1. A supplier’s right to compel a purchaser to
buy at a particular price and time.
2. On option granted to the supplier to make
delivery within a specified, limited period.
A component to take into
consideration when conducting a “make or
buy” analysis and deciding whether a service
should be done in-house or outsourced if the
costs are almost equal. A sensitivity analysis
can be performed to determine the
consideration of the costs relative to the
assumptions. This additional information and
any intangible factors could influence the final
make or buy decision.
Sequential Sampling Plan
approach to sampling in which the sample
units are selected one at a time. After each
unit is inspected, the decision is made to
accept, reject, or continue inspection until the
acceptance or rejection criteria are met.
The provision by the
procurement department of any services
common to departments throughout the
entity, thereby relieving those departments of
the need to perform those activities. See also:
Line Function, Staff Function.
Service Level Agreement (SLA)
between a buyer and a seller or between
departments within an entity that defines the
level and quality of service that is to be
1. An agreement calling for a contractor’s time
2. The furnishing of labor, time, or effort by a
contractor or supplier, which may involve to a
lesser degree, the delivery or supply of
A procurement exclusively or partially
reserved for the participation of small or
minority business concerns or a special class
of contractors. See also: Goals, Contract
An agreement between two parties to
balance one debt against another or a loss
against a gain. May be used in construction
contracting to minimize the cost of change
orders or other unanticipated costs.
The cost incurred to change
machine tooling or to change the production
line to produce a different item or product.
A pre-trial conference
conducted by a settlement judge or referee
and attended by representatives of the
opposing parties to reach a mutually
acceptable settlement of the matter in