Dictionary of Procurement Terms

Insurance against losses resulting from the dishonesty of an employee.

A legal obligation to act solely in accordance with the best interests of another party.

Monies used to account for assets held in a trustee or agency capacity for others and which cannot be used to support the entity’s own programs.

A type of purchase order with a pre-approved maximum value used to expedite the procurement of nonrecurring goods and services necessary for business operations under delegated authority to field staff. An FPO is used for occasional, unexpected business expenditures (e.g., the breakdown of a company vehicle in the middle of a delivery trip).

A cost objective whose costs are not assigned to any other cost objective and is, therefore, one of the final points for accumulating costs in the accounting system.

A review or examination of a product, service, or construction by the purchaser to ensure that the seller/contractor has conformed to all applicable specifications and requirements before making final payment.

Payment made for completed services after all offsets are calculated and claims are completed.