for failure to complete the work by such stipulated date.
Boundary Survey: A mathematically closed diagram of the completed peripheral boundary of a site, reflecting dimensions, compass bearings and angles.
Brand Name Specification: A purchase description that identifies a product by its brand name and model or part number, or other appropriate terminology by which the product is offered for sale.
Broker: A person or firm that acts as an intermediary between a buyer and seller, usually charging a commission for "value added."
Brownfields: Abandoned, idled, or underused industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination.
Building Code: A collection of rules and regulations adopted by authorities having appropriate jurisdiction to control the design and construction of buildings, alteration, and repair, quality of materials, use and occupancy, and related factors of buildings within their jurisdiction.
Building Inspector: A member of a building department, usually of a municipality, who inspects construction to determine if it conforms to both the requirements of the building code and the approved plans.
Building Permit: A written authorization to an applicant for a specific project allowing him to proceed with construction; granted by the authorized agency, a tribe or a local municipality having jurisdiction after plans have been filed and reviewed.
Building Rehabilitation: The returning of a building to a useful state by repair, alteration, and modification.
Building (Historic) Restoration: The accurate reestablishment of the form and details of a building, its artifacts, and the site on which it is located, usually as it appeared at a particular time.
Building Restriction: Any one of a number of restrictions, imposed on the construction of a building or the use of land. Also known as restrictive covenant.
Building Services: The utilities and services supplied and distributed within a building generally related to the building environment.
Bundling: Consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small-business concern.
Buyer: A professional purchaser aka purchasing agent, procurement specialist etc. Government buyers typically specialize in a given group of materials or services and are responsible for market analysis, purchase planning, and coordination with users. (Return to top)
CAGE Code: The Commercial and Government Entity (CAGE) code is a five-character ID number used extensively within the Federal government and administered by Defense Logistics Information Service (DLIS).
Capital: 1. Assets less liabilities, representing the ownership interest in a business; 2. A stock of accumulated goods, especially at a specified time and in contrast to income received during a specified time period; 3. Accumulated goods devoted to the production of goods; 4. Accumulated possessions calculated to bring income.
Capital Equipment: An article of non-expendable (tangible) personal property having a useful life of more than one year and an acquisition cost of $5,000 or greater per unit. Items that cost less than $5,000 or have a useful life of less than one year are considered materials and supplies.
Cartage: A charge made for the hauling and transferring of goods, usually on a local basis and short haul in nature.
Cash Allowance: An amount established in the contract documents for inclusion in the contract sum to cover the cost of prescribed items not specified in detail, with provision that variations between such amount and the finally determined cost of the prescribed items will be reflected in change orders adjusting the contract sum.
Cash on Delivery (C.O.D.): Cash payment for purchases on delivery.
Cash Discount: A form of discount for securing prompt payment of an account.
Certificate Of Insurance: A memorandum issued by an authorized representative of an insurance company stating the types, amounts, and effective dates of insurance in force for a designated insured (usually part of the representations and certifications).
Certificate of Occupancy: A document issued by governmental authority certifying that all or a designated portion of a building complies with the provisions of applicable statutes and regulations, and permitting occupancy for its designated use.
Certified 8(a) Firm: A firm owned and operated by socially and economically disadvantaged individuals and eligible to receive Federal contracts under the Federal Government's Small Business Administration's 8(a) Business Development Program.
Change Order: Unilateral written change order issued to a contractor to modify contractual requirements within the general scope of the contract. Such modifications are limited to changes to the drawings, designs, specifications, the method of shipment or packing, or the place of delivery.
Clerk of the Works: Same as project representative.
Closed List Of Bidders: Same as invited bidders.
Closed Specifications: Specifications stipulating ;the use of specific products or processes without provision for substitution. Same as base bid specifications.
Closeout: The process in which the awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and the awarding agency (This is the point where the bond or other encumbrance will be released.)
Closing Date: The deadline for all bid submissions.
Code: A legal instrument adopted within a political jurisdiction that prescribes the minimum acceptable levels of the design, construction, installation, and performance of materials, components, devices, items of equipment, and appliances used in a building or building system and/or subsystem.
Code Of Practice: A technical document setting forth standards of good construction for various materials and trades
Commercial-Off-The-Shelf (COTS): Refers to supplies readily available in the commercial marketplace.
Commodity: A transportable article of trade or commerce that can be bartered or sold.
Commodity Agreement: Primary source agreements designated for supply of goods or services to an agency established because of a competitive quotation for indefinite quantities during a period at firm prices or with an established basis for price changes.
Commodity Manager: The Strategic Sourcing Manager assigned responsibility on an agency-wide basis for coordinating standards and specification development covering specific commodities or groups of commodities and for developing, negotiating, and monitoring pool purchases, commodity agreements, and price schedules for assigned commodities.
Common Carrier: A common carrier serves all customers, but carries only the type of freight for which it is certified. Benefits include the availability of service to anyone seeking transportation; the publication of rates; the provision of service on a schedule; service to designated points or within a designated area; and service for a given class(es) of movement and commodities.
Competition: A procurement strategy where more than one contractor that is capable of performing the contract is solicited to submit an offer for supplies and services. The successful offeror is selected based on criteria established by the agency's contracting office and the program offices for which the work is to be performed.
Competitive Bidding: The offer of vendor bids by individuals or vendors competing for a contract, privilege, or right to supply specified services or goods, over an agency-specific amount (e.g., $5,000). The amount is determined from agency to agency.
Competitive Intelligence (CI): Gathering and analyzing information about customers, competitors and the marketplace to support successful business decisions.
Competitive Sealed Bid: A bid submitted in a sealed envelope to prevent disclosure of its contents before the deadline set for the receipt of all bids. Sealed bidding procedures are required on procurements construction projects exceeding an agency-specific amount.
Competitive Negotiation: A method for purchasing goods and services, usually of a highly complex and technical nature whereby qualified individuals or vendors are solicited by means of a Request for Proposals. Negotiations are conducted with selected offerors, the best proposal, as judged against criteria contained in the Request for Proposals, is accepted, and an award is issued.
Completed Operations Insurance: Liability insurance coverage for injuries to persons or damage to property occurring after an operation is completed but attributed to that operation; does not apply to damage to the completed work itself.
Completion Bond, Construction Bond, Contract Bond: The guarantee of a bonding company that a contractor will perform and deliver the work contracted free of all encumbrances and liens.
Completion Date: In the contract documents, the date of substantial completion of the work.
Completion List: Same as inspection list.
Comprehensive General Liability Insurance: A broad form of liability insurance covering claims for bodily injury and property damage which combines under one policy coverage for all liability exposures on a blanket basis and automatically covers new and unknown hazards that may develop; automatically includes contractual liability coverage for certain types of contracts.
Conditions of the Bid: Conditions set forth in the instructions to bidders, the notice to bidders or advertisement for bids, the invitation to bidders, or other similar bid documents prescribing the conditions under which bids are to be prepared, executed, submitted, received, and accepted.
Conditions Of The Contract: Those portions of the contract documents that define, set forth or relate to the following: contract terminology; the rights and responsibilities of the contracting parties an of others involved in the work; requirements for safety and for compliance with laws and regulations; general procedures for the orderly prosecution and management of the work; payments to the contractor; and similar provisions of a general, nontechnical nature.
Confirming Purchase Order: A purchase order issued after the fact by a procuring agency to a vendor for goods or services ordered orally or by some other informal means. The order will usually be marked "CONFIRMING ORDER. DO NOT DUPLICATE."
Conflict Of Interest: A situation in which an individual has a personal interest (or responsibility, as well as a job responsibility) and a clear possibility exists that there may be a conflict between the two. The individual's actions may be influenced by his/her personal interest to the detriment of performing the professional responsibility effectively (e.g., buying from a supplier owned by a family member). (See Ethics below.)
Consent of Surety: Written consent of the surety on a performance bond and/or labor and material payment bond to such contract charges as change orders or reductions in the contractor's retainage, or to final payment, or to waiving notification of contract changes.
Consideration: Something of value given for a promise to make the promise binding. One of the essential elements of a legal contract.
Construction: Construction means building, altering, repairing, improving or demolishing any structure, building or highway, and any draining, dredging, excavation, grading or similar work upon real property.
Construction Inspector: Same as project representative.
Construction Management Contract: A contract in which a party is retained by the owner to coordinate and administer contracts for construction services for the benefit of the owner, and may also include, if provided in the contract, the furnishing of construction services to the owner (in contrast to an "at risk" contract under which a contractor guarantees a maximum fixed price and is at risk for cost overruns if the price goes above that).
Consulting Services: Advice or assistance of a purely advisory nature provided for a predetermined fee to an agency by an outside individual, vendor, or organization under contract to that agency.
Contingency Allowance: A sum designated to cover unpredictable or unforeseen items of work, or changes subsequently required by the owner.
Contingency Agreement:Any agreement under which the rights or obligations of a party are subject to the happening of stated contingency.
Contract: When used as a noun, contract refers to an agreement enforceable by law, between two or more competent parties, to do or not to do something not prohibited by law, for a consideration. Any type of agreement or order for the procurement of goods or services. (As a verb, contract has its usual legal sense, signifying the making of an agreement for consideration.)
Contract Administration: The management of all facets of a contract to assure the vendor's total performance is in accordance with the contractual commitments and that the obligation of the vendor under the terms and conditions of the contract are fulfilled.
Contract Administration Office (CAO): The organization assigned responsibility for ensuring that the contractor complies with the terms and conditions of the contract.
Contract, Cost-Plus-A-Fixed-Fee: A cost-reimbursement type contract that provides for the payment of a fixed fee to the vendor. The fixed fee, once negotiated, does not vary with the actual cost but may be adjusted because of any subsequent changes in the scope of work or services to be performed under the contract.
Contract Modification: Any written change in the terms of a contract.
Contract, Requirements Type: (open-end contracts) A form of contract covering long-term requirements used when the total quantity required cannot be definitely fixed but can be stated as an estimate or within maximum and minimum limits, with deliveries on demand. Such contracts are usually for one year or more in duration. (Example: an agency selects an HVAC contractor to supply services at $65 hour - agency does not have specific task but just needs to know that it can use the HVAC contractor when and if needed at a certain price.)
Contract, Service: A contract for work performed by an independent vendor in which the service rendered does not consist primarily of the acquisition of equipment or materials, or the rental of equipment, materials and supplies.
Contract, Time and Material: A contract providing for the procurement of supplies or services on the basis of direct labor hours at specified fixed hourly rates and material at cost, or at some bid percentage discount from manufacturer's catalog or list prices.
Contract Officer, Purchase Officer, Buyer: An agency employee whose primary assignment is purchasing goods or services.
Contracting Officer's Representative (COR): A subject-matter expert who often performs inspection of contractor services on behalf of a government agency and the contracting officer.
Contractor: An individual or vendor that has entered into an agreement to provide goods or services to an agency.
Contractor's Liability Insurance: Insurance purchased and maintained by the contractor to protect him from specified claims that may arise out of or result from his operations under the contract, whether such operations be by himself or by any subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable.
Contractor's Option: A provision of the contract documents under which the contractor may select certain specified materials, methods, or systems at his own option, without change in the contract sum.
Cooperative Agreement: An assistance instrument used when substantial involvement is anticipated between the Federal government and the state or local government or other recipient during performance of the contemplated activity.
Cooperative Purchasing: The combining of requirements of two or more governmental units to obtain the benefits of volume purchases and/or reduction in administrative expenses.
Corporation: A group of persons granted a state charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members. The process of incorporating is done through a state's secretary of state or state corporate counsel and usually requires the services of an attorney.
Cost Plus Award Fee Contracts (CPAF): The pricing structure of a contract where the contractor is reimbursed for all allowable, allocable and "reasonable" costs. Contract typically will include a base fee and an award fee as an incentive for superior performance.
Cost Reimbursement Contracts: Contracts based on payment by an agency to a contractor of allowable, reasonable and allocable costs incurred in the contract performance to the extent prescribed in the contract. These contracts may not require completion of the contract work, but rather the best efforts of the contractor. The types of cost reimbursement contracts include: (a) cost, (b) cost sharing, (c) cost-plus-fixed-fee (CPFF), (d) cost-plus incentive fee (CPIF), and (e) cost-plus-award fee (CPAF) contracts.
Critical Path Method (CPM): A system of project planning, scheduling, and control that combines all relevant information into a single master plan, permitting the establishment of the optimum sequence and duration of operations; the interrelation of all the efforts required to complete a construction project are shown, and indication is given of the efforts that are critical to timely completion of the project.
Cradle-To-Grave: Procurement from inception through development, procurement, performance, and final disposition.
Cure Notice: A notice, either oral or written, that informs the vendor that he or she is in default and states what the vendor has to do to correct the deficiency. (Return to top)
Damages: Same as liquidated damages below.
Data Universal Numbering System (DUNS) number: A unique nine-character identification number provided by the commercial company Dun & Bradstreet (D&B).
Date Of Agreement: The date stated on the face of the agreement. If no date is stated, it may be the date on which the agreement is actually signed (if this is recorded), or it may be the date established by the award; also referred to as the contract date.
Date Of Commencement Of The Work: The date established in a notice to proceed or, in the absence of which notice, the date of the agreement or such other date as may be established therein or by the parties thereto.
Date Of Substantial Completion: The date certified by the architect when the work or a designated portion thereof is sufficiently complete, in accordance with the contract documents, so the owner may occupy the work or designated portion thereof for the use for which it is intended.
Davis-Bacon Wages: Wage determinations issued by the Department of Labor that determine the minimum wage rates to pay on federally funded or assisted construction projects. The prevailing wage rate corresponds directly to the union wage. This is especially true in urban areas, where union membership tends to be higher.
Debt Service: The periodic payment of a loan, including both accrued interest and a portion of the principle.
Default: Failure of a vendor to comply with the terms and conditions of a contract.
Decentralized Purchasing: When a firm or agency approaches purchasing in a decentralized manner, individual departments (in a single-site organization) or location managers (in a multi-site organization) control the purchasing functions. There is no central purchasing department with specialized buying expertise in a single-site operation, although in a multi-site operation each agency office/location may have its own purchasing department.
Deduction: The amount deducted from the contract sum by a change order.
Deductive Alternate: An alternate bid resulting in a deduction from the same bidder's base bid. Same as Alternate Bid.
Deed: Any duly attested, written document executed under seal and delivered to effect a transfer, bond, or contract, such as a conveyance of real property or interest therein.
Deed Restriction: A limitation on the use of land, which is set forth in a deed conveying the restrictions.
Defective Work: Work not complying with the contract requirements.
Deliverable: A report or product that must be delivered to an agency by the contractor (or by the sub to the prime contractor) to satisfy contractual requirements.
Delivery Order: An order for supplies placed against an established contract.
Demolition: The systematic destruction of a building, all or in part.
Department of Housing and Urban Development (HUD): Federal housing agency.
Deposit For Bidding Documents: Monetary deposit required to obtain a set of construction documents and bidding requirements, customarily refunded to bona fide bidders on return of the documents in good conditions within a specified time.
Design-Build Contract: A contract between an institution and another party in which the party contracting with the institution agrees to both design and build the structure, roadway or other item specified in the contract.
Design Specification: A purchase specification setting forth the essential physical characteristics that an item bid must possess to be considered for award.
Designated Public Area: An area that is available to the public during normal business hours and is the physical spot designated by an agency for the posting of procurement solicitations and notices.
Development: A tract of previously undeveloped land that is subdivided and provided with all necessary utilities, such as roads, water, electricity, sewers, etc.
Disadvantaged Business Enterprise: An independent small business enterprise which is at least fifty-one percent (51%) owned and controlled by one or more socially and/or economically disadvantaged individuals, or in the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is owned by one or more socially and economically disadvantaged individuals; and whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.
Distributor: One that markets or sells merchandise - i.e., a wholesaler.
Drop Shipment: Merchandise that is shipped by a manufacturer directly to a customer in response to the seller who collects orders but does not maintain an inventory. (Return to top)
Government Terms - E
Effective Competition: A market condition that exists when two or more contractors, acting independently, actively compete for an agency's business in a manner which ensures that the agency will be offered the lowest price or best technical design to meet its minimum needs.
Electronic Data Interchange (EDI): Transmission of information between computers using highly standardized electronic versions of common business documents.
Emergency: An occurrence of a serious and urgent nature that demands immediate action.
Eminent Domain: The power or right of the nation or state to take private property for public use, usually with reasonable compensation to the owner.
Employer's Liability Insurance: Insurance protection for the employer against claims by employees for damages that arise out of injuries or diseases sustained in the course of their work, and that are based on common-law negligence rather than on liability under workmen's compensation acts.
Energy-Savings Performance Contract: A contract that provides for the performance of services for the design, acquisition, financing, installation, testing, operation, and where appropriate, maintenance and repair, of an identified energy or water conservation measure or series of measures at one or more locations. Such contracts shall provide that the contractor must incur costs of implementing energy savings measures, including at least the cost (if any) incurred in making energy audits, acquiring and installing equipment, and training personnel in exchange for a predetermined share of the value of the energy savings directly resulting from implementation of such measures during the term of the contract. Payment to the contractor is contingent upon realizing a guaranteed stream of future energy and cost savings. All additional savings usually go to the government.
Energy Star: A federal standard applied to office equipment for the purpose of rating the energy efficiency of the equipment. Energy Star computers, monitors, and printers save energy by powering down and going to "sleep" when not in use, resulting in a reduction in electrical bills and pollution levels.
Engineer: A person trained and experienced in the profession of engineering; a person licensed to practice the profession by the authority in the area.
Engineers Estimate: An estimate of what a project will cost to construct. This estimate is prepared using the final plan and proposal and it is compared with the bids received to determine if the project should be awarded. In some locales, the Engineers Estimate is not available to the public until after the project is awarded; in other cases, it may be included with the project description.
Environmental Design Professional: The professions collectively responsible for the design of man's physical environment.
Environmental Impact Statement: A detailed analysis of the probable environmental consequences of proposed federal legislation, major federal actions, or large-scale construction making use of federal funds, likely to have significant effects on environmental quality; such a statement is required by the National Environmental Policy Act of 1969.
Escalation Clause: A contract provision that permits the adjustment of contract prices by an amount or percent if certain specified contingencies occur, such as changes in the vendor's raw material or labor costs.
Ethics: In this case, pertains to general laws governing the conduct of public officials and employees and their interactions with vendors and contractors. Ethics laws and codes may limit what public officials and employees may do on the job, what they may do after hours or on the side, and what they may do after they leave public service.
Evaluation of Bids: The process of examining a bid after opening to determine the bidder's responsiveness to requirements, responsibility, and other characteristics of the bid relating to selection for award.
Extra Work: Any work not included in the contract documents; an extra. (Return to top)
Government Terms - F
Fabrication: To construct equipment from a set of instructions or blueprints from supplied parts by a manufacturer or expert.
Facility: the building(s), playground(s), parking area(s), etc. where the program or construction site is located.
Facilities Contract: Provides for the procurement, construction, and installation of facilities or the use, maintenance, management, accountability, or disposition of facilities.
Factor: A person or firm that factors, or purchases invoices.
Federal Acquisition Regulations (FAR): The body of regulations that are the primary sources of authority governing the Federal government procurement process.
Federal Supply Schedule (FSS) Program: A "simplified" process for procuring commonly used supplies or services by placing delivery orders against Federal Supply Schedule contracts that have been awarded by the General Services Administration (GSA) for use by numerous Federal agencies.
Field Representative: Same as project representative.
Field Supervision: That portion of the owner's supervisory work that is done at a construction or other project site.
Final Acceptance: The owner's acceptance of a project from the contractor upon certification by the owner that it is complete and in accordance with the contract requirements; final acceptance is confirmed by the making of final payment unless otherwise stipulated at the time of making such payment.
Final Completion: The completion of work and all contract requirements by the contractor.
Final Inspection: The final review of the project by the architect prior to his issuance of the final certificate for payment.
Final Payment: Payment made by the owner to the contractor, upon issuance by owner of the final certificate for payment, of the entire unpaid balance of the contract sum as adjusted by change orders.
Fiscal Year: The new year for most government agencies starts October 1st.
Fixed Price Contract: A type of contract that provides for a firm price or, under appropriate circumstances, for an adjustable price for the supplies or services being procured.
Force Account: A term used when work is ordered to be done without prior agreement as to lump sum or unit price cost thereof and is to be billed for at cost of labor, materials and equipment, insurance, taxes, etc., plus an agreed percentage for overhead and profit.
Formal Solicitation: A solicitation that requires a "sealed" response.
Franchise: Authorization granted to someone to sell or distribute a company's goods or services in a certain area; a business or group of businesses established or operated under such authorization.
Freedom of Information Act (FOIA): Process enacted in 1966 that generally provides that any person has a right of access to Federal, and many state and local, agency records.
Freight on Board (FOB): Used in conjunction with destination or origin to denote where goods and/or services are to be delivered.
Full and Open Competition: With respect to a contract action, "full and open" competition means all responsible sources are permitted to compete. (Return to top)
Government Terms - G
General Services Administration (GSA): A Federal agency that supplies products and communications for U.S. government offices, provides transportation and office space to federal employees, and develops cost-minimizing policies. GSA's business lines include the Federal Acquisition Service (FAS) and the Public Buildings Service (PBS). Other divisions include the Office of Government-wide Policy, and various Staff Offices, including the Office of Small Business Utilization, the Office of Citizen Services and Communications, and the Office of Civil Rights. It conducts its business activities through 11 offices (known as GSA Regions) throughout the United States, located in Atlanta, Boston, Chicago, Denver, Ft. Worth, Kansas City, New York City, Philadelphia, San Francisco, Seattle (Auburn), and Washington, D.C.
General Terms and Conditions: Standard clauses and requirements incorporated into all solicitations (bids/RFPs/RFQs) and resulting contracts that are derived from laws or administrative procedures of the governmental agency (also called "Boiler Plate").
General Contract: Under the single contract system, the contract between the owner and the contractor for construction of the entire work.
General Contractor: The prime contractor who is responsible for most of the work at the construction site, including that performed by the subcontractors.
Generally Accepted Standard: A specification, code, rule, guide, or procedure in the field of construction, or related thereto, recognized and accepted as authoritative.
Goods: Materials, equipment, supplies, printing, and IT hardware and software.
Guarantee: A legally enforceable assurance of the quality or duration of a product or of work performed.
Guaranteed Maximum Cost: An amount estimated in an agreement between the owner and contractor as the maximum cost of performing specified work based on cost of labor and materials plus overhead expense and profit.
Guaranty Bond: Same as bid bond. Same as labor and material payment bond. Same as performance bond. Same as surety bond. (Return to top)
Historically Black Colleges and Universities Program (HBCU Program): Provides grants to Historically Black Colleges and Universities (HBCUs). Only the 104 HBCUs designated by the U.S. Department of Education in 34 CFR 608.2 are eligible for funding under the HBCU Program.
Historically Underutilized Business Zones: Through the HUBZone Empowerment Contracting Program, Federal contracting opportunities are provided for qualified small businesses located in distressed areas. Goal is that by fostering the growth of these contractors as viable businesses, in the long term, helps to empower communities, create jobs, and attract private investment. (Return to top)
Government Terms - I
Implied Warranty Of Fitness For A Particular Purpose: One of the warranty protections granted by law under the Uniform Commercial Code (UCC - see Uniform Commercial Code). If the seller knows the buyer's intended use for the goods, and if the buyer has relied on the seller's expertise in choosing these goods, then the seller warrants that these goods will be fit for the buyer's intended use. Frequently sellers attempt to limit or exclude fitness for a particular purpose in their warranty terms.
Improper Influence: An influence that induces or tends to induce an agency employee to consider awarding a contract or purchase on any basis other than its merit. (See Ethics above.)
Indefinite Delivery/Indefinite Quantity Contracts (ID/IQ): A type of contract in which the exact date of delivery or the exact quantity are not specified until a delivery or task order is issued.
Independent Contractor: An independent contractor relationship exists when the agency/buyer has the right to control only the result of the service, not the manner of performance. The following elements are essential to establish the relationship of an independent contractor to its client, as contrasted with the relationship of an agent to its principal. An independent contractor must: (1) exercise independent judgment as to the means used to accomplish the result; (2) be free from control or orders from any other person; and (3) be responsible only under the contract with the client for the result obtained.
Independent Consultant: An independent consultant relationship exists when the agency does not control either the manner of performance or the result of the service. Independent consultants are individuals not employed by the agency or organizations not a part of the agency, with proven professional or technical competence that provide primarily professional or technical advice.
Independent Verifications and Validation Contract (IVV or IV & V): Contracts through which testing and validation or developed software is accomplished by someone other than the developer.
Informal Solicitation: A solicitation which does not require a sealed response.
Informality: A minor defect or variation of a bid or proposal from the exact requirements of the invitation for bids, or the request for proposals, that does not affect the price, quality, quantity, or delivery schedule for the goods, services or construction being procured.
Inherently Governmental Activity: An activity that is so intimately related to the public interest as to mandate performance by government employees. Activities that meet these criteria are not in competition with commercial sources and are not generally available from commercial sources.
Inspection: Examination and testing of goods and services to determine whether the goods and services furnished conform to contract requirements. (Example: Materials testing.)
Instructions to Bidders: Instructions contained in the bidding requirements for preparing and submitting bids for a construction project. Same as notice to bidders.
Insurance: A contract between an insurance company and a person or group that provides for a monetary payment in case of covered loss, accident or death.
Interested Party: A prime contractor or an actual or perspective offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract.
Invitation for Bids (IFB): Formal solicitations for offerings, to perform procurements by competitive bids when the specifications describe the requirements of the agency clearly and accurately.
Invoice: A list of goods or services sent to a purchaser showing information including prices, quantities and shipping charges for payment. (Return to top) G
overnment Terms - J
Javits-Wagner-O'Day Act (JWOD): A Federal law that requires the government to purchase some of its supplies and services from nonprofit agencies (e.g., National Industries for the Blind and NISH) that employ Americans who are blind or have other severe limitations.
Job: Same as project. Same as work.
Job Captain: A member of a designer's staff normally responsible, on a given project, for the preparation of drawings and their coordination with other documents.
Job Site: The site of the project.
Job Superintendent: Same as superintendent.
Joint Venture: An association of two or more business entities to carry on a single business enterprise for profit for which purpose they combine their property, capital, efforts, skills and knowledge. (Return to top)
Government Terms - K
Kickback: Any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which is provided, directly or indirectly, to agency procurement or program officials by any prime contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or receiving favorable treatment in connection with obtaining a contract. (Return to top)
Government Terms - L
Labor and Material Payment Bond: A bond of the contractor in which a surety guarantees to the owner that the contractor will pay for labor and materials used in the performance of the contract. The claimants under the bond are those having direct contracts with the contractor or any subcontractor.
Labor Surplus Area: A civil jurisdiction designated by the U.S. Department of Labor; updated annually in the fall. Used as one of the criteria for designating economically disadvantaged (ED) vendors.
Landscape Architect: A person trained and experienced in the design and development of landscapes and gardens.
Land Survey: A survey of landed property establishing or reestablishing lengths and directions of boundary lines. Land boundaries are usually defined by ownership, commencing with the earliest owners through successive ownerships and partitions.
Late Bid or Proposal: A bid or proposal that is received at the place designated in the invitation for bids or request for proposals after the deadline established by the solicitation.
Latent Defect: A deficiency or imperfection that impairs worth or utility that cannot be readily detected from visual examination of a product. Examples would be the use of non-specification materials in manufacture, building materials that are not to specifications, or missing internal parts such as a gasket, gear, or electrical circuit, etc.
Lead Time: The time that it takes a supplier to delivery goods or services after receipt of an order.
Lease: A contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.
Less-Than-Truckload (LTL): A quantity of freight less than the amount necessary to constitute a truckload.
Lessee: One to whom a lease is granted.
Lessor: One who grants a lease.
Letter Of Intent: A letter signifying an intention to enter into a formal agreement, usually setting forth the general terms of such agreement.
Liability Insurance: Insurance that protects the insured against liability on account of injury to the person or property of another.
Licensed Architect: Same as architect.
Licensed Contractor: A person or organization certified by governmental authority, where required by law, to engage in construction contracting.
Licensed Engineer: Same as professional engineer.
Lien: A term for any sort of charge or encumbrance against an item of property that secures the payment of a debt or performance of some other obligation.
Life Cycle Cost: The cost of a building or equipment based not only on the initial expenditure, but also on its maintenance and operating cost over its entire lifetime.
Line Item: An item of supply or service specified in a solicitation for which the vendor must specify a separate price.
List Price: The price of an article published in a catalog, advertisement or printed list from which discounts, if any, may be subtracted.
Liquidated Damages: A sum stated in a contract to be paid as ascertained damages for failure to perform in accordance with the contract. The damage figure stipulated must be a reasonable estimate of the probable loss to the agency and not calculated simply to impose a penalty on the vendor.
Loss of Use Insurance: Insurance protecting against financial loss during the time required to repair or replace property damaged or destroyed by an insured peril.
Lowest Apparent Bidder: The bidder whose bid is the lowest at a public bid opening. However, the lowest apparent bid must be verified and the bidder must comply with additional requirements to become the lowest responsible bidder (i.e. the bidder that submits the lowest bid and complies with all prescribed requirements).
Lump Sum Agreement: Same as stipulated sum agreement. (Return to top)
Government Terms - M
Mandatory: Required by the order stipulated, e.g., a specification or a specific description that may not be waived.
Maintenance Bond: A bond that provides a guarantee to an owner that the contractor will rectify defects in workmanship or materials reported to the contractor within a specified time period following final acceptance of the work under contract.
Maintenance, Repair and Operations (MRO): Services and supplies that are consumed in the operations process, but that do not become part of the product (e.g., janitorial services, soap, lubricating oil, machine repair and parts, office supplies).
Manufacturer: A business that makes or processes raw materials into a finished product.
Market: The aggregate forces (including economics) at work in trade and commerce in a specific service or commodity. Also, to sell, analyze, advertise, package, etc.
Market Survey: An attempt to determine the availability of qualified sources capable or satisfying an agency's procurement requirements. This testing of the marketplace may range from written or telephone contacts with knowledgeable experts regarding similar or duplicate requirements, and the results of any market test recently undertaken, to the more formal sources-sought announcements in pertinent publications (e.g., technical/scientific journals, or the FedBizOps, or requests for information for planning purposes).
Material Variance/Material Deviation: A variance or deviation in a response from specifications of conditions that allows a responder a substantial advantage or benefit not enjoyed by all other responders or that gives the state something significantly different from what the state requested in the solicitation document.
Materials Management: Embraces all functions of acquisition, standards, quality control and surplus property management.
Memorandum Of Understanding (MOU): Expression of mutual understanding of an issue without implying commitments by parties to the understanding.
Most-Favored-Customer Clause: Price protection clauses in a contract that specify that the seller will not offer a lower price to other buyers unless seller agrees to extend such lower price to buyer.
Multiple Award: The award of contracts to more than one bidder (for example, when a solicitation in its terms and conditions provides that awards may be made to more than one vendor). Often used in situations where the award of a single contract would be impractical and awards are limited to the least number of suppliers necessary to satisfy program requirements. (Return to top)
Government Terms - N
NAPM: National Association of Purchasing Management. A nonprofit educational and technical organization of purchasing and materials management personnel and buying agencies from the public and private sectors.
NASPO: National Association of State Purchasing Officials. An organization of state procurement representatives for the purpose of promoting efficient and effective public purchasing policies and procedures at the state level. NASPO is an affiliate of the Control of State Governments (CSG).
Negligence: Failure to exercise that degree of care that a reasonable and prudent person would exercise under the same circumstances.
Negotiation: A bargaining process between two or more parties, each with its own viewpoints and objectives, seeking to reach a mutually satisfactory agreement on, or settlement of, a matter of common concern.
Negotiated Contract Cost (NCC): The estimated cost negotiated in a cost-plus-fixed-fee contract or the negotiated contract target cost in either a fixed-price incentive contract or a cost-plus-incentive-fee contract.
Net Price: Price after all discounts, rebates, and the like have been allowed.
NIGP: National Institute of Governmental Purchasing. A nonprofit, educational and technical assistance corporation of public purchasing agencies and activities at the federal, state and local levels of government.
No Bid: A response to a solicitation for bids stating that respondent does not wish to submit an offer. It may be very important as it may operates as a procedure to prevent suspension from the vendors list for failure to submit a response.
Non-Collusion Affidavit: A notarized statement by a bidder that he has prepared his bid without collusion of any kind.
Non-Competitive Negotiation: The process of arriving at an agreement through discussion and compromise when only one source is practically available.
Nonconforming Work: Work that does not fulfill the requirement of the contract documents.
Non-Professional Services: Any services not specifically identified as professional services in the definition of professional services. For example, janitorial and general maintenance service orders including those for fleet management, buildings, and mowing.
North American Industrial Classification System or "NAICS": NAICS (pronounced "Nakes") comprise new codes that were developed by the Census Bureau to replace the current SIC Code. NAICS recognizes hundreds of new businesses in our economy, primarily in the fast-growing service sector. NAICS classifications are updated regularly to keep pace with changing business conditions and information needs. The new numbering system provides five levels of classification containing detailed codes that have a maximum of six digits.
Notice of Award: A Notice of Award is written notification to a vendor stating that the vendor has received an award.
Notice To Bidders: A notice contained in the bidding requirements informing prospective bidders of the opportunity to submit bids on a project and setting forth the procedures for doing so.
Notice of Intent to Award: The Notice of Intent to award is a written notice or bid tabulation sheet publicly displayed prior to award that shows the selection of a vendor for the award of a specific contract or purchase order. Note that this decision may be changed prior to the actual award of a contract or purchase order.
Notice to Proceed: Written communication issued by the owner to the contractor authorizing him to proceed with the work and establishing the date of commencement of the work. (Return to top)
Government Terms - O
Obligee: The entity (person, firm, corporation, government) protected by the surety bond against loss. The surety bond "runs to" the obligee and the obligee has the ability to set the language of the surety bond.
Observation of the Work: A function of the owner or his representative in the construction or project build phase, during his periodic visits to the site, to familiarize himself generally with the progress and quality of the work an to determine in general if the work is proceeding in accordance with the contract documents.
Offer: An invitation to "come and do business with me on XYZ terms"; it is a promise made to the other party that if the terms proposed are satisfactory, there will be a contract.
Offeror: A person who makes an offer in response to a request for proposals.
Option: A clause contained in a contract that gives an agency the unilateral right to extend the term of the contract or obtain additional quantities of products or services at the prices contained in the contract for that option period or additional quantity of products or services.
OSHA: The Occupational Safety and Health Administration of the Federal Department of Labor.
Over Design: As applied to structural design, a design based on requirements higher than service demands, usually as a means of compensating for unknown and/or anticipated deficiencies.
Owner: The architect's client and party to the owner-architect agreement.
Owner's Liability Insurance: Insurance that protects the owner against claims arising from his ownership of property and that may be extended to cover claims that may arise from operations of others under the construction contract. (Return to top)
Government Terms - P
Parties Excluded from Procurement Programs: Contractors or suppliers included on government lists of debarred, suspended, and ineligible contractors.
Payment Bond, For Labor and Material: A bond required of a vendor to assure fulfillment of the vendor's obligation to pay all persons supplying labor or materials in the performance of the work provided for in the contract.
P.E.: The abbreviation for professional engineer. A designation reserved, usually by law, for a person or organization professionally qualified and duly licensed to perform such engineering services as structural, mechanical, electrical, sanitary, civil, etc.
Performance Based Service Acquisition or PBSA (aka performance-based contracting or performance contracting): A variety of acquisition strategies, methods, and techniques that describe and communicate measurable outcomes rather than direct performance processes. Such contracts are structured around defining a service requirement in terms of performance objectives and providing contractors the latitude to determine how to meet those objectives (i.e., it is a method for purchasing what is required and placing the responsibility for how it is accomplished on the contractor). In some cases, for example in energy retrofits, the contractor can be paid based upon amount of money saved.
Performance Bond: A contract of guarantee executed in the full sum of the contract amount subsequent to award by a successful bidder to protect the agency from loss due to his/her inability to complete the contract in accordance with its terms and conditions.
Performance Specification: A condition setting forth performance requirements that have been determined necessary for the item involved to perform as required.
Performance Work Statement: Method for the agency to articulate its requirement; used in PBSA (see Performance Based Service Acquisition above). Sometimes called a performance-based SOW.
PERT: Acronym for project evaluation and review technique.
PERT Schedule: A PERT chart of the activities and events anticipated in a work process. Same as critical path method or CPM.
Petty Cash Purchase: A method of purchasing low-value items from a firm or agency's cash on hand system; is often combined with a C.O.D. approach.
Planning: The process of studying the layout of spaces within buildings and of buildings and other facilities or installations in open spaces in order to develop the general scheme of a building or group of buildings.
Plans: These are the profiles, typical cross-sections, and supplemental drawings that show the locations, character, dimensions, and details of the work to be done.
Planholders List: A list of vendors/contractors that have acquired plans, specifications, bidding documents and/or proposals for a specific job in the active bid or proposal stage.
Plant-Matter Based Or Bio-Based Product: A product derived from renewable resources, including fiber crops (for example, chemical extracts from oilseeds, nuts, fruits and vegetables, and agricultural residues such as wood wastes generated from processing and manufacturing operations).
Political Subdivision: A subdivision of a state that has been delegated certain functions of local government. Can include counties, cities, towns, villages, hamlets, boroughs and parishes.
Post-Consumer Material: A finished material that would normally be disposed of as a solid waste after its lifecycle as a consumer item is complete. Refers to material collected for recycling from office buildings, homes, retail stores, etc.
Pool (Cooperative) Purchase: Typically involves two or more locations and provides that definite or guaranteed minimum quantities of specified items be purchased at fixed prices during a stated period. Pool purchases are normally made on a regularly scheduled basis one or more times a year.
Potential Bidder or Offeror: A person who, at the time an agency awards or proposes to award a contract, is engaged in the sale or lease of goods, or the sale of services or construction of the type to be procured under such contract, and who at such time is eligible and qualified in all respects to perform that contract, and who would have been eligible and qualified to submit a bid or proposal had the contract been procured through competitive sealed bidding or competitive negotiation.
Pre-Award Survey: An evaluation by an agency representative of a prospective contractor's capability to perform a proposed contract. Can include site visit to contractor facilities etc.
Pre-Bid Conference or Pre-bid Walk-Through: Meeting held with prospective bidders or offerors (prior to submission of bids or proposals) to review, discuss, and clarify technical considerations, specifications, and standards relative to the proposed procurement.
Pre-Consumer Material: Material or by-products generated after the manufacture of a product but before the product reaches the consumer, such as damaged or obsolete products. Pre-consumer material does not include mill and manufacturing trim, scrap, or broken material THAT is generated at a manufacturing site and commonly reused on-site in the same or another manufacturing process.
Preliminary Drawings: Drawings prepared during the early stages of the design of a project.
Preliminary Estimate: same as statement of probable construction costs.
Premises: Land and/or it appurtenances.
Pre-Qualifications: A procedure to prequalify products or vendors and limit consideration of bids or proposals to only those products or vendors that have been prequalified.
Price: The amount of money that will purchase a definite amount of a commodity.
Price Agreement: A contractual agreement in which a purchaser contracts with a vendor to provide the purchaser's requirements at a predetermined price. Usually involves a minimum number of units, orders placed directly with the vendor by the purchase, and limited duration of the contract.
Price Analysis: The process of examining and evaluating a proposed price by comparing it with other offered prices or prices previously paid for similar goods or services.
Price Fixing: Agreement among competing vendors to sell at the same price.
Price Schedules: Agreements designated as optional for supply of goods or services to an agency.
Prime Contractor: A corporation, partnership, business association, trust, joint-stock company, education institution or other non-profit organization, or individual that has entered into a prime contract with an agency.
Prime Contract: A contract between the owner and contractor for construction of a project or portion thereof.
Prime Professional: Any person or firm having a contract directly with the owner for professional services.
Principle: One on whose behalf or in whose name binding transactions may be entered into by another, usually called the agent.
Procurement: The procedures for obtaining goods or services, including all activities from the planning steps and preparation and processing of a requisition, through receipt and acceptance of delivery and processing of a final invoice for payment.
Procurement Technical Assistance Centers (PTAC): The Defense Logistics Agency, on behalf of the Secretary of Defense, administers the DoD Procurement Technical Assistance (PTAC) Cooperative Agreement Program. PTA Centers are designed to be a local resource available to provide assistance to business firms in marketing products and services to government.
Procurement Vehicle: A generic term used to refer to a contract or financial assistance award.
Production Drawings: Same as working drawings.
Professional Services: Work performed by an independent vendor within the scope of the practice of accounting, actuarial services, architecture, land surveying, landscape architecture, law, dentistry, medicine, optometry, pharmacy, or professional engineering etc.
Program: A statement prepared by or for an owner, with or without an architect's assistance, setting forth the conditions and objectives for a building project including its general purpose and detailed requirements, such as a complete list of the rooms required, their sizes, special facilities, etc.
Program Evaluation and Review Technique (PERT): A management control technique applied to project management; determines what must be done to complete a project by a given date.
Progress Chart: A chart prepared by a contractor, brought up to date weekly, monthly, etc.; the principal professional and non-professional disciplines of the project are tabulated vertically and the scheduled work time shown horizontally.
Progress Payment: A partial payment made during progress of the work on account of work completed and/or materials suitably stored.
Progress Schedule: A diagram, graph, or other pictorial or written schedule showing proposed and actual times of starting and completion of the various elements of work.
Project: An undertaking, composed of one or more elements of work, planned and executed in a fixed time period.
Project Budget: The sum established by the owner as available for the entire project, including the budget, material costs, equipment costs, financing costs, compensation of professional services, contingency costs, and other similar established or estimated costs.
Project Cost: The total cost of a project.
Project Manager: A third-party consultant or employee of the owner that works for the owner and coordinates the activities of the project. Assists with the development of specific strategies of the project (including bidding and contracting), establishes time frames and benchmarks for the project, assists the owner in hiring other professional services, reviews plans and drawings and makes recommendations to the owners, monitors the budget of all phases of the project, works with all consultants, monitors the day-to-day work progress of the contractor, assists the owner in close-out, and prepares for occupancy.
Project Manual: The manual prepared for a project, including the bidding requirements, conditions of the contract, and the technical specifications.
Proposal: A document used by the owner to evaluate the professional capabilities of a business, agency, or individual against a set of pre-established criteria that may be weighted on a numerical scale using a set of questions that allows the owner to determine the best business, agency, or individual to hire for their specific job. Normally, the proposal does not include the cost of services; cost is generally a negotiated amount after the competing proposals have been evaluated and ranked. The proposal, however, is designed to evaluate such criteria as previous work experience; the qualifications of the lead professional and the qualifications of the team that will be working on the project; and whether their previous work has been completed on time and within budget.
Proprietary Specification: One that restricts the acceptable products or services to those of one manufacturer or vendor. A common example would be a specification by brand name that excludes consideration of proposed "equals." Note: Although all sole source specifications are proprietary, all proprietary specifications are not sole source - proprietary items may be available from several vendors through competitive bidding.
Protest: A written complaint about an administrative action or decision brought by a bidder or offeror to the appropriate administrative section with the intention of receiving a remedial result.
Public Bid Opening: The process of opening and reading bids at the time and place specified in the RFQ/RFP and in the presence of anyone who wishes to attend.
Public Posting: The display of procurement notices in an area or on a board designated and regularly used for that purpose that is available to the public during normal working hours.
Public Purchasing: The process of obtaining goods and services for public purpose following procedures implemented to protect public funds from being expended extravagantly or capriciously.
Purchase Order: A document an agency uses to execute a purchase transaction with a vendor. It serves as notice to a vendor that an award was made and that performance can be initiated under the terms and conditions of the contract.
Purchasing: This function typically is responsible for acquisition of required materials, services, and equipment used in the organization. (Return to top)
Government Terms - Q
Qualified Products List (QPL): A list of products that have been tested and approved based on written prequalification procedures.
Qualified Contractors List (QCL): A list of contractors whose capability to provide a service has been evaluated and approved based on detailed prequalification procedures.
Quality: The composite of material attributes, including performance features and characteristic, of a product or service to satisfy a given need.
Quality Assurance: The inspection, testing, and other relevant action taken to ensure that the desired level of quality is in accordance with the applicable standards or specifications for the product or work.
Quality Control: The inspection, analysis, and other relevant action taken to provide control over what is being done, manufactured, or fabricated, so that a desirable level of quality is achieved and maintained.
Quality Survey: A detailed analysis and listing of all items of materials and equipment necessary to undertake a project.
Quantity: Amount or number.
Quantity Discount: A reduction in the unit price offered for large volume contracts.
Quitclaim Deed: A written instrument whereby the seller conveys only whatever interest he has in property, but makes no warranties or representations as to the nature of that interest or as to the absence of any limitations or restrictions thereon, or even that he has any right to the property at all.
Quotation: A price quoted by a contractor, sub-contractor, material supplier, or vendor to furnish materials, labor, or both. (Return to top)
Government Terms - R
Real Estate: Property in the form of land and all its appurtenances, such as buildings.
Real Property: Land, everything growing on it and all improvements made to it.
Realty Officer: An employee who assists the governments in realty issues including, but not limited to, disputes, developments, and assignments.
Reasonable Bidder or Offeror: A person or vendor who has the capability, in all respects, to perform fully the contract requirements and the moral and business integrity and reliability which will assure good faith performance, and who has been prequalified, if required.
Reasonable Price: A price that does not exceed that which would be incurred by a prudent person in the conduct of a competitive business. Reasonable price can be established by market test, price or cost analysis, or the experience and judgment of the purchaser.
Recycled Content: The portion of a product that is made from materials directed from the waste stream; usually stated as a percentage by weight.
Recycled Product: A product that contains the highest amount of post-consumer material practicable or, when post-consumer material is impracticable for a specific type of product, contains substantial amounts of pre-consumer material.
Remanufactured Product: Any product diverted from the supply of discarded materials by refurbishing and marketing said product without substantial change to its original form.
Regular Dealer: A person or vendor that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business.
Regulation: Any rule prescribing permitted or forbidden conduct, whether found in legislation or in the actions of an administrative agency or federal agency.
Render: To give a mechanical drawing, as in elevation, a more or less complete indication of shades and shadows.
Request for Proposals (RFP): All documents, whether attached or incorporated by reference, utilized for soliciting proposals; the government RFP process usually requires negotiation with offerers as distinguished from competitive bidding when using an invitation for bids.
Request for Quotation (RFQ): A type of solicitation used typically with small-dollar contracts or purchases, but may be used for commercial items up to an agency's prescribed dollar limit.
Requirements Contract: A form or contract that is used when the total long-term quantity required cannot be definitely fixed, but can be stated as an estimate or within maximum and minimum limits with deliveries on demand.
Requisition: An internal document that a functional department (stores, maintenance, production, etc.) sends to the purchasing department containing details of materials to meet its needs, replenish stocks or obtain materials for specific jobs or contracts.
Requisitioner: One who initiates a purchase request.
Resident Engineer: A person representing the owner's interests at the project site during the construction phase; frequently used on projects in which a governmental agency is involved.
Responsible Bidder: A business entity that has the capability in all respects to perform fully the contract requirements and whose integrity and reliability will assure good-faith performance. Factors considered in evaluating responsibility may include financial resources, past performance, delivery capability, experience, organization, personnel, technical skills, operations controls, equipment, and facilities.
Responsive Bidder: A person or vendor who has submitted a bid or proposal, which conforms in all material, respects to the RFP/RFQ.
Retainage: A sum withheld from progress payments to a contractor in accordance with the terms of the owner-contractor agreement.
Retention: The withholding of a portion (usually 10%) of a periodic payment to a contractor, by prior agreement, for work completed. The retention is held in escrow for a stipulated time period after the acceptance of the completed work by the architect and owner.
Reused Product: Any product designed to be used many times for the same or other purpose without additional processing other than specific requirements, such as cleaning, painting or minor repairs.
Right-Of-Way: Any strip of land, including surface and overhead or underground space, that is granted by deed or easement for the construction and maintenance of specified linear elements such as power and telephone lines. (Return to top)
Government Terms - S
Schedule: A detailed tabulation of components, items, or parts to be furnished.
Schedules Of Values: A statement furnished by the contractor to the owner or her representative reflecting the portions of the contract sum allotted for the various parts of the work and used as the basis for reviewing the contractor's application for progress payment.
Schematic Design Phase: In this phase, a designer consults with the owner to ascertain the requirements of the project and prepares schematic design studies consisting of drawings and other documents illustrating the scale and relationship of the project components for approval by the owner. The designer also submits to the owner a statement of probable construction costs.
Schematic Drawing: Same as schematic design phase.
Scheme: The basic arrangement for an architectural composition. Primary sketch for a design.
Sealed Bid: A sealed bid is a bid that has been submitted in a sealed envelope to prevent its contents from being revealed or known before the deadline for the submission and opening of all bids.
Services: Services means any work performed by an independent vendor wherein the service rendered does not consist primarily of acquisition of equipment or materials, or the rental of equipment, materials and supplies.
Service-Disabled Veteran-Owned: A small business concern that not less than 51% owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more service-disabled veterans; and the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran. Service-disabled veteran means a veteran with a disability that is service-connected.
Set-aside: A contract designated for small or minority business bidding only.
Setback: The minimum distance between a reference line and a building, or portion thereof.
Scope of Work: The purpose is to provide bidders with a clear, accurate, and complete description of the work to be performed, including inspection, test and acceptance (see Statement of Work below).
Shop Drawings: Drawings, diagrams, illustrations, schedules, performances charts, brochures, and other data prepared by the contractor or any subcontractor, manufacturer, supplier, or distributor, that illustrate how specific portions of the work shall be fabricated and/or installed.
Site Investigation: An examination of the subsoil and surface of a site to obtain complete information necessary for the design of foundations and structures on them.
Small Business Innovation Research (SBIR) Contract: A type of Federal contract designed to foster technological innovation by small businesses with 500 or fewer employees.
Small Disadvantaged Business (SDB): Federal (and some state and local) programs that certify SDBs to make them eligible for special bidding benefits. SDBs are at least 51% owned by one or more individuals who are both socially and economically disadvantaged. This can include a publicly owned business that has at least 51% of its stock unconditionally owned by one or more socially and economically disadvantaged individuals and whose management and daily business is controlled by one or more such individuals.
Software: Software includes all applications software, whether packaged or requiring development, and all systems software such as assemblers, compilers, CPU performance measurement systems, data base management systems, file back-up and recovery, job accounting, operating systems, programming aids and development systems and soft-merge utilities.
Solicitation: The document requesting potential suppliers to make offers or submittals to the buyer. Solicitations are also referred to as bid requests or submittal requests - for example, a request for information (RFI), request for proposal (RFP) or a request for quotation (RFQ).
Sole Proprietorship: An individually owned business where assets are wholly owned by a single individual.
Sole Source: A product or service that is practicably available only from one source.
Solicitation: An invitation for bids, a request for proposals or response (RFP/RFR), telephone calls, or any document issued by the Governmental entity to obtain bids or proposals for the purpose of entering into a contract.
Source Selection Authority (SSA): Usually used in Federal contracting, it is the official designated to direct the source selection process, approve the selection plan, select the source(s), and announce contract award.
Source Selection Advisory Council (SSAC): Military or government civilian personnel designated by the SSA to serve as staff and advisors during the source selection process.
Source Selection Evaluation Board (SSEB): A group of military and/or government civilian personnel, representing functional and technical disciplines, charged with evaluating proposals and developing summary facts and findings during source selection.
Special Conditions: A section of the conditions of the contract, other than general conditions and supplemental conditions, that may be prepared for a particular project. Same as conditions of the contract.
Specifications: A description of the technical requirements for a material, product, or service that includes the criteria for determining whether these requirements are met. A specification may describe the performance parameters that a supplier has to meet, or it may provide a complete design disclosure of the work or job to be done. Specifications for service contracts normally take the form of a statement of work.
Standard: An item's characteristic or set of characteristics generally accepted by the manufacturers and users of the item as a required characteristic for all such items.
Standard Industrial Classification (SIC): A code representing a category within the Standard Industrial Classification System consisting of a two-digit code that designates each major industry group, which is coupled with a second two-digit code representing subcategories.
Standardization: The process of defining and applying the conditions necessary to ensure that a given range of requirements can normally be met, with a minimum of variety, in a reproducible and economic manner based on the best current techniques.
Statement of Work (SOW): That portion of the contract that clearly and concisely defines requirements of the specific work to be accomplished. Statements of work are individually tailored to consider the period of performance, deliverable items, if any, and the desired degree of performance flexibility. In the case of task-order contracts, the statement of work for the basic contract only defines the scope of the overall contract in general terms. The statement of work for each task order must articulate the specific requirement.
Stipulated Sum Agreement: A contract in which a specific amount is set forth as the total payment for performance of the contract.
Street opening/encroachment bond: Often required of a principal holding a permit to cut into a public sidewalk or road - the bond guarantees that the principal will comply with the conditions of the permit.
Sub-Bidder: One who tenders to a bidder on a prime contract a proposal to provide materials and/or labor.
Subcontract: An agreement between a prime or general contractor and a subcontractor for the execution of a portion of the contractual obligation of the prime contract to the owner.
Subcontracting Plan: A written plan, submitted by a prime contractor and approved by a contracting officer, that describes goals and actions the contractor plans to take to use small and small disadvantaged businesses to the maximum practicable extent in performing the contract.
Subcontractor Bond: A performance bond given by a subcontractor that guarantees performance of a contract and the payment of bills for labor and materials.
Subdivision/site Bond: Many municipalities provide, by ordinance, that a developer who undertakes to develop a housing or industrial subdivision will provide a bond to guarantee that, within a specified time, improvements on the property, such as streets, sidewalks, curbs, gutters, and sewers will be constructed.
Substantial Completion: Same as date of substantial completion.
Substitution: A materials or process offered in lieu of, and as being equivalent to, a specified material or process.
Successful Bidder: Same as selected bidder.
Superintendent: At a construction site, the contractor's representative who is responsible for continuous field supervision, coordination, and completion of the work and, unless another person is designated in writing by the contractor to the owner and the architect, for the provision of accidents.
Supply Bond: Guarantees faithful performance of a contract to furnish supplies or materials.
Supplier Evaluation: An "objective" analysis of either existing suppliers by evaluating past performance, or as a preliminary assessment of potential new suppliers. Suppliers typically are evaluated based on their technical quality, production capabilities, delivery, service, cost, and managerial capabilities.
Surety: A person or organization who, for a consideration, promises in writing to make good the debt or default of another.
Surety Bond: A three-way agreement between a surety company, a contractor and the project owner. If the contractor fails to comply with the contract, the surety assumes responsibility and ensures that the project is completed. By law, prime contractors to the Federal government must post surety bonds on Federal construction projects valued at $25,000 or more. Many state, county, city and private sector projects require bonding as well. See Performance Bond above.
Surplus Property: Property that is in excess of the needs of an agency and which is not required for its foreseeable need. The property may be used or new, but possesses some usefulness for the purpose for which it was intended or for some other purpose. It includes scrap, which is material that is damaged, defective, or deteriorated to the extent that it has no value except for its basic material content.
Survey: A boundary and/or topographic mapping of a site.
System for Award Management (SAM): A database (www.sam.gov) of all businesses contracting or seeking contracts with the Federal government.
Government Terms - T
Tabulation Of Responses: The recording of responses for the purposes of comparison, analysis and record keeping.
Technical Proposal: An unpriced proposal that sets forth in detail that which a vendor proposes to furnish in a response to a solicitation.
Technical Specifications: Specifications that establish the material and performance requirements of goods and services.
Terms And Conditions: Applied to the rules under which all bids/proposals must be submitted and the stipulations included in most purchase contracts; often published by the purchasing authorities for the information of all potential vendors.
Term Contracting: A technique by which a source of supply is established for a specific period of time. Term contracts are established based on indefinite quantities to be ordered "as needed," although such contracts can specify definite quantities with deliveries extended over the contract period.
Termination For Convenience: The contract termination by an agency's purchasing office, at its discretion, of the performance of work in whole or in part and makes settlement of the vendor's claims in accordance with appropriate policy and procedures.
Termination For Default: Action taken by the purchasing office to order a vendor to cease work under the contract, in accordance with the contract's terms and conditions.
Third-Party Services: Services performed by any person or firm other than the buyer and supplier. Examples may include transportation, public warehousing, brokerage services, rate-auditing firms, and third-party network services in EDI data transmission.
Timely Completion: Completion of the work or designated portion thereof on or before the date required.
Time Of Completion: The date established in the contract, by name or by number of days, for substantial completion of the work.
Title: The instrument or document whereby ownership of property is established.
Title Search: An inquiry into the historical ownership record of a property.
Topographical Survey: The configuration of a surface including its relief and the locations of its natural and fabricated features.
Total Quality Management (TQM): An integration of management techniques, improvement efforts, and technical tools that focuses on continuous process improvement activities involving everyone in both the buying and supplying firms (i.e., an integrated effort toward improving quality performance at every level).
Trade: A person's occupation or craft, usually involving manual skill.
Turnkey Job: A job in which the contractor completes all work and furnishing of a building or other project so that it is ready for immediate use. (Return to top)
Government Terms - U
Uniform Commercial Code (UCC): Codification of uniform laws concerning commercial transactions. Generally refers to a uniform method of recording and enforcing a security interest or charge upon existing or to be acquired personal property. (For example, if an agency buys something on credit, there is a UCC filing showing that the "bank" has an interest in the property.)
Unit Price: The price of a selected unit of a good or service (e.g., price/pound, labor hours, etc.).
Unsealed Bid: An unsealed written offer conveyed by letter or other means. The bids are normally opened and recorded when received.
Unsolicited Proposal: A written proposal that is submitted to an agency by an outside source offering to perform an agency's work more effectively or efficiently. The unsolicited proposal is not in response to a formal or informal request, unless it is an agency request constituting a publicized general statement of need.
Unsuccessful Vendor: A vendor whose response was not accepted for like price, quantity, failure to comply with specifications, etc.
Used Equipment: Equipment that has been previously owned and used and is offered "where is" "as is". It does not include demonstration or factory rebuilt or remanufactured equipment marketed through normal distribution outlets. (Return to top)
Government Terms - V
Value Added: The value added to a product or service at each stage of its production and distribution, based on its increased value at that stage.
Value Engineering: An organized effort to analyze the functions of systems, equipment, facilities, services, and supplies for achieving the required functions at the lowest lifecycle cost consistent with required performance, reliability, quality, and safety.
Vendor: One who sells goods or services.
Vendor List: A list of names and addresses of suppliers from whom bids, proposals and quotations might be expected. The vendor list, usually maintained by a purchasing office, includes all suppliers that have expressed interest in doing business with the government agency.
Veteran-Owned Small Business: A small business concern that not less than 51% of which is owned by one or more veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more veterans; and the management and daily business operations of which are controlled by one or more veterans.
Virgin Product: A product that is made with 100% new raw materials and contains no recycled materials.
Visual Inspection: Inspection by examination without the use of testing apparatus. (Return to top)
Government Terms - W
Waiver of Lien: An instrument by which a person or organization who has or may have a right of mechanic's lien against the property of another relinquishes such right. Same as mechanic's lien and release of lien.
Warranty: The representation, either expressed or implied, that a certain fact regarding the subject matter of a contract is now true or will be true. Not to be confused with "guarantee," which means a contract or promise by one person to answer for the performance of another person.
Women Business Enterprise (WBE): An independent business concern that is at least fifty-one percent (51%) owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens, or in the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is owned and controlled by one or more women who are U.S. citizens or Legal Resident Aliens; and whose management and daily operation is controlled by one or more of the women owners.
Working Drawings: Drawings, intended for use by a contractor, subcontractor, or fabricator, which form part of the contract documents for a building project.
Worker's Compensation Insurance: Insurance covering liability of an employee to his employees for compensation and other benefits required by worker's compensation laws. (Return to top)