Glossary of Defense Contracting Terms (C)

This Glossary provides you with the most frequently used terms in government and military base contracting. Familiarity with the language of government contracting is essential for doing business with the Department of Defense (DoD) and working with contracting offices at military bases and DoD agencies.  You may also find it helpful to use our master list of Acronyms frequently used in DoD contracting


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View ACRONYMS used in Defense Contracting


CONSIDERATION   In contract law, something of value. It may be money, an act, or a promise. It is one of the key elements required to have a binding contract.

CONSULTING SERVICES     Advice or assistance of a purely advisory nature provided for a predetermined fee to an agency by an outside individual or vendor under contract to that agency.

CAGE CODE    A five-character identifying number used extensively within the federal government.

CANCELLATION   The cancellation (within a contractually specified time) of the total requirements of all remaining program years of a multi-year contract. Cancellation results when the Contracting Officer notifies the contractor of nonavailability of funds for contract performance for any subsequent program year, or fails to notify the contractor that funds are available for performance of the succeeding program year requirement.

CAPITAL    Assets, less liabilities, representing the ownership interest in business.

CENTRAL CONTRACTOR REGISTRATION (CCR)   The primary vendor database for the U.S. Federal Government. Registration with CCR is mandatory in order to apply for a General Services Administration (GSA) Schedule Contract.

CERTIFIED 8(a) FIRM    A designated small business that is at least 51 percent owned by one or more individuals who are both designated socially and economically disadvantaged, and eligible to receive federal contracts under the Small Business Administration's 8(a) Business Development Program.

CHANGE ORDER   A written order, signed by the Contracting Officer, directing the contractor to make a change that the Changes clause authorizes the Contracting Officer to order without the contractor's consent.

CHIEF INFORMATION OFFICER (CIO)   General Services Administration (GSA) officer who manages the Electronic and Information Technology (IT) business for the Office of Government-wide Policy (OGP).

CLAIM     A written demand by one of the contracting parties as a matter of right, the payment of money in a certain sum, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.

CLASSIFIED INFORMATION     Any information or material, regardless of its physical form or characteristics, that is owned by, produced by or for, or under the control of the United States Government, and determined pursuant to Executive Order 12356, April 2, 1982 or prior orders to require protection against unauthorized disclosure, and is so designated.

CLOSEOUT   The process in which the awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and the awarding agency.

CLOSING DATE    The deadline for all bid submissions.

COLLATERAL COSTS   In value engineering, agency costs of operation, maintenance, logistic support, or Government-furnished property.

CONTINGENT FEE     Any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.

CONTRACT   Any type of agreement or order for the procurement of goods or services.

CONTRACT ADMINISTRATION OFFICE (CAO)    The organization responsible for ensuring that the contractor complies with the terms and conditions of the contract.

CONTRACT MODIFICATION    Any written change in the terms of a contract (after it has been established).

CONTRACT OFFICER    General Services Administration (GSA) staff member, who signs purchase orders, thereby awarding orders to contractors.

CONTRACTOR TEAM ARRANGEMENT     An arrangement under a government contract in which two or more contractors join together to provide a total solution to meet a customer's needs. 

COST ANALYSIS   The review and evaluation of the separate cost elements and profit in an offeror's or contractor's proposal (including cost or pricing data or information other than cost or pricing data), and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be, assuming reasonable economy and efficiency.

COST DATA    All the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred.

COST PLUS AWARD FEE (CPAF)    A cost-reimbursement contract that provides for a fee consisting of a base amount fixed at inception of the contract and an award amount that the contractor may earn in whole or in part during performance and that is sufficient to provide motivation for excellence in such areas as quality, timeliness, technical ingenuity, and cost-effective management. The amount of the award fee to be paid is determined by the Government's judgmental evaluation of the contractor's performance in terms of the criteria stated in the contract. This determination is made unilaterally by the Government and is not subject to the Disputes clause.

COST PLUS FIXED FEE (CPFF)    A cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract. This contract type permits contracting for efforts that might otherwise present too great a risk to contractors, but it provides the contractor only a minimum incentive to control costs.

COST PLUS INCENTIVE FEE (CPIF)   A cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. This contract type specifies a target cost, a target fee, minimum and maximum fees, and a fee adjustment formula. After contract performance, the fee payable to the contractor is determined in accordance with the formula. The formula provides, within limits, for increases in fee above target fee when total allowable costs are less than target costs, and decreases in fee below target fee when total allowable costs exceed target costs. This increase or decrease is intended to provide an incentive for the contractor to manage the contract effectively. When total allowable cost is greater than or less than the range of costs within which the fee-adjustment formula operates, the contractor is paid total allowable costs, plus the minimum or maximum fee.

COST REIMBURSEMENT CONTRACTS    Contracts based on payment by an agency to a contractor of allowable, reasonable and allocated costs incurred in the contract performance to the extent prescribed in the contract.

CURE NOTICE    Oral or written – informs the vendor that he/she is in default and how to correct it.


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