Dictionary of Procurement Terms

A type of contract between two parties in which one side has all the bargaining power and uses it to write the contract primarily to their advantage.

A change that requires the written approval of both parties to a contract in signatory form. Bilateral modification is often related to some alteration of one or more substantive terms of the contract. See also: Unilateral Modification (of a Contract).

Failure to live up to the terms of a contract without legal excuse.

Term for when the entity-authorized official has determined that a contract should be terminated for cause, default, or convenience. See also: Termination for Convenience, Termination for Default.

A certification issued to qualified individuals by the National Contract Management Association.

1. An obligation—such as an accepted offer— between competent parties upon a legal consideration to do or abstain from doing some act. The essential elements of a contract are an offer and an acceptance of that offer; the capacity of the parties to contract; consideration to support the contract; a mutual identity of consent; legality of purpose; and definiteness. 2. A legally binding promise enforceable by law. 3. An agreement between parties with binding legal and moral force, usually providing for the exchange of goods or services for money or other considerations.

CANADA The solicitation or bid contract established between the owner of the solicitation (the “buyer”) and each of the suppliers who submit a compliant bid or proposal. The solicitation document (e.g., Invitation to Tender, Request for Proposals, etc.) is viewed as an invitation from the buyer to interested suppliers to submit a bid or proposal, and as an offer by the buyer to enter into a Contract “A” (or Bid Contract) with any supplier that submits a bid or proposal. The submitted bid or proposal is the supplier's acceptance of the buyer’s offer to enter into Contract “A” and also an offer by the supplier to enter into Contract “B” (see defined term) with the buyer. The formation of a Contract "A" occurs with each supplier whose bid or proposal is responsive (i.e., meets all mandatory criteria of the solicitation). By submitting a responsive bid or proposal, the supplier agrees to be bound by all terms and conditions of the solicitation as established by the buyer (e.g., conditions of tender or the solicitation rules of process).

The dollar value for a contract reflecting adjustments made for changes such as foreign currency fluctuations or inflation.

The functions that are performed after all parties have signed a contract. Typical contract administration activities are goal-oriented and are aimed at ensuring compliance with the contract terms and conditions while giving attention to the achievement of the stated output and outcome of the contract. See also: Contract Management, Surveillance.