Federal Spending Glossary
Plain-language definitions of the terms used in federal contracting, government budgets, and spending data. 31 terms and counting.
Contracts & Awards
Competitive Bidding (Full and Open Competition)The standard procurement process where the government publicly solicits proposals from multiple vendors and selects the best offer based on price, quality, and capability.Contracting Officer (CO)The government official with legal authority to enter into, administer, and terminate federal contracts — the only person who can obligate the government.Cooperative AgreementA type of federal financial assistance similar to a grant, but with "substantial involvement" by the government in carrying out the funded activity.Federal ContractA legally binding agreement between the U.S. government and a private company to provide goods or services — from fighter jets to IT consulting.Federal GrantGovernment funding awarded to state/local governments, nonprofits, or institutions for a specific public purpose — unlike contracts, grants are not purchases of goods or services.ObligationA legally binding commitment by the government to spend money — the point at which funds are formally committed to a contract, grant, or other agreement.OutlayThe actual payment of money by the U.S. Treasury — the moment dollars leave government accounts and go to a contractor, grantee, or beneficiary.Sole-Source Contract (No-Bid Contract)A contract awarded to a specific company without competitive bidding — used when only one vendor can meet the requirement or in urgent situations.
Budget & Appropriations
AppropriationA law passed by Congress that authorizes federal agencies to spend a specific amount of money for a specific purpose during a defined period.Continuing Resolution (CR)A temporary funding measure passed by Congress when it fails to complete the annual appropriations process — keeping the government funded at prior-year levels.Defense SpendingThe portion of the federal budget dedicated to national defense — including military personnel, weapons systems, operations, and maintenance — totaling over $850 billion annually.Discretionary SpendingFederal spending that Congress controls through annual appropriations — covering defense, education, transportation, and other agency budgets.Government ShutdownA funding gap that occurs when Congress fails to pass appropriations or a continuing resolution — forcing "non-essential" federal employees to be furloughed and many services to halt.Mandatory SpendingFederal spending required by existing law without annual Congressional approval — primarily Social Security, Medicare, Medicaid, and interest on the debt.
Oversight & Transparency
Government Accountability Office (GAO)The independent, nonpartisan agency that audits federal spending, investigates how taxpayer dollars are used, and reports findings to Congress.Inspector General (IG)An independent official within each federal agency who investigates fraud, waste, abuse, and mismanagement — reporting to both the agency head and Congress.SAM.gov (System for Award Management)The federal government's central registration database for entities doing business with the government — required for receiving contracts, grants, or other awards.USASpending.govThe official U.S. government website that tracks all federal spending — contracts, grants, loans, and other financial assistance — searchable by agency, recipient, and location.
Contract Types
Cost-Plus ContractA contract where the government reimburses the contractor for allowable costs plus a fee (profit) — used for complex projects where total costs are hard to predict upfront.Firm-Fixed-Price Contract (FFP)A contract with a set price that doesn't change regardless of the contractor's actual costs — placing the financial risk on the contractor, not the government.Indefinite Delivery/Indefinite Quantity (IDIQ) ContractA contract that establishes ceiling prices and terms but allows the government to order specific quantities as needed over a multi-year period through individual task orders.Small Business Set-AsideA federal contracting provision that reserves certain contracts exclusively for small businesses — part of the government's goal of awarding 23% of contract dollars to small firms.Task OrderAn individual work order issued under a larger IDIQ contract, specifying the exact scope, deliverables, and price for a particular piece of work.
Procurement Process
Bid ProtestA formal challenge by a losing bidder who believes a contract was awarded improperly — filed with the GAO, the Court of Federal Claims, or the contracting agency.DebarmentThe exclusion of a company or individual from receiving federal contracts or grants due to fraud, criminal conduct, or serious contract performance failures.Federal Acquisition Regulation (FAR)The comprehensive rule book governing how federal agencies buy goods and services — covering everything from how to write a solicitation to when to use competitive bidding.NAICS CodeThe North American Industry Classification System code — a 6-digit number that classifies a business by the type of economic activity it performs, used to determine small business size standards.Product Service Code (PSC)A 4-character code that describes what the government is buying — from "R&D in weapons systems" to "janitorial services" — used to categorize contract spending.
Key Agencies
Department of Government Efficiency (DOGE)An executive branch initiative launched in 2025 to identify and eliminate wasteful federal spending, duplicative programs, and bureaucratic inefficiency.General Services Administration (GSA)The federal agency that manages government buildings, provides acquisition services, and operates the GSA Schedule — a pre-negotiated contract vehicle used to buy commercial products and services.Small Business Administration (SBA)The federal agency that sets small business size standards, manages small business contracting programs, and provides loans and counseling to help small businesses grow.