Dictionary of Procurement Terms

The broadest classification applicable to purchase transactions with reference to understandings between buyer and supplier, either as to the meanings of certain abbreviations, words, or phrases, or to customs applicable to transactions as established by agreement between the parties, or as established by general usage.

The value obtained when trading one piece of equipment for another.

An evaluation technique used to score proposals. This approach requires the evaluation team to evaluate the technical differences between proposals to determine if these differences justify paying the cost or price differential.

Words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and indicate the source of the goods.

An intermediary that sells goods or services manufactured or provided by others.

In computer science, a group of logical operations that must all succeed or fail as a group. Systems dedicated to supporting such operations are known as transaction processing systems. Examples include bill payment and credit card processing.

Activities or process changes that decrease the cost to process a purchase order or a payment transaction. Procurement credit cards are an example of a transaction cost reduction.

A leadership prospective based on give and take. A transactional leader provides efficiency by securing resources to get the objective completed. A transactional leader links performance to reward. Transactional leaders accept the goals, structure, and culture of the existing organization.

Relationship: An economic, functional, reciprocal relationship based on the exchange of goods, services, or money with no concern for the success or welfare of the other party.

A leadership theory that involves leaders who are charismatic and visionary and can inspire followers to transcend their own self-interest for the good of the organization. These leaders appeal to the follower’s ideals and moral values and inspire them to think about problems in new or different ways. This leader exhibits vision, that is, the ability to bind people together with an idea. Transformational leadership can result in lower turnover rates, higher productivity rates, higher employee satisfaction.