Dictionary of Procurement Terms

The act of recording the details of stock movements and balances in value.

To provide for the efficient storage and handling of goods to be redistributed to the requisitioner, end user, or client department.

A contract document that provides for direct shipment to a consignee.

An arrangement between two or more parties to work together on a mutually beneficial project with each party retaining its own autonomy.

A comprehensive document that clearly states an entity's mission, vision, values, goals, and desired outcomes for the next 3-5 years, and the resources and actions needed to achieve them. See also: Tactical Planning.

The transformation of an entity’s mission, goals, and objectives into measurable activities to be used to plan, budget, and manage the procurement function within that entity. The ultimate goal is to effectuate positive change in organizational culture, systems, and operational processes.

A systematic, continuous improvement process that directs supply managers to assess, plan, manage, and develop a supply base in line with an entity’s stated objectives. This involves the constant re-evaluation of purchasing activities to ensure a supplier's alignment with an entity's long-term goals.

Methods to achieve specific goals and carry out objectives. All strategies must be sensitive to financial and other resource allocation decisions.

The first offer received in a competitive negotiation to get the negotiations moving forward. It is generally of little merit, but intended to encourage more purposeful negotiation.

An RFP evaluation technique whereby an evaluation team takes an informal vote of no consequence to gauge the feeling of the group toward a proposal or group of proposals. Used to informally determine the predisposition of the group.