The start and end dates during which you are authorized to do the work and bill for it. Performing outside that window, even by a few days, can mean the government will not pay for it, so period of performance dates matter as much as the price on a contract. A period of performance can include option years, in which case the full window and the currently funded window are not always the same thing.

In a sentence

"The period of performance is 12 months from date of award, plus four 12-month option periods." The base year is the only part actually funded and authorized right now; the rest arrives only if the options are exercised.