Reference
Government contracting glossary
Plain-English definitions of the terms contractors run into when bidding on government work. Each one is short on purpose — enough to get you unstuck and back to the bid.
- Best Value
- Best value is an award approach that selects the proposal offering the best combination of price and non-price factors — such as technical approach and past performance — rather than simply the lowest price.
- Related:Request for Proposal (RFP)Invitation for Bid (IFB)IFB vs RFP vs RFQ →
- Bid Bond
- A bid bond is a surety bond guaranteeing that a bidder will honor its bid and provide the required performance and payment bonds if it is awarded the contract.
- Related:Performance BondPayment Bond
- CAGE Code
- A CAGE (Commercial and Government Entity) code is a five-character identifier assigned during SAM.gov registration and used to identify a business across federal systems.
- Related:SAM.gov (System for Award Management)Unique Entity ID (UEI)SAM.gov Registration Guide →
- Capability Statement
- A capability statement is a concise, typically one-page marketing document that presents a contractor's core competencies, differentiators, past performance, and company data to government buyers.
- Related:Set-AsideNAICS Code
- Davis-Bacon Act
- The Davis-Bacon Act is a federal law requiring contractors on federally funded construction over $2,000 to pay workers the local prevailing wages and benefits.
- Related:Prevailing Wage
- Invitation for Bid (IFB)
- An Invitation for Bid is a sealed-bid solicitation awarded to the lowest responsive, responsible bidder; it is used when the requirements are well defined and price is the deciding factor.
- Related:Request for Proposal (RFP)Request for Quote (RFQ)Responsive and ResponsibleIFB vs RFP vs RFQ →
- NAICS Code
- A NAICS (North American Industry Classification System) code classifies a business's primary industry and is used to match opportunities and set the small-business size standard for a contract.
- Related:Product/Service Code (PSC)Set-Aside
- Payment Bond
- A payment bond is a surety bond guaranteeing that the subcontractors and suppliers working on a project will be paid.
- Related:Performance BondBid Bond
- Performance Bond
- A performance bond is a surety bond guaranteeing that the contractor will complete the project according to the terms of the contract.
- Related:Payment BondBid Bond
- Prevailing Wage
- The prevailing wage is the minimum hourly pay and benefits legally required for workers on covered public-works projects, set by the governing labor authority.
- Related:Davis-Bacon Act
- Product/Service Code (PSC)
- A Product/Service Code describes what is being purchased in a federal solicitation (the product or service), complementing the NAICS code, which describes the seller's industry.
- Related:NAICS Code
- Request for Information (RFI)
- A Request for Information is a market-research notice an agency uses to learn about available vendors and solutions before issuing a real solicitation; you do not win a contract directly from an RFI.
- Related:Sources Sought NoticeRequest for Proposal (RFP)
- Request for Proposal (RFP)
- A Request for Proposal is a solicitation awarded on best value, weighing price against non-price factors such as technical approach and past performance; discussions and revised proposals are common.
- Related:Invitation for Bid (IFB)Request for Quote (RFQ)Best ValueIFB vs RFP vs RFQ →
- Request for Quote (RFQ)
- A Request for Quote asks vendors to quote pricing on a defined item or service, typically for smaller or commercial buys; a quote is not a binding offer, and the agency awards by issuing an order.
- Related:Request for Proposal (RFP)Invitation for Bid (IFB)Simplified Acquisition ThresholdIFB vs RFP vs RFQ →
- Responsive and Responsible
- On a sealed bid, "responsive" means the bid meets every material requirement of the solicitation, and "responsible" means the bidder has the capacity and integrity to perform; a bidder must be both to win.
- Related:Invitation for Bid (IFB)IFB vs RFP vs RFQ →
- SAM.gov (System for Award Management)
- SAM.gov is the U.S. federal government's official, free system where businesses register to become eligible for federal contracts and grants.
- Related:Unique Entity ID (UEI)CAGE CodeSAM.gov Registration Guide →
- Set-Aside
- A set-aside is a contract reserved for a specific category of small business — such as Small Business, SDVOSB, WOSB, HUBZone, or 8(a) — limiting competition to firms that hold that status.
- Related:NAICS CodeCapability StatementHow to Win Government Contracts →
- Simplified Acquisition Threshold
- The Simplified Acquisition Threshold is a dollar ceiling, adjusted periodically, below which agencies may use streamlined purchasing procedures with lighter paperwork; many RFQs fall under it.
- Related:Request for Quote (RFQ)
- Sources Sought Notice
- A Sources Sought notice is a market-research posting that asks whether capable vendors — often small businesses — exist for an upcoming requirement; responding can help shape the eventual solicitation.
- Related:Request for Information (RFI)Set-Aside
- Unique Entity ID (UEI)
- The Unique Entity ID is the 12-character identifier assigned in SAM.gov that identifies a business in the federal award system; it replaced the DUNS number in 2022.
- Related:SAM.gov (System for Award Management)CAGE CodeSAM.gov Registration Guide →
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