More Contracts for Small Business Owners

Thirteen core words to learn from the country’s leading buyer…the U.S. Government.


When we talk about purchasing power, little do we think of the US Government as a possible client.

The Government is by far one of the largest buyers in the nation, with an annual spending budget of over $4.4 trillion. This means that there are possibilities of servicing the government as a client.

In pursuing government contracts there is a verbiage that is common when encountering legal material, therefore I would like to share with you some of the lingo that you should become familiar with when seeking one of the many contracts out there.

1. EIN:

Employer Identification Number, simple to obtain with the IRS upon incorporation or registration of your business.

2. CAGE Code:

Is a five-character number that identifies a contractor, this will help when receiving your payments.

3. SAM Registration:

You must first register with SAM to obtain a CAGE Code. SAM stands for System for Award Management.

4. DUNS Number:

Just like your credit score, a company can have its own credit score as well.

The place to register your business is with Duns & Bradstreet, and upon registering you will have obtained an identifying number for the credit worthiness of your business. When becoming a vendor for large organizations including the government you will most likely be required to have this number.

5. BID:

This is what a government contract is usually referred to as, given they must be published for companies to respond with their proposals.

A BID is usually a lengthy document that contains details on the contract. They include what they are contracting for, quantities and due dates. Essentially every detail for your proposal is in this document.

It is also very important to note that in the BID, there will be contact information for any questions you may have regarding the contract.

6. RFP:

Stands for Request For Proposal, what the government refers to as the response you provide to an open BID. Your response is always going to be in accordance to the specifications provided in the BID.

7. VOSB:

Is short for Veteran Owned Small Business and refers to a small business that is 51% owned by a veteran. In government contracting, there is at least a 3% from the federal spending budget reserved for veteran owned businesses. Additionally, when holding this designation your company will be on the top of the RFP pile.


Is short for Service Disabled Veteran Owned Business.

Similarly to the VOSB it is a designation for companies that 51% of the owners are veterans that have a disability that is connected to their time of service. Keep in mind that all SDVOSB are by default VOSB, BUT not all VOSB are SDVOSB. So, when seeking a certification be sure to know which one are you.

9. SBA:

The Small Business Administration, is the federal organization that determines the size of a small business.

Meaning every so often they decide how much of an annual revenue a company can have to still be determined as a small business. In recent years this ceiling has been about $10 million (please refer to their website for an updated amount).

10. MWBE:

Is short for Minority Owned Business Enterprise and refers to a small business that has at least 51% of owners as women.

This certification as well as the previous ones are of importance as well, given not only the government but private organizations reserve a good part of their budget for vendors that fall under this certification. There are many other requirements you must fulfill, such as being in business for a minimum of two years, be profitable just to name a few.

I suggest you visit your local economic development corporation or local SBA chapter to learn more on the application process.

11. HUBZone:

Is another certification that stands for Historically Underutilized Business Zones.

It was created to help businesses located in the urban and rural communities. In order to identify if your business fall in one of the zones, you can reference the map created by the SBA. Upon identification you can proceed with the application process.

Once you obtain your certification, be sure to include in your profile as there is part of the spending budget designated for HUBZone certified companies.

12. 8(a):

Is a business development program that will certify disadvantaged individuals to assist in leveling the playing field when responding to BIDs.

13. NAICS:

Is short for North American Industry Classification System.

These are codes that are designated to identify the service or product you are selling. It is important to look up your number and have it on hand for when either you search through the current open BIDs or when responding to one.

You need to ensure that you are fulfilling the correct product or service.


The phrases and acronyms covered above do not cover one hundred percent of the government contracting terminology, as there is still more to be learnt in this specialized arena.

That being said, these key terms are a great way to get started and will help you understand in what direction your business can go depending upon which category it falls under. It should be a solid foundation for setting up your profile and to become more familiar with the opportunities available to your organization.

Taking a deep dive into the jargon is the only way to truly understand which suits your business best and then maybe you too will become the next government contractor.

Related articles:

What Small Business Contracts Are Required and Who Reviews?

Andrea Giraldo
Andrea Giraldo
Andrea Giraldo, Partner, Director Translation Initiatives, has spent the last ten years helping people introduce their products to the US market, start new businesses as well as helping take existing businesses to the next level. A creative thinker and entrepreneur, she is founder/owner of Giraldo Farms, importing coffee that is in nationwide distribution. Giraldo has a degree in Business and Economic Development from Fordham University and considered an expert in international trade. She has been providing bilingual advisement to small businesses in the New York Metro area for the last six years.

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