Dictionary of Procurement Terms

A chart or diagram in which each branch of a tree represents an outcome, decision, or reaction that is used to determine a statistical probability or course of action.

1. The monetary value placed by a shipper on a shipment of goods when it is delivered to the carrier. 2. The value placed on imported goods by an importer for clearance through customs.

Failure to fulfill a contractual obligation (e.g., failure to repay a debt, properly perform work, or perform work by an agreed-upon date).

An imperfection or shortcoming, especially one that renders a good unable to be used for the ordinary purposes pursuant to the warranty for which it is sold and used. See also: Latent Defect.

1. The number of defects found in any quantity of a product, divided by the total number of units, then multiplied by one hundred. 2. The average number of defects per hundred.

A subset of the Federal Acquisition Regulations (FAR) that directly apply to the U.S. Department of Defense (DOD).

Government spending in excess of the revenues collected or budgeted during a given fiscal year.

Term used when a specific requirement quantity and delivery date have been established.

The important or material terms of an agreement that are specifically expressed. Under common law, an offer must include the important, or material, terms of the proposed agreement so that, when a party accepts the offer, a resulting agreement is enforceable. Important terms include subject matter, price, payment terms, quantity, quality, duration, and the scope of work to be done. If the parties purport to agree on a material term, but do so in a vague manner, as contrasted from omitting the term altogether, there is no agreement because it is too indefinite.

Phenomenon that occurs when the general level of prices decreases to the point that the inflation rate becomes negative. See also: Inflation.