Dictionary of Procurement Terms

Grading used when procuring commodities that are traded regularly on the commodity exchange, such as lumber, steel, food products, and fuel. Grading determines the quality level of the commodities. Trade associations, commodity exchanges, and government entities are sources of market grade information.

Collecting and analyzing information about capabilities within the market to satisfy agency needs. The results of market research are used to arrive at the most suitable approach to acquiring, distributing, and supporting goods and services.

A marketing term for the division of prospective buyers or a targeted market into more approachable groups with common characteristics, traits, or needs.

The portion of a market for a good or service controlled by a specific seller.

The amount of a good or service that producers are willing and able to sell at different prices over a specific period of time.

An attempt to determine whether there are qualified sources capable of satisfying the specific requirements for supplies, services, or construction. May range from written or telephone contacts with knowledgeable experts regarding similar requirements, to consultation with technical or scientific journals, to solicitation for information or planning purposes only.

A service contracting technique that refers to the use of public-private competition to compare or benchmark inhouse service delivery approaches and costs against the private sector. (Ferrell and Hirt 2002)

The price that a product, service, or property might be expected to bring if offered for sale in a fair market (i.e., one that is not prone to fluctuations).

A pricing strategy that sets the value of a product from the market perspective and is based on supply and demand.

Price setting that occurs when prices are defined according to the range of the quality of the product or service provided by the supplier.