Dictionary of Procurement Terms

An understanding between two or more parties in which they state a common understanding and intention regarding past or future intentions or facts, sometimes with a view to altering performance, rights, and obligations. When the additional elements of a contract are satisfied, e.g., mutual obligation (consideration), capacity, definiteness, and legal purpose, contracts may be formed. The terms “agreement” and “contracts” are sometimes used interchangeably. (An agreement, however, may not be legally enforceable unless it contains all of the elements of a legal contract, so the terms are not truly synonymous.) See also: As to Form.

A simplified procurement method for fulfilling the anticipated recurring needs for supplies or services through the award of competitive line-item contracts or discounts from a supplier’s/manufacturer’s catalog, usually through competition. BPAs are used to reduce the administrative expenses resulting from small, recurring requirements.

A federal grant that supports a joint federal/state program in which the grantor (federal government) and the grantee (state government) share in the management decisions about the funded activity.

A legal agreement signed by 23 countries on October 30, 1947, that facilitates tariff negotiations and provides for the discussion and resolution of international trade issues.

Agreements between various government entities that may involve the joint use of public property, such as buildings and equipment.

A lease in which the lease payments are applied, in whole or in part, to installment payments for equity or ownership upon completion of the agreement.

A written agreement signed by the parties to the agreement that they understand the agreement in its entirety, and nothing shall be deemed to constitute a waiver of the agreement.

Passed by Congress in 1993, NAFTA is an agreement among Canada, Mexico, and the United States that created a Free Trade Area (FTA) consistent with the World Trade Organization’s (WTO) rules, whereby all tariffs are eliminated within the FTA during a transition period.

A legal document executed by the original parties to a contract and a successor to whom interest in the contract has been transferred by one of the parties; the document transfers all obligations and rights under the contract to the successor.

A contractual agreement in which a purchaser contracts with a supplier to provide the purchaser’s requirements at a predetermined price. See also: Open-End Contract, Requirements Contract, Blanket Order.