Let’s face it: government is a complex maze that baffles the mind. Taken together, our Federal and State governments are the world’s largest conglomerate enterprise. How does a small business even begin to get a handle on it?
You’ve got a good start. Entrepreneurs are known for their patience and persistence, and breaking into government markets takes plenty of both. Your first task is to figure out where and how to enter the maze. Even before deciding whether to enter as a Prime- or subcontractor, which agency to pitch, and finding the best portal of entry, getting a grasp on the most basic government contracting terms will get you started, give you confidence, and enhance your credibility in the government marketplace.
Knowing these 11 everyday terms in the world of government contracting, a small business can establish a foothold. The names of the most common people, places, and things of government contracting are essential gear for navigating the government maze. Here we will discover what they are:
You will regularly encounter the names for people in the following three positions in government procurement:
Contracting Officer (CO). The CO has overall responsibility for government contracts, from writing, distribution, award, administration, and close out. The CO is the only person authorized to obligate the government to expend funds.
- Contracting Officer Technical Representative (COTR, pronounced as “KOH-tar”). Typically, government contracts are laid out in two parts: technical and cost. The COTR often reports to the CO and is responsible for overseeing the contractor’s performance under the terms, conditions, deliverables, and period of performance requirements of the contract.
- Program Manager (PM). The PM is the person responsible for the actual content of a contract and its deliverables and is often the direct “customer” that the vendor works with to satisfy the terms of the contract. The PM also works with the CO and the COTR to ensure that the terms of the contract are met.
There are three essential destinations in the government maze that you need to locate and navigate your way to early in your journey to becoming a government contractor:
U.S. Small Business Administration (SBA). The SBA should be your first stop. SBA maintains a nationwide network of offices and offers small business educational programs and support services.
- U.S. General Services Administration (GSA). GSA serves as the umbrella organization that monitors acquisition and procurement policies, strategies, and ethics throughout the Federal Government. You’ll hear a lot about “GSA Schedules” as you get familiar with GSA. For the moment, don’t worry about it. That comes later.
- U.S. Office of Management and Budget (OMB). Among its responsibilities, OMB oversees and coordinates regulatory, procurement, financial management, information technology, and information management policies. It tracks and reports on how government spends its funds, much of which is expended through government contracts and grants.
Government uses a variety of means and mechanisms to achieve its procurement goals in an orderly fashion. The terms for the most common of these are:
- Solicitation. A solicitation is the announcement of requirements with suggested terms and conditions to be met in a contract. Solicitations are usually issued by the agencies that buy the products and services sought.
Uniform Contract Format (UCR). Federal Government solicitations usually follow the UCR outline. UCR can be very simple or very complex depending on the scope and nature of the solicitation.
- North American Industrial Classification System (NAICS, pronounced as “nayks”). The Federal Government solicits vendors by NAICS codes. NAICS codes describe the products and services that vendors offer, and government commonly requires that a vendor’s NAICS codes must match those specified in the solicitation.
- Federal Acquisition Regulation (FAR, pronounced as “far”). The FAR is the set of regulations for uniform use by all Federal agencies in their acquisition of supplies and services. It is massive in scope, including 52 “Titles.” Most solicitations will include references to specific FAR regulations that must be met under the contract. FAR is beyond the comprehension of any one person. For now, be aware of it and what it is.
- System for Award Management (SAM, pronounced as “sam”). SAM is the central registration point for all companies and individuals that want to do business with the Federal Government. There is no fee to register with SAM. SAM will ask you for basic contact information, your NAICS codes, legal status (e.g., corporation, limited partnership, etc.), and basic financials. Technically, you don’t need to be registered in SAM to do business with the government: but you must be registered in SAM if you want to get paid!
Memorize and learn the meanings of these 11 terms. As you get deeper into the government maze, refer back to them to check your bearings and set your compass. There are thousands of government terms that affect small businesses (our Govlish® databases encompass about 80,000) as well as all citizens. Most States follow the terms used in the Federal Government, and these 11 terms will get you started on the journey to the happy hunting grounds in government’s maze.
Wait! I almost forgot. One last term: Award. That’s government’s way of telling you that you have succeeded and won the contract.