Dictionary of Procurement Terms

A precise description of the physical characteristics, quality, or desired outcomes of a commodity to be procured that a supplier must be able to produce or deliver in order to be considered for a contract.

The process of collecting, cleansing, classifying, and analyzing expenditure data from all sources within an entity (i.e., purchasing card, eProcurement systems, etc.). The process analyzes the current, past, and forecasted expenditures to enable the visibility of data within the organization at various levels (e.g., by supplier, commodity, service, or by department). See also: Market Analysis, Procurement Profile, Supply Positioning.

A negotiation technique that begins by reaching a minimum agreement, even though it is not related to the objectives, and building bit-by-bit on that first agreement.

Successively breaking up single requirements into smaller ones to stay within small purchase limits and avoid competitive solicitations. Also known as order splitting.

The current marketplace price for an immediate purchase of a good or service. See also: Forward (Supply) Contract.

A one-time purchase occasioned by a small requirement, an unusual or emergency circumstance, or a favorable market condition.

A procurement department's provision of specialized advice and expertise to staff in line positions. Staff functions can include other departments, such as human resources, maintenance, legal, accounting, and public relations. See also: Line Function, Service Function.

Any entity, group, or individual that can place a claim on an entity’s resources or services or is affected by what the entity does or the services it provides.

A level of quality or attainment.

1. A pre-established document containing certain predetermined terms and conditions. 2. A template contract that may be used for the most basic contractual obligations.