Dictionary of Procurement Terms

A valuation and assetmanagement method in which goods acquired or produced first are used, sold, or disposed of first. See also: Last In-First Out.

A term usually used in the purchase of custom-made goods (design specification). A qualitative method by which the supplier must provide a final production item for the purchaser’s review and approval before the balance of the production run is made and shipped by the supplier. Also known as First-Article Testing.

The means by which a government adjusts tax rates and spending levels to influence the country's economy.

Tax hikes or spending cuts intended to reduce aggregate demand. (Schiller 2000)

Policy measures that a government takes to reduce taxes or regulations, or to increase government spending to encourage and boost economic activity.

The 12-month period used for accounting purposes. A fiscal year generally begins July 1 or October 1 for governments. (The U.S. federal government’s fiscal year begins October 1.)

Physical, functional, and performance characteristics or specifications that uniquely identify a component or device and determine its interchangeability in a system or piece of equipment; used especially when considering the suitability of a suggested alternate or “equivalent.”

Physical assets such as property, plant, and equipment.

Expenditure that is constant and does not change, regardless of the quantity of the goods or services produced.

A mathematical calculation used to divide the total usage during a fixed period (generally 12 months), usually using the last fiscal calendar, by the number of months involved (generally 12). The resulting average is the forecast for the entire comparable future period. This is a straight mathematical calculation that ignores current trends.