Defense Contracting: Decoding the ABCs of the DoD

The Department of Defense (DoD) drops more than $300 billion a year on defense contracts — for everything from weapons and vehicles to food and uniforms. More than $120 billion of that went to small businesses in 2018. 

While working for DoD can boost your bottom line, it takes time, resolve and a working knowledge of the acronym-choked world of federal contracting, including the Defense Federal Acquisition Regulation Supplement or DFARS.

Let MxD guide you through the alphabet jungle of defense contracting with this breakdown of some of the most common terms:

SAM: System for Award Management. An online portal. Businesses must register with SAM to take part in government contracting. Government agencies search the SAM database when looking for contractors. Registration is free and must be updated yearly. Search for defense contracting proposals on the Contract Opportunities section of this new website, where federal agencies advertise contracts, forthcoming solicitations (pre-solicitation notices), Requests for Information (RFI), and award notifications that exceed $25,000. Contract Opportunities replaces the former site.

DFARS — is a supplement to the Federal Acquisition Regulation (FAR) that specifies the additional contracting rules that companies doing business with DoD, military departments, and defense agencies must follow. It governs things like contract administration, contract pricing, contracting officers’ responsibilities, purchasing thresholds, research and development and who can conduct procurement for the military.  

CMMC: Cybersecurity Maturity Model Certification. CMMC builds upon existing regulation (DFARS) — which is based on trust — by adding a verification component on cybersecurity requirements. DoD contractors must comply with this new cybersecurity framework to be eligible to bid on future contracts. Third-party assessors will certify that contractors are in compliance with one of five security levels, from basic to advanced. A final rule on cybersecurity measures is expected from DoD in fall 2020. CMMC requirements will appear in the first DOD Requests for Information (RFI), expected in June 2020.

BPA:  Blanket purchase agreement. Allows contractors to fill government buyers’ recurring needs for supplies or services with less paperwork.

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CAGE code: Commercial and Government Entity. Once registered with SAM, a business will receive this identification code, which is required to do business with the federal government. 

DLA: Defense Logistics Agency. The DoD agency that manages the global supply chain for military and other agencies, purchasing food, clothing, medical supplies, construction equipment, building supplies and industrial hardware. Click through the DLA’s Small Business page to learn how to begin working with the agency.

DUNS Number: Data Universal Numbering System. Bidding on some government contracts requires a DUNS Number, a unique nine-digit identification ID. You can request a free DUNS number at the Dun & Bradstreet website

DSBS: Dynamic Small Business Search. Another online portal. Contracting officers use this database to find potential contractors. Companies can create a profile of their business when registering with SAM, and that information will go into the DSBS.

IDIQ: Indefinite Delivery/Indefinite Quantity. A contract that allows for provision of an undefined quantity of services during a fixed time period. Often used for on-call and architectural-engineering services.

NAICS code: North American Industry Classification System. This code classifies companies based on their product or service and may be required to determine eligibility to bid on some contracts.

OSBP: DoD’s Office of Small Business Programs offers resources for small businesses seeking to compete for defense prime contracts and subcontracts. Here you’ll find information on programs such as SBIR (Small Business Innovation Research), in which small companies compete to take part in federal R&D projects, and RIF (Rapid Innovation Fund), which supports the transition of small business technologies into defense acquisition programs.  

OTA: Other Transaction Authority. DoD uses this instrument to engage non-tradition commercial and academic institutions in research and prototyping. OTAs generally are exempt from federal procurement laws and regulations. Agreements may include joint ventures, partnerships or consortia.

PCRs: Procurement Center Representatives. These SBA (Small Business Administration) counselors help small businesses obtain federal contracts and ensure that small businesses get a fair share of such opportunities.

PTACs: Procurement Technical Assistance Centers. They help small businesses compete for DoD contracts through a national network of 300 local offices. Most services, including contracting classes, individual advice and access to bid opportunities, are free.

SBA: U.S. Small Business Administration. The SBA offers general advice on becoming a federal contractor. Look for details on contracting assistance programs where the federal government aims to award a percentage of all contracting dollars to: WOSBs (Women-Owned Small Businesses), SDVOSBs (Service-Disabled Veteran-Owned Small Businesses), socially and economically disadvantaged small business owners through the 8(a) Business Development Program and small businesses in historically underutilized areas or HUBZones.

SUBnet: SBA Subcontracting Network system. Large contractors post subcontracting opportunities on this site. 

Need help navigating the requirements of the Department of Defense supply chain? MxD can help. Learn more about becoming a partner.