Government Contracting Glossary: NAICS, PSC, IDIQ, GWAC and 50+ Terms Explained

Government contracting has a vocabulary problem. A single solicitation can ask you to confirm your NAICS code and size standard, respond to an RFQ under a MAS BPA, acknowledge DFARS clauses, and certify set-aside eligibility — before you have written a word about the actual work. Most people who give up on federal bidding do not give up because they lack capability. They give up because the language makes a straightforward transaction feel like a closed profession.

This page defines the terms that actually appear in front of a small business bidder, in plain English, with the specific FAR references where they matter. It is one page on purpose: you can search it with Ctrl+F, jump by letter, and come back to it mid-solicitation without hunting through a series of thin articles.

Where to start if you are brand new

If you read only a handful of these, read these first. They are the terms that decide whether you are even eligible to bid, and they come up in that order in practice:

1. NAICS code and small business size standard — whether you count as small in your industry.
2. SAM.gov and UEI — the registration you must hold before any award.
3. Set-aside and the rule of two — why some contracts are reserved for firms like yours.
4. Sources sought and RFI — the notices that appear before a solicitation, when you can still influence it.
5. RFQ versus RFP — the difference between a quick quote and a full proposal effort.
6. Simplified acquisition threshold — the dollar range where most first contracts are won.
7. Past performance and CPARS — how your record follows you into the next competition.

Full term index

Numbers

8(a) Business Development Program

An SBA program for small firms at least 51 percent owned and controlled by socially and economically disadvantaged individuals. Participation lasts up to nine years and makes a firm eligible for 8(a) set-aside competitions as well as sole-source awards below stated dollar limits (currently $4.5 million for services and $7 million for manufacturing, adjusted periodically). Certification is applied for through the SBA and is not something a firm can self-declare.

B

Best Value

The FAR term for the outcome that gives the government the greatest overall benefit in response to a requirement, which is not necessarily the lowest price. In a best-value tradeoff under FAR 15.101-1, an agency may pay a premium for stronger technical merit, past performance, or lower risk, and the solicitation must state the relative importance of price and non-price factors. Reading that weighting correctly is often the difference between a wasted bid and a competitive one.

Bid Protest

A formal challenge to the terms of a solicitation or to an award decision. Protests can be filed with the agency, the Government Accountability Office (GAO), or the US Court of Federal Claims. GAO timelines are strict: generally within 10 days of when you knew or should have known the basis of protest, and within 5 days of a required debriefing if you want an automatic stay of contract performance.

Blanket Purchase Agreement (BPA)

A pre-arranged charge-account style agreement with a supplier for repeat purchases, established either under simplified acquisition procedures (FAR 13.303) or against GSA Schedule contracts (FAR 8.405-3). A BPA does not itself obligate funds; the individual orders placed under it, often called calls, do. Holding a BPA can mean steady low-friction work, because the agency can order without running a fresh competition every time.

C

CAGE Code

The Commercial and Government Entity code, a five-character identifier assigned to each physical location of an entity doing business with the federal government. It is issued through the Defense Logistics Agency and generated automatically when a US entity completes SAM.gov registration; non-US entities receive an NCAGE code instead. It appears throughout contract documents, packaging, and payment records.

Capability Statement

A one- to two-page summary of what your firm does, used in federal business development much like a resume is used in hiring. It typically lists core competencies, differentiators, past performance, NAICS codes, certifications and set-aside status, UEI and CAGE code, and a point of contact. It is the standard attachment when responding to a Sources Sought notice or introducing yourself to an agency small business specialist.

Commercial Product or Commercial Service

Products or services of a type customarily sold to the general public or to non-governmental buyers, as defined in FAR 2.101. When an agency buys them it can use the streamlined procedures of FAR Part 12, with a shorter clause set and terms closer to commercial practice. If what you sell qualifies, saying so clearly in your response can reduce compliance burden on both sides.

Contracting Officer (CO)

The only government official with actual authority to enter into, modify, or terminate a contract, acting within the limits of a written warrant. Day-to-day technical direction usually comes from a Contracting Officer Representative (COR), who cannot change price, scope, or terms. Direction from anyone other than the CO that increases your cost or scope is not a binding change, and performing it without a modification is a classic way small contractors lose money.

CPARS

The Contractor Performance Assessment Reporting System, the government-wide database where agencies record formal evaluations of contractor performance. Ratings cover areas such as quality, schedule, cost control, management, and regulatory compliance, and evaluators retrieve them when assessing past performance on future competitions. Contractors get at least 14 calendar days to review and comment on an evaluation before it is finalized, which is worth using rather than ignoring.

D

Debriefing

An agency explanation of how your proposal was evaluated, available pre-award or post-award under FAR 15.505 and 15.506. Requests are generally due within three days of receiving notice of the award decision, and DoD offers an enhanced debriefing process that allows written follow-up questions. Debriefings are the cheapest proposal feedback available in federal contracting, and they also start the clock on protest deadlines.

Delivery Order

An order for supplies placed against an existing contract vehicle such as an IDIQ, BPA, or GSA Schedule. It is the supplies counterpart to a task order, which covers services. The parent contract sets the terms and ceiling; the order specifies quantity, price, and delivery.

DFARS

The Defense Federal Acquisition Regulation Supplement, the Department of Defense supplement to the FAR. It adds defense-specific rules and clauses, including the cybersecurity requirements at DFARS 252.204-7012, which obliges contractors handling controlled unclassified information to implement NIST SP 800-171 safeguards and report cyber incidents. If you sell to defense customers, the DFARS clauses listed in your contract are where most of your compliance obligations live.

DUNS Number

A nine-digit identifier issued by Dun and Bradstreet that federal registrants used before April 2022. For federal award purposes it has been replaced by the Unique Entity ID (UEI) issued directly through SAM.gov. Older guides, templates, and some state systems still ask for a DUNS number, so it helps to know that the request now almost always means the UEI.

E

EDWOSB

An Economically Disadvantaged Women-Owned Small Business: a WOSB whose owners also meet SBA limits on personal net worth, adjusted gross income, and total assets. Certain NAICS codes are reserved for EDWOSB set-asides specifically rather than for WOSB generally, so this distinction decides which competitions you can enter. Certification is obtained through the SBA or an approved third-party certifier.

F

FAR

The Federal Acquisition Regulation, codified at Title 48 of the Code of Federal Regulations, is the primary rulebook for how executive branch agencies buy goods and services. It governs solicitation methods, evaluation, contract types, clauses, and contract administration, and individual agencies layer their own supplements on top of it. Solicitations incorporate FAR clauses by reference, which means the clause list tells you what you are actually agreeing to.

FPDS

The Federal Procurement Data System, the government record of contract actions: who was awarded what, by which agency, under which NAICS and PSC codes, and for how much. Its data feeds public sites including USAspending.gov. It is the standard free source for researching incumbents, agency buying patterns, and realistic contract values in your niche.

Full and Open Competition

An acquisition in which all responsible sources may submit offers, as described in FAR Part 6. It is the default approach unless the requirement is set aside for small business, restricted to a socioeconomic program, or justified as sole source. HUBZone-certified firms receive a 10 percent price evaluation preference when competing in full and open competition.

G

GSA Schedule (Multiple Award Schedule)

A long-term government-wide contract with commercial suppliers that gives agencies pre-negotiated access to products and services under FAR Subpart 8.4. GSA consolidated its former separate schedules into a single Multiple Award Schedule organized into large categories. Getting onto the MAS is a contract award in its own right, not a directory listing: it requires disclosing pricing and typically demonstrating relevant corporate experience and financial standing.

GWAC

A Governmentwide Acquisition Contract: a multiple-award vehicle for information technology that agencies across government can order from, operated by an executive agent designated under federal IT acquisition law. Examples include GSA vehicles such as Alliant 2, 8(a) STARS III, VETS 2, and Polaris, and the NIH CIO-SP vehicles. Several GWACs are reserved for small business or specific socioeconomic categories, which makes a seat on one a durable source of task order competition.

H

HUBZone

The Historically Underutilized Business Zone program, which certifies small firms whose principal office is located in a designated HUBZone and where at least 35 percent of employees live in a HUBZone. Certified firms can compete for HUBZone set-asides and sole-source awards and receive a 10 percent price evaluation preference in full and open competition. Designated areas change over time, so office location and workforce composition need ongoing monitoring.

I

IDIQ

An Indefinite-Delivery Indefinite-Quantity contract, described in FAR 16.504, which fixes terms and a ceiling but not a firm quantity. The government commits to a guaranteed minimum and then buys through individual task or delivery orders across an ordering period. On multiple-award IDIQs, holders generally must be given a fair opportunity to be considered for each order, so the real competition happens at order level after the vehicle is won.

IFB

An Invitation for Bids, the solicitation used in sealed bidding under FAR Part 14. Bids are submitted by a deadline, opened publicly, and award goes to the lowest priced responsive and responsible bidder with no negotiations. IFBs are most common in construction and other requirements that can be specified completely up front.

Incumbent

The contractor currently performing the work an agency buys. Incumbents hold real advantages: existing relationships, past performance on that exact requirement, and knowledge of the operating environment. Identifying the incumbent and the contract end date early, using FPDS or USAspending data, is the basic first move in planning a recompete bid.

J

Joint Venture (JV)

A formal arrangement between two or more firms created to pursue and perform specific contracts. Under SBA rules a properly structured JV, including a mentor-protege JV, can pursue set-asides the small partner qualifies for without the partners being treated as one large firm for size purposes. The JV agreement must contain specific required provisions, and the small business partner must perform a defined share of the work the JV performs.

L

LPTA

Lowest Price Technically Acceptable, an evaluation approach under FAR 15.101-2 in which proposals are rated only acceptable or unacceptable and award goes to the lowest priced acceptable offer. There is no credit for exceeding requirements, so bid strategy narrows to strict compliance and price discipline. DoD has restricted when LPTA may be used, and it suits well-defined, low-risk requirements rather than complex services.

M

Mentor-Protege Program

An SBA program pairing an experienced firm with an eligible small business, letting the mentor provide technical, management, and financial assistance and form a joint venture with the protege that can compete for small business set-asides. DoD runs its own separate mentor-protege program. For a capable small firm with thin past performance, an approved mentor-protege JV is one of the few legitimate accelerators into larger work.

Micro-Purchase Threshold

The dollar level, generally $10,000 under FAR 2.101, below which agencies can buy with minimal process, often on a government purchase card and without competitive quotes if the price is reasonable. For new vendors these small buys are an underrated entry point, because they build both a relationship and a performance record quickly. Some thresholds vary by circumstance, so confirm the current FAR value before relying on it.

N

NAICS Code

The North American Industry Classification System code, a six-digit number identifying an industry. In federal contracting, the NAICS code assigned to a solicitation determines which SBA small business size standard applies to it. Your registration lists the codes you work in, and agencies use them for market research and set-aside decisions, so precision matters more than listing as many codes as possible.

Free tool: NAICS Code Lookup →

O

Option Period

A contract period the government has a unilateral right to exercise, usually structured as a base year plus a number of option years. The government is not obliged to exercise an option, and exercise depends on funding and satisfactory performance. When a contract is advertised with a five-year value, check how much of that is base period and how much is optional before you build a business case on it.

P

Past Performance

The record of how a firm performed on relevant prior work, evaluated as a proposal factor under FAR 15.305 and usually documented through CPARS and customer references. Offerors without a relevant record cannot be penalized for the absence and are generally rated neutral, which is why relevant commercial or subcontract work should be presented rather than left out. Building a citable record on small contracts is the standard route into larger ones.

Prime Contractor

The firm holding the contract directly with the government and legally accountable for performance, invoicing, and compliance, including flowing required clauses down to subcontractors. Being prime means owning both the customer relationship and the risk. Many small firms deliberately start as subcontractors and move to prime once they have past performance and enough back-office capacity.

PSC (Product and Service Code)

A four-character code describing what is being bought, as distinct from NAICS, which describes the industry that supplies it. Agencies apply PSCs to solicitations and awards, and the codes appear throughout FPDS data. Searching by PSC alongside NAICS catches opportunities that either code alone would miss.

R

Recompete

The re-solicitation of a requirement as an existing contract or ordering period approaches its end. Recompetes are attractive targets because the requirement is proven, funded, and documented, and their timing is largely predictable from award data. Winning one starts long before the solicitation posts, through market research responses and early agency contact.

RFI (Request for Information)

A market research instrument rather than a solicitation. Under FAR 15.201(e) an RFI cannot be used to award a contract, and responses are not offers. Responding is still worthwhile, because it puts your capability in front of the buying team while the requirement is still being shaped.

RFP (Request for Proposals)

The solicitation used in negotiated acquisitions under FAR Part 15. It states the requirement, the evaluation factors and their relative importance, and the instructions offerors must follow, and it may lead to discussions before award. Proposals are evaluated on price and non-price factors, and failing to follow the stated instructions is one of the most common reasons a technically strong bid loses.

RFQ (Request for Quotations)

A request used mainly in simplified acquisitions under FAR Part 13 and in ordering against GSA Schedules. A quotation is not a binding offer, so the government responds by issuing an order rather than by accepting the quote. RFQs typically move faster and demand far less proposal effort than an RFP, which makes them a practical place for a new contractor to start.

Responsibility Determination

The contracting officer finding, required by FAR 9.104-1, that a prospective contractor has adequate financial resources, can meet the required schedule, has a satisfactory performance record and record of integrity and business ethics, and has or can obtain the necessary organization, experience, and facilities. Unlike responsiveness, responsibility can be established after offers are received. If a small business is found non-responsible, the matter can be referred to the SBA for a Certificate of Competency.

Responsiveness

In sealed bidding, whether a bid conforms in all material respects to the Invitation for Bids. A non-responsive bid must be rejected and cannot be fixed after bid opening, which is how an unsigned form, a missing certification, or an unauthorized condition eliminates an otherwise winning price. Responsiveness is about the bid; responsibility is about the bidder.

Rule of Two

The principle in FAR 19.502-2 that an acquisition above the simplified acquisition threshold must be set aside for small business when there is a reasonable expectation of offers from at least two responsible small businesses and that award can be made at fair market prices. It is the mechanism that creates most small business set-asides, and it is decided on the strength of the market research an agency gathers. The Department of Veterans Affairs applies a separate statutory version of the rule that gives priority to certified veteran-owned firms.

S

SAM.gov

The System for Award Management, the official federal site for entity registration and contract opportunities. Registration is free, must be completed before you can receive a federal award, must be renewed annually, and produces your UEI. SAM.gov absorbed the former FedBizOpps opportunity postings, so it serves as both the vendor registry and the primary place solicitations are published.

Free tool: SAM.gov Registration Checker →

Sealed Bidding

The procurement method in FAR Part 14 in which bids are solicited by an Invitation for Bids, submitted sealed, opened publicly at a stated time, and awarded to the lowest priced responsive and responsible bidder. There are no discussions and no tradeoff for technical merit, so price and strict compliance decide the outcome. It requires a requirement specific enough to be described completely in advance.

SDVOSB

A Service-Disabled Veteran-Owned Small Business, at least 51 percent owned and controlled by one or more veterans with a service-connected disability. Since 2023 certification has been handled by the SBA through its Veteran Small Business Certification program, having moved across from the VA. Certified firms can compete for SDVOSB set-asides and sole-source awards, and the VA applies a statutory preference for veteran-owned firms in its own procurements.

Set-Aside

An acquisition reserved for a defined category of business, such as small business generally or a socioeconomic program like 8(a), WOSB, HUBZone, or SDVOSB. Acquisitions above the micro-purchase threshold and at or below the simplified acquisition threshold are generally reserved exclusively for small business, and larger acquisitions are set aside when the rule of two is satisfied. Bidding outside the categories you are certified for wastes proposal time, so eligibility is worth confirming before pursuit.

Free tool: Set-Aside Eligibility Checker →

SIC Code

The Standard Industrial Classification code, a four-digit legacy system replaced by NAICS for federal statistical and procurement purposes in the late 1990s. You will still encounter SIC references in older documents, commercial credit files, and some state or private databases. For anything federal, use NAICS.

Simplified Acquisition Threshold (SAT)

The dollar level, generally $250,000 under FAR 2.101, below which agencies may use the streamlined procedures of FAR Part 13 rather than full negotiated procurement. Buys above the micro-purchase threshold and at or below the SAT are generally reserved for small business. Because the paperwork and competition burden are lighter, this range is where many small firms win their first federal contract.

Small Business Size Standard

The maximum size at which a firm still counts as small in a given industry, set by the SBA for each NAICS code and published in 13 CFR 121.201. Standards are expressed either as average annual receipts, calculated on a five-year average, or as number of employees, calculated on a 24-month average, and affiliated companies are counted together. Because the standard varies by NAICS code, the same company can be small for one solicitation and other-than-small for another.

Small Business Subcontracting Plan

A plan that an other-than-small prime must submit when a contract exceeds the threshold in FAR Subpart 19.7 and offers subcontracting opportunities, setting goals for small business and each socioeconomic category. Current thresholds are $750,000 for most contracts and $1.5 million for construction of a public facility. Performance against the plan is reported through the electronic Subcontracting Reporting System, which is exactly why large primes actively look for qualified small subcontractors.

Sole Source

An award made without competition, either under a FAR Part 6 exception such as only one responsible source or unusual and compelling urgency, supported by a written justification and approval, or under a socioeconomic authority such as an 8(a), HUBZone, or SDVOSB sole-source award below the applicable dollar limit. Sole source is not a loophole; it requires documented justification. For certified small firms, sole-source authority is one of the highest-value reasons to hold a certification.

Sources Sought Notice

A market research notice asking capable firms to identify themselves and describe their capability, usually by submitting a capability statement. It is not a solicitation and no award follows from it directly, but it informs whether the agency sets the requirement aside for small business and how the requirement gets written. For a small business it is the single most useful notice type to respond to, because it lands while those decisions are still open.

Subcontractor

A firm performing part of the work under a contract with the prime rather than with the government. Subcontractors have no privity of contract with the government, so payment, direction, and disputes all run through the prime. Subcontracting is the standard way to build federal past performance before bidding as a prime, and required flow-down clauses still apply to you.

T

Task Order

An order for services placed against an existing vehicle such as an IDIQ, BPA, or GSA Schedule contract, as opposed to a delivery order, which covers supplies. A large share of federal services spending now moves through task orders rather than standalone contracts. That is why winning a seat on a vehicle is only step one: the competition that produces revenue happens at task order level.

Teaming Agreement

A contractor team arrangement, recognized in FAR Subpart 9.6, in which firms agree to pursue a specific opportunity together, either as prime and subcontractor or through a joint venture. Teaming lets a small firm bid work it could not deliver alone and presents the customer with a stronger combined capability. How enforceable a teaming agreement is depends on how specifically it defines scope, workshare, and exclusivity, so vague one-page documents are worth avoiding.

U

UEI (Unique Entity ID)

A 12-character alphanumeric identifier issued through SAM.gov that replaced the DUNS number for federal award purposes in April 2022. It identifies your entity across registration, solicitations, awards, and payment systems, and it is created as part of SAM registration at no cost. Every federal award document you handle will reference it.

V

VOSB

A Veteran-Owned Small Business, at least 51 percent owned and controlled by one or more veterans, certified through the SBA Veteran Small Business Certification program. VOSB status carries a statutory preference in Department of Veterans Affairs procurements and counts toward prime contractors subcontracting goals. Unlike SDVOSB, VOSB has no general government-wide set-aside authority outside the VA.

W

Wage Determination

A Department of Labor schedule of minimum wages and fringe benefits that must be paid on covered contracts: Service Contract Act determinations for service work and Davis-Bacon determinations for construction. The applicable determination is attached to or referenced in the solicitation and published on SAM.gov. It sets a hard floor under your labor cost, so pricing a covered contract without reading the determination is a common and expensive mistake.

WOSB

A Women-Owned Small Business, at least 51 percent owned and controlled by one or more women who are US citizens, certified through the SBA or an approved third-party certifier. Self-certification for set-aside purposes ended in 2020, so certification is required to compete on WOSB set-asides. Those set-asides are limited to NAICS codes the government has designated as underrepresented, and some are reserved specifically for EDWOSB firms.

A note on thresholds and dollar figures

Several of the numbers above — the micro-purchase threshold, the simplified acquisition threshold, 8(a) sole-source limits, subcontracting plan thresholds — are adjusted periodically for inflation, and some vary in specific circumstances such as contingency operations or overseas performance. The figures here reflect the commonly applicable values, but the authoritative sources are the FAR itself and, for size standards, the SBA table of small business size standards. When a threshold decides whether you can bid, check the current figure rather than a glossary — including this one.

Turning vocabulary into a pipeline

Knowing the terms is the entry fee, not the advantage. The advantage comes from applying them consistently: keeping your NAICS codes precise, watching the agencies that already buy what you sell, answering sources sought notices while requirements are still being shaped, and tracking when incumbent contracts come up for recompete.

If you want to put a few of these to work immediately, our free tools cover the most common first steps — finding your NAICS code, checking which set-asides you qualify for, verifying a SAM.gov registration, estimating typical award values, and working through a bid or no-bid decision. No account needed for any of them.