Dictionary of Procurement Terms

Previously owned, installed, or refurbished equipment.

Fee paid for the use of a publicsector good or service.

1. A department or unit of government that requests goods or services through a central procurement organization. 2. A participant in a cooperative procurement contract.

1. A service provided to the public or the company providing such a service (e.g., water, gas, sewage, and electricity). 2. The state or quality of being useful, beneficial, or profitable; functional.

A fair return on investment.

1. Feature or benefit added to an existing good or service that increases its usefulness or worth to the buyer or end user. 2. The increased worth of a good or service as it progresses through production and distribution.

A critical and systematic assessment of the functions of a good or service to ensure the cost of the good or service is no greater than is necessary to perform the functions of that good or service and meet standards, specifications, procedures, and practices. See also: Value Engineering.

An organized, systematic approach to providing the necessary functions in a project at the lowest possible cost by substituting methods and materials with less costly alternatives without negatively affecting functionality. See also: Value Analysis.

A fixed-price contract with a provision for rewarding the supplier for faster delivery or superior performance.

A statement used by a company to differentiate its overall offerings in the marketplace to increase the attractiveness of its goods and services by highlighting and explaining features, benefits, or innovations.