1.

PROCUREMENT TERMS
Award: The process for Awards includes all activities from the time a Vendor is
selected to the time that the Contract or Purchase Order is executed. Vendors can be
selected through a Solicitation process (i.e. the lowest-priced Bidder or highest-scoring
Proponent), a Corporate Supply Arrangement, a Standing Offer, a Pre-Qualification List,
or a Direct Award process.
Baseline: This is the original approved plan (for a project, Contract or an activity) plus
or minus approved changes. There can be different Baselines such as a cost Baseline,
schedule Baseline or Performance Measurement Baseline.
Benchmarking: is a process of comparing an organization's services, processes,
products and performance standards against other recognized and accepted
organizational, industry or public sector standards.
Bid: A Bid is submitted in response to an Invitation to Quote (ITQ) or an Invitation to
Tender (ITT) or Request for Proposals. It is based on detailed Specifications or plans
provided by the purchaser, who wants specific prices or costs for the delivery of a
particular good or service or construction project.
Bid Bond: Bid Bonds are used for construction projects. In a Bid Bond, a surety
company agrees to pay to the purchaser the lesser of the value of the bond or the
difference between a successful Bidder’s Bid and the next lowest Bid if the successful
Bidder withdraws from the process for any reason other than those permitted in the
Solicitation document. A Bid Bond provides security that a project can be undertaken if
the successful Bidder elects not to do the work. The standard Bid Bond value is 5 or 10
percent of the Bid value.
Bidder: A Bidder is a Vendor who submits or intends to submit a Bid to a price-based
Solicitation (i.e. an Invitation to Tender or Invitation to quote).
Budget: This is a project's detailed, time-based estimate of the costs of all of the
project's resources.
Constraint: This refers to a project restriction that may limit the extent of a project's
success. Limitations could include time, cost, Scope complexity, qualified resources,
and performance / quality measures.
Continuing Service Agreement: This is a Contract between the Procuring Agency or
department and a Contractor for the delivery of service. Continuing Service
Agreements do not have an end date, but rather are renewed each year, subject to the
Procuring Agency continuing need for the services and Budget availability.
Contract: This is a legal agreement between a buyer and a seller whereby the buyer
agrees to pay for or contribute to the cost of services and / or goods delivered by the
seller.
Contract Ceiling Price: This is the maximum total cost of a Contract, including related
expenses, agreed to by both parties, based on specified Terms of Reference for the
work to be performed. Every contract must include a maximum contract ceiling price.
Contract Closeout: Contract Closeout refers to all activities to close a Contract once all
Deliverables have been received and payment has been issued.
Contractor: A Contractor is the legal entity (organization or individual) who has entered
into a Contract with the buyer to deliver goods and / or services, as described in the
Contract. A Vendor becomes a Contractor after the Contract is fully executed by all
parties. If a Contract includes Subcontractors, the Contractor may be called the Prime
Contractor. See the related terms Independent Contractor and Prime Contractor.
Cost / Benefit Analysis (Justification): A Cost / Benefit Analysis is a comparative
assessment of the project's expected benefits to the projected costs for implementing a
project.
Direct Costs: These are the costs incurred directly by a Procurement project, such as
project team member wages, specific travel costs, special equipment and out-sourcing
costs (project specific Contracts).
Holdback: A Holdback is a portion of a payment(s) under Contract that is withheld until
certain conditions relating to satisfactory performance and / or liability (i.e. third party
liability), as determined by the Contract, have been met.
Indirect Costs: Indirect Costs are overhead costs that are allocated to the Procurement
project by the organization as a cost of doing business (e.g. the costs associated with
the building, offices, heating, lighting, etc. that would be incurred whether the project or
Contract was being performed or not). Indirect Costs are usually calculated as a
percentage of Direct Costs.
Performance Bond: Performance Bonds are usually associated with construction
Contracts. The form and amount must be specified in the Contract. Performance Bonds
should be received before work commences.
A Performance Bond is used to pay for the costs for another Contractor to rectify and/or
complete the services required in the event that of a default by the Contractor (i.e., if the
original Contractor breaches the terms and Specifications of the original Contract).
Purchase Order (PO): A PO is the purchaser's written offer to a Vendor formally stating
all terms and conditions of a proposed transaction. POs are usually used to purchase
goods. By accepting the PO, the Vendor agrees to supply the specified goods at the
price and by the delivery date indicated.
Qualified Supplier: A Qualified Supplier is a Vendor who has responded to a Request
for Qualifications and, having met the qualification requirements, has been included in
the Pre-Qualification List.
Request for Information (RFI): This is a document issued before a formal Solicitation,
where Vendors are provided with a general or preliminary description or need, and are
requested to provide the buyer / owner with additional information that may assist in
preparing a subsequent Solicitation document. The buyer / owner can use the
information provided through the RFI to make decisions on what to buy, to determine an
appropriate Budget, and / or to select an appropriate Solicitation process. No Contract
Awards are made directly from an RFI.
Request for Proposals (RFP): This is a request for Vendors to submit Proposals that
include information on their relevant qualifications or experience, their proposed
approach or methodology, and usually the price they would charge to provide a good or
service in response to an identified problem, requirement or Objective. RFPs include
predefined criteria against which Proposals will be evaluated. Subject to the express
terms of the Request for Proposals, the Contract is normally awarded to the Proponent
whose Proposal meets all RFP Mandatory Criteria, terms and conditions, and achieves
the highest overall rating of all Weighted Criteria specified in the Solicitation.
Request for Quotation (RFQ): This is a request, verbal or written, provided to Vendors
to submit a Bid for goods or services desired by the purchaser / buyer. The selection of
the Successful Bidder is usually based on the lowest qualified Bid that meets specific
Mandatory Criteria as stipulated by the Request for Quotation.
Solicitation: A Solicitation is any competitive process whereby one or more Vendors
compete for a Contract, Purchase Order, Standing and Request for Proposals (RFP).
Terms of Reference: This document provides the framework and Planning elements
that are required to successfully plan project Scope. The Terms of Reference also
includes Solicitation and Contract Award processes, project implementation processes,
including Contract Monitoring and reporting requirements. It is sometimes referred to as
the Contract Management Plan.
Unsolicited Proposals (UP): This is an offer initiated from a Vendor that was not
solicited through a competitive process. An Unsolicited Proposal may include unique or
innovative goods and / or services that are not commonly known or available in the
marketplace.
Vendor: A Vendor is an organization or individual that sells goods and / or services to
its customers. A Vendor is also known as a supplier or a service provider.

2. Def:
Bid: A bid is often used to get new business or repeat business. Therefore, a bid will be
a joint effort from members of the organization of various levels of authority. A bid will
usually be handled by a bid manager, who interacts with experts from technical to legal
issues. Bid is also the term used when documenting an offer submitted in response to a
request or invitation to tender.
Tender: Tender can be used in place of bid, while meaning basically the same thing.
Mostly, the term bid is used by the organization seeking the project, while the term
tender is more often used by the organization seeking the contract. Just as there is a
bid manager, there is also a position for the tender manager. A project manager can
often do this work as well.
Proposal: A proposal is a written document, drafted by the seller to a prospected buyer.
It is one step in a more complicated sales process. Proposals tend to be more client-
based and are highly tailored with solutions to the buyer’s requirements. They are
created by a proposal writer who writes to the client’s or buyer’s needs. They can use
the help of a technical specialist, who is not selling as much as focusing on design and
functionality. If the work is very complex, a technical writer might be employed to more
expertly and clearly address the technical aspects of the proposal.

3. Def.
EOI: A call to potential providers of goods and/or services to register interest in
supplying them. Commonly a document describing requirements or specifications and
seeking information from potential providers that demonstrate their ability to meet those
requirements.
RFP: A request for proposal is an early stage in a procurement process issuing an
invitation for suppliers, often through a bidding process, to submit a proposal on a
specific commodity or service.
RFI: A request for information (RFI) is a proposal requested from a potential seller or a
service provider to determine what products and services are potentially available in the
marketplace to meet a buyer's needs and to know the capability of a seller in terms of
offerings and strengths of the seller.
RFQ: A request for quotation (RFQ) is used when discussions with bidders are not
required (mainly when the specifications of a product or service are already known) and
when price is the main or only factor in selecting the successful bidder.