Dictionary of Procurement Terms

1. A method of rewarding a contractor for completing a project as quickly as possible. By providing a cost for each working day, the contract combines the cost to perform the work (“A” component) with the cost of the impact to the public (“B” component) to provide the lowest cost to the public. 2. A cost-plus-time bidding procedure. The low bidder is selected based on a combination of the traditional contract unit price items-based bid (A) and the time component proposed by the bidder to complete the project or a critical portion of the project (B). (WSOT 2015)

Developed by the American Bar Association (ABA) and adopted in 1979. A collection of statutory principles and policies that provides guidance to public policy managers who wish to responsibly manage public procurement. State and larger local governments have individually codified the ABA MPC into procurement law and policy to effectively guide their procurement departments. The code was updated in 2000 and contains enhancements in the following areas: electronic commerce, cooperative purchasing, flexibility in purchasing methods, and processes for delivery of infrastructure facilities and services. Also called the Model Procurement Code.

A code similar to the ABA Model Procurement Code but intended for use by small local jurisdictions.

The prioritization of inventory based on the entity's business approach, e.g., a factor such as cost, importance, or lead time. "A" would be items of high cost, importance, lead time, or other aspect. "B" would designate a medium prioritization, and "C" would designate a low prioritization. A variation on the Pareto Principle.

The ability to produce a good or service at a lower absolute cost (the minimum costs to remain in business) per unit using a smaller number of inputs or a more efficient process than another supplier producing the same good or service. See also: Comparative Advantage.

A pre-approved list of products, usually grouped by manufacturer, that have proven to be in conformance with developed specifications and standards. The list may result from performance testing of the product or from field testing or laboratory analysis. See also: Qualified Products List (QPL), Approved Brands List (ABL).