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Understanding jargon used in government contracting can be a daunting task. I remember sitting in important meetings at the Pentagon, feeling like I was on vacation in a foreign country. I did exactly what most people would do in this situation. I sat quietly and discretely scribbled every unfamiliar word in my notebook. Later that night, I had a series of “ah-hah” moments as I researched the definitions.

I’ve compiled this list so you don’t have to suffer the same internalized shame I had to endure. After you finish reading the entire list, fuzzy terms like “FAR” and “contract vehicle” will never haunt you again.

Company Related

1. Security Clearance – A security clearance is a status that an individual must obtain to access classified information. The most common types are Confidential, Secret, Top Secret and TS/SCI (Sensitive Compartmented Information).

2. 1099 consultant – 1099 is a tax form independent consultants use. Government contractors hire independent contractors as consultants to work on specific projects. Hiring a 1099 contractor is an alternative to hiring a person as an employee. The major benefit of hiring 1099s is the company is not required to pay fringe benefits for the consultant.

3. D-U-N-S – Duns and Bradstreet Number is a code used to track contracting companies.

4. EIN (Employer Identification Number) – Also known as a tax id number, EINs are used by the IRS to track businesses.

5. CCR -Central Contracting Registry -The CCR is a large database used by government agencies to locate contractors.

6. Small Business – Any business that makes under 7 million a year is considered a small business. The only exception is computer service based businesses, which must make under $25 million to be considered small.

7. 8a – 8a is a business development program that a minority owned contracting company can become a member of by meeting a set of requirements.

8. WOSB (Women Owned Small Business) - A business that is 51% owned by a woman.

9. MOSB (Minority Owned Small Business) - A business that is 51% owned by a minority.

10. VOSB (Veteran Owned Small Business) - A business that is 51% owned by a military veteran.

11. SDVOSB (Service Disabled Veteran Owned Small Business) - A business that is owned by a service disabled veteran. The owner must have been given a disability rating by Veteran Affairs.

12. Past Performance - Work that a contractor has done in the past that can be used to demonstrate proficiency on a contract.

13. Capability Statement - A document similar to a resume that outlines your business offering.

14. Teaming Agreement - A formal document between two or more contracting companies that describes the details of a partnership.

Contract Related

15. Procurement – The process of buying goods or services.

16. FedBizOpps.com – A website where contracting opportunities are posted by government agencies.

17. Prime – A contracting company that wins a contract and has subcontractors working for them.

18. NAICS (North American Industry Classification System) – NAICS codes are used by the government to classify products and services. Instead of using long descriptions to identify services, the government decided to use NAICS for the purpose of collecting, analyzing, and publishing statistical data.

19. FSC (Federal Supply Codes) – Codes used by the government to categorize products.

20. Contract Vehicle – A contract vehicle is a procurement method used by government agencies to buy goods and services.

21. GWACs (Government Wide Agency Contract) - Information technology contracts established by one agency for use throughout the government.

22. GSA Schedule - A schedule is a way to group products and service offerings from different companies to make the buying process easier for the buyer. Prices for all products and services on the schedule must be federally approved.

23. MACs  (Multiple Award Contracts) - Contracts established by one agency for use by government agencies to obtain a variety of supplies and services.

24. Contracting Officer - The individual in charge off issuing, funding and managing a contract.

25. B&P (Bid and Proposal) – When a contract has been listed, you will respond to it by submitting a Bid and Proposal. The B&P is what you as a government contractor will use to prove to the customer that your company can complete the contract task.

26. ID/IQ (Indefinite delivery Indefinite Quantity) - A contract that does not have a predefine dollar amount or services. It will typically have a set number of years that the customer will expect work to be completed or products to be provided.

27. RFI (Request for Information) - When a contract issuer is trying to find out information about the interested parties for an upcoming contract, they issue an RFI.

28. RFP (Request for Proposal) - When a contract is up for bidding a Request for Proposal is put out by the contracting officer. The contracting company may use the RFP requirements to create their proposal and demonstrate their capabilities.

29. RFQ (Request for Quotation) - Also called an invitation to bid, a RFQ is issued when the contracting officer invites companies to bid on a particular contract.

30. Industry Day – A Q&A meeting where the contract officers invite interested companies to discuss the details of an upcoming contract.

31. Award - When a contract is won and a bid is accepted it’s called an award or contract award.

32. Set Aside - Set asides are government funds that are only available to woman and members of minority groups.

33. Statement Of Work – A document that defines work or task to be completed for a contract.

34. Fixed Price Contract - A contract with a firm price and statement of work that doesn’t change unless the scope of the task changes.

35. CPFF (Cost Plus Fixed Fee) - A contract with a firm price that reimburses the contractor for any purchases that are made for materials or supplies.

36. CPIF (Cost Plus Incentive Fee) - A contract with a reward for finishing the statement of work under budget or ahead of schedule.

37. CPAF (Cost Plus Award Fee) - A contract where a contractor is paid for all of its allowed expenses to a set limit plus additional payment to allow for a profit.

38. Micro Purchase - Purchases made by the government that are under $2,500.

39. Time and Materials - A contract where the contractor is paid for the amount of time it takes to complete the task and for the cost of materials.

40. Burn Rate - The amount of hours left minus the total amount of hours given to work on a contract.

Accounting Related

41. Rate- A rate is a calculated dollar amount that a government contractor uses to charges it’s customer.

42. Wrap Rate - This is the total multiplier (overhead, G&A and fee) that is applied to an individual’s hourly rate, to get the rate that appears on an invoice.

43. Indirect Cost – Cost that are not attributed to one project or contract.

44. Direct Cost – Costs that can be attributed to one, and only one, project, task, program or contract.

45. FAR (Federal Acquisition Regulations) – A reference that governs what accounting procedures you must adopt as a government contractor. The FAR can be purchased as a hard copy or you can use the FAR website and search for particular regulations.

46. G&A (General & Administrative) – An accounting term for any expense or cost related to administrative or corporate needs. This includes cost related to business development, accounting, or legal fees.

47. ODC (Other Direct Cost) – Cost not directly related to a contract requirement, but they are a cost of doing business. For example, by traveling from your place of business to a customer’s office you will incur cost.

48. Fringe -These are health and other benefits that you provide to your employees. This will be included as a percentage of the rates that you provide your customer or prime when you bid on a contract.

49. Overhead – Overhead consist of any cost that can not be directly billed to a contract. These cost eat into your profit margin and should only be used if they make good business sense.

50. Audit Agency – An audit agency is responsible for auditing and enforcing regulations on contracts. The most common audit agency in federal contracting is the Defense Contracting Audit Agency (DCAA).