Dictionary of Procurement Terms

The cost of materials or services identified with only a single cost objective, such as labor, supplies, equipment, or transportation.

The shipment of goods directly from their source to an end user; frequently used when a third party acts as the purchasing agent for the end user.

The portion of a contract, proposal, or invoice that denotes the time spent working solely to satisfy the specific requirements of the contract as detailed in the specifications or scope of work.

Business model in which the seller sells directly to the buyer in a non-retail environment.

CANADIAN A statement indicating the mandatory features of a policy. In cases in which the Canadian Treasury Board is prepared to permit deviations, departments must obtain prior approval by means of submissions. Directives are characterized by the use of the verbs, “shall,” “must,” and “will,” which appear in bold Italics throughout the manual.

As established by the U.S. Small Business Administration, a business that is at least 51% controlled or owned by person(s) who are members of a group officially designated as economically or socially discriminated against. See also: Historically Underutilized Business (HUB), Minority-Owned Business Enterprise (MBE), Woman-Owned Business Enterprise (WBE).

An allowance, reduction, or deduction from a selling price or list price extended by a seller to a buyer in order for the net price to become more competitive. More common forms of discounts include trade discounts, quantity discounts, seasonal discounts, and cash discounts. See also: Payment Terms, Prompt Payment Discount, Cash Discount.

A listing of various discounts offered to a buyer for varying amounts of goods or services. May be requested as part of a solicitation.

Mathematical calculation to determine a buyer’s price from a manufacturer’s price list. On non-automated term contracts, the manufacturer must submit a printed price list/catalog from which prices are to be figured. Prices in this category cannot be increased for a specified time period after the contract begins, unless otherwise noted in the contract.

1. A deviation between the contract or purchase order and the material or services received or delivered. 2. A variance or difference in identification, condition, or quantity between the supplies or services delivered and the contracting documents.