Dictionary of Procurement Terms

Flexible virtual supply system linked together by communication systems and alliances to optimize the flow of materials, services, information, and money.

An analysis of the complexity of the supply marketplace and its impact on agency service delivery based on factors such as: 1) dependency of agency service delivery upon particular goods and service, 2) risk to agency service delivery arising from potential disruption, such as discontinuity of supply or significant increase in price, 3) the makeup of the marketplace, 4) lead times and the complexity of the technology involved, 5) and the source of the original manufacture or service supply and any related opportunities. See also: Market Analysis, Procurement Profile, Spend Analysis.

The use of tax incentives, deregulation, and other mechanisms to increase the ability and willingness to produce goods and services. (Schiller 2000)

A pledge or guarantee by an insurance company, bank, individual, or corporation on behalf of the bidder/proposer that protects against default or failure of the contracted bidder/proposer to satisfy the contractual obligations.

1. An overstock situation that occurs when the quantity of goods on hand exceeds the quantity of goods needed. The overstocked goods may be returned to the supplier, sold at auction, or disposed of in a method acceptable to the entity. 2. The goods or materials that are obsolete or no longer needed by the agency and are designated for disposal. Surplus becomes available for disposal outside of the entity due to an unforeseen situation that affects the use of the item (for example, chairs or desks that have been replaced with new items). See also: Obsolete Supplies/Equipment.

Often used in contracting, this term refers to a quality assurance process in which both an entity and a contractor are regularly monitored to ensure the parties are meeting their obligations as defined in their contract. See also: Contract Administration, Contract Management.

1. Prohibiting a supplier from submitting bids and proposals for a definite or indefinite period of time. 2. A temporary determination to exclude a supplier from obtaining any contracts for a period of time, usually before initiating debarment. Reasons for this action may include poor performance, late deliveries, violations of previous contract terms, etc. See also: Debarment.

A contract provision that allows an agency to suspend, interrupt, or delay work for the agency’s convenience. A contractor is not entitled to compensation if the delay is the contractor’s fault. A contractor may be compensated only if the resultant delay is considered unreasonable.

An action in which the entity orders work to cease in accordance with a suspension of work clause contained in the contract.

The capacity to endure. Sustainability requires a reconciliation of environmental, social, and economic demands. It encompasses the concept of stewardship, which is the responsible management of resources. See also: Environmentally Preferable Purchasing.