Dictionary of Procurement Terms

A supplier's reduction to an entity in the price of goods already purchased and delivered without a requirement for the entity to return the goods.

The process by which potential customers decide whether and which goods or services to purchase (e.g., consulting search engines, asking for advice or references from similar entities, attending supplier expos).

Knowingly submitting a proposal or bid below the supplier’s anticipated cost with the expectation of increasing the contract amount after the contract is awarded through unnecessary or overpriced change orders. Commonly referred to as “low balling” a price. See also: Lowball.

Term that defines the goods and services to be procured within a set timeframe, usually on an annual basis, as well as the method of procurement that will be used for each good and service. Also referred to as a Procurement Plan.

Term that most commonly refers to a city or municipal law or ordinance passed under the authority of a charter or provincial/state law that specifies which things may be regulated by the municipality. See also: Ordinance.