Procurement Glossary

– A –

ABC – Aboriginal Business Canada, a division of Industry Canada.

ACAN – acronym for Advanced Contract Award Notice, which is a notice of intent to solicit a bid and negotiate with a single firm. Other suppliers are not invited to bid on these opportunities but can forward letters of intent indicating their interest before the closing date. Notice of bidding requests will then be solicited from letters of interest that have been received.

ACCEPTANCE – The act of accepting by an authorized representative; an indication of a willingness to pay; the assumption of a legal obligation by a party to the terms and conditions of a contract.

ACQUISITION – The act of acquiring goods and services (including construction) for the use of a governmental activity through purchase, rent, or lease. Includes the establishment of needs, description of requirements, selection of procurement method, selection of sources, solicitation of procurement, solicitation for offers, award of contract, financing, contraction administration, and related functions.

Access to Information Office – a facility within governments for information regarding contract awards.

Access to Information Program (ATIP) – is mandated by the Access to Information Act and the Privacy Act, and gives any person in Canada the right to access information held in government records, subject to certain exceptions and limitations.

ACOL – Atlantic Canada On-Line is a public-private partnership between the Newfoundland, Nova Scotia, New Brunswick and Prince Edward Island governments and Unisys Canada Inc. It can be found at http://www.acol.ca

ADDENDUM – An addition or supplement to a document; e.g., items or information added to a procurement document.

ADM – Assistant Deputy Minister

Administration and Control of Contracts and Regional Data (ACCORD) – a computer-assisted system, used by PWGSC, to register construction and maintenance service contractors.

Advanced Contract Award Notice (ACAN) – a notice of intent to solicit a bid and negotiate with a single firm. Other suppliers are not invited to bid on these opportunities but can forward letters of intent indicating their interest before the closing date. Notice of bidding requests will then be solicited from letters of interest that have been received.

ADVERTISE – To make a public announcement of the intention to purchase goods, services or construction with the intention of increasing the response and enlarging the competition. The announcement must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the public.

AGREEMENT – A duly executed and legally binding contract; the act of agreeing.

AG – Auditor General

Agent – persons who act on behalf of another person (the principal) by their authority, express or implied, in dealings with third parties.

Agreement Type – refers to the agreement under which the opportunity is governed, such as the Agreement on Internal Trade (AIT), North American Free Trade Agreement (NAFTA), the World Trade Organization’s Agreement on Government Procurement (WTO-AGP) or the General Agreement on Tariffs and Trade (GATT).

Agreement on Internal Trade (AIT) – signed by the federal and provincial governments, text of the agreement is at http://strategis.ic.gc.ca/epic/internet/inait-aci.nsf/en/h_il00034e.html.

ALPAuthority for Local Purchase: granted by the commissioner of Administration to an individual who has successfully completed all requirements established by the Materials Management Division.

ALTERNATE RESPONSE – A substitute response; an intentional substantive variation to a basic provision or clause of a solicitation by a vendor.

AIT – Agreement on Internal Trade, signed by the federal and provincial governments. Text is at http://strategis.ic.gc.ca/epic/internet/inait-aci.nsf/en/h_il00034e.html.

Alternative Service Delivery (ASD) – also known as Alternate Service Delivery or Alternative Forms of Delivery, looks at new ways of delivering some of its services, frequently by contracting to suppliers for services that were previously provided in-house.

Alternative Forms of Delivery – also known as Alternative Service Delivery (ASD), looks at new ways of delivering some of its services, frequently by contracting to suppliers for services that were previously provided in-house.

AMENDMENT/CHANGE ORDER – A written modification to a contract or purchase order or other agreements.

APPROPRIATION – Sum of money from public funds set aside for a specific purpose.

AROAfter Receipt of Order.

Approved Source List – a list of suppliers that can supply specific goods and services and are approved on the basis of the suitability of their facilities and capabilities.

ASD – Alternative Service Delivery or Alternate Service Delivery, also known as Alternative Forms of Delivery, looks at new ways of delivering some of its services, frequently by contracting to suppliers for services that were previously provided in-house.

Assignment of a Contract – the transfer by the contractor of responsibility for performance of all or part of the contract from the contractor to a third party.

ATIP – the Access to Information Program is mandated by the Access to Information Act and the Privacy Act, and gives any person in Canada the right to access information held in government records, subject to certain exceptions and limitations.

Atlantic Canada On-Line (ACOL) – a public-private partnership between the Newfoundland, Nova Scotia, New Brunswick and Prince Edward Island governments and Unisys Canada Inc. It can be found at http://www.acol.ca.

Auditor General of Canada (AG) – audits government operations and provides the information that helps Parliament to hold the government to account for its stewardship of public funds. More information can be found at http://www.oag-bvg.gc.ca.

Award – the notification to a bidder or tenderer of acceptance of a bid or tender which brings a contract into existence.

– B –

BDP – Benefits Driven Procurement is an approach to procurement that stresses a focus on results and on the benefits that government and suppliers gain from the procurement. The supplier is asked to deliver certain agreed-upon results rather than follow a blueprint.

Benefits Driven Procurement (BDP) – is an approach to procurement that stresses a focus on results and on the benefits that government and suppliers gain from the procurement. The supplier is asked to deliver certain agreed-upon results rather than follow a blueprint.

BEST VALUE – A result intended in the acquisition of all goods and services. Price must be one of the evaluation criteria when acquiring goods and services. Other evaluation criteria may include, but are not limited to environmental considerations, quality, and vendor performance.

BILL OF LADING – A written receipt or contract, given by a carrier, showing a list of goods delivered to it for transportation. The straight bill of lading is a contract which provides for direct shipment to a consignee. The order bill of lading is negotiable; it enables a shipper to collect for a shipment before it reaches its destination (this is done by sending the original bill of lading with a draft drawn on the consignee through a bank). When the consignee receives the lading indicating that payment has been made, the lading will be surrendered to the carrier’s agent, and the carrier will then ship the goods to the consignee, and the bill of lading will be surrendered to the carrier. Note: Shippers frequently consign shipments to themselves on order bills of lading so that delivery is made only upon the shipper’s order; the person or firm to be notified upon arrival of the shipment at destination must be designated.

BLANKET ORDER – A contract under which a vendor agrees to provide goods or services on a purchase-on-demand basis. The contract generally establishes prices, terms, conditions and the period covered (no quantities are specified); shipments are to be made as required by the purchaser.

Bid – a tender, proposal or quotation submitted in response to a solicitation from a contracting authority.

Bid Protest – a complaint that is made against the methods employed or decisions made by a contracting authority in the administration of a process leading to the award of a contract.

Bid-rigging – illegal collusion by tendering suppliers, where one or more bidders agree not to submit a bid, or two or more bidders agree to submit prearranged bids, to avoid competition in prices. Also referred to as Price Fixing.

Bid Set – a package of data which identifies the article to be purchased, the quantity and delivery, and which includes designs, specifications, quality requirements and general conditions which will govern the contract resulting from acceptance of a bid.

Bidders’ Conference – a meeting to discuss with potential bidders, technical, operational and performance specifications, and/or the full extent of financial, security and other contractual obligations related to a bid solicitation.

“BRAND NAME OR EQUAL” SPECIFICATION – A specification that uses one or more manufacturers brand names or catalog numbers to describe the standards of quality, performance and other characteristics needed to meet the requirements of a solicitation and provide for the submission of equivalent products.

BROKER – A business that carries no inventory and that has no written ongoing agreement with any manufacturer or manufacturer’s authorized distributor to sell the products of the manufacturer.

BUSINESS – A contractor, subcontractor, supplier, consultant, or provider of technical, administrative, or physical services organized as a sole proprietorship, partnership, association, corporation, or other entity formed for the purpose of doing business for profit.

Business Process Outsourcing (BPO) – NelsonHall defines BPO as the outsourcing of business functions or processes, such as procurement, to a third party. In these contracts the provider is responsible for performing and managing the outsourced function or process on behalf of the customer. In order to qualify under this definition, BPO contracts must involve the provider taking overall responsibility for the business process and not just supplying IT applications or services to facilitate the process. Thus applications hosting and stand-alone IT outsourcing are not regarded as forms of BPO.

Buyer Qualification Required – allows buyers to confirm the accuracy of the document they have received.

Buying Categories – The different areas of spend are divided into two main categories: indirect (or non-strategic) materials, such as office supplies and IT hardware, that are required for the operation of a business and direct (or strategic) materials, such raw material that are intrinsic to the delivery of a company’s product or service.

– C –

Call-up – a requisition or a request for delivery which is forwarded directly to a supplier to obtain delivery of materiel from a previously negotiated contract, or a standing offer, in accordance with their terms.

Canadian Council for Public-Private Partnerships (CCPPP) – is an organization promoting the benefits of joint ventures between government and business. The CCPPP can be found at http://home.inforamp.net/~partners/.

Canadian International Trade Tribunal (CITT) – deals with, among other issues, bid challenges on Canadian government contracts, arising under an international agreement. The CITT can be found at http://www.citt.gc.ca.

Canadian Public Procurement Council (CPPC) – an organization that represents public sector procurement professionals across Canada. Its members are the institutions that employ the procurement professionals. The CPPC can be found at http://www.ccmp-cppc.qc.ca.

Category Management – Continual monitoring of expenditures, compliance, market dynamics and supplier performance in specific buying categories with the intent of driving ongoing cost innovation and supplier performance improvements. Narrower approaches are sometimes referred to as supplier relationship management or commodity management.

CCPPP – the Canadian Council for Public-Private Partnerships is an organization promoting the benefits of joint ventures between government and business. The CCPPP can be found at http://home.inforamp.net/~partners/.

Certified Professional Purchaser (CPP) – a designation offered by the Purchasing Management Association of Canada to those who have achieved specified professional qualifications.

CI – competitive intelligence involves gathering and analyzing information about customers, competitors and the marketplace to support successful business decisions.

Client Agency – identifies the name and address of the organization on whose behalf the bid request has been submitted.

Closing Date – the deadline for all bid submissions.

Closing Time and Zone – indicates the exact time and time zone at which the bid submissions must be received.

COMMODITY – A transportable article of trade or commerce that can be bartered or sold.

COMMODITY/SERVICE CONTRACT – Previously referred to as “M-contracts.” Since the inception of MAPS, the contract number is a six-digit number assigned by the computer system. An “M” number is no longer assigned for these types of contracts.

Competitive Bidding – offers submitted by individuals or firms competing for a contract, privilege or right to supply specified services or merchandise.

Competitive Bid Solicitation – where two or more qualified sources are solicited.

Competitive Intelligence (CI) – involves gathering and analyzing information about customers, competitors and the marketplace to support successful business decisions.

Compliance – the degree to which buyers purchase from a company’s preferred, negotiated supplier agreements vs. alternative sources. In order to realize sourcing savings, companies must drive high compliance.

COMPREHENSIVE PROCUREMENT GUIDELINES (CPG) – Designates items that must contain recycled content when purchased by federal, state, and local agencies, or by contractors using appropriated federal funds, when these agencies spend more than $10,000 a year on any of the designated items. For example, if a state agency spends more than $10,000 a year on copy paper, and part of that money is from appropriated federal funds, then that state agency must follow the EPS guidelines and buy 30 percent post-consumer recycled paper. (Section 6002 of the Resource Conservation and Recovery Act [RCRA] and Presidential Executive Order 13101.)

CONSIDERATION – Something of value given or done as recompense that is exchanged by two parties; that which binds a contract.

Contract – a contract is an obligation, such as an accepted offer, between competent parties upon a legal consideration, to do or abstain from doing some act. The essential elements of a contract are: an offer and an acceptance of that offer; the capacity of the parties to contract; consideration to support the contract; a mutual identity of consent; legality of purpose; and sufficient certainty of terms. Under the Government Contracts Regulations, a contract means a construction contract, a goods contract, a service contract or a lease entered into by or on behalf of Her Majesty by a contracting authority.

Contracts can be of many types, e.g. sales contracts (including leases), purchasing contracts, partnership agreements, trade agreements, and intellectual property agreements.

  • A sales contract is a contract between a company (the seller) and a customer where the company agrees to sell products and/or services and the customer in return is obligated to pay for the product/services bought.
  • A purchasing contract is a contract between a company (the buyer) and a supplier who is promising to sell products and/or services within agreed terms and conditions. The company (buyer) in return is obligated to acknowledge the goods / or service and pay for liability created.
  • A partnership agreement may be a contract which formally establishes the terms of a partnership between two legal entities such that they regard each other as ‘partners’ in a commercial arrangement. However, such expressions may also be merely a means to reflect the desire of the contracting parties to act ‘as if’ both are in a partnership with common goals. Therefore, it might not be the common law arrangement of a partnership which by definition creates fiduciary duties and which also has ‘joint and several’ liabilities.

CONTRACT ADMINISTRATION – The management of all actions after the award of a contract that must be taken to assure compliance with the contract; e.g., timely delivery, acceptance, payment, closing contract, etc.   Administrative functions related to dealing with contracts, like;

  • request to bid,
  • evaluating bid,
  • allotment of contract,
  • implementing contract,
  • measuring completed work, and
  • computing payments.
  • It also involves supervising contract connection, addressing linked issues, integrating necessary alterations or adjustments in the deal, making sure that both parties adhere to or surpass each other

Contract Amendment – an agreed addition to, deletion from, correction or modification of a contract.

Contracts Canada – an inter-departmental initiative to improve supplier and buyer awareness and simplify access to federal government purchasing information. Contracts Canada can be accessed at http://contractscanada.gc.ca.

Contract Claims Resolution Board (CCRB) – a part of PWGSC that resolves claims resulting from both contract terminations and disputes. Can be found at http://www.pwgsc.gc.ca/ccrb/index.html.

Contract Dispute – a matter of dispute in respect of a contract that cannot be resolved between the contractor or its authorized representative and the contracting officer designated in the said contract.

Contract Signing Authority – the authority delegated by the Minister to the person designated to occupy a position, that is, the incumbent of a position, to sign on his/her behalf contract, contract amendment or Standing Offer documents after ascertaining that the approval authority has been duly granted and ensuring that the terms and conditions written in the documents reflect those approved by the contract approval authority.

Contractor – one who contracts to perform work or furnish materiels in accordance with a contract.

COOPERATIVE PURCHASING – The combining of requirements of two or more governmental units to obtain the benefits of volume purchases and/or reduction in administrative expenses.

COOPERATIVE PURCHASING VENTURE (CPV) – A joint purchasing program where governmental units obtain the benefits of volume purchasing and/or reduction in administrative expenses by participating in a purchasing program and commodity contracts.

Co-operative Supply – federal, provincial or local governments may, where it is advantageous for them to do so, provide goods and services to each other.

Copyright – an exclusive statutory right of those such as authors, publishers, composers, etc. to control the publication/ dispositions of their works of art, literature, music, films, pictures, etc., which is protected by the Copyright Act of Canada. Under the Geneva Convention of 1952 to which Canada became a party in 1962, international copyright is obtained without any formalities by placing on the work the symbol ©, identifying the name of the copyright holder in the year of the first publication.

Cost Plus Fixed Fee – a basis of price in which the contractor is paid costs reasonably and properly incurred as determined by audit together with an agreed upon fixed fee (or a percentage of cost) by way of profit.

Contracting Officer’s Technical Representative (COTR) is a business communications liaison between the United States government and a private contractor. He or she ensures that their goals are mutually beneficial. The COTR is normally a federal or state employee who is responsible for recommending actions and expenditures for both standard delivery orders and task orders, and those that fall outside of the normal business practices of its supporting contractors and sub-contractors. Most COTRs have experience in the technical area (e.g., electronics, chemistry, public health, etc.) that is critical to the success of translating government requirements into technical requirements that can be included in government acquisition documents for potential contractor to bid and execute that work. A COTR must be designated by a Contracting Officer (CO). The CO has the actual authority to enter into, administer, and/or terminate contracts and make related determinations and findings. Other terms for COTR include Contracting Officer’s Representative (COR) and Project Officer (PO). The terminology may be agency specific.

CPP – Certified Public Purchaser designation, offered by the Purchasing Management Association of Canada to those who have achieved specified professional qualifications.

CPPC – the Canadian Public Procurement Council is an organization that represents public sector procurement professionals across Canada. Its members are the institutions that employ the procurement professionals. The CPPC can be found at http://www.ccmp-cppc.qc.ca

Crown Property – property to which title is vested in the Crown. This includes Crown-owned property usually in the care, custody and/or control of contractors. Examples of Crown property usually in the custody of contractors are: capital assistance assets, special production tooling, special test equipment, equipment undergoing repair and overhaul, contract issue materiels and equipment, work-in-process and finished work to which title is vested in the Crown as a result of progress payments, accountable advances or by any other means.

Cure period – When a contractee is in default of the deliveries in a contract, the cure period is the period of time that the contractor can give to the contractee to make good on the services required to be delivered, or additional time for the product contracted for to be delivered. The period of time is ultimately up to the contractor. The cure period would come before the contractor deems the contract to be terminated for reasons of default.

– D –

DEALER, JOBBER OR DISTRIBUTOR – A business that maintains a store, warehouse, or other establishment in which a line or lines of products are kept in inventory and are sold to the public on a wholesale or retail basis.

DEBARMENT – The disqualification of a person to receive invitations for bids or requests for proposals, or the award of a contract by a government body, for a specified time commensurate with the seriousness of the offense, the failure, or the inadequacy of performance.

DFAIT – Department of Foreign Affairs and International Trade, conducts all consular and diplomatic relations on behalf of Canada, works to foster economic relations and international trade and manages international negotiations.

DEFAULT – Failure by a party to a contract to comply with contractual requirements.

DELIVERY – The formal handing over of property; the transfer of possession, such as by carrier to purchaser.

Demand Management – the art or science of controlling economic demand to avoid a expenditure and waste. In natural resources management and environmental policy more generally, it refers to policies to control consumer demand for environmentally sensitive or harmful goods such as water and energy. Within manufacturing firms the term is used to describe the activities of demand forecasting, planning and order fulfillment.

DEMURRAGE -The detention of a ship, railroad, car or truck beyond a specified time for loading/unloading; the payment required and made for the delay.

DESIGN SPECIFICATION – A specification setting forth the required characteristics to be considered for award of contract, including sufficient detail to show how the product is to be manufactured.

DESTINATION – The place to which a shipment is consigned.

DG – Director General

Diversity Sourcing – is a strategy that typically supports broader organizational diversity objectives by encouraging the use of: minority-owned, women owned, veteran owned, LGBT-owned, service-disabled veteran owned, historically underutilized business, and SBA defined small business vendors as suppliers. It is not directly correlated with supply chain diversification, although utilizing more vendors may enhance supply chain diversification.

DISO – Departmental Individual Standing Offer

Disposal – the removal of materiel from a supply system by sale, trade-in or destruction. Within the federal government, disposal is normally arranged through the PWGSC Crown Assets Distribution Directorate/Centre.

DM – Deputy Minister

DOCUMENT TYPE – document type to differentiate among different functions for a requisition, solicitation, contract, or order. The document type is a field to be entered on those screens that are for requisition solicitation, contract, or order.

DROP SHIPMENT – Merchandise which is shipped by a manufacturer directly to a customer in response to the seller who collects orders but does not maintain an inventory.

– E –

ECONOMICALLY DISADVANTAGED AREA BUSINESS (ED) – Small business eligible for certification as socially disadvantaged business or economically disadvantaged area business: A small business entity with its principal place of business is organized for profit, including an individual, partnership, corporation, joint venture, association, or cooperative that is 51 percent owned and is operationally controlled on a day-to-day basis by citizens of the United States. The areas of economic disadvantage are determined by the US Department of Labor.

ECP – the Environmental Choice Program is an ecolabelling program of Environment Canada that promotes the use of environmentally responsible goods and services, encouraging consumers, organizations and government to buy “green.” More information is available at http://www.environmentalchoice.com.

EDI – Electronic Data Interchange

EDP – Electronic Data Processing

Electronic Service Delivery (ESD) – is the provision of services and the ability to access and exchange information electronically.

EMERGENCY ACQUISITION – A threat to public health, welfare, or safety that threatens the functioning of government, the protection of property or the health or safety of people.

ENERGY STAR – A federal standard applied to office equipment for the purpose of rating the energy efficiency of the equipment. Energy Star computers, monitors, and printers save energy by powering down and going to “sleep” when not in use, resulting in a reduction in electrical bills and pollution levels.

Environmental Choice Program (ECP) – is an ecolabelling program of Environment Canada that promotes the use of environmentally responsible goods and services, encouraging consumers, organizations and government to buy “green.” More information is available at http://www.environmentalchoice.com.

ENVIRONMENTALLY PREFERABLE PRODUCT (EPP) – A product or service that has a lesser or reduced impact on human health and the environment when compared with competing products or services that serve the same purpose. Such products or services may include, but are not limited to those which contain recycled content, minimize waste, conserve energy or water, and reduce the amount of toxics either disposed of or consumed.

eProcurement – Electronic tools that support and expedite the transactional purchasing process. Through eProcurement, buyers search electronic catalogs (eCatalogs) to find needed items, place requisitions, route for approval, and send to suppliers for fulfillment. Some eProcurement tools (but not all) support the back-end invoicing and payment processing.

EQUAL OR APPROVED EQUAL – Used to indicate that an item may be substituted for a required item if it is equal in quality, performance and other characteristics.

ESD – Electronic Service Delivery is the provision of services and the ability to access and exchange information electronically.

ESCALATION CLAUSE – A contract provision which permits the adjustment of contract prices by an amount or percent if certain specified contingencies occur, such as changes in the vendor’s raw material or labor costs.

eSourcing – Electronic tools that support, expedite and optimize the benefits of the strategic sourcing process. Tools include eRFIs (request for information from buyers to suppliers), eRFQs (request for price quotes), eRFPs (request for a formal proposal); reverse auctions (on-line negotiation tools), and bid optimization (decision support).

Estimated Cost – the estimated cost to be used as the basis for the sourcing decision is that cost determined as being representative of all known work and expected unscheduled work arising out of the requirement, i.e. the total estimated contract value.

Estimated Value – indicates the approximate value of the contract.

EVALUATION OF RESPONSES – The examination of responses after opening to determine the vendor’s responsibility, responsiveness to requirements, and other characteristics of the solicitation relating to the award.

– F –

Facility – a physical plant or installation, e.g. base, arsenal or building, used to make easier the performance of a function; or the materiel resources needed to facilitate any action or operation.

FCM – the Federation of Canadian Municipalities promotes strong, effective and accountable municipal governments. They can be found online at http://www.fcm.ca.

Federation of Canadian Municipalities (FCM) – promotes strong, effective and accountable municipal governments. They can be found online at http://www.fcm.ca.

FISCAL YEAR – The 12 months between one annual settlement of financial accounts and the next; a term used for budgeting, etc. The fiscal year for the U.S. Government is October 1 to September 30; the fiscal year for the State of Minnesota is July 1 to June 30.

FIXED ASSETS – State property that is in one of four categories:

  1. all non-expendable property having a normal life expectancy of more than two years and a value of $2,000 or more.
  2. all semi-expendable property established by the owning agency’s policy as fixed assets: any item having a normal life expectancy of more than two years and a value of less than $2,000.
  3. all firearms, regardless of their value.
  4. all sensitive items, as established by the agency policy.

FORMAL SOLICITATION – A solicitation which requires a sealed response.

Full-time equivalent (FTE) or whole time equivalent (WTE) – a unit that indicates the workload of an employed person (or student) in a way that makes workloads or class loads comparable across various contexts.  FTE is often used to measure a worker’s or student’s involvement in a project, or to track cost reductions in an organization.

A FTE of 1.0 is equivalent to a full-time worker or student, while an FTE of 0.5 signals half of a full work or school load.  In the U.S. Federal Government, FTE is defined by the Government Accountability Office (GAO) as the number of total hours worked divided by the maximum number of compensable hours in a full-time schedule as defined by law.  For example, if the normal schedule for a quarter is defined as 411.25 hours ( [35 hours per week * (52 weeks per year – 5 weeks regulatory vacation)] / 4), then someone working 100 hours during that quarter represents 100/411.25 = 0.24 FTE. Two employees working in total 400 hours during that same quarterly period represent 0.97 FTE.

The U.S. Office of Management and Budget, or OMB, the President’s budget office, will often place upper limits on the total number of FTE that a given agency may utilize each year. In the past, if agencies were given a ceiling on the actual number of employed workers, which was reported on a given day of the year, the agency could employ more than this number for much of the year. Then, as the reporting deadline approached, employees could be let go to reduce the total number to the authorized ceiling on the reporting date. Providing agencies with an FTE ceiling, which is calculated based on the total number of hours worked by all employees throughout the year, irrespective of the total numbers employed at any point in time, prevents agencies from using such a strategy.

Although the generally accepted human-resources meaning for the “E” in FTE is “equivalent”, the term is often overloaded in colloquial usage to indicate a “direct, as opposed to contract, full-time employee”.  The term WYE is often used instead of FTE when describing the contractor work. WYE stands for work year equivalent.

– G –

GAAP – Generally Accepted Accounting Principles are those accounting principles which have been given formal recognition or authoritative support in any particular jurisdiction.

GATT – General Agreement on Tariffs and Trade

Generally Accepted Accounting Principles (GAAP) – those accounting principles which have been given formal recognition or authoritative support in any particular jurisdiction.

Global Sourcing – the practice of sourcing from the global market for goods and services across geopolitical boundaries. Global sourcing often aims to exploit global efficiencies in the delivery of a product or service. These efficiencies include low cost skilled labor, low cost raw material and other economic factors like tax breaks and low trade tariffs

GMEF – the Green Municipal Enabling Fund provides grants to Canadian municipal governments to fund up to 50 percent of costs of feasibility studies into technological innovations that protect the climate and improve air, water and soil quality.

GMIF – the Green Municipal Investment Fund is a revolving fund providing financial services (including loan guarantees and interest-bearing loans) that allow Canadian municipalities to fund projects that protect the climate and improve air, water and soil quality.

GOL – Government On-Line is a federal government project aimed at building electronic services around its customers, or citizens.

GOODS – All types of personal property including commodities, materials, supplies, and equipment.

Goods and Services Identification Number (GSIN) – a system of materiel and services categorization used within PWGSC. The system is used in conjunction with the Federal Supply Classification (FSC) code.

Government Business Opportunities (GBO) – a publication, available by subscription, that provides the details of procurement opportunities that are subject to any of the international trade agreements. The bid documents for each opportunity are available through MERX.

Government On-Line (GOL) – a federal government project aimed at building electronic services around its customers, or citizens.

Green Municipal Enabling Fund (GMEF) – the fund provides grants to Canadian municipal governments to fund up to 50 percent of costs of feasibility studies into technological innovations that protect the climate and improve air, water and soil quality.

Green Municipal Investment Fund (GMIF) – a revolving fund providing financial services (including loan guarantees and interest-bearing loans) that allow Canadian municipalities to fund projects that protect the climate and improve air, water and soil quality.

GTEC – Government Technology Exhibition run in conjunction with Technology in Government Week, generally held each fall in Ottawa. More info at http://www.techgov.com.

– H –

HAZARDOUS WASTE – Any waste (solid, liquid, or gas) which because of its quantity, concentration, or chemical, physical, or infectious characteristics pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of.

– I –

Implementation – once contracting is complete, detailed and category-specific implementation plans are executed to ensure buyers and suppliers are best positioned to conduct business together. Key implementation activities include loading preferred suppliers and pricing into purchasing systems, implementing tailored communication programs, and training relevant suppliers.

Independent Contractor – the test which distinguishes an independent contractor from an agent is the degree of control which the contractor is entitled to exercise, i.e. existence of the right of control over the agent in respect of the manner in which the work is done. An independent contractor is one who exercises discretion as to the mode and time of doing the work. The contractor is bound by its contract, not by the orders of the party for whom the contract is being performed.

INFORMAL SOLICITATION – A solicitation which does not require a sealed response.

Infrastructure – in the procurement arena, infrastructure describes the integrated set of technologies, processes, information and intelligence, and human expertise that enables efficient and highly effective sourcing and purchasing activities.

Intellectual Property – includes inventions, patents, copyrights, trade secrets, trademarks, technical data, know-how (e. g., engineering, Technical Documentation, Technical Information and technical assistance and services) and industrial designs.

Invitation to Tender (ITT) – an ITT is sent out to bidders when the opportunity is worth $25,000 or more and has fairly straightforward requirements, such as a request for off-the-shelf goods. The lowest-priced responsive bid (the lowest bid that complies with all the mandatory requirements specified in the ITT document) will be awarded the contract.

INSURANCE – A contract between an insurance company and a person or group which provides for a money payment in case of covered loss, accident or death.

INVOICE – A list of goods or services sent to a purchaser showing information including prices, quantities and shipping charges for payment.

ISO – the International Organization for Standardization is a worldwide federation of national standards groups that jointly establish process-based standards that companies and organizations can adhere to in order to become ISO-certified. ISO 9000 certifies quality management systems within any organization. ISO 14000 standards certify an organization’s environmental performance. More information is available at http://www.iso.ch.

– J –

Joint Venture – an association of two or more parties who combine their money, property, knowledge, skills, experience, time or other resources in a joint business enterprise, agreeing to share the profits and the losses and each having some degree of control over the enterprise. The temporary association of two or more businesses to secure and fulfill a procurement bid award.

– L –

LABOR SURPLUS AREA – A civil jurisdiction designated by the U.S. Department of Labor, usually updated annually in the late fall. Used as one of the criteria for designating economically disadvantaged (ED) vendors.

LEAD TIME -The time that it would take a supplier to delivery goods after receipt of order.

Lean manufacturing, lean enterprise, or lean production, or simply, “Lean”: A production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for.

LEASE – A contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

LESS-THAN-TRUCKLOAD (LTL) – A quantity of freight less than the amount necessary to constitute a truckload.

LESSEE – One to whom a lease is granted.

LESSOR – One who grants a lease.

Letter of Interest (LOI) – an LOI or Request for Information (RFI) is not open for bidding. The buyer is interested in receiving feedback from suppliers and may re-open or re-issue an opportunity as an open tender at a later day. LOIs may include attached documents.

Liability – a broad legal term. In general, a debt owed. The condition of being actually or potentially subject to an obligation; a condition of being responsible for a possible or actual loss, penalty, evil, expense or burden; a condition which creates a duty to perform an act immediately or in the future.

Life cycle – a “crade to grave”approach to asset management that looks at products and services from initial concept through procurement, to disposal once the item is no longer usable or required.

LIFE CYCLE COSTING – A procurement evaluation technique which determines the total cost of acquisition, operation, maintaining and disposal of the items acquired; the lowest ownership cost during the time the item is in use.

LINE ITEM – An item of supply or service specified in a solicitation for which the vendor must specify a separate price.

LIQUIDATED DAMAGES – A specific sum of money, agreed to as part of a contract to be paid by one party to the other in the event of a breach of contract in lieu of actual damages, unless otherwise provided by law.

LIST PRICE – The price of an article published in a catalog, advertisement or printed list from which discounts, if any, may be subtracted.

LOWEST RESPONSIBLE VENDOR – The vendor with the lowest price whose past performance, reputation and financial capability is deemed acceptable.

– M –

MANDATORY – Required by the order stipulated, e.g., a specification or a specific description that may not be waived.

Maintenance – the cost of keeping a property in efficient working condition; or all action to retain materiel in a serviceable condition or to restore it to serviceable condition or to restore it to serviceability. It includes inspection, testing, servicing, classification as to serviceability, repairs, rebuilding and reclamation.

MANUFACTURER – A business that makes or processes raw materials into a finished product.

MARKET – The aggregate forces (including economics) at work in trade and commerce in a specific service or commodity. To sell, analyze, advertise, package, etc.

MATERIAL VARIANCE/MATERIAL DEVIATION – A variance or deviation in a response from specifications of conditions that allows a responder a substantial advantage or benefit not enjoyed by all other responders or that gives the state something significantly different from what the state requested in the solicitation document.

MATERIALS MANAGEMENT – Embraces all functions of acquisition, standards, quality control and surplus property management.

MASH – the segment of the public sector that includes Municipalities, Academic Institutions, Schools and Hospitals, also referred to as MUSH.

Materiel and Supply Management Steering Committee (MSMSC) – a federal government interdepartmental body aiming to enhance the skills, professionalism and value-added contribution of procurement, materiel and supply managers in delivering programs and services.

Materiel Management Institute – the Materiel Management Institute (MMI) is a Canadian non-profit organization offering professional development in the field of public sector materiel and supply management. The MMI can be found at http://www.thewillowgroup.com/mmi.

MCP – Major Crown Project

MERX – a Canadian online service that advertises government contracting opportunities to potential bidders. MERX can be accessed at http://www.merx.com.

MMI – the Materiel Management Institute is a Canadian non-profit organization offering professional development in the field of public sector materiel and supply management. The MMI can be found at http://www.mmi-igm.ca.

MODEL PROCUREMENT CODE (MPC) – A publication approved by the American Bar Association which sets forth procurement statutory principles and policy guidelines for managing and controlling the procurement of supplies, services and construction for public purposes; administrative and judicial remedies for the resolution of controversies relating to public contracts; and a set of ethical standards governing public and private participants in the procurement process.

MSMSC -the Materiel and Supply Management Steering Committee is a federal government interdepartmental body aiming to enhance the skills, professionalism and value-added contribution of procurement, materiel and supply managers in delivering programs and services.

MULTIPLE AWARD – Contracts awarded to more than one supplier for comparable supplies and services. Awards are made for the same generic types of items at various prices.

MUSH – the segment of the public sector that includes Municipalities, Universities, Schools and Hospitals, also referred to as MASH.

– N –

NAFTA – North American Free Trade Agreement. The agreement can be found at http://www.dfait-maeci.gc.ca/nafta-alena/over-en.asp.

NAICS (NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM) CODE [FORMERLY KNOWN AS SIC (STANDARD INDUSTRIAL CLASSIFICATION) CODE] – Classification of business established by type of activity for the purpose of facilitating the collection, tabulation, presentation, and analysis of data collected by various agencies of the United States government, state agencies, trade associations, and private research organizations for promoting uniformity and comparability in the presentation of statistical data relating to those establishments and their fields of endeavor.

NAPM – National Association of Purchasing Management, a nonprofit educational and technical organization of purchasing and materials management personnel and buying agencies from the public and private sectors.

NASPO – National Association of State Purchasing Officials. An organization of state procurement representatives for the purpose of promoting efficient and effective public purchasing policies and procedures at the state level. NASPO is an affiliate of the Control of State Governments (CSG).

NAPM – the National Association of Purchasing Management is a US-based association for purchasing and supply management professionals (not public sector-focused). NAPM can be found at http://www.napm.org.

National Association of Purchasing Management (NAPM) – a US-based association for purchasing and supply management professionals (not public sector-focused). NAPM can be found at http://www.napm.org.

National Institute of Governmental Purchasing (NIGP) – a US-based organization providing education, research, technical assistance and networking opportunities to its members, the public sector purchasing professionals. NIGP can be found at http://www.nigp.org.

NEGOTIATION – Requests for proposals are sometimes used as a starting point for negotiations to establish a contract. RFPs generally include more than just price considerations. This method is especially applicable when dealing with a single source manufacturer.

NET PRICE – Price after all discounts, rebates, etc., have been allowed.

NGO – Non-Governmental Organization, e.g. Canadian Red Cross, CARE Canada.

NIGP – the National Institute of Governmental Purchasing is a US-based organization providing education, research, technical assistance and networking opportunities to its members, the public sector purchasing professionals. A nonprofit corporation of public purchasing agencies and activities at the federal, state and local levels of government. NIGP can be found at http://www.nigp.org.

NISO – National Individual Standing Offer

NO BID – A response to a solicitation for bids stating that respondent does not wish to submit an offer. It usually operates as a procedure consideration to prevent suspension from the vendors list for failure to submit a response.

NMSO – National Master Standing Offer

Non-recurring Business Critical Spend (NRBC) – larger, one-time, project driven purchases (also called “project spend”). According to The Hackett Group, companies spend hundreds of millions of dollars these purchases each year. Given the complexity, volatility and time-sensitive nature of these purchases, companies are rarely able to apply the combination of category expertise and sourcing rigor required to minimize cost.

North American Free Trade Agreement – The NAFTA agreement can be found at http://www.dfait-maeci.gc.ca/nafta-alena/over-en.asp.

Notice of Bidding Request – a general opportunity available to suppliers to provide specified products or services. Also referred to as a Notice of Proposed Procurement.

Notice of Proposed Procurement (NPP) – a general opportunity available to suppliers to provide specified products or services. Also referred to as a Notice of Bidding Request.

Notice Title – the title of the opportunity.

NSN – NATO Stock Number

– O –

OEDC – Organization for Economic Cooperation and Development

Ontario Public Buyers Association (OPBA) – is a professional organization representing those whose work requires them to spend public funds. They can be found online at http://www.vaxxine.com/opba/.

OPEN MARKET REQUISITION (OMR) – The requisition document type used in MAPS Procurement to request the purchase of a non-contract item when the requested item’s estimated cost exceeds the authority for purchase level of the buyer. An OMR conveys the request for purchase to the person with the authority to purchase. The resulting order type is most often the Purchase Order Requisition (POR).

OPTION TO EXTEND/RENEW – A provision (or exercise of a provision) which allows a continuance of the contract for an additional time according to permissible contractual conditions.

OPBA – the Ontario Public Buyers Association is a professional organization representing those whose work requires them to spend public funds. They can be found online at http://www.vaxxine.com/opba/.

OSHA – The Occupational Safety and Health Administration. Created by the OSHA Act.

– P –

P3 – a Public Private Partnership is an arrangement for service delivery, whereby government and private enterprise pool their skills and resources to meet a particular objective.

PACKING LIST – A document which itemizes in detail the contents of a particular package or shipment.

PARTIAL PAYMENT – The payment authorized in a contract upon delivery of one or more units called for under the contract or upon completion of one or more distinct items of service called for thereunder.

PER DIEM – By the day.

PERFORMANCE BOND – A contract of guarantee, executed subsequent to award by a successful vendor to protect the buyer from loss due to the vendor’s inability to complete the contract as agreed.

PERFORMANCE SPECIFICATION – A specification setting forth performance requirements determined necessary for the item involved to perform and last as required.

PKI – public key infrastructure is a tool that allows secure electronic transactions, using computer hardware, specialized security software and policies and procedures which make up a certificate authority- ensuring the integrity and confidentiality of the information being delivered.

PLANT-MATTER BASED OR BIO-BASED PRODUCT – A product derived from renewable resources, including fiber crops, such as kenaf; chemical extracts from oilseeds, nuts, fruits and vegetables (such as corn and soybeans); agricultural residues, such as wheat straw and corn stover; and wood wastes generated from processing and manufacturing operations. These products stand in contrast to those made from fossil fuels (such as petroleum) and other less renewable resources (such as virgin timber).

PMAC – the Purchasing Management Association of Canada is a national organization for purchasing and supply management professionals. More information at http://www.pmac.ca/.

POINT OF ORIGIN (shipping point) – The location where a shipment is received by a transportation line from the shipper.

Point Rating – an evaluation procedure in which a list of criteria, to which values have been assigned, is used to ascertain the individual merits of proposals that have met the mandatory factors specified in a Request for Proposal.

POLITICAL SUBDIVISION – A subdivision of a state which has been delegated certain functions of local government. Can include counties, cities, towns, villages, hamlets, boroughs and parishes.

POST-CONSUMER MATERIAL – A finished material which would normally be disposed of as a solid waste after its life cycle as a consumer item is completed. Does not include manufacturing or converting wastes. This refers to material collected for recycling from office buildings, homes, retail stores, etc.

PREQ – is a child document of a preexisting Purchasing Order (PO).  A PREQ is created when a set of items from the parent PO are approved through to FINAL status. Price Fixing – illegal collusion by tendering suppliers to avoid competition in prices. Also referred to as Bid-rigging.

PRE-CONSUMER MATERIAL – Material or by-products generated after the manufacture of a product but before the product reaches the consumer, such as damaged or obsolete products. Pre-consumer material does not include mill and manufacturing trim, scrap, or broken material which is generated at a manufacturing site and commonly reused on-site in the same or another manufacturing process.

PREFERENCE – An advantage in consideration for award for a contract granted to a vendor by reason of the vendor’s residence, business location, or business classifications (e.g., minority, small business).

PREPAID – A term denoting that transportation charges have been or are to be paid at the point of shipment.

PREQUALIFICATION OF VENDORS – The screening of potential vendors in which such factors as financial capability, reputation and management are considered when developing a list of qualified vendors. See Vendors List, Qualified Vendor/Responsible Vendor.

PRICE – The amount of money that will purchase a definite weight or other measure of a commodity.

PRICE AGREEMENT – A contractual agreement in which a purchaser contracts with a vendor to provide the purchaser’s requirements at a predetermined price. Usually involves a minimum number of units, orders placed directly with the vendor by the purchase, and limited duration of the contract. See Blanket Order and Requirements Contract.

PRICE FIXING – Agreement among competing vendors to sell at the same price.

Private Sector – all individuals resident in Canada, all private organizations resident in Canada and incorporated, registered, or recognized as such, under federal or provincial legislation, and which carry on activities in Canada. Non-profit organizations, universities and other public or para-public institutions resident in Canada, such as provincial research organizations, are considered to be private organizations.

Probity – integrity and uprightness. Uncompromising adherence to the laws, regulations and policy imperatives concerning government contracting.

PROCUREMENT – The combined functions of purchasing, inventory control, traffic and transportation, receiving, inspection, store keeping, and salvage and disposal operations. The process of obtaining materiel and services which includes the determination of requirements and acquisition from a supply system or by purchase from the trade.  The process of managing activities associated with a company’s need to procure the goods and services required to either manufacture a product (direct) or to operate the organization (indirect). Specific activities in procurement may involve determining which commodities or services are best, choosing the right suppliers, negotiating the best prices, and awarding contracts to ensure that the correct amount of the product or service is received at the appropriate time. To conduct these tasks successfully, purchasing managers, buyers and purchasing agents study sales records and inventory levels of current stock, identify domestic and foreign suppliers, and keep abreast of changes affecting both the supply of and demand for the products and materials for which they are responsible. The key subsegments that make up the procurement function are spend analysis, sourcing, supplier implementation and enablement, transaction management, category management and supplier performance management.

Procurement BPO – IDC defines procurement BPO as the transfer of management and execution of one or more procurement management activities, entire procurement subsegments, or the entire procurement business function to an external service provider. The procurement BPO vendor is part of the decision-making structure surrounding the outsourced procurement activity, subsegment or function. Performance metrics are primarily tied to customer service and strategic business value. Strategic business value is recognized through such results as increased capability to drive cost savings, increased productivity, business transformation and/or improvement of shareholder’s value.

Procurement Outsourcing – the assignment of managerial responsibility for all or select aspects of the procurement process to a third-party specialist.

Procurement Savings– hard-dollar cost reductions that translate to a company’s bottom line. Achievement of significant procurement savings involves a three-phase process: identification of savings during the sourcing phase, realization of savings during the transaction phase, and continuous improvement of savings on an ongoing basis through category management and other activities.

The New Procurement: An innovative approach to procurement that helps companies optimize spend, realize savings and support key strategic imperatives of improving sustainability, enabling agility, managing risk and fostering innovation and growth.

Procurement Services Provider – third-party specialists that focus on helping companies make improvements in different areas of procurement and achieve savings through the use of category and process experts and best-of-breed technologies.

Procurement Strategy for Aboriginal Business (PSAB) – helps Aboriginal companies do more contracting with the federal government: by setting aside contracts that serve primarily Aboriginal communities for competition among Aboriginal businesses; by encouraging Aboriginal companies to enter into joint ventures with non-Aboriginal businesses in bidding for contracts; by encouraging non-Aboriginal companies to sub-contract to Aboriginal businesses for portions of their government contracts; and by making federal employees and Aboriginal businesses more aware of the PSAB. More information on PSAB and ASI (the Aboriginal Supplier Inventory) can be found at http://www.inac.gc.ca.

Product Life Cycle – time from product selection or conception, design and specification development, purchasing, manufacturing, packaging, delivery, warehousing, maintenance, repair and overhaul, through to use and disposal.

Proposal – an offer, submitted in response to a request from a contracting authority, that constitutes a solution to the problem, requirement or objective in the request.

PROPRIETARY – The only items that can perform a function and satisfy a need. This should not be confused with “single source.” An item can be proprietary and yet available from more than one source. For example, if you need a camera lens for a Nikon camera, the only lens that will fit is a Nikon lens, thus, this lens is “proprietary.” However, the Nikon lens is available from more than one source, thus, it is not single source.

PSAB – the Procurement Strategy for Aboriginal Business helps Aboriginal companies do more contracting with the federal government: by setting aside contracts that serve primarily Aboriginal communities for competition among Aboriginal businesses; by encouraging Aboriginal companies to enter into joint ventures with non-Aboriginal businesses in bidding for contracts; by encouraging non-Aboriginal companies to sub-contract to Aboriginal businesses for portions of their government contracts; and by making federal employees and Aboriginal businesses more aware of the PSAB. More information on PSAB and ASI (the Aboriginal Supplier Inventory) can be found at http://www.inac.gc.ca.

Public Key Infrastructure (PKI) – a tool that allows secure electronic transactions, using computer hardware, specialized security software and policies and procedures which make up a certificate authority – ensuring the integrity and confidentiality of the information being delivered.

Public Private Partnership (P3) – an arrangement for service delivery, whereby government and private enterprise pool their skills and resources to meet a particular objective.

Public Property – all property, other than money, belonging to the Crown.

PUBLIC PURCHASING – The process of obtaining goods and services for public purpose following procedures implemented to protect public funds from being expended extravagantly or capriciously.

PURCHASE MANUAL – A document that stipulates rules and prescribes procedures for purchasing with suppliers and other departments.

PURCHASE ORDER – The signed written acceptance of the offer from the vendor. A purchase order serves as the legal and binding contract between both parties.

Purchasing – the buying process within the procurement cycle.  The transactional placement and processing of a purchase order. This activity takes place after a formal sourcing process (if conducted) and begins with the placement of a requisition, which upon approval, becomes a purchase order and is sent to a supplier. Upon fulfillment, the buyer is invoiced and the supplier is paid. This process is also referred to as the “req to check” process.

Purchasing Management Association of Canada (PMAC) – is a national organization for purchasing and supply management professionals. More information at http://www.pmac.ca/.

Purchase Order – a purchaser’s written offer to a supplier formally stating all terms and conditions of a proposed transaction.

PWGSC – Public Works and Government Services Canada is a department of the Government of Canada, providing goods and services to other departments and offering procurement opportunities to businesses and industry. Their bid methods include Invitation to Tender (ITT), Request for Proposal (RFP), Request for Quotation (RFQ), Request for Standing Offer (RFSO) and Telephone buy (T-buy).

– Q –

QUALIFIED VENDOR/RESPONSIBLE VENDOR – A vendor determined by a buying organization to meet minimum set standards of business competence, reputation, financial ability and product quality for placement on the vendor list.

QUALIFIED PRODUCTS LIST (QPL) – A list of products that, because of the length of time required for test and evaluation, are tested in advance of procurement to determine which suppliers comply with the specification requirements. Also referred to as an “approved brands list.”

QUALITY – The composite of material attributes, including performance features and characteristic, of a product or service to satisfy a given need.

QUANTITY – Amount or number.

QUANTITY DISCOUNT – A reduction in the unit price offered for large volume contracts.

Quotation – is the bid submitted in response to a Request for Quotation from a contracting authority.

– R –

Realized Savings – actual reductions in expenses that can drop to the bottom line as improved profits. The Everest Research Institute defines realized savings as, “the difference between the original, i.e., pre-sourcing cost, and the actual price paid based on an analysis of invoices and/or payables.” (Everest Research Institute, “Get More from Your Non-Core Spend,” June 2010). Realized savings are more beneficial to companies than “negotiated savings,” which, while based on past spending or future spending projects, may or may not actually result in a company saving money.

RECYCLED CONTENT – The portion of a product that is made from materials directed from the waste stream; usually stated as a percentage by weight.

RECYCLED PRODUCT – A product that contains the highest amount of post-consumer material practicable, or when post-consumer material is impracticable for a specific type of product, contains substantial amounts of pre-consumer material.

RFP OR RFB CONFERENCE – A meeting arranged by a procurement office to help potential bidders understand the requirements of an RFB or an RFP.

RFI – a Request for Information or Letter of Interest (LOI) is not open for bidding. The buyer is interested in receiving feedback from suppliers and may re-open or re-issue an opportunity as an open tender at a later day. RFIs may include attached documents.

As the name suggests, RFI’s gather information to help decide what step to take next. RFI’s are therefore seldom the final stage, but instead are often used in conjunction with the other 3 requests detailed in this article.

An RFI is a solicitation sent to a broad base of potential suppliers for the purpose of conditioning, gathering information, preparing for an RFP or RFQ, developing strategy, or building a database about:

  •       The suppliers, including: facilities, finances, attitudes, and motivations
  •        The state of the supply market
  •        Supply market dynamics
  •        Trends and factors driving change
  •        Alternative pricing strategies
  •        Supplier competition
  •        Breadth and width of product/service offerings, by supplier
  •        Supplier strategic focus, business, and product plans

RFIs may include a detailed list of products/services for which pricing is requested. The pricing should be used for comparative purposes, not as the basis of buying decisions. Through analysis of RFI responses, strategic options, lower cost alternatives, and cost reduction opportunities may be identified.

RFP – a Request for Proposal, while generally used for requirements of $25,000 or more, is often employed for requirements where the selection of a supplier cannot be made solely on the basis of the lowest price. An RFP is used to procure the most cost-effective solution based upon evaluation criteria identified in the RFP.

An RFP is a solicitation sent to potential suppliers with whom a creative relationship or partnership is being considered. Typically, the RFP leaves all or part of the precise structure and format of the response to the discretion of the suppliers. Indeed, the creativity and innovation that suppliers choose to build into their proposals may be used to distinguish one from another.

Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a perspective. If there are specific problems to be addressed in the RFP response, those are described along with whatever root cause assessment is available.

While specific data, offerings and quotations may be sought, questions about the following will make up a significant portion of both an RFT an RFP:

  •        The specific items on which the suppliers are proposing
  •        Business requirements
  •        Performance measures
  •        Information
  •        Ideas
  •        Instructions on how to reply
  •        Due date
  •        How will we evaluate how feedback will work
  •        Describe the process for selection
  •        Request for cost breakdown (sometimes)
  •        Communication: cover letter (sets the stage), calls in advance
  •        Who to contact with questions
  •        Addressee – chosen carefully

RFQ – a Request for Quotation is normally sent out when a requisition is received for goods and services valued at less than $25,000. The bid documents are kept simple so that the contract can be awarded quickly.

RFQ’s are best suited to products and services that are as standardised and as commoditised as possible. Why? To make the suppliers’ quotes comparable.

An RFQ is a solicitation sent to potential suppliers containing in exacting detail a list or description of all relevant parameters of the intended purchase, such as:

  •        Personnel skills or competencies
  •        Part descriptions/specifications or numbers
  •        Quantities/Volumes
  •        Description or drawings
  •        Quality levels
  •        Delivery requirements
  •        Term of contract
  •        Terms and conditions
  •        Other value added requirements or terms
  •        Draft contract

Price per item or per unit of service is the bottom-line with RFQ’s, with other dimensions of the deal impacting the analysis process as determined by the buyer. Supplier decisions are typically made following a comparison and analysis of the RFQ responses.

RFQs are typically used as supporting documentation for sealed bids (either single-round or multi-round) and may be a logical pre-cursor to an electronic reverse auction.

RFSO – a Request for Standing Offer. Standing offers are not contracts. If and when the government issues a call-up against your standing offer, then you have a contract.

RFT – Request for Tender
An opportunity for potential suppliers to submit an offer to supply goods or services against a detailed tender.  An RFT is an open invitation for suppliers to respond to a defined need as opposed to a request being sent to potential suppliers. The RFT usually requests information required from a RFI. This will usually cover not only product and service offerings, but will also include information about the suitability of the business.

It is not unusual for a buyer to put out unclear or vague business requirements for an RFT. This makes it challenging for the supplier to propose a solution. This is not the best use of a RFT. RFT’s should only be used when the buyer is clear on their requirements, and is also clear on the range of possible solutions that might fit the buyer’s needs.

A RFT is not a very time or cost efficient method to source supply due to its lack of defined business requirements and open invitation for suppliers to respond.

Remedy – the means by which a contractual right or obligation is enforced or the violation of such a right is prevented, reduced or compensated. Remedies may be defined in the contract, by agreement between the parties such as by accord and satisfaction, by arbitration, by operation of law or judicial remedy such as by action or suit.

REMANUFACTURED PRODUCT – Any product diverted from the supply of discarded materials by refurbishing and marketing said product without substantial change to its original form.

RENT – A rental contract giving the right to use real estate or property for a specified time in return for rent or other compensation.

Request for Information (RFI) – an RFI or Letter of Interest (LOI) is not open for bidding. The buyer is interested in receiving feedback from suppliers and may re-open or re-issue an opportunity as an open tender at a later day. RFIs may include attached documents.

Request for Proposal (RFP) – a Request for Proposal, while generally used for requirements of $25,000 or more, is often employed for requirements where the selection of a supplier cannot be made solely on the basis of the lowest price. An RFP is used to procure the most cost-effective solution based upon evaluation criteria identified in the RFP.

REQUEST FOR BID (RFB) – A solicitation in which the terms, conditions, and specifications are described and responses are not subject to negotiation.

REQUEST FOR PROPOSAL (RFP) – A solicitation in which it is not advantageous to set forth all the actual, detailed requirements at the time of solicitation and responses are subject to negotiation. Price must be a factor in the award but not the sole factor.

Request for Standing Offer (RFSO) – standing offers are not contracts. If and when the government issues a call-up against your standing offer, then you have a contract.

Request for Quotation (RFQ) – an RFQ is normally sent out when a requisition is received for goods and services valued at less than $25,000. The bid documents are kept simple so that the contract can be awarded quickly.

REQUIREMENT – Materials, personnel or services needed for a specific period of time.

REQUIREMENTS CONTRACT – A form or contract that is used when the total long-term quantity required cannot be definitely fixed, but can be stated as an estimate or within maximum and minimum limits with deliveries on demand.

REQUISITION – An internal document that a functional department (stores, maintenance, production, etc.) sends to the purchasing department containing details of materials to meet its needs, replenish stocks or obtain materials for specific jobs or contracts.

RESIDENT VENDOR – A person, firm, or corporation authorized to conduct business in the State of Minnesota on the date a solicitation for a contract is first advertised or announced. It includes a foreign corporation duly authorized to engage in business in Minnesota.

RESPONDER – One who submits a response to a solicitation document.

RESPONSE – The offer received from a vendor in response to a solicitation. A response includes submissions commonly referred to as “offers,” “bids,” “quotes,” or “proposals.”

RESPONSIBLE BIDDER – A bidder whose reputation, past performance, and business and financial capabilities are such that the bidder would be judged by an appropriate authority as capable of satisfying an organization’s needs for a specific contract.

RESPONSIVE BIDDER – A bidder whose bid does not vary from the specifications and terms set out in the invitation for bids.   A tender, proposal or quotation that meets all the mandatory requirements stipulated in the solicitation document. Also known as Valid Bid.

RESTRICTIVE SPECIFICATIONS – Specifications that unnecessarily limit competition by eliminating items capable of satisfactorily meeting actual needs. See Performance Specification.

REUSED PRODUCT – Any product designed to be used many times for the same or other purpose without additional processing other than specific requirements, such as cleaning, painting or minor repairs.

RISO – Regional Individual Standing Offer

RMSO – Regional Master Standing Offer

– S –

SACC – Standard Acquisition Clauses and Conditions is a manual of contracting terms and parameters, available in print and on the Internet at http://www.pwgsc.gc.ca/sacc/browse-e.html.

SALES TAX – A levy on a vendor’s sale by an authorized level of government.

SEALED – A method determined by the commissioner to prevent the contents being revealed or known before the deadline for submission of responses.

Selection Prequalification and Evaluation of Consultants (SPEC) – a computer system used by PWGSC to register architectural and engineering firms.

SERVICES – Unless otherwise indicated, both professional or technical services and service performed under a service contract.

SINGLE SOURCE – An acquisition where, after a search, only one supplier is determined to be reasonably available for the required product, service or construction item.

SMALL BUSINESS – A designation for certain statutory purposes referring to a firm, corporation or establishment having a small number of employees, low volume of sales, small amount of assets or limited impact on the market.

SMEs – small and medium-sized enterprises.

SOLICITATION – The process used to communicate procurement requirements and to request responses from interested vendors. A solicitation may be, but is not limited to a request for bid and request for proposal.

SOURCE REDUCTION PRODUCT – A product that results in a net reduction in the generation of waste, and includes durable, reusable and remanufactured products; products with no packaging or reduced packaging.

Sole Sourcing – under government policy, this non-competitive method is used, subject to obligations under the trade agreements, only when:

  • the product or service is required immediately due to pressing emergency and there isn’t enough time to issue a competitive tender;
  • there’s only one qualified company, such as a business that has developed a patented or copyrighted product or service, or a prototype; or
  • it’s not in the public interest to hold a competition, for example, for requirements falling under the national security umbrella, such as classified military or national defence projects.

Solicitation Method – outlines any restrictions on a specific opportunity. Normally used in association with the Agreement Type.

Solicitation Number – procurement numbers are assigned to each contract bid opportunity. The number cannot exceed 20 characters and can include dash and slash symbols.

SOA – Special Operating Agency

SOR – the Statement of Requirement, also known as SOW, describes the procurement deliverables.

SOW – the Statement of Work, also known as SOR, describes the procurement deliverables.

SPEC – Selection Prequalification and Evaluation of Consultants is a computer system used by PWGSC to register architectural and engineering firms.

Spend Analysis – a process whereby companies categorize and evaluate historical expenditures (at the commodity/buying category or item level) in order to identify areas of corporate spend that may be ripe for savings opportunities. Spend analysis and on-going visibility also has become increasingly important as a vehicle for ensuring that procurement practices meet Sarbanes-Oxley compliance requirements.

SPECIFICATION – A concise statement of a set of requirements to be satisfied by a product, material or process that indicates whenever appropriate the procedures to determine whether the requirements are satisfied; including the identification of test methods or the procedures which will determine whether the requirements have been met. As far as practicable, it is desirable that the requirements are expressed numerically in terms of appropriate units, together with their limits. A specification may be a standard, a part of a standard, or independent of a standard.

STANDARD – An item’s characteristic or set of characteristics generally accepted by the manufacturers and users of the item as a required characteristic for all such items.

STANDARDIZATION – The process of defining and applying the conditions necessary to ensure that a given range of requirements can normally be met, with a minimum of variety, in a reproducible and economic manner based on the best current techniques.

SURPLUS PROPERTY – Property in excess of the needs of an organization and not required for its foreseeable use. Surplus may be used or new, but it possesses some usefulness for the purpose it was intended or for some other purpose.

SRI – Supplier Registration Information is a database of suppliers who have registered to do business with the Government of Canada. Suppliers can register at http://contractscanada.gc.ca/en/regist-e.htm.

Standard Acquisition Clauses and Conditions (SACC) – a manual of contracting terms and parameters, available in print and on the Internet at http://www.pwgsc.gc.ca/sacc/browse-e.html.

Statement of Requirement (SOR) – describes the procurement deliverables, also known as SOW.

Statement of Work (SOW) – describes the procurement deliverables, also known as SOR.

Strategic Sourcing – the process of formally selecting a vendor to supply a particular product or service that is routinely purchased by a company. This process includes the definition of product and service requirements, identification of qualified suppliers, negotiation of pricing, service, delivery and payment terms, and supplier selection. The end result of the Strategic Sourcing process is a negotiated contract with a preferred supplier.

Subcontractor – a party who contracts with a contractor to perform all or any part of the contractor’s obligations in a particular contract. The contractor is accountable for the work performed by the subcontractor.

Supplier Registration Information (SRI) – a database of suppliers who have registered to do business with the Government of Canada. Suppliers can register at http://contractscanada.gc.ca/en/regist-e.htm.

Supply – the operations normally involved in furnishing, providing, affording or distributing items of supply to a user to satisfy stated requirements. The function includes all actions from the initial determination of requirements as to kind and quality through testing, standardization, adoption, modification, procurement, acceptance, receipt, storage, issue, maintenance, distribution, salvage, reissue, disposal, accountability, responsibility and stock control.

Surplus Materials – materials, including raw materials, parts and equipment, purchased or manufactured by a contractor specifically for a contract but which remain unused after completion of the contract.

– T –

TABULATION OF RESPONSES – The recording of responses for the purposes of comparison, analysis and record keeping.

TARGETED GROUP BUSINESS (TG) – A certified business designated by the commissioner of Administration that is majority owned and operated by a woman, person with disabilities, or a member of a specific minority group who provides goods, products, or services within purchasing categories designated by the commissioner.

Target Price – Fixed fee and incentive fee formula. A method of pricing in which the contractor is paid costs reasonably and properly incurred as determined by audit, together with an agreed upon fixed fee as profit supplemented by an incentive fee which will be paid to the contractor on any savings achieved between a prescribed target cost and the actual cost as established by audit. A target price contract may also include a provision for a ceiling price.

TBS – Treasury Board Secretariat, a federal government department also known as the Treasury Board of Canada Secretariat, has as its mission to help the Government of Canada manage its human, financial, information and technology resources.

TDBU – Transmission and Distribution Business Unit

TERMS AND CONDITIONS – A phrase generally applied to the rules under which all bids must be submitted and the stipulations included in most purchase contracts; often published by the purchasing authorities for the information of all potential vendors.

Telephone buy (T-buy) – this method is commonly used for small competitive purchases valued at under $5,000 when a requisition is received for something that can be easily identified over the phone and must be delivered quickly. The purchasing officer calls at least three companies, including the last successful company from source lists. The companies give their bids over the phone. The one that offers the lowest price and fulfills all of the terms of the requirement wins the contract.

Tender – a proposal, bid or offer that is submitted in response to an Invitation to Tender, Request for Proposal, or Request for Quotation from a contracting authority.

Tender Type – the mechanism under which an opportunity is offered to potential suppliers. Types include Advanced Contract Award Notice (ACAN), Letter of Interest (LOI), Request for Information (RFI) and Notice of Bidding Request/Notice of Proposed Procurement (NPP).

TITLE – The instrument or document whereby ownership of property is established.

TORT – A wrongful act, other than a breach of contract, such that the law permits compensation of damages.

Treasury Board Secretariat (TBS) – a federal government department also known as the Treasury Board of Canada Secretariat, has as its mission to help the Government of Canada manage its human, financial, information and technology resources.

TRUCKLOAD (TL) –

  1. A quantity of freight to which truckload rates apply or a shipment tendered as a truckload.
  2. A highway truck or trailer loaded to its carrying capacity. See Less-Than-Truckload.

– U –

UCS – the Universal Classification Standard is the standard for classifying federal government employees by occupational group, assigning points according to responsibility, skill and effort requirements.

UNIFORM COMMERCIAL CODE (UCC) – A comprehensive modernization of various statutes relating to commercial transactions, including sales, lease, negotiable instruments, bank deposits and collections, funds transfers, letters of credit, bulk sales, documents of title, investment securities and secured transactions.

UNIT PRICE – The price of a selected unit of a good or service (e.g., pound, labor hours, etc.).

Universal Classification Standard (UCS) – the standard for classifying federal government employees by occupational group, assigning points according to responsibility, skill and effort requirements.

Unsolicited Offers – written offers to supply goods or to perform services by suppliers which were not requested to submit such offers. Unsolicited offers are normally received in either of the following circumstances: a bid solicitation was issued for an existing requirement, and a supplier which was not solicited submits a bid; or a supplier, on its own initiative, offers to supply goods or to perform a service for which no current requirement is held.

UNSUCCESSFUL VENDOR – A vendor whose response is not accepted for reasons such as price, quantity, failure to comply with specifications, etc.

– V –

Valid Bid – a tender, proposal or quotation that meets all the mandatory requirements stipulated in the solicitation document. Also known as Responsive Bid.

VALUE ANALYSIS – An organized effort directed at analyzing the function of systems, products, specifications, standards, practices, and procedures for the purpose of satisfying the required function at the lowest total cost of effective ownership consistent with the requirements for performance, reliability, quality and maintainability.

VENDOR – Someone who sells something; a “seller.”

VENDORS LIST – A list of names and addresses of suppliers from whom bids, proposals and quotations might be expected. The list, maintained by the purchasing office, should include all suppliers who have expressed interest in doing business with the government.

VIRGIN PRODUCT – A product that is made with 100 percent new raw materials and contains no recycled materials.

VOLATILE ORGANIC COMPOUNDS (VOCs) – Compounds that evaporate easily at room tempurature and often have a sharp smell. They can come from many products, such as office equipment, adhesives, carpeting, upholstery, paints, solvents, and cleaning products. Some VOCs can cause cancer in certain situations, especially when they are concentrated indoors. VOCs also create ozone, a harmful outdoor air pollutant.

– W –

Warehousing – the performance of those physical and administrative functions incidental to and required in the conduct of the storage activity, i.e. receipt, sorting, identification, inspection, preservation, putting away, safekeeping, retrieval for issue and preparation for shipment of materiel.

Warrant of payment – In financial transactions, a warrant is a written order from a first person that instructs a second person to pay a specified recipient a specific amount of money or goods at a specific time. The warrant may or may not be negotiable and may authorize payment to the warrant holder on demand or after a maturity date. Governments may choose to pay wages and other accounts payable by issuing warrants instead of checks.

WARRANTY – The representation, either expressed or implied, that a certain fact regarding the subject matter of a contract is presently true or will be true. Not to be confused with “guarantee,” which means a contract or promise by one person to answer for the performance of another person.

World Trade Organization – the WTO is a global international organization dealing with the rules of trade between nations.

World Trade Organization’s Agreement on Government Procurement – the text of the WTO-AGP can be found at http://www.wto.org/english/tratop_e/gproc_e/agrmnt_e.htm.

WTO – the World Trade Organization is a global international organization dealing with the rules of trade between nations.

WTO-AGP – the text of the World Trade Organization’s Agreement on Government Procurement can be found at http://www.wto.org/english/tratop_e/gproc_e/agrmnt_e.htm.