Dictionary of Procurement Terms

The process of defining and coordinating human, physical, and financial resources to achieve results.

The company that produces parts, materials, or equipment, or the authorized reseller of such parts, materials, or equipment.

The result of a process.

A measurable quantity that results from the effort or input of a person, business, machine, or system.

Action that occurs when an entity makes an informed decision to contract out a product, service, or business process that was previously provided by internal (in-house) resources. The responsibility for providing the outsourced product, service, or business process remains with the entity; the entity pays the contractor for the work done and administers the contract. See also: Insourcing (in-house), Contracting Out.

The contracting of non-core functions or operations with external contractors, businesses, or suppliers.

The recurring costs of running a business, excluding the costs directly associated with the creation of a product or service.

An amount by which the actual cost of performance exceeds the amount budgeted for the work or the amount contracted for.