Contract Types and Contract Vehicles: The Difference Matters

Nuances matter in Federal Contracting. Those who haven't lived the Federal Contracting experience day in and day out may believe it's minor details that don't make a difference. They don't pick up on the nuances.

For those that have lived it from behind the walls of an agency know how those nuances can make a difference between how you are perceived building relationships with primes, potential team members and, most importantly, agency decision-makers.

One nuance -- Contract Types and Contract Vehicles.  

Contract TYPES are defined by the pricing structure and risk ratio between the parties. They are:

✅️ Firm-Fixed-Price (FFP) to include FFP with Economic Price Adjustment (FFP w/EPA), Prospective Price Determination, Fixed-Ceiling Priced Contracts with Retroactive Price Redetermination, and those with a Level-of-Effort term (FFP-LOE).

✅️ Cost Reimbursement (or "Cost-Plus" ("CP")) to include cost sharing, Cost-Plus-Fixed-Fee (CPFF), Award Fee (CPAF), and Incentive Fee (CPIF).

✅️ Time-and-Materials (T&M) with materials on a fixed-price or cost-reimbursement basis.

✅️ Labor-Hour (L-H).

Contract VEHICLES provide the performance and administrative structure for the Contract Type. Those are:

✅️ Definitive Contracts are for specific stand-alone project(s) that fall above the Simplified Acquisition Threshold (SAT).

✅️ Indefinite Delivery Vehicles (IDVs) include Indefinite Delivery Indefinite Quantity contracts (IDIQs), Definitely Quantity, and Requirements vehicles. They include, but are NOT exclusively, governmentwide (GWACs), agency-specific, or GSA Multiple Award Schedules (MAS).  

➡️➡️ Under the IDV umbrella falls task orders (services) & delivery orders (products) and specific instructions for who can order and how.

✅️ Agreements such as Basic Agreements, Basic Ordering Agreements (BOAs), and Blanket Purchase Agreements (BPAs).

➡️ ➡️ They are most often an umbrella for calls / orders (agencies call them both of these things even where FAR / RFO is specific, so it is easy to get confused), but don't have to be.

✅️ Purchase Orders (POs) (actions that fall under SAT).

✅️ Letter Contracts.

Yea, I know. FAR (even the RFO) lumps them all together as "Contract Types" in Part 16. But none stand alone. In my opinion, the FAR rewriters blew their chance to clarify this important piece of the procurement puzzle.  For example:

▶️ IDIQs for services may include the ability to issue multiple types of task orders like fixed-priced, cost, T&M, and L-H under them, or only one type.

▶️ Definitive contract vehicles can be any contract type or combination thereof (hybrid) as indicated in the contract line items (CLINs) and for which terms and conditions are included.

Bottom line is -- There is not a complete understanding of a contract vehicle without defining its contract type(s).

If you see folks lumping TYPES and VEHICLES together in a discussion without explaining the difference, you know they aren't familiar with the nuances of Federal Contracting or lived it daily.  

Follow those that are and have. Visit fedsubk.com and Expand your Federal Contracting knowledge today.

UPDATED November 2025 to incorporate changes from the SBA Dynamic Small Business Search (DSBS) to the new SBA Small Business Search (SBS)

I’ve posted on LinkedIn a lot recently about ways to be seen as a little fish in the big pond that is the Federal marketplace. Every GovCon consultant has a take on the best entry points with agencies. My take is there is only one place small businesses MUST put their best foot forward to be quickly and easily seen by Federal buyers for potential opportunities and influence small business set-asides.

The Small Business Administration (SBA) Small Business Search (SBS) is THE PLACE you must be on your A-game.

The Small Business Search (SBS) is a database in which SBA houses information on the current pool of certificated small businesses.  Presently, small businesses that do not have certifications or are self-certified, may also create a profile in this database. The SBS is used by contracting officers, small business specialists, large prime contractors, and other small businesses looking for teaming partners to find small businesses that can help meet Federal requirements and identify businesses that can help the Government (or a prime contractor) meet its small business goals. SBS is one of the first--and often only--sources used in market research by agencies to determine the numbers of small businesses able to provide products or services by North American Industry Classification System (NAICS) code.

You can see why this might be an important place to pay attention to, eh?

Businesses have forgotten about the SBS in the last few years because SAM.gov no longer sends small business registrants directly to SBS at the end of their registration to complete the profile like it used to. I HUGE bummer. Businesses now must wait for their SAM.gov registration to be activated, then they can establish an SBA SBS account, claim their entity record, and fill in their company profile in the SBS system. Federal buyers are looking for detailed information from SBS to use as part of their market research efforts.

SBS isn’t only for market research.

Even more importantly, the SBS shows Federal buyers the status of any pending certification applications for the purpose of determining whether you are eligible to compete for a set-aside action. For example, an Economically Disadvantaged Woman Owned Small Business (EDWOSB) can still submit an offer for an WOSB set-aside even with a pending application for certification showing in the SBS.  Contracting Officers often use SBS as a source to confirm the socioeconomic certification status and 8(a) program participation along with SAM.gov.  

While MySBA Certifications automatically sends socioeconomic certification status to SAM.gov and updates the requisite reps and certs to reflect the correct socioeconomic status, recently it has taken weeks for that migration to occur. WOSBs and EDWOSBs have reported not seeing their correct socioeconomic status reflected in their SAM entity record.

Businesses should always check their SAM entity record to ensure that the proper status is shown within a reasonable time after receipt of an active certification status; usually within 14 business days. If the record is not accurately reflected, you can contact answerdesk@sba.gov or  the SBA socioeconomic program under which your business was certified for assistance. If a Contracting Officer says that your SAM record does not reflect the status claimed, ask the Contracting Officer to check SBS for the more accurate information because of these delays.

So now let’s talk about BEING SEEN in SBS and walk through each part of the registration.

Understanding how to maximize the fields in SBS is how you can make the best possible first impression so that Federal buyers want to learn more about YOU!

‍The Key Words

Often businesses pluck these from thin air and over-generalized based on what they think the Government wants to see. Key words need to reflect and incorporate aspects of your primary NAICS, secondary NAICS, and what you can provide under those NAICS. If you use key words that don’t reflect your primary NAICS, you’ll leave the Government scratching their head about you. They won’t understand the message you’re sending about your company. Be consistent and specific with key words while tying into your NAICS codes in order to leave the best impression. You have 500 characters -- use them wisely.

The Website

Be sure that you include the URL for any website you have. Make it be more than a landing page. It needs to tell your story. It needs to include information about your company, what you sell, past customers, and products or solutions you provide. And most of all, it must be polished. Scrub your site hard for formatting, typos, grammatical errors, etc.  Acquisition personnel using the SBS will often quickly click on the site to see just how polished it is. When it looks good, they get the impression you know your stuff and pay attention to details.

The Capabilities Narrative

This is the written equivalent of your elevator pitch. This section should include all the things you’d include in that two-minute speech. Hit hard on what your company specialized in and its core product or service areas. Show the business’s focus and avoid being all over the map by overpromising on the breadth of work the business performs.  

Near the end of the capabilities narrative, list  any socioeconomic certifications Why not lead with it? Because that certification is only part of your business, and it alone does not get you interest from the Contracting Officer.  End with that information so the Contracting Officer can easily see it in a quick query and get your business into their market research counts.  

Lastly, identify any government contract vehicle or GSA Schedule your company may hold.  If you can catch their eye that you have an existing GSA Schedule or your business participates in the 8(a) program, you’ll get counted and likely get a look in terms of the Contracting Officer wanting to know more. If they need to meet a socioeconomic goal, they can see quickly. You’re helping the Contracting Officer do their job. They LOVE that! (And made another great first impression!)

SBS now also includes a field to add a link to your online capabilities statement. Use it!

“Extras” You Should Never Skip

Performance History

I cannot say this enough…if you history doing work for any Government or quasi-Government entity at any level -- Federal, State, or Local level -- list them! Don’t play the “they’ll see that when I propose” game. Showing performance history—even if it is minimal or commercial and not Government--helps. How? It proves the viability of the business and the size and types of projects you’ve completed. Those goes a long way to determining eligibility of the business based on performance on same / similar work of a same / similar dollar value (“Rule of Two” stuff – you can read more about that here).  

Review Your Profile

Go out to the SBS site and use the filters for your NAICS, business name, geographic location, and business types. Make sure your show up and see how your profile measures up to your competitors. Look at their records and see what they included that you haven’t. Use the good ideas of others, but don’t plagiarize. Contracting Officers will see that and that won’t look good for either of you.  

Keep Evolving

Your SBS isn’t something that you can just set and forget either. Make reviewing your profile in SBS something you do when you renew your SAM.gov registration every year. If something major changes in your business focus, NAICS, or socioeconomic status, make associated changes in SBS.

What GovCon doesn't always talk about -- The SBS Influence

When doing market research and trying to determine if an acquisition should be set-aside for small businesses, the Government is not only counting about the numbers of small businesses that claim they can do the work under a NAICS code in SBS.  They are analyzing your SBS profile to see if your business could be one of the "... two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery" and they have “…a reasonable expectation of obtaining an offer…” from you. (There’s that pesky “Rule of Two” again.)

In other words, based on what they see, could you submit a proposal likely to win?  And how does a Contracting Officer determine that?  Simply put... the your answers to everything we just covered.

Completing your profile helps tip the market research scales toward a small businesses set-aside and possibly a specific socioeconomic set-aside.  If you're all over the map in your SBS narrative, the Government will not consider you viable eligible contractor towards that “Rule of Two” and could possible choose to go another way with their acquisition strategy, away from a small business set-aside. Or worse, they set it aside but remember your name from the market research as one of the businesses that didn’t make their initial market analysis cut.

Influence where you can! SBS is the place where you have a lot of influence!  

Have I convinced you to get out there and create or update your SBS profile yet?

While the system is no longer got the word "Dynamic" in the title, don't forget its meaning. Life is dynamic, business is dynamic, and your SBS profile should still be dynamic, too. Get it completed ASAP. You can’t afford not to.

Remember again, SBS IS WHERE FEDERAL BUYERS GO TO FIND SMALL BUSINESSES and where other small businesses go to find teaming partners and subcontractors.

Get out there, GET NOTICED, BE SEEN, and STAY DYNAMIC!

I sat in on a session yesterday where another GovCon was talking about watching SAM for opportunities. But if you are doing that, you are going to be too late, unfortunately. Small businesses must start ahead of any opportunity announcement and connect with agency personnel early, before the opportunity is announced in order to be known and help shape future acquisition strategies. It got me thinking about my days as a Branch Chief and Chief of Contracting and the small businesses I know that are still flourishing today.

One particular company stands out. They were a new 8(a) firm that asked for a meet and greet. They had no federal work but showed a level of understanding about our mission that made an impression. While our acquisition strategies were in place already for the end of FY run of award, I told them I'd keep them in mind new projects crossed my desk.

Every month, without fail, I would get a call or a quick drop in chat from this 8(a) to say hello and briefly inquiry about any possible upcoming projects. During one of the in-person chats about a year after our first meeting, our chief estimator popped his head in my office quickly to apologize for a few late government estimates. He said he was going crazy with end of FY and lack of staff. The 8(a) took the opportunity and said, "We can help with that." While it wasn't ideally the work the 8(a) was looking for, that simple pivot and flexibility, along with the relationship building done to that point, led to a small 8(a) sole source contract for cost estimating support. It was their first federal contract.

That small contract quickly turned into a much larger 8(a) sole source contract for the same work that reached its max capacity 18 months earlier than anticipated. That led to 8(a) contracts for environmental the work the company ideally wanted, then graduation from the 8(a) program, and successfully competing on SB set-asides throughout the region and getting their own (successful) GSA Multiple Award Schedule contract.  

Ask for the meet and greet. Make the phone calls. This former Contracting Officer is here to tell you that acquisition personnel and Small Business Specialists EXPECT to hear from businesses. Large businesses aren't shy about calling -- trust me.

Federal employees may not be able to tell you much depending on the stage an acquisition is in, but the relationship building and continual reminder that you know what they are looking for and can fill a niche -- even when it's not your first choice of work -- is KEY.