Unsure of a phrase or a word? Check our glossary for an explanation of the terms used.
Unsure of a phrase or a word? Check our glossary for an explanation of the terms used.
Accounts payable (abbreviated as AP) is a financial division within a company, responsible for tracking outgoing payments to other companies, payment and reimbursements to employees, and verifying the accuracy between different documents issued within a single transaction process (typically reconciling received invoices against purchase orders). On Tradogram, archiving a three-way match between a purchase order, invoice, and received deliveries is organized automatically, with these pieces of information linked to one another on the system. Additionally, a number of integration options exist to integrate Tradogram with third-party accounts payable systems, allowing the automated transfer of data between the two.
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. The bid response from the supplier includes detailed information about their pricing for goods, services, and delivery in relation to the purchasing party’s project. On Tradogram, bids can be received in response to a created request form that is submitted to one or more suppliers.
Used in construction projects, a bid bond is a guarantee provided by a surety company that provides financial compensation to an obligee (the owner or party undertaking a project) in a circumstance where a bidding party (also known as the principle) fails to deliver upon their contract obligations. The function of a bid bond is to assist with filtering out bidders that are not qualified for the project, and if often a necessary measure in a competitive bidding process.
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. An example of bid rigging activity by suppliers is purposefully bidding with unacceptably high prices or disagreeable conditions in rotation to create a false cycle of winning bid submissions by the colluding parties.
The term “branch” refers to an organizational division within a company. A branch is typically defined by being part of the same company, but operating in an entirely different location. Branch divisions within a company may have multiple departments operating within them. On Tradogram, each branch can have its own administration team, purchase order numbering system, approval routing configurations, and database directories. The typical use for a branch division on Tradogram is to configure a purchasing process which is largely or entirely separate from the processes used by other branches on the system. For groups of users who frequently issue and interact with documents created by one another, department divisions are a more effective organizational tool. See the definitions for “centralized procurement” and “decentralized procurement” for more information and clarification about organizational methods for procurement processes.
A business case is a document presented to a company to provide reasoning and justification for the allocation of resources towards a project. The document can include details such as problems to be addressed, different ways to approach each problem, and a cost benefit analysis. On Tradogram, documents can be attached to requisition documents - allowing a business case to be included with the submission of a requisition form.
Centralized procurement refers to a systematic ordering process in which all documentation must be reviewed and approved by a “central” group of company stakeholders. In contrast to a decentralized procurement system, all purchasing actions are initiated only after passing through a streamlined process that ends with a single purchasing authority making the final decision to confirm the transaction(s). On Tradogram, a company seeking to operate with using a centralised process should do so by establishing a single branch on the system, with optional department division within that branch. Key stakeholders will be able to grant approval and review all documentation passing through the branch with through the use of approval rule configuration.
Consignment is a purchasing arrangement in which the purchasing party pays for and receives goods from a supplier, but agrees that these goods will remain the property of the supplier until such time as they are used or sold. The term is also used when a shipment of goods is given to a carrier service for transport and delivery shipment.
A constraint is a term used in project management for indicating factors that may limit success - such as available time, funding, associated complexities, and other resources. On Tradogram, projects can have notes associated with them in a description section, and item lists and pricing can be tracked for each project.
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. While there are many different kind of contracts, the buying party typically agrees to compensate the seller for a set of goods or services agreed upon in the contract. On Tradogram, the contracts module can be used to create, store, and track details about flexible contract arrangements.
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, as a few examples) is considered to be inviting those suppliers to participate in what’s referred to as contract “A”. Suppliers that submit a response to this invitation are considered to have entered into and accepted contract “A”, and at the time of this acceptance simultaneously create an invitation to the buying party to enter into what’s referred to as contract “B”. The creation of multiple contract “A” agreements is possible if multiple suppliers respond to the offer to do so. On Tradogram, contract “A” can be considered any received supplier response to an RFX (request for X, where X is the purpose of the document) that meets the qualifications outlined in the request/invitation document.
Once contract “A” is entered into by a supplier (see description for the term contract “A”), the acceptance of that contract is considered to by an invitation from that supplier for the buyer to enter into what’s referred to as contract “B” (also referred to as the “performance contract”). Contract “B” can be entered into with any of the suppliers that have entered into contract “A”. Contract “B” typically defined working parameters, goods and services to be delivered, and pricing obligations to be upheld by both the buying and supplying parties. On Tradogram, contract “B” can be considered as entered into when the terms provided in a supplier response are accepted and used to create a contract or a purchase order document on the system (multiple contract “B” arrangements can be created through the system, depending on the situation).
A contract ceiling price is the term used to define the absolute maximum total cost of a contract arrangement, including additional expenses that may not be explicitly defined in the contract arrangement. On Tradogram, custom line items and added costs can be used to established a well defined contract ceiling.
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. This process may include supplier evaluation, reporting, and closing of files associated with the contract. On Tradogram, contracts may be closed at any time when all deliverables have been received. Features such as supplier evaluation also allow a digital contract closeout workflow to be accomplished.
Contract management refers to the active process of a buyer and supplier working together to fulfil the requirements of an active contract. Typically, the management of a contract requires communication among stakeholders, performance and quality reports for goods and services rendered, and tracking of details including delivery times and locations. On Tradogram, the contract repository allows for the management of multiple contracts, with tracking for details such as item quantities, pricing information, and timeframes.
A contract management plan is a document in which the scope of project deliverables are defined, including pricing, item quantities, and other deliverables. The document also outlines a framework for the procurement process that will be used, including the method of receiving solicitation and which criteria will be used during the contract award process. On Tradogram, external documents can be attached to contract arrangements, allowing a contract management plan to be stored on record
The process of contract monitoring involves quality assurance and performance tracking to ensure that the deliverables provided during a work arrangement adhere to an agreed standard. On Tradogram, notes can be left on file for received deliveries, and supplier evaluation reports can be provided after the completion of each purchase order
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. On Tradogram, the initial terms and conditions proposed by the purchasing party may be edited by the supplier and sent as a counter offer to the buyer, with all changes highlighted for ease of review. The buyer may then make additional changes to continue the negotiation process with a counter offer of their own to the supplier. Documents will be marked with the “supplier has countered” or “buyer has countered” status during this process to indicate which phase a negotiation is currently in.
Decentralized procurement refers to a systematic ordering process in which documentation must be reviewed and approved by different groups of company stakeholders, depending on factors including where an order originated from and what the order is for. In contrast to a centralized procurement system, a decentralized process is often leveraged by larger organizations in which different specialities or physical operating locations exist, each with their own sets of purchasing authorities. Because documentation can be routed to different approving parties, and transaction authority and processing is considered “decentralized”. On Tradogram, multiple branch locations can be created to manage different physical office locations, each with their own subset of departments. Approval rules can also be configured to route documentation based on custom categories, pricing, and the point of origin for the document.
A decision point refers to a point in a project’s development during which key stakeholders (procurement specialists, senior managers, directing officers, etc.) review and evaluate completed work in preparation for the next phase of the project. A decision point often requires a meeting amongst decision makers and signage of approval forms before project work proceeds.
A deliverable is a set of goods or services provided by a supplying party to a buying party as part of a contract agreement, or as the result of completing part or all of a given project. The attributes of a deliverable are often evaluated based on the acronym “SMART”: Specific. Measurable. Achievable. Results-oriented. Time-Bound. Deliverables are considered to be an internal or external obligation to deliver a specific outcome or product as a result of services rendered.
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. On Tradogram, delivery note information can be entered and stored on the system under its own dedicated modules, and also used to populate item qualities on entered invoices.
The term “department” refers to a organizational division of personnel within a company. Different departments within a company specialise in particular operations or areas of professional focus, and each department is often allocated with its own funding to be assigned to budgets and projects. Companies may have multiple branches within them (often divided by different physical operating locations), and each branch may have multiple departments within it. Companies that have no branch divisions may still have department divisions within their organization structure. On Tradogram, each branch within a company may have multiple departments. If only a single branch is used, multiple departments can be created within that branch. Each department can have its own budgets and approval processes configured and associated with it. See the definitions for “centralized procurement” and “decentralized procurement” for more information and clarification about organizational methods for procurement processes.
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. The defining trait of a direct award is that no competitive solicitation process is initiated by the purchasing party - the terms are only sent directly to a single supplier for confirmation. On Tradogram, flexible request forms, contracts, and purchase orders can be sent to a single party for review and confirmation.
Direct procurement is traditionally a term used in manufacturing to describe the process used to acquire base materials and goods that are then used to create a finished product. It can also refer to products that are purchased with the intention of direct resale or sale after modification. In most cases, direct procurement can be classified as the process used to make purchases with the intent of returning profit from the investment of those purchases.
The term “e-bidding” refers to supplier responses are received during a buyer’s initiated solicitation process, particularly when initiated using an online platform. On Tradogram, a flexible request module allows e-bidding responses to be received from suppliers directly through the system.
Expense authority is a permission granted to an individual to approve expenditures, transactions, and entitlement transfers within their department or area of focus. In procurement, it is a term typically reserved to describe a position of authority within the government sector. On Tradogram, users can be assigned with an approval role, and included on configured approval lists to be delegated as an approving party for certain documents.
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. An extension is typically arranged when unexpected or unavoidable delays impede goods or services from being provided within an agreed timeframe. A modification agreement signed by both the buyer and the supplier is required for an official extension to be recognised as part of the agreement. The included modifications must not significantly alter the deliverables or purpose of the original agreement, and typically only alter the due dates associated with certain aspects of the project.
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 and file different types of expenditures based on the purpose of each transaction. In professional accounting, the numbers used for each account typically follow a standardized numbering convention for each type of expenditure. On Tradogram, GL accounts can be configured and applied to each line item in a transaction. Expenditures made when a GL account is assigned will be automatically tracked under that GL account on the system, and reports for each GL account can be compiled from the stored information. Additionally, some integrations offered on Tradogram allow GL account information to be tied to third party accounting software during data transfer.
Holdback is a term that refers to a portion of contract payment that is reserved/withheld by the buying party until specific deliverables and/or conditions have been verified as having been completed at a satisfactory level. Holdback payments are determined at the inception of a contract arrangement.
Indirect procurement is a term used to define the process used for acquiring goods and services that are essential to a business’s operations. Typically, the purchases made from an indirect procurement are leveraged by internal stakeholders to keep the business running, and are not made with the intent to directly (unlike direct procurement) return a profit from the investment. Some examples of indirect procurement include marketing, equipment repairs, and the purchase of office supplies.
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 contract resulting from an ITQ is typically awarded to the lowest bid received from a supplier, provided that the deliverables meet the project’s standards. The ITQ process is considered to be less formal than other forms of competitive bidding, such as an invitation to tender. A supplier’s response to an ITQ creates a contract “A” arrangement between both parties. On Tradogram, a flexible request form can be used as an invitation to quote for one or more relevant supplier parties.
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. This competitive bidding method is mostly used in the construction sector for projects that have a well defined set of qualifying criteria for the scope of work involved. The main point of comparison between qualifying bids in an ITT is the price, with the contract being awarded to the lowest bidder. A supplier’s response to an ITT creates a contract “A” arrangement between both parties.
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. The invoice document provides a summary of pricing details for all items that require payment from the buyer, and typically include payment terms and timeframes that are determined at the time of order placement. On Tradogram, invoices can be entered against purchase orders on the system to create a 2-way match between what was ordered and what was invoiced. Invoice entries can also include file attachments if physical documents are received.
An item can refer to a physical or digital product, service, or subscription offered, stocked, or used by a company. On Tradogram, each item has its own profile which can be populated with pricing details, supplier associations, transaction histories, and external file attachments. Items can also be categorized for efficient ordering and reporting processes.
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. It is a method that is typically leveraged by businesses and government organizations to generate innovative approaches to overcoming specific challenges (for example, system integrations) through partnership work with a qualified supplier. The scope of work for a JSRFP is estimated and provided in the solicitation document and agreed upon by both parties involved, and a defined process is used to evaluate and select the most efficient proponent.
A key performance indicator (KPI) is a method of measuring and tracking the effectiveness of different functions within the procurement process. KPIs can be used to evaluate contract performance, supplier quality and pricing, as well as certain aspects of completed project work. The value of establishing KPIs comes from the data they provide during regular review when updating strategies and objectives.
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. This can include raising and sending purchase orders to suppliers, using allocated company funding for purchases outside of designated projects and budgets, or paying for invoices without confirming their validity with accounts payable personnel.
The term “outcome” refers to the anticipated results following a completed contract arrangement. Outcomes can be interpreted as the expectations for what will be accomplished when all deliverables in a contract are completed, but are entirely separate from the contract arrangement itself. The supplier in a contract agreement is not obligated to fulfil the outcomes the buyer expects to attain, though the supplier is responsible for providing the agreed deliverables that may provide those desired outcomes.
The term “outputs” refers to all of the deliverables, including services, required from the supplier in a contract arrangement. Outputs are typically well defined in a contract, and include details such as technical requirements, item quantities and prices, and delivery times and locations.
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. Some of the activities that comprise the pre-award phase include defining deliverables and scope of work, qualifying suppliers, selecting the method of solicitation, and determining the award criteria (lowest-price, highest proponent score, etc.). On Tradogram, a number of tools exist for managing aspects of the pre-award phase, including supplier lists and evaluations, requisition creation and approval, solicitation document drafts, and on-system messaging between users.
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. A pre-qualification list can be populated from pre-existing transactions and work arrangements with suppliers, or acquired from new suppliers through the use of pre-qualifying documents such as a request for qualification. On Tradogram, suppliers can be categorized, assigned with different types, and have evaluation scores associated with their profiles. Flexible request documents can also be issued to suppliers of interest to gather additional information.
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. In mid to large sized organizations, a purchasing manager is responsible for populating purchase orders with details from requisition orders received from other internal departments. On Tradogram, the entire purchase to pay process can be managed through the system, including requisitions, approvals, and invoice association with created POs.
A purchase order number (abbreviated as PO number) is an identification number used to stamp a purchase order document. The number is issued to the document by the purchasing party, and can be used to internally track, review, and reference the document associated with that number. On Tradogram, PO numbering can be automated by configuring the custom PO numbering system. Each established branch within the company can have its own unique numbering convention assigned to its PO documents.
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. The full purchase to pay process can include several steps, including the optional use of a requisition, approval of documentation, sending the completed purchase or to the supplier, receiving delivery confirmation, and processing the associated invoice for payment. On Tradogram, the entire purchase to pay cycle can be managed on the system, with the possibility for custom approval workflows to be configured based on different categories, departments, price thresholds, and other criteria.
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. Qualified suppliers may be placed on a list based on past contract performance records, or during a solicitation event in which proponents provide information that indicates favorable pricing and/or quality of deliverables. On Tradogram, supplier profiles can be managed and assigned to custom categories. File attachments can also be attached to supplier profiles, allowing received documents to be stored for later review by system users.
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. For complicated procurement projects, an RFEI provides suppliers with time to evaluate the scope of work for a project, and prepare financial details. An RFEI does not guarantee that a responding supplier will continue to be involved in the solicitation process, and contracts are not awarded directly following an RFEI.
A request for information (abbreviated as RFI) is a pre-solicitation method used to confirm the goods and services offered by a supplier, as well as their pricing to determine the supplier’s qualification as a proponent. Included in the RFI document are details about the general requirements of the buyer, allowing the supplier to confirm their ability to meet a working obligation. Contracts are not awarded directly following an RFI.
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, services, and experience in relation to a given order or project. Details in an RFP can include strategy proposals, timeframes, and pricing for goods and services rendered. Once RFP responses are received from the solicited suppliers, a set of criteria is used to grade each proponent, with the highest scoring supplier being awarded with the contract. On Tradogram, flexible request templates allow one or more suppliers to be sent an RFP document, with a side-by-side comparison view available for evaluating reach response.
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. A set of defined criteria is used to evaluate and qualify or disqualify each supplier response received. The scorcing criteria information is included in the submitted RFQ document upon sending it to the supplier(s). The list of pre-qualified vendors can then be used for subsequent solicitation processes, or for placing transactions during a timeframe requiring frequent ordering from one or more of the qualified suppliers on the list.
A request for quotation (abbreviated as RFQ - not to be confused with a request for qualification) is sent to suppliers with the expectation of receiving a bid for providing goods and/or services offered by those suppliers. On Tradogram, flexible request forms can be used to issue an RFQ to one or more suppliers. The RFQ can be used to establish contract arrangements or one time transactions with one or more of the involved suppliers.
A request for standing offer (abbreviated as RSO) is a form of solicitation used to request that suppliers make available their goods and/or services for delivery on an “as-needed” basis. A standing offer is not considered to be an active contract until such time as the buyer orders from a supplier’s standing offer for the first time. On Tradogram, flexible request forms can be used to negotiate contract terms. The stored contract arrangement can then have orders placed from it under the supplier’s agreed terms.
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. Requisitions are used as a method of tracking internal ordering requirements within a company, and are not sent to suppliers. On Tradogram, requisitions can be created by users who have their permission set to access this module. Requisitions can be configured to be automatically routed for review and approval to one or more other users on the system.
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. On Tradogram, flexible request forms can be used to initiate a solicitation process. These forms are ideal for creating requests for quotation (abbreviated RFQ, also referred to as an invitation to Quote or ITQ), requests for proposal (RFP), requests for information (RFI), and concluding each process with an awarded contract or purchase order to one or more 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), prior to “paying” for them. There are many different forms of solicitation which can be used to receive information from suppliers. In addition, many source to pay processes involve competitive bidding processes between multiple suppliers before a proponent is finally selected by the purchasing party. On Tradogram, flexible request forms can be used to initiate a wide variety of solicitation processes. Suppliers are able to review offers proposed by the purchasing party, and provide a counter-offer with their proposed adjustments directly through the system.
Specifications refer to detailed information surrounding goods or services requested by a buyer. For complicated orders, each product or service should have well defined specifications that make it clear to the supplier what their deliverables should include to be considered qualified. On Tradogram, transactions that are sent to suppliers can have files and forms attached to them per-line item, allowing complicated goods and services to be well described to the receiving supplier(s).
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 and/or services from the contractor with which the SA is signed. Quantities and due dates for placed orders are not specified in a standing agreement, meaning that orders may be placed on an as-needed basis. On Tradogram, a “fixed” contract can be used to define item quantities and timeframes (for tracking the lifespan of the contract) for an SA. The contract can be used to place an order with flexible quantities and due dates using the stored terms at any time.
A standing offer (abbreviated as “SO”) is an arrangement made between a buyer and a supplier in which prices are pre-determined, but the order itself is unconfirmed and does not have a set date for delivery. An acceptance of the SO is not confirmed until such time as the order is placed by the buyer using the agreed terms. On Tradogram, purchase orders can be saved as drafts, allowing an SO arrangement to be stored on the system to be placed with a supplier at a later date.
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. The document can include a summary of objectives, schedules, performance expectations, and other plans and processes to be followed. On Tradogram, transactions can have documents attached to them to be sent to the supplier, allowing a SOW file to be included with and orders or solicitations initiated through the system.
Successful bidders, proponents, and respondents are similar (but not interchangeable) terms that are used to refer to suppliers that qualify during different solicitation processes. The term “successful bidder” refers to suppliers who meet all of the qualifications for an invitation to quote (ITQ) or invitation to tender (ITT) process, while providing the lowest-price for their offered goods or services. Typically, only one successful bidder is awarded the contract or a purchase order arrangement following the bidding process. The term “successful proponent” refers to suppliers who meet all of the qualifications for a request for proposal (RFP). More than one supplier may qualify as a successful proponent and subsequently awarded a contract for a single project. The term “successful respondent” refers to suppliers who meet all of the qualifications for a request for standing offer (RSO), request for qualifications (RFQ), or request for expression of interest (RFEI). Additional forms of solicitation may take with respondents following the confirmation of their qualification.
A supplier is an individual or an organization capable of providing certain goods and services to buyers who desire to purchase them. A supplier may provide their goods and services directly through a straightforward transaction, but can also serve as contractors who provide goods and services over a period of time. On Tradogram, a database serves as a directory for storing profile information about each supplier. Multiple points of contact can be established when necessary, financial details and be saved for automatic use in transactions, and external files can be uploaded to each supplier profile.
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, and delivery information recorded upon receiving a shipment. In situations where delivery information isn’t recorded, the term is referred to as a “two-way match” between the purchase order and the invoice. The three-way match is a verification process used to ensure that what was ordered, what was received, and what was paid for align correctly to avoid overpaying. On Tradogram, purchase orders, invoices, and delivery records are always linked to one another, providing a straightforward approach to verifying a three-way match.
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. Payment may occur based on hourly rates as direct labour is provided, or billed based on the usage of certain equipment. On Tradogram, Time and Material contracts can be used to track line-item quantities as purchase orders are raised from the contract that include the contracted items.
The term unsolicited proposal (abbreviated as “UP”) refers to offers or informative documentation received from suppliers in the absence of a formal solicitation process. Unsolicited proposals, while typically not adhering to budgeting or project plans, may sometimes contain useful services and solutions which were not originally considered by the buyer.
A work breakdown structure (abbreviated as “WBS”) is a visual presentation used to organize the scope of work for a project by grouping deliverables and other elements of a contract based on the level of detail required for fulfilling each aspect. Levels of detail for certain project elements are classified in a hierarchy, with more complicated aspects of the contract receiving additional levels of description. A WBS is commonly used in project management, particularly for projects which have a complicated set of requirements, obligations, or deliverables to define during the request for proposal (RFP) solicitation process with suppliers.