Dictionary of Procurement Terms

An invoice received before a purchase that informs the buyer of the terms of sale. In foreign purchases, it is often used by buyers as proof of a future purchase to support the buyer’s request to governmental authorities for import permits and foreign exchange.

The detailed series of related activities that must be completed, and the order in which they must be done, to accomplish a given task.

A manufacturing quality control technique in which inspection feedback identifies and leads to corrections in the production process.

The practice of identifying, analyzing, and improving current processes to enhance quality, meet best practice standards, or optimize performance.

A knowledge-sharing trend that proactively fosters collaboration and promotes customer-centric processes by encouraging workers to form collaborative teams responsible for the completion of an entire process from end to end. This system organizes workflow to support crossfunctional business processes that emphasize the importance of sharing product-related and process-related knowledge across functional boundaries.

The use of flowcharts to graphically illustrate the flow of a process to identify opportunities for improvement.

1. Purchasing, renting, leasing, or otherwise obtaining any supplies, services, or construction; includes all functions that pertain to the procurement, including description of requirements, selection, and solicitation of sources, preparation and award of contract, and all phases of contract administration. 2. The combined functions of purchasing, inventory control, traffic and transportation, receiving, inspection, storekeeping, salvage, and disposal operations.

A detailed review and examination of procurement documents and business processes by internal staff or independent experts, concluding with a detailed report that may also include a management letter of findings.

Public sector procurement code (legislation) that waives competition requirements for the direct purchase of specific goods or services, e.g., authorized or mandated preferred source (prisoners, vision impaired, and disabled), emergency procurements, and other goods or services stipulated by local laws and regulations.

The total sum of all actual and administrative costs incurred by the buyer in the process of obtaining goods, services, or construction. See also: Carrying Cost.