Dictionary of Procurement Terms

1. An aggregate or lot price that may represent the total price for a group of items in place of or in addition to unit prices for each individual item. 2. The total price of a group of items that is priced as a whole for bidding purposes.

The upkeep of property that neither adds to its permanent value nor prolongs its intended life appreciably, but instead keeps it in an efficient operating condition.

A surety guarantee that protects the purchaser against Defects or inferior materials or workmanship for a specified period of time following the expiration of the initial warranty or guarantee period; an extended warranty guaranteed by a surety.

Refers to the equipment, tools, and activities associated with the daily operations of an entity.

A procurement decision that examines the cost/benefit of producing an item in-house vs. externally. Two factors that stand out at the tactical level are total cost of ownership and the availability of production capacity.

A strategy used to determine the most advantageous alternative, including the cost benefits of each alternative, when considering whether to obtain a good or service by buying it from a third-party or by producing it in-house using the entity’s resources.