Dictionary of Procurement Terms

To carve out an internal business process such as information technology (IT) or human resources (HR) and outsource those processes to private entities to reduce costs and improve efficiency.

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 contractual transfer of procurement-related activities to a private contractor or third party.