A contract is an obligation between two parties to agree to hold true to the terms and conditions that were previously decided upon. As it pertains to government contracting, a contract is established between a government agency and the contractor or company they have chosen to do business with. The contract is established when the bidding period closes and the agency announces the name of the winning contractor.

Within a bid contract, like most contracts, are terms and conditions that the contractor must meet while carrying out the project. These terms and conditions can include, but are not limited to, specifications on the brand name of the products used, time period for completion of the project, subcontracting regulations, and so forth. Every contract is different, so it is very important to read through it thoroughly to make sure you understand and meet all of the expectations. This will ensure and help maintain quality relations with government agencies, and pave the way for future awarded projects.