Dictionary of Procurement Terms

Obligatory, required by order; a provision that may not be waived.

A condition that may apply to Request for Proposals (RFP) and Invitation for Bids (IFB) that is established in the scope of work/specifications that must be met without alteration. A mandatory requirement should be clearly identified. Not meeting a mandatory requirement may be grounds for the disqualification of a bid or proposal.

A document that lists all the items in a shipment for the use of officials (e.g., customs; bill of lading).

A person or business entity that creates, makes, processes, or fabricates a product or something of value that changes a raw material or commodity from one form to another or creates a new product or commodity. (Business 2002)

A price list published in some form by the manufacturer and available to and recognized by the trade. The term does not include a price list prepared especially for a given offer.

1. A group of individuals who have a collective need, purchasing power, and the desire and authority to spend money on goods, services, and ideas. 2. A setting in which buyers and sellers establish prices for identical or very similar products and exchange goods and/or services. 3. The aggregate forces (including economics) at work in trade and commerce in a specific service or commodity.

The process of analyzing prices and trends in the competitive marketplace to compare product availability and set prices with market alternatives to establish the reasonableness of offered prices. (Business 2002) See also: Demand Analysis, Procurement Profile, Spend Analysis, Supplier Analysis, Supply Positioning.

A standard set of goods, services, or combination of the two, used to determine a supplier's price for evaluation purposes or to calculate an index.

The total quantity of a good or service that buyers are willing and able to buy during a specific time.

An economic system in which prices are guided through free, unrestricted trade between buyers and sellers.