Acquisition – The overall process of implementing a system, including planning, procurement, design, development, testing and acceptance.

Agency-Furnished Property - This describes how Agency property will be delivered to a Contractor for use during the term of the contract.

Allowable Costs and Payment - This identifies all Contractor costs that will be allowable under the contract and the process of payment for those costs.

Anti-Bribery - This requires the Contractor to affirm that none of its officers, directors, partners or employees has been convicted of bribery under the laws of any state or the federal government.

Assignment of Claims - This allows the Contractor the right to assign its rights to be paid to a bank, trust company, or any other financing institution.

Best Value – A form of contractor selection based on both the quality of the contract and cost.

Bid Guarantee - This protects the Agency in the event Bidder’s do not provide an acceptable bid guarantee as required at the time of bid submission.

Bid Samples (Sealed Bidding Only) - This insures the Contractor provides bid samples, in the quantities, sizes, etc., required for the items identified in the bid and must be submitted and received before or at the time for opening the bids.

Brand Name of Equal - This requires the Contractor to provide the brand name product or one that will be equal in all material respects

Burden – A percentage charge applied to the direct contract costs that cover the contractor’s cost of doing business.  Typical burden items include overhead (rent, office supplies, business expenses, office equipment, legal expenses, etc.), fringes (employee benefits - including sick leave, vacation, health insurance, etc.), general and administrative costs (management costs).

Certification – The formal acknowledgement (usually provided by an independent organization) that a contractor has certain capabilities and procedures required for a particular purpose.  Certification may be required as part of a pre-qualification process.

CCTV – Closed circuit television.

Collaboration – A close working relationship between the customer and the supplier that permits the exchange of ideas and joint resolution of problems associated with a project.

Commercial Computer Software-Restricted Rights - This describes the specific restricted rights for contracts computer software of the Agency and Contractor.

Commercial Warranty - This insures the Contractor agrees to provide the most favorable commercial warranties the Contractor gives to any of its customers for supplies or services.

Commodity – A commodity is a product as distinguished from a service. Commercial off-the-shelf products (including software) are considered commodities.

Commodity Supplier – A supplier from which a product is being purchased.  See definition of commodity.

Compensation and Method of Payment - This identifies the terms of compensation and the method of payments the Agency will pay to the Contractor.

Compliance with Laws - This requires the Contractor to be in compliance with all laws (Federal, State, Local etc.) to qualify for award of a contract.

Conflicting Terms - This protects the Agency from any terms the Contractor may attempt to add to the contract with the Agency terms taking precedence.

Consultant – A consultant is a contractor whose work is restricted to the provision of personal services.  Consultants are not usually selected on a low-bid basis.  They are generally restricted from providing hardware, construction services and electrical contracting services.

Consultant – A contractor whose work is limited to personal services.  Consultants do not supply construction services and/or equipment.

Contingent Fee Prohibition - This allows the Agency to terminate a contract if the contractor is found to have employed or retained to solicit a contract from a bona fide employee of Agency.

Contingent Fees - This protects the agency from any commission, percentage, brokerage or other fee that is contingent on the success that a person or firm has in securing a contract with the Agency.

Contract – A written agreement between two parties (in this case it is assumed that the parties will be the agency and an outside organization usually a private sector firm) that is an agreement for doing or not doing something that is specified.

Contract Affidavit - This affirms that the Contractor is indeed a recognized business entity either domestic or foreign and the individual signing the contract is duly authorized to do so by the business.

Contract Form – As used in these guidelines, the manner in which work is authorized during the contract period of performance. 

Contract Type – As used in these guidelines, the manner in which contractors are reimbursed for their work.

Contracting – The selection of a firm to provide a set of services or products, as well as negotiating and executing a contract. 

Contractor – This term is used in two different ways.  The general use of this term is that the contractor is an organization with which a contract has been signed.  This general terminology can include a design contractor (consultant), software company, systems integrator, electrical contractor, construction contractor, etc.  When the Consultant/Contractor form of work allocation is discussed, the term contractor is a reference to an organization that has been selected (usually on a low-bid basis) to implement a system specified by a consultant.  To avoid confusion in the discussion of this form of work allocation, the organization selected in this manner will be referred to as a low-bid contractor.

Contractor Inspection Requirements - This requires the Contractor to be responsible for performing all inspections and tests necessary to insure conformance with contract requirements.

Contractor’s Invoices - This describes what the Agency requires from the Contractor on all its invoices for payment purposes.

Cost and Price Certification - This requires the Contractor to certify that their cost or price information is accurate and complete.

Cost Reimbursable – A form of reimbursement in which the contractors are paid the actual cost of performing the work, plus a fee that may be a fixed amount, or may be adjusted based on the quality of the contractor’s performance.

COTS – Commercial off the shelf

DBOM  - Design-build Operate and Maintain

Definite Quantity - This is used when exact numbers of the requirements are known and can often protect the Agency from paying more for known quantities.

Delays and Extensions of Time - This describes the process and protects the Agency in the event delays and/or extensions of time are encountered or requested by the Contractor.

Delivery and Acceptance - This describes the delivery and acceptance process the Contractor must comply with.

Delivery of Supplies F.O.B. Destination - This insures the Agency is free of expense and the Contractor will be responsible for all costs associated with delivery of supplies and or materials.

Delivery Orders (Task Orders) - This describes the process the Agency will use to order specific work under the contact.

Descriptive Literature (Sealed Bidding Only) - This requires the bidder to furnish literature that shows the item/s in the bid for which it pertains by the time specified in the bid for receipt.

Disputes - This defines the parties to the contracts rights in the event of any disputes associated with the contract.

Design-build Contract – A form of contract in which the contractor is given responsibility for both the system design as well as its implementation

Design-build Operate and Maintain – A design-build contractor (see definition) who has also been given responsibility for operations and maintenance once the system development has been completed.

Design within Funding Limitation - This requires the Contractor to design the requirement within a not to exceed amount of funding available for the project.

Direct Costs – Expenses directly attributable to work performed on a project, as opposed to indirect costs, which are unrelated to specific projects.

Discount for Prompt Payment - This provides for the Agency to receive a percentage discount for payments made to the contractor normally within a certain number of days from the submittal of an invoice to the Agency from the Contractor.

DMS – Dynamic Message Sign

DOT – Department of transportation

Equal Low-Bids - This provides for the Agency to award a contract when there is economic benefit that is in its bets interest (in State vs., out of State Contractor).

Evolutionary Model – A systems engineering methodology in which the system is implemented incrementally.  The steps of design, development and testing are repeated for each incremental “build”.

Extras - This prevents the Contractor from receiving payment for Extras unless such Extras are authorized in writing by the Agency Contracting Official.

Federal Grant Flow Down Provisions - This identifies the Federal contract terms and conditions (clauses) that must be used in Agency contracts when using federal grant funds.

Federal, State, Local Taxes - This assures the Contractor warrants that no Federal, State or Local Taxes have been included (EXCISE TAXES) in the amounts quoted in the bid or proposal.

Fee – Synonymous with Profit.  The fee (or profit) is the payments received by the contractor in excess of contract costs and burdens that are value-added compensation for performing the work.

Financial Disclosure - This requires the Contractor to file specific information to include disclosure of beneficial ownership of business interests.

Fixed Fee - This provides the Contractor with a predetermined amount of fee to be paid by the Agency assuming the Contractor satisfactorily completes the requirements under contract.

Fixed Price – A form of reimbursement in which the contractors are paid a fixed amount, independent of the actual costs of performing the work, based on an initial cost estimate. This provides for the Agency to assume the least financial risk and places the most risk on the Contractor.

Gratuities - This insures the Agency’s right to terminate a contract in the event the contractor offers or gives a gratuity to any Officer, Official or employee of the Agency.

IFB – Invitation for bids

Incentive Fee - This provides for the Contractor to receive additional compensation providing they exceed the Agency’s requirements.

Incorporation by Reference - This protects the Agency by stating that all terms and conditions of the contract and any changes are made a part of the contract.

Indefinite Quantity - This is used when the exact numbers of the requirements are not known and can cost the Agency more as more risk is placed on the Contractor.

Indemnification - This protects the Agency from any obligation to indemnify, hold harmless, or pay attorney’s fees that result from the contract.

Independent Pricing - This insures the Contractors offer has been arrived at independently without attempting to limit full and open competition.

Inspection of Supplies - This requires the Contractor to maintain an inspection system that is acceptable to the Agency.

Insurance - This defines the types and amounts of insurance coverage the Contractor shall provide to perform any work under a contractor.

Intellectual Property - This indemnifies the Agency with respect to any claim, cost or action for patent infringement or trademark or copyright violation as a result of the contract.

Invitation for Bids – A document including plans and specification that is released to prospective contractors that defines the agency’s requirements in connection with a low-bid procurement.

Incentive – An additional fee paid to the contractor based on pre-defined criteria

Indirect Costs – Expenses of doing business that cannot be directly attributable to a specific project.  Examples of indirect costs include office space, advertising, employee fringe benefits, etc.

Invitation for bids – A document released by a procuring agency requesting bids for services, equipment and/or commodities from potential contractors.  A contract is awarded to the lowest responsive bidder.

Invitation to Negotiate – A contractor selection process that includes a series of steps in which work scope is adjusted based on vendors proposals.

IT – Information Technology

ITN – Invitation to Negotiate

ITS - Intelligent Transportation Systems

Late Bids, Modifications or Withdrawals of Bids - This describes the process by which late bids, modifications or withdrawals of bids from the Contractor will or will not be accepted by the Agency.

Liquidated Damages - Provides for the Agency to receive from the Contractor compensation in the event the Contractor fails to perform in accordance with the contract

Low-Bid – The process of competing for work defined by a set of plans and specifications based exclusively on bid price.  The competitor with the lowest bid price is selected for the project.

Method of Award – As used in these guidelines, the process by which a contractor is selected during a competitive procurement.

Modifications - This describes the process by and for which modifications will be executed under the contract.

Multiple Contract Awards - This allows the Agency to award more than one contract if multiple awards are in the best interests of the Agency.

Multi-Year Contracts Contingent Upon Appropriations - This protects the Agency for long-term contracts in the event that the funding authority does not make future-year fiscal appropriations.

Negotiation - This identifies the Agency’s process for a negotiated procurement.

Negotiated Procurement – A process by which all procurement terms are discussed and may be reconsidered by the purchaser and the offeror.  These terms may include requirements, specifications, period of performance, location of work, scope of services, staffing requirements, etc.  Negotiated procurements typically reflect a discussion of non-financial considerations prior to the discussion of the proposed contract cost although this “two step” evaluation is not always required.

Negotiated Selection – A selection process in which a contractor (usually a consultant or systems manager) is selected based on the quality of a proposal which describes the contractor’s capabilities, staff skills, technical approach and prior experience.  Negotiated selections usually do not include consideration of cost.

Nondiscrimination in Employment - This insures the contractor will not discriminate against any race when employing individuals to perform work under the contract.

Non-Hiring of Employees - This does not allow the Contractor to hire Agency employees during the contract term and sometimes vice versa.

Notice of Cost Comparison - This puts all contractors on notice of the Agency’s intent to perform cost comparisons of proposals prior to award of a contract.

Officials Not to Benefit - This protects against Agency officials in sharing or benefiting in any way from a contract.

Option for Increased Quantity - This allows the Agency to increase the quantities of supplies called for in the contract at the contract bid price.

Order of Precedence - This describes the order in which each part of the contract will govern and generally protects the Agency more in the event of contract disputes.

Ordering - This describes how the Agency will order supplies or services from the Contractor under the contract.

Outsourcing – A form of contract in which the contractor’s responsibilities are defined based on managing or maintaining certain aspects of an agencies’ business. 

Parties to the Contract -This identifies and defines all legal entities to the contract.

Patent Infringement Indemnification - This describes how the Contractor indemnifies the Agency for infringement of Agency patent.

Patent Rights - This protects the Agency against any claims made against them for any alleged infringements of patents by the Contractor or other third parties.

Payments Under Transportation Contracts - This describes how the Contractor will be paid by the Agency for transportation or transportation related services.

Performance-Based Contracting – A contracting process in which the contractor’s compensation for work on the contract is partially dependent on the success of the project.

Performance Based Payments - This describes how the Agency will make payments to the Contractor based strictly on performance of specific requirements (normally specific deliverables) under the contract.

Phased – A contract in which work is divided into stages.  Typically each stage cannot begin without prior authorization of the agency.

Political Contribution Disclosure - This requires the contractor to file specific information for political contributions made for elective office in any primary general election.

Pre-Existing Regulations - This protects the Agency in the event there may be other regulations to consider that may take precedence over the specific terms and conditions within a contract.

Pre-Qualification – The process of assessing a contractor’s ability to perform the required work based on past experience and staff skills.  Pre-Qualification is often a step that precedes the proposing or bidding process of procurement, and must be satisfied by the contractors in order for them to participate in the process.

Procurement – The process of selecting a contractor and negotiating a contract for delivery of a services and/or products.  Procurement is a subset of the system acquisition process. Same as contracting

Purchase Order – A form of contract usually issued on a sole source basis for small procurements. 

Redesign Responsibility for Design Errors or Deficiencies - This requires the Contractor to redesign the requirement at no cost to the Agency in those cases where the Contractor has errors, deficiencies or inadequacies in the design.

Retention of Records - This requires the Contractor to maintain all records pertaining to a contract for a specific period of time.

Request for proposals – A document released by a procuring agency asking for the submission of proposals for personal services from interested consultants. A document that is released to prospective contractors in connection with a negotiated procurement that defines the agency’s requirements. 

RFP - Request for proposals

Rights in Data - This describes the Agency’s and Contractor’s rights for data and identifies the specific types of data under the contract.

Scope of the Contract - This describes in as much detail as possible what the Agency is soliciting and expects to receive from the Contractor and becomes a part of the contract at time of contract award.

Specifications - This requires the Contractor to ensure that all materials, equipment, supplies or services conform to federal and State laws and regulations and to the specifications contained in the contract.

Sole Source – A contract that is awarded without competition.

SOW - Statement of Work

Spiral Model – A systems engineering methodology in which system requirements are developed based on extensive prototyping and analysis.

State Law Prevails - This protects the Agency in the event of contract disputes in that their own State laws will be used to litigate those disputes.

Statement of Work – A description of the services and products to be provided by a contractor along with the contractor’s overall responsibilities in connection with these items.  The Statement of Work is contained both in the request for proposals and the contract. Also known as Work Scope.

Suspension of Work - This allows the Agency to suspend the Contractor’s work if it is in the best interests of the Agency.

Systems Integrator – A contractor assigned responsibility for providing all personal services required for system development.  This may include software development, systems integration, inspection and testing.

Systems Manager – A contractor assigned responsibility for providing all personal services required to implement a project.  Systems managers may be given responsibility for system planning, design, software development, systems integration, inspection and testing.

Task Order – A contract form in which work assignments are divided into tasks that are defined once the contract is underway.  Task order contracts require the agency to release a task order to the contractor.  The contractor responds with a brief proposal and cost estimate.  If the contractor’s submission is acceptable, work on that task is authorized.

Tax Exemption - This protects the Agency from paying any taxes borne by the Contractor under the contract.

Termination for Convenience - This allows the Agency to terminate a contract at any time for its convenience with minimal financial risk to the Agency.

Termination for Default - This protects the Agency in the event of contractor non-performance that results in early termination of a contract due to actions or inactions solely by the Contractor.

Terms and Conditions – Contract requirements that define all of the responsibilities of both parties to the contract except for the work to be performed. 

Time and Materials – A form of reimbursement in which contractors are reimbursed for the actual cost of performing the work plus a fee that is a percentage of the reimbursed costs.

TSMO – Transportation Systems Management and Operations

Truth-In-Negotiation Certification - This requires the Contractor to certify that their wage rates and other factual unit costs and current and accurate at the time of contract award.

Unnecessary Elaborate Contractor Proposals (Negotiation Only) - This informs the Contractor’s that elaborate proposals are not desired and may be an indication of the Contractor’s lack of cost consciousness.

Variations in Estimated Quantities - This protects the Agency when it becomes necessary for the Agency to order more of less work under the contract.

Waterfall Model – A systems engineering methodology in which the project planning, design, implementation and testing steps are performed sequentially.

Work Allocation – As used in the guidelines, work allocation refers to the assignment of responsibilities to various project team members including the agency, contractors and consultants.

Work Oversight - This allows for general oversight, supervision, direction and approval by the Agency over the Contractor for prosecution of the work under the contract.