Dictionary of Procurement Terms

1. The specified minimum performance that must be achieved by a good or service to ensure the entity that the good or service will perform as per the specifications or scope of work. 2. A predetermined quality level that has been deemed acceptable, generally used in the manufacturing of material items. Example: AQL of 1% defective rate is acceptable for this item. See also: Acceptance Sampling (Acceptance Testing).

1. Indication that all parties to the contract agree to be bound by the terms of the contract. 2. An indication by one party of a willingness to act in accordance with the contract or offer. 3. The assumption of a legal obligation by a party to a contract and to the terms and conditions of that contract. 4. The act of receiving the good or service by an authorized representative with the intention of approving the good or service for payment. May include transfer of title.

The agreement of the Supplier to deliver the goods ordered for the price offered.

The agreement of the purchaser to an offer submitted by a supplier.

A quality control technique used to evaluate the overall condition of a given lot by physically inspecting a portion or sample of the lot. See also: Acceptable Quality Level (AQL).

The cost that a carrier may charge in addition to the actual freight transportation charge, such as inside delivery, interim storage, and redelivery charges. (ISM Glossary 2000)

A list or enumeration of monetary transactions between parties to a contract, showing purchases, payments, and credits for goods or services.

The principle that employees who accept an assignment and the authority to carry it out are answerable to a superior or a higher authority for the outcome. See also: Accountable. (Business 2002)

The concept that a person is obliged to give a reckoning or explanation for one’s actions; responsible. See also: Accountability.

1. Financial obligations that arise as a result of making credit purchases. 2. An accounting function that is responsible for making payment to contractors according to the contract terms and conditions. 3. Liability accounts that indicate the charges owed on open accounts.