Dictionary of Procurement Terms

The process of analyzing prices and trends in the competitive marketplace to compare product availability and set prices with market alternatives to establish the reasonableness of offered prices. (Business 2002) See also: Demand Analysis, Procurement Profile, Spend Analysis, Supplier Analysis, Supply Positioning.

A standard set of goods, services, or combination of the two, used to determine a supplier's price for evaluation purposes or to calculate an index.

The total quantity of a good or service that buyers are willing and able to buy during a specific time.

An economic system in which prices are guided through free, unrestricted trade between buyers and sellers.

Grading used when procuring commodities that are traded regularly on the commodity exchange, such as lumber, steel, food products, and fuel. Grading determines the quality level of the commodities. Trade associations, commodity exchanges, and government entities are sources of market grade information.

Collecting and analyzing information about capabilities within the market to satisfy agency needs. The results of market research are used to arrive at the most suitable approach to acquiring, distributing, and supporting goods and services.

A marketing term for the division of prospective buyers or a targeted market into more approachable groups with common characteristics, traits, or needs.

The portion of a market for a good or service controlled by a specific seller.

The amount of a good or service that producers are willing and able to sell at different prices over a specific period of time.

An attempt to determine whether there are qualified sources capable of satisfying the specific requirements for supplies, services, or construction. May range from written or telephone contacts with knowledgeable experts regarding similar requirements, to consultation with technical or scientific journals, to solicitation for information or planning purposes only.