Common Federal Contracting Terms

To bid on federal government contracts, you will need to learn the strange language of government contracting. Here are some of the words you will encounter most often.

Broad Contracting Terms

You’ll find these common contracting terms throughout the federal government, and used in the Contracting Opportunity Finder.

Disadvantaged Business

A business that is owned and controlled by one or more socially and economically disadvantaged person(s). The disadvantaged person(s) must own at least 51 percent of the business. To be eligible for this status, a business must also meet small business size standards, so disadvantaged businesses are often referred to as small disadvantaged businesses (SDB). Businesses self-certify; there is no formal certification process for this status. Learn more about disadvantaged business requirements.

Socially Disadvantaged Person 

A person who has been subjected to racial or ethnic biases or prejudice in America because of their identity as a member of a group or groups, without regard to their individual qualities. This may include members of racial or ethnic minority groups or a person with a physical handicap. A person must be prepared to show that they currently identify as a member of that group, and that other people identify them as a member of that group. Learn more about socially disadvantaged requirements.

Economically Disadvantaged Person 

A person who is socially disadvantaged and able to show that this status has impacted their ability to compete in the American free market by limiting their access to capital and credit. A business owner with this status can apply to the 8(a) Business Development Program or the Economically Disadvantaged Women-Owned Small Business Program through the SBA. Each program has its own set of requirements applicants must meet to qualify as economically disadvantaged. Learn more about economically disadvantaged requirements.

FedBizOpps

A web-based system that businesses can use to search for federal contracting opportunities. Many federal agencies use the system to post public notices and information about current, upcoming, and potential contracting opportunities. The system also allows businesses to register to receive notifications when opportunities are posted that match their products or services. The system is operated by the General Services Administration (GSA). Learn more about FedBizOpps.

GSA Schedules Program

One of the largest and most commonly used federal contracting programs. Businesses must register and be certified for the GSA Schedules program. Businesses that are “on Schedule” can access and respond to opportunities that may not be posted on other, public contracting systems. Learn more about the GSA Schedules Program.

Set-Aside

All or part of a contract that is reserved by the federal government for competition among specific types of qualified small and/or disadvantaged businesses. Contracts can be reserved for businesses owned by veterans, women, minorities, and other groups. Learn more about set-asides.

Set-Aside Type

A type of small and/or disadvantaged business that meets specific qualifications to compete for reserved federal government contracts. Each set-aside type has its own eligibility requirements.

Small Business

An independently-owned for-profit firm that meets the Small Business Administration (SBA) qualifications and size requirements. Businesses self-certify; there is no certification process. To be eligible for small business status:

  • A business must meet small business size standards.

  • Part of a business must be within the U.S.

  • A business must operate mainly within the U.S. or make a significant contribution to the U.S. economy through the payment of taxes or the use of American products, materials, or labor.

  • A business must be independently owned and operated.

  • A business cannot be dominant in its field on a national basis.

Back to Top

Types of Contracting Opportunity Solicitations

The Contracting Opportunity Finder features three types of solicitations for upcoming or current opportunities for federal contractors. For a broader range of opportunity types, search the FedBizOpps listing.

Combined Synopsis/Solicitation

This is a notice about a contract opportunity that is currently open and the agency is accepting proposals. This notice generally includes contact information, deadlines, and details about how to submit your proposal. It may also be called a Request for Proposals (RFP) or a Request for Quotes (RFQ).

Presolicitation

This is a notice about a contract opportunity that will open for proposals in the future. This notice may ask interested businesses to submit information. The information received may help an agency determine whether the contract should be reserved for businesses that qualify for types of set-asides.

Sources Sought

This is a request for information (RFI), or a solicitation of interest, from an agency. The information received may help an agency understand the interests and capabilities of the businesses that would submit proposals for a future contract. A sources sought notice may or may not be followed by a contract.

Back to Top

Types of Special Business Labels (Set-Aside Types)

Federal agencies set aside contracts for a variety of small and/or disadvantaged businesses. Learn how each type is defined to see if your business could qualify.

Competitive 8(a)

The 8(a) Business Development Program reserves federal contracts for competition among small businesses owned by socially and economically disadvantaged person(s). The program requires a nine-year commitment and offers participants a variety of government assistance options. Businesses must apply to the 8(a) program through the SBA. To be eligible for the Competitive 8(a) program:

  • A business must meet small business size standards.

  • At least 51 percent of a business must be owned by U.S. citizens.

  • The business officers must show good character.

  • The business must demonstrate potential for success.

  • There are separate eligibility requirements for businesses owned by American Indians, Native Alaskans, Native Hawaiians or Certified Development Companies. 

  • At least 51 percent of a business must be owned, controlled, and managed by one or more person(s) who meet the SBA requirements for being socially disadvantaged and economically disadvantaged.

    • To qualify as economically disadvantaged through the Competitive 8(a) program, a person must submit a written statement and personal financial information. A person must also meet these requirements at the time the application is submitted:

      • Have a net worth of $250,000 or less.

      • Have an average personal income of $250,000 or below over the last 3 years.

      • The fair market value of all assets must be below $4 million.

Economically Disadvantaged Woman-Owned Small Business (EDWOSB)

The federal government reserves contracts for competition among small businesses owned by economically disadvantaged women. The contracts must be in industries where women-owned businesses are underrepresented. Businesses certify for EDWOSB status through the SBA. To be eligible for EDWOSB status:

  • A business must meet small business size standards.

  • Women must manage day-to-day operations and make long-term decisions.

  • A woman must hold the highest officer position and work at the business full-time during normal working hours.

  • At least 51 percent of your business must be owned by one or more economically disadvantaged women who are U.S. citizens. To qualify as economically disadvantaged through the EDWOSB program, a woman must meet these requirements:

    • Have a personal net worth of $750,000 or less.

    • The fair market value of all assets must be $6 million or less.

    • Have an adjusted gross yearly income (averaged over the three years prior to the certification) less than $350,000. 

Emerging Small Business (ESB)

The federal government reserves contracts for competition among emerging, or very small, businesses. Businesses self-certify; there is no certification process. To be eligible for ESB status:

HBCU/MI

The Historically Black Colleges and Universities/Minority Institutions Program reserves federal contracts for competition among specific businesses and institutions that are identified by the Department of Education. To be eligible for HBCU/MI certification, an institution must be:

  • Established prior to 1964 with the principal mission of educating black Americans

  • Accredited by a nationally recognized accrediting agency or association

  • Legally authorized by the state where it is located

HUBZone

The Historically Underutilized Business Zone Certification Program reserves federal contracts for competition among small businesses that are located in specific rural and urban communities. Businesses must apply to the HUBZone program through the SBA. To be eligible for the HUBZone program:

Indian Economic Enterprise (IEE)

The federal government reserves contracts for competition among businesses that are owned by American Indians or American Indian Tribes. Businesses self-certify; there is no certification process. To be eligible for IEE status:

  • At least 51 percent of a business must be owned by an American Indian(s) of a federally recognized American Indian Tribe or Alaska Native Village.

  • American Indian(s) or American Indian Tribe must manage the contract and control daily business operations.

  • The American Indian(s) or American Indian Tribe must receive the majority of earnings from the contract.

Indian Small Business Economic Enterprises (ISBEE)

The federal government reserves contracts for competition among small businesses that are owned by American Indians or American Indian Tribes. Businesses self-certify; there is no certification process. To be eligible for ISBEE status:

Service-Disabled Veteran-Owned Small Business (SDVOSB)

The federal government reserves contracts for competition among small businesses that are owned by service-disabled veterans. Businesses self-certify; there is no certification process for this status. However, if a business is competing for a Department of Veterans Affairs contract, its status must be verified through the Vets First Program. To be eligible for SDVOSB status:

  • A business must meet small business size standards.

  • At least 51 percent of a business must be owned by one or more person(s) with service-disabled veteran status through the VA.

  • The service-disabled veteran(s) must control the management and daily business operations. A spouse or permanent caregiver can take the place of a service-disabled veteran owner if the veteran has a permanent or severe disability.

  • The service-disabled veteran owner(s) must hold the highest officer position.

Learn more about SDVOSB requirements.

Small Business

An independently-owned for-profit firm that meets the Small Business Administration (SBA) qualifications and size requirements. Businesses self-certify; there is no certification process. To be eligible for small business status:

  • A business must meet small business size standards.

  • Part of a business must be within the U.S.

  • A business must operate mainly within the U.S. or make a significant contribution to the U.S. economy through the payment of taxes or the use of American products, materials, or labor.

  • A business must be independently owned and operated.

  • A business cannot be dominant in its field on a national basis.

Note: The government awards Total Small Business and Partial Small Business set-asides. A Partial Small Business set-aside is a portion of a contract opportunity that’s reserved for competition among small business. A Total Small Business set-aside is an entire contract opportunity that’s reserved.

Learn more about small business requirements.

Veteran-Owned Small Business (VOSB)

The federal government reserves contracts for competition among small businesses that are owned by veterans. Businesses self-certify; there is no certification process for this status. However, if a business is competing for a Department of Veteran’s Affairs contract, its status must be verified through the Vets First Program. To be eligible for VOSB status:

  • A business must meet small business size standards.

  • At least 51 percent of a business must be owned by one or more person(s) with veteran status through the VA.

  • The veteran(s) must control the management and daily business operations.

  • The veteran(s) must hold the highest officer position.

Learn more about VOSB requirements.

Women-Owned Small Business (WOSB)

The federal government reserves contracts for competition among small businesses that are owned by women. To be reserved, the contracts must be in industries where women-owned businesses are significantly underrepresented. Businesses certify for WOSB status through the SBA. To be eligible for WOSB status:

  • A business must meet small business size standards.

  • At least 51 percent of a business must be directly owned by one or more women who are U.S. citizens.

  • Women must manage day-to-day operations and make long-term decisions.

  • A woman must hold the highest officer position and work at the business full-time during normal working hours.

Learn more about WOSB requirements.

Share This Page: Facebook Twitter Email

Back to Top

Last Updated: August 15, 2017

Do you need help?

Ask us any question about the U.S. government for free. We'll get you the answer or tell you where to find it.

What you think matters!