GLOSSARY

Accounts payable (abbreviated as AP) is a financial division within a company, responsible for tracking outgoing payments to other companies

Used in construction projects, a bid bond is a guarantee provided by a surety company that provides financial compensation to an obligee

A bid is a response from a supplier, submitted after receiving an Invitation to Quote (ITQ) or an Invitation to Tender (ITT) from a purchasing party

Bid rigging occurs when collusion takes place between one or more parties that are bidding on a project. In most countries, this is an indictable criminal offence.

The term “branch” refers to an organizational division within a company. A branch is typically defined by being part of the same company

A business case is a document presented to a company to provide reasoning and justification for the allocation of resources towards a project

Centralized procurement refers to a systematic ordering process in which all documentation must be reviewed and approved by a “central” group of company stakeholders.

Consignment is a purchasing arrangement in which the purchasing party pays for and receives goods from a supplier

A constraint is a term used in project management for indicating factors that may limit success - such as available time

The buying party who initiates an interaction with one or more suppliers (through actions such as an invitation to tender or a request for proposal

Once contract “A” is entered into by a supplier (see description for the term contract “A”), the acceptance of that contract is considered

A contract ceiling price is the term used to define the absolute maximum total cost of a contract arrangement

Once all obligations and deliverables have been provided by a supplier to the buying party, the process of closing the contract is referred to as contract closeout

A contract is a legally binding agreement which obligates a buyer and a supplier to fulfil a set of terms that they specify for one another

Contract management refers to the active process of a buyer and supplier working together to fulfil the requirements of an active contract.

A contract management plan is a document in which the scope of project deliverables are defined, including pricing, item quantities, and other deliverables.

The process of contract monitoring involves quality assurance and performance tracking to ensure that the deliverables

A counter offer is a supplier’s response to a request for quotation (RFQ) or other sourcing event in which the terms and conditions of the arrangement are negotiable.

Decentralized procurement refers to a systematic ordering process in which documentation must be reviewed and approved by different groups of company stakeholders

A decision point refers to a point in a project’s development during which key stakeholders (procurement specialists, senior managers

A deliverable is a set of goods or services provided by a supplying party to a buying party as part of a contract agreement

A delivery note is a document included by a supplier during a delivery that indicates the quantities and types of goods being shipped to the buyer

The term “department” refers to a organizational division of personnel within a company

A dependency refers to one or more actions or processes which require the subsequent activity to conclude before the next one may proceed.

A direct award is a term used to define a contract for goods or services that is established between a buying party and a single qualifying supplier

Direct procurement is traditionally a term used in manufacturing to describe the process used to acquire base materials and goods

The term “e-bidding” refers to supplier responses are received during a buyer’s initiated solicitation process, particularly when initiated using an online platform

Expense authority is a permission granted to an individual to approve expenditures, transactions, and entitlement transfers within their department or area of focus

A request for an expression of interest (abbreviated as RFEI) is a solicitation method used to confirm a supplier’s interest in participating in a competitive bidding process for a contract.

In procurement, an extension is a modification to the timeframe of a contract arrangement to allow more time for outputs and/or deliverables to be completed.

Named after Henry Gantt, a Gantt chart is used to visually track and display when project activity begins and when it concludes.

A general ledger account (abbreviated GL account) is a series of numbered accounts, used by businesses to keep track of

Holdback is a term that refers to a portion of contract payment that is reserved/withheld by the buying party until specific deliverables

Indirect procurement is a term used to define the process used for acquiring goods and services that are essential to a business’s operations.

An invitation to tender (ITT) is a formal competitive bidding process in which suppliers provide their bids for a project, typically in an opening environment where bids can be viewed publicly.

An invoice is a document received from a supplier once goods or services from a purchase order or contract arrangement have been delivered or fulfilled.

An item can refer to a physical or digital product, service, or subscription offered, stocked, or used by a company.

A joint solutions request for proposal (JSRFP, or JSP) is a formal method of procurement used for developing solutions to complicated problems or completing projects with a complex scope of work.

A key performance indicator (KPI) is a method of measuring and tracking the effectiveness of different functions within the procurement process.

A standing agreement (abbreviated as “SA”) is a contract obligation between a buyer and supplier in which the buyer agrees to only purchase the specified goods

The term “maverick spending” refers to transactions which are initiated and paid for in full without the knowledge and/or approval of purchasing authorities or financial personnel within a company.

The term “outcome” refers to the anticipated results following a completed contract arrangement.

The term “outputs” refers to all of the deliverables, including services, required from the supplier in a contract arrangement.

A posting period is a term used to define the timeframe in a tendering process from which an invitation to tender is initially posted through to the time of the solicitation.

The term “pre-award” refers to all of the steps, processes, and planning necessary before a contract is finalized and awarded to a supplier.

A pre-qualification list is a term used to define a series of suppliers who are confirmed as being able to deliver particular goods or services of a quality that meet outcome expectations.

The term “Purchase to Pay” (abbreviated as P2P) refers to the entire process of raising a “purchase” order, through to the process used during which time that order is “paid” for.

A purchase order (abbreviated as PO) is a document used by a purchasing party to communicate the details of an intended transaction to a supplier.

A purchase order number (abbreviated as PO number) is an identification number used to stamp a purchase order document.

A qualified supplier is a term used describe a supplier which is capable of providing goods and services at a level which is anticipated to produce desired outcomes.

A request for information (abbreviated as RFI) is a pre-solicitation method used to confirm the goods and services offered by a supplier

A request for proposal (abbreviated as RFP) is a method of solicitation in which suppliers are requested to provide details about the qualifications of their goods

A request for qualifications (abbreviated as RFQ - not to be confused with a request for quotation) is a solicitation method used to populate a pre-qualification list.

An invitation to quote (ITQ) is a form of competitive bidding issued to qualified suppliers that meet the requirements of a project’s scope.

A request for quotation (abbreviated as RFQ - not to be confused with a request for qualification) is sent to suppliers with the expectation

A requisition is a document submitted by employees within a company to indicate a need for goods or services, often within the department they work in.

In procurement, the term “solicitation” can refer to a number of different methods with which a buyer can initiate a competitive bidding process between multiple suppliers.

The term “source to pay” (abbreviated S2P) refers to the general process used to contact one or more suppliers to “source” different solution proponents (options)

Specifications refer to detailed information surrounding goods or services requested by a buyer. For complicated orders, each product or service should have well defined

A standing offer (abbreviated as “SO”) is an arrangement made between a buyer and a supplier in which prices are pre-determined

A request for standing offer (abbreviated as RSO) is a form of solicitation used to request that suppliers make available their goods

A statement of work (abbreviated as “SOW”) is a document containing a detailed description of all goods and services that are considered deliverables in a contract arrangement with a supplier.

Successful bidders, proponents, and respondents are similar (but not interchangeable) terms that are used to refer to suppliers that qualify during different solicitation processes.

A supplier is an individual or an organization capable of providing certain goods and services to buyers who desire to purchase them.

A “three-way match” is a term used to describe the relationship between a purchase order document raised by a buyer, an invoice document received from a supplier

A time and material contract is an arrangement between a buyer and a supplier in which goods and/or services are paid for as the agreed deliverables are provided over time.

The term unsolicited proposal (abbreviated as “UP”) refers to offers or informative documentation received from suppliers in the absence of a formal solicitation process.

A work breakdown structure (abbreviated as “WBS”) is a visual presentation used to organize the scope of work for a project by grouping deliverables