Dictionary of Procurement Terms

Sales agreement granting a purchaser any reduction in price the supplier may establish prior to shipment of the goods; sometimes extended for a period beyond the date of shipment.

The difference between the lowest and highest prices for a good or service during a specific time period.

A reduction in price, usually given after the completion of the contract and based on the quantity or value of goods purchased.

1. A decrease in the assigned value for a commodity or service exchanged relative to its worth determined in some previous time period. 2. The reduction of an agreed-upon price (to be paid by the buyer) that is lower than the price previously paid. See also: Cost Reduction, Cost Savings.

A pricing strategy in which a seller initially charges a higher price for a good or service and then lowers the price as demand declines.

Economic term used to describe a period of time during which prices remain unchanged or change at a slow rate.

The price of a stock share divided by earnings per share. (Business 2002)

The process of establishing a reasonable amount to be paid for goods and services; generally includes labor, material, ancillary costs, and profit.

Factual information about prices for goods and services that are substantially similar to those being procured; can include offered or proposed selling prices, historical selling prices, and current selling prices.

A contract entered into by a public entity with a business entity for the purpose of obtaining supplies, services, or construction items of any kind.