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Glossary of Award Types

Commercial Item generally means supplies and services of a type customarily used by the general public. This includes components and any combination of items or services, as well as management and professional support services providing assistance, advice or training. Congress requires buying commercial items when feasible, and authorized a streamlined process to do so.

Contract. A mutually binding legal relationship obligating the seller to furnish supplies or services and the buyer to pay for them.

Contracting. Purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes description of supplies and services required, selection and solicitation of sources, preparation and award of contracts and all phases of contract administration.

Cost Reimbursement Contracts. A family of contracts that provide for payment of the contractor's allowable costs incurred in the performance of the contract.

Cost Sharing. An explicit arrangement under which the contractor bears some of the burden of reasonable, allocable and allowable contract cost. Full and Open Competition. When used with respect to a contract action, means that all responsible sources are permitted to compete..

GSA Schedule Contracts ID/IQ contracts awarded by GSA for supplies and services at stated prices for given periods of time. They provide a quick, simplified process for obtaining commonly used commercial supplies and services at prices associated with volume buying.

Intra/Interagency Agreement. A formal agreement between two or more DOT Operating Administrations (intra-agency) or two or more Government agencies (interagency) involving a transfer of funds in exchange for supplies or services. They are sometime referred to as Reimbursable Agreements.

Nonpersonal Services Contract. A contract under which the personnel rendering the services are not subject, either by the contractor's terms or by the manner of its administration, to the supervision or control by Government employees.

Option. A unilateral right in a contract by which the Government may elect to purchase additional supplies or services, or extend the term of the contract.

Performance Based Contract. A contract that describes a required objective or outcome vs. prescribing a method by which the work is to be accomplished.

Personal Services Contract. A contract that, by its express terms or as administered, makes or appears to make the contractor's personnel, in effect, Government employees. An agency may enter into such contracts only when specifically authorized by statute to do so.

Reimbursable Agreement. See Intra/Interagency Agreement.

Section 8(a). The section of the Small Business Act [15 USC 637 (a)] that established a program authorizing the Small Business Administration (SBA) to enter into contracts with other agencies and let subcontracts for performing those contracts to firms eligible for program participation. The SBA's subcontractors are referred to as "8(a) contractors."

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

Task Order. An order for services placed against an established contract or with Government sources.

Unsolicited Proposal. A research and development proposal that is made to the Government by a prospective contractor without prior formal or informal solicitation from a procuring activity.