Week 5 Vocabulary

Pre-Award
Acquisition planning

• The process by which efforts of all personnel responsible for an acquisition are coordinated and integrated
through a comprehensive plan for fulfilling the customer need in a timely manner at a reasonable cost; includes
developing the overall strategy for managing the acquisition

Acquisition risk

• The probability that some element of an acquisition process produces an undesirable result with an adverse
effect on system effectiveness, suitability cost, or availability for deployment

Auction

• Sale in which property, services, or merchandise are sold to the highest bidder

Basic ordering agreement

• Similar to a basic agreement, but may also include terms and conditions intended to describe the types of goods
and services that may be ordered in the future, to define pricing methods that will apply, or to define ordering
or delivery procedures

Broad agency announcement

• General announcement of an agency’s research interests, including criteria for selecting proposals and soliciting
the participation of all offerors capable of satisfying the agency’s needs

Business development

• This is in the pre-award life cycle phase of contract management and it is in the “develop offer” domain. It is the
process of the seller organizing pre-sales activities to develop customer relations and market strategy, and
assessing competition

Commercial contract financing

• May include:
o Obtaining loans and lines of credit from financial institutions
o Obtaining advance funding of accounts receivable or funding of purchase orders from private firms
o Obtaining funds from venture capitalists
o Negotiating favorable payment clauses
o Commercial advance payments made before performance has begun
o Commercial interim payments made after some work has been done
o Delivery payments made after receiving and accepting a portion of the total work to be performed
Contract type

• A specific pricing arrangement, or combination of pricing arrangements, employed for the performance of work
under the contract

Copyright

• A royalty-free, nonexclusive, and irrevocable license to reproduce, translate, publish, use, and dispose of written
or recorded material, and to authorize others to do so

Cost contract

• A cost-reimbursement contract that provides no fee

Cost-plus-fixed-fee

• A cost-reimbursement type contract that provides for the payment of a fixed fee to the contractor. The fee does
not vary with actual costs, but may be adjusted as a result of any subsequent changes in the work or services to
be performed under the contract.

Cost-plus-incentive-fee contract

• A cost-reimbursement type of contract with a provision for a fee that is adjusted by a formula in accordance
with the relationship between total allowable costs and target costs

Cost reimbursement

• A type of contract that provides for payment of allowable incurred costs, to the extent prescribed in the
contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing
a ceiling that the seller may not exceed (except at its own risk) without the approval of the buyer.

Cost sharing contract

• An explicit arrangement under which the seller bears some of the burden of reasonable, allocable, and allowable
contract cost. A cost-sharing contract is a cost-reimbursement contract in which the seller receives no fee and is
reimbursed only for an agreed-upon portion of its allowable costs.

Debrief(ing)

• An explanation given by buyer personnel to an offeror detailing the reasons its offer was unsuccessful.
• At a minimum, the debriefing information shall include:
o The buyer’s evaluation of the significant weaknesses or deficiencies in the offeror’s proposal, if
applicable
o The overall evaluated cost or price (including unit prices) and technical rating, if applicable, of the
successful offeror and the debriefed offeror, and past performance information on the debriefed offeror
o The overall ranking of all offerors, when any ranking was developed by the agency during the source
selection
o A summary of the rationale for award
o For acquisitions of commercial items, the make and model of the item to be delivered by the successful
offeror
 o Reasonable responses to relevant questions about whether source selection procedures contained in
the solicitation, applicable regulations, and other applicable authorities were followed

Design-to-cost

• A concept that establishes cost elements as management goals to achieve the best balance between life cycle
cost, acceptable performance, and schedule; under this concept, cost is a design constraint during the design
and development phases and a management discipline throughout the acquisition and operation of the system
or equipment

Discussions

• Negotiations conducted in a competitive acquisition, after establishment of the competitive range

Electronic commerce (e-commerce)

• Refers to a group of automated processes that can be used to accomplish business transactions using the
Internet

External market research

• Market research consisting of looking for useful information about capabilities and limitations in the commercial
marketplace in order to find information that can help determine the best method to obtain required goods and
services consistent with pertinent laws, regulations, industry standards, and/ or organizational policies

Federal Supply Schedules (FSS)

• Directed and managed by the General Services Administration, provides federal agencies with a simplified
process for obtaining commonly used supplies and services at prices associated with volume buying. There are
four types of Federal Supply Schedules:
o Single Award,
o Multiple Award,
o New Item Introductory
o International

Fixed price

• A form of pricing that includes a ceiling beyond which the buyer bears no responsibility for payment

Firm fixed price contract

• A contract that provides for a price that is not subject to any adjustment by reason of costs experienced by the
seller in the performance of the contract

Fixed price incentive contract

• A type of contract that provides for adjusting profit and establishing the final contract price by application of a
formula based on the relationship of total final negotiated cost to total target cost. The final price is subject to a
price ceiling, negotiated at the outset
Fixed-price-incentive (firm target) contract (FPIF)

• Specifies a target cost, target profit, price ceiling (but not a profit ceiling or floor), and a profit adjustment
formula. These elements are all negotiated at the outset.

Fixed-price-incentive (successive target) contract (FPIS)

• Specifies the following elements, all of which are negotiated at the outset: an initial target cost, initial target
profit, and initial profit adjustment formula

Fixed price with economic price adjustment

• A fixed-price contract that permits an element of cost to fluctuate to reflect current market prices.; economic
price adjustments may be based on established prices, actual costs of labor or material, or cost indexes of labor
or material.

Fixed price redeterminable prospective

• A contract that provides for a firm-fixed-price for an initial period of contract deliveries or performance and
prospective redetermination (at a stated time or times during performance) of the price for subsequent periods
of performance

Fixed price redeterminable retroactive

• Provides for a fixed ceiling price and a retroactive price determination within the ceiling after completion of the
contract

Firm fixed price level of effort

• A contract suitable for investigation or study in a specific research and development area; the product of the
contract is usually a report showing the results achieved through application of the required level of effort,
however, payment is based on the effort expended rather than on the results achieved

Fixed price with award fee contract

• Establishes a fixed price (including normal profit) for the effort; this price will be paid for satisfactory contract
performance, and award fee earned (if any) will be paid in addition to that fixed-price

Flexible progress payments

• A method of making progress payments used by the Department of Defense for certain negotiated contracts
performed in the United States; tailors the progress payment rate to more closely match the contractor’s cash
needs for financing contract performance

Framework pricing arrangement

• A contract that is definitive in all respects except pricing. The agreement or contract specifies a predetermined
index, formula, or algorithm (i.e., the “framework”) for the calculation of price at the point of sale

Gap fillers

• Sources of pertinent information that may be used to fill in missing areas when a contract fails to adequately
address an issue
Government contract financing

• Completing a government contract with the government’s assistance in some form of contract financing; in
federal government contracting, when a contractor requests financing, the contracting officer is to consider the
following order of preference for methods of contract financing:
o Private financing,
o Customary contract financing other than loan guarantees,
o Loan guarantees,
o Unusual contract financing, and
o Advance payments.

Industry day

• Opportunities for the buyer to present upcoming requirements to several sellers at one time; can provide a
networking environment with other sellers to help determine future teaming opportunities

Intellectual property

• Includes inventions, trademarks, patents, industrial designs, copyrights, and technical information including
software, data designs, technical know-how, manufacturing information and know-how, techniques, technical
data packages, manufacturing data packages, and trade secrets

Internal market research

• Market research consisting of examining the buyer’s own organization with the primary goal of learning as much
as possible about the organization, how it does business, and how it has used goods and services acquired in the
past

Invitation for bids (IFB)

• The method of solicitation for the sealed bid process. The IFB must describe the requirements of the buyer
clearly, accurately, and completely. Unnecessarily restrictive specifications or requirements that might unduly
limit the number of bidders are prohibited. The IFB includes all documents (whether attached or incorporated
by reference) furnished by prospective bidders for the purpose of bidding.

Licensing

• A license permits the usage of software, patents, trademarks, or technology by another entity without
transferring ownership rights. The sale of a license permits the use of patents, trademarks, or other technology
to another entity.

Make-or-buy program

• That part of a contractor’s written plan for the development or production of an end item outlining the
subsystems, major components, assemblies, subassemblies, and parts intended to be manufactured, test
treated, or assembled by the seller (make) and those the seller intends to procure from another source (buy)
Market research

• The process used for collecting and analyzing information about the entire market available to satisfy the
minimum agency needs to arrive at the most suitable approach to acquiring, distributing, and supporting
supplies and services.

Modular contracting

• A contracting approach under which the need for a system is satisfied in successive acquisitions of interoperable
increments. Each increment complies with common or commercially acceptable standards applicable to
information technology so that the increments are compatible with the other increments of IT comprising the
system.

Negotiation

• A process between buyers and sellers seeking to reach mutual agreement on a matter of common concern
through fact-finding, bargaining, and persuasion

Nondisclosure agreement

• A legally binding document setting forth the conditions under which proprietary information is offered and
received between the parties

Offer

• A legally binding promise, made by one party to another, to enter into a contractual agreement if the offer is
accepted

Patent

• A government grant of exclusive rights to an inventor that prohibits others from making, using, or selling an
invention

Performance-based acquisition

• A documented business arrangement in which the buyer and seller agree to use a performance work statement,
performance-based metrics, and a quality assurance surveillance plan to ensure contract requirements are met
or exceeded

Prequalification

• A buyer’s announcement of interest, including criteria for selecting proposals, and selecting offerors capable of
meeting the requirements

Request for information

• A document used to obtain price, delivery, other market information, or capabilities for planning purposes when
the buyer does not presently intend to issue a solicitation.
• A formal invitation to submit general and/or specific information concerning the potential future purchase of
goods and/or services.
Request for proposal (RFP)

• Used in negotiated acquisitions to communicate buyer requirements to prospective contractors and to solicit
proposals. RFPs for competitive acquisitions shall, at a minimum, describe the following:
o The buyer’s requirement
o The anticipated terms and conditions that will apply to the contract
o Information required to be in the offeror’s proposal
o Factors and significant subfactors that will be used to evaluate the proposal and their relative
importance
• A formal invitation that contains a scope of work and seeks a formal response (proposal), describing both
methodology and compensation, to form the basis of a contract

Request for quotations (RFQ)

• A formal invitation to submit a price for goods and/or services as specified

Reverse auction

• A single buyer of a single item (or lot of items) receives decreasing offers from prospective sellers. The auction
ends at a predetermined time, and the item is purchased from the lowest offeror for the lowest offer price.

Royalties

• Any costs or charges in the nature of royalties, license fees, patent or license amortization costs, or the like that
are paid for the use of or for rights in patents and patent applications in connection with performing a contract
or subcontract.

Sales contract

• Business arrangement in which all elements of the transaction, including mutual assent, exchange of
consideration, capacity to contract, and legal purpose, are determined and defined between the parties at the
time of contract formation.

Sealed bidding

• Procurement by obtaining sealed bids and awarding the contract to the lowest-priced responsible bidder whose
bid is responsive.

Service contract

• A contract that directly engages the time and effort of a seller whose primary purpose is to perform an
identifiable task rather than furnish an end item of supply

Service Contract Labor Standards

• Requires contractors and subcontractors performing services on covered federal or District of Columbia
contracts in excess of $2,500 to pay service employees in various classes no less than the monetary wage rates
and to furnish fringe benefits found prevailing in the locality or in a collective bargaining agreement

Service mark

• The same as a trademark except that it identifies and distinguishes the source of a service rather than a product
Set-aside

• A kind or class of procurement reserved for contenders that fit a certain category (e.g., business size, region,
minority status). Can be total or partial, or a class set-aside (whereby a class of acquisitions of selected products
or services may be set aside for exclusive participation by small business concerns). Includes:
o Service-Disabled Veteran-Owned Small Business
o Small Disadvantaged Business
o HUBZone Small Business
o Woman-Owned Small Business (WOSB)
o Veteran-Owned Small Business
o 8(a) Contractor
o Indian Incentive Program
o Disaster or Emergency Assistance Activities

Shop rights

• The right of an employer to use, without payment of royalties, an invention conceived by an employee in the
course of employment or through the use of the employer’s facilities if the employee was not hired to perform
such work

Should-cost

• An estimate of what an item or system should cost based upon an evaluation by independent reviewers of all
applicable seller business methods (contrasting more efficient methods with present seller methods)

Simplified acquisition

• A less rigorous method for entering into relatively low-dollar-threshold contracts; usually occurs without the
elaborate and formal solicitation techniques required by sealed bidding and negotiation

Single-source negotiation / Sole-source negotiation

• Negotiation with a single provider, because either the provider is the sole seller of the product or service, or the
relationship with the provider is of strategic importance based on long-term relationships and built on mutual
trust

Small business concern

• A business that is independently owned and operated, and is not dominant in its field; a business concern
meeting buyer size standards for its particular industry type

Small business financing

• Financing programs offered by federal, state, and local governments to help small businesses start and grow
their operations; these programs include low-interest loans, venture capital, and scientific and economic
development grants

Solicitation

• Any request to submit offers or quotations to the buyer

Statement of Work

• That portion of a contract describing the actual work to be done by means of specifications or other minimum
requirements, quantities, performance date, and a statement of the requisite quality. The SOW for the project
should reflect all work to be performed. The SOW communicates the work scope requirements for a program
and should define the requirements to the fullest extent practicable. It is a basic element of control used in the
processes of work assignment and establishment of program schedules and budgets.

Technical Data Package

• Those documents, drawings, reports, manuals, revisions, technical orders, or other submissions as set forth as a
contract data requirements list line item to be delivered as required by contract.

Terms and conditions

• All language in a contract, including time of delivery, packing and shipping, applicable standard clauses, and
special provisions

Time-and-Materials contract

• A type of contract providing for a fixed hourly rate, including overhead and profit and material at cost plus
handling charges; used when it is impossible to estimate schedule and costs at the time of contract award

Trade secret

• A formula, process, device, or other business information that is kept confidential to maintain an advantage over
competitors

Trademark

• A word, name, symbol, or device that is used in trade with goods to indicate the source of the goods and to
distinguish them from the goods of others