Glossary of Financial Terms

Company: For the purposes of USASpending.org a company is any vendor defined by a DUNS number.  A DUNS number is a unique corporate identification code assigned by Dun & Bradstreet used to track contract actions with a vendor.  It defines a separate financial reporting center within a company and translates into a company’s name, address and related contact and financial information. Some companies consist of only one DUNS number; large companies may be assigned dozens of DUNS numbers, even multiple numbers at the same location.  Approximately 200,000 DUNS numbers are used in any given fiscal year. 

Contract De-obligation: A downward adjustment made to a previously issued contract obligation typically resulting from contract termination, a change in acquisition requirements or changes in other business conditions.  De-obligations are not uncommon as agencies adjust payments on large contracts approaching the end of their term.  Dollar totals appearing in USASpending.org rankings may show net negative totals because de-obligations total more than obligations. 

Contract Obligation: A legal commitment by a federal agency to a vendor to procure goods or services defined on a particular contract, task or delivery order at the specified price.  The USASpending.org contract database consists of the records of millions of Contract Obligations annually.  An obligation can be viewed like a purchase order – it is often identical in value to the eventual payment made to a vendor but it may not match exactly.  In order for a contract to appear in USASpending.org in any given Fiscal Year an agency must have reported at least one obligation against it.  Large contracts consisting of hundreds of obligations are common.  The dollar figure, or “Obligation Amount,” specified in each contract record forms the basis of all dollar aggregations in USASpending.org.

Fiscal Year: For the federal government a Fiscal Year is the 12-month period beginning on October 1 and ending on September 30.  A fiscal year is defined by the last two digits of the calendar year in which the bulk of the fiscal year falls.  For example, the period spanning October 1, 2007 through September 30, 2008 is called FY 2008.  Each individual contract obligation is assigned a fiscal year in USASpending.org based on the Sign Date of the obligation – the date a government agency committed to making the Contract Obligation.  Fiscal year dollar totals – whether totals of agency spending, company revenue, etc. – are aggregations of all the Obligation Amounts reported as being made during the indicated fiscal year.  Many large contracts consist of obligations stretching over multiple Fiscal Years.  The Fiscal Year is an indication of when the spending occurred, not the start date of the contract.  Contract data appearing in USASpending.org is updated periodically throughout the year on a roughly quarterly basis.  Note that Department of Defense contract records are subject to a 90-day delay before release to the public.

Funding Office: The buying office funding a contract acquisition.  For example, an Army buying office may fund a purchase on a multi-agency GSA Schedule contract where the administering Purchase Office is within GSA.   In this case the administering purchase would appear as part of GSA and the funding purchase office as part of the Department of Defense.

Governmentwide Acquisition Contract (GWAC): GWACs are task or delivery order-type contracts for Information Technology (IT) established by one agency for governmentwide use.  Most GWACS are administered by GSA, but other agencies like NASA and HHS also administer popular GWACS.  GWAC contract obligations are included in Fedspending.org.

Grant: Any one of  approximately 1,300 authorized programs through which government agencies provide direct assistance to state and local governments, quasi-government entities, non-profits and individuals in fulfillment of each agency’s goals and missions.  Each agency defines and administers the terms of their grant programs.  Although grants can be awarded to commercial entities they are not subject to the terms and conditions of the Federal Acquisition Regulations (FAR).

GSA Schedule Contract : Also referred to as a Multiiple Award Schedule (MAS) Contract and a Federal Supply Schedule (FSS) Contract, the GSA Schedule Contract is multi-agency contract vehicle negotiated and administered by the U.S. General Services Administration that permits agencies worldwide to order directly from vendors holding a Schedule.  GSA Schedule Contracts are included in USASpending.org.

NAICS Code: The North American Industrial Classification System (NAICS) Code defines the nature of a good manufactured or a service provided.  The NAICS Code replaced the Standard Industrial Classification (SIC) code in the contracts data starting around FY 2000.  A NAICS code is one of two market descriptors assigned to each contract obligation record.  The other contract market descriptor is the Product/Service Code (PSC).  Generally the NAICS code is more specific and current.  Note that currently the grants database contains no market codes at all.

Obligation Amount: The dollar value of each individual Contract Obligation.  All dollar figures appearing in USASpending.org are based on the Obligation Amount.

Parent Company: A Parent Company is the unique name of a Company’s parent organization – the entity that owns the majority share of an individual company as defined by its DUNS number.  Parent Companies are assigned by Eagle Eye researchers in order to make the contract data more relevant and useful.  A Parent Company consists of one or more subsidiaries and divisions.  When all related entities are “rolled up” into the proper Parent organization analysts get a more realistic picture of the key corporate players in their area of study.  Parent Companies are updated continuously and are intended to reflect the majority owners of a company in the current fiscal year.  When Parent Company assignments are updated in USASpending.org all historical records are also updated.  This means that Parent Company rankings for prior years reflect the parent assignment in the current Fiscal Year.

Prime Contract: A legal agreement directly between a government agency and a vendor defining the terms, conditions and pricing of goods or services to be provided by the vendor.  A contract typically supports the processes of government; a grant generally provides assistance to individuals.  The process of awarding Prime Contracts is subject to the terms and conditions specified in the Federal Acquisition Regulations (FAR).  Currently USASpending.org tracks approximately 1.2 million contracts annually.  All data is historical in nature – anticipated spending is not included.

Product/Service Code: The Product/Service Code (PSC) is a traditional federal government market descriptor defining the nature of a good manufactured or a service provided.  It is not widely used outside of the federal government.  Nonetheless it has been used by government agencies for decades and provides consistency over long periods of time in measuring market trends.  PSCs beginning with letters (A-Z) designate services; PSCs beginning with numbers (0-9) designate manufactured items.  The first two digits of  the PSC are considered shorthand for defining the corresponding GSA Schedule program.  For example, the GSA’s Computer Hardware and Software Schedule is commonly referred to as the “Group 70” Schedule because PSCs beginning with 70 designate computer hardware and off-the-shelf software.  Also note that the first one or two characters of the PSC provide the organizing principle for opportunity announcements that appear on the government’s Federal Business Opportunities (www.fedbizopps.gov) website.

Purchase Office: The buying office administering the purchase of goods and services under contract.  In the case of multi-agency contracts like GSA Schedules and GWACS  most often the administering purchase office is part of the same agency that is funding the acquisition.  Agencies like GSA can administer purchases from GSA Schedule contracts on behalf of other agencies.  In these cases GSA will appear as the administering agency.  This situation accounts for a relatively small portion of all spending.

Sign Date: The official date an agency makes a contract obligation.  The Sign Date is the basis for determining the fiscal year in which an obligation occurred.  The Sign Date is not the same as the date on which an agency formally announces a contract award to a vendor.  Furthermore, the Sign Date is not necessarily the same date a company enters a contract payment on its books.  Differences between the government’s obligation schedule and an individual company’s bookkeeping practices may lead to differences between when the government and a vendor recognize contract payments and revenue.

Sub-contract: A legal agreement between a vendor and another vendor defining the terms, conditions and pricing of goods or services to be provided as part of a deliverable to a federal agency.  Currently sub-contracts are not part of USASpending.org.