Dictionary of Procurement Terms

An agreement between a buyer and a seller or between departments within an entity that defines the level and quality of service that is to be provided.

1. An agreement calling for a contractor’s time and effort. 2. The furnishing of labor, time, or effort by a contractor or supplier, which may involve to a lesser degree, the delivery or supply of products.

A procurement exclusively or partially reserved for the participation of small or minority business concerns or a special class of contractors. See also: Goals, Contract Goals.

An agreement between two parties to balance one debt against another or a loss against a gain. May be used in construction contracting to minimize the cost of change orders or other unanticipated costs.

The cost incurred to change machine tooling or to change the production line to produce a different item or product.

A pre-trial conference conducted by a settlement judge or referee and attended by representatives of the opposing parties to reach a mutually acceptable settlement of the matter in dispute.

Denotes the imperative in contract clauses or specifications. See also: May.

An intergovernmental agreement for the provision of goods or services that is commonly used by two or more entities. The agreements are commonly created to address economic and logistical needs in an effective and efficient manner. For example, when a municipal town agreement allows multiple towns’ residents access to an emergency medical services (EMS) station that is shared across organizations. See also: Intergovernmental Contract.

Software that is initially distributed at no cost to end users, after which a fee may be charge for continued use or support. See also: Freeware.

1. An evasion and indirect misrepresentation just short of actual fraud. 2. An unscrupulous practice that focuses on short-term gains and ignores the long-term implications for a business relationship.