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Contract
1. An obligation—such as an accepted offer—
between competent parties upon a legal
consideration to do or abstain from doing
some act. The essential elements of a
contract are an offer and an acceptance of
that offer; the capacity of the parties to
contract; consideration to support the
contract; a mutual identity of consent; legality
of purpose; and definiteness.
2. A legally binding promise enforceable by law.
3. An agreement between parties with binding
legal and moral force, usually providing for the
exchange of goods or services for money or
other considerations.
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Contract A – Bid Contract
CANADA The
solicitation or bid contract established
between the owner of the solicitation (the
“buyer”) and each of the suppliers who submit
a compliant bid or proposal. The solicitation
document (e.g., Invitation to Tender, Request
for Proposals, etc.) is viewed as an invitation
from the buyer to interested suppliers to
submit a bid or proposal, and as an offer by
the buyer to enter into a Contract “A” (or Bid
Contract) with any supplier that submits a bid
or proposal. The submitted bid or proposal is
the supplier's acceptance of the buyer’s offer
to enter into Contract “A” and also an offer by
the supplier to enter into Contract “B” (see
defined term) with the buyer. The formation of
a Contract "A" occurs with each supplier
whose bid or proposal is responsive (i.e.,
meets all mandatory criteria of the
solicitation). By submitting a responsive bid or
proposal, the supplier agrees to be bound by
all terms and conditions of the solicitation as
established by the buyer (e.g., conditions of
tender or the solicitation rules of process).
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Contract Acquisition Plan
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Contract Adjusted Amount
The dollar value for a
contract reflecting adjustments made for
changes such as foreign currency fluctuations
or inflation.
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Contract Administration
The functions that are
performed after all parties have signed a
contract. Typical contract administration
activities are goal-oriented and are aimed at
ensuring compliance with the contract terms
and conditions while giving attention to the
achievement of the stated output and
outcome of the contract. See also: Contract
Management, Surveillance.
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Contract Administration Plan (CAP)
A planning
tool that provides the framework for effective
contract administration with an emphasis on
process, output, and outcome. The length and
detail of the CAP depends on the complexity
and potential risk of the contract. Also
referred to as Contract Acquisition Plan.
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Contract Administration Team
A cross-functional
team comprised of such members as the
procurement professional (or their
representative), subject matter experts,
information technology and engineering
representatives, legal advisers, price and cost
analysts, quality assurance specialists, and
others who offer their expertise to ensure
both parties comply with the terms of the
contract or assist in resolving conflicts that
arise during the contract performance.
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Contract Amendment
An agreed addition to,
deletion from, correction, or modification of a
contract. See also: Contract Modification.
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Contract Amount/Value
Total dollar amount
negotiated between buyer and seller.
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Contract Award
The entity's final decision about
which supplier receives the contract.
