There is often confusion regarding the definition of the term,
“Contractor” in government work. The term is used in a
conflicting manner to describe companies, individuals and
business relationships. It has different connotations within
corporations as opposed to government agencies, and is often
confused with terms like “Subcontractor”, “Supplier” or
“Vendor”. This article will define the term, “Contractor” and
discuss the regulatory factors and practical considerations
related to use of the term from a small business federal
government contracting perspective. 1. Contractor (As Used In
Corporations) The term “Contractor” in corporations often refers
to an individual, performing work for a company while not on the
payroll as an employee, having no taxes, benefits or deductions
taken from their pay and not covered by any form of insurance.
The company issues a purchase order to the individual at an
hourly rate and submits a Form 1099 to the US government
reporting what the contractor is paid for services. The