Employees

Glossary of Terms

This glossary has been reproduced, in most part, from the Council of State Governments publication, State and Local Governmental Purchasing. Also, reproduction of the Model Purchasing Manual from the State Comptrollers Office. The reader is urged to read, periodically, the Uniform Commercial Code found in each of the statutes of the fifty states bearing in mind the courts have shown little sympathy for those in the market place who plead ignorance of the Code.

ACKNOWLEDGMENT - A form used by a vendor to advise a purchaser that an order has been received, and usually implying acceptance.

ACQUISITION PRICE - See "Initial Price."

ACT OF GOD - A contingency or occurrence that cannot be avoided by human power; a cause of damage which is irresistible (e.g., hurricane, flood, lightening) and not attributable to negligence.

ADMINISTRATIVE LAW - A rule or regulation having the force and effect of promulgated (usually in accordance with an Administrative Procedure Act) by an agency to implement, interpret or make statute/ordinance law specific. See "Regulation," "Rule."

ADVERTISING - A form of public notice of an intended purchase. See "Legal Notice."

ADVICE OF SHIPMENT - A notice to a purchaser advising shipment has gone forward and usually containing details of packing, routing, etc.

AGENCY - (1) An administrative division of a government. (2) A relationship between two parties by which one, the agent, is authorized to perform or transact certain business for the other, the principal; also, the office of the agent.

AGENT - A person authorized by a superior, i.e., principal, to act for him. In public purchasing, this designation is usually incorporated into statute/ordinance law. See "Purchasing Agent."

AGREEMENT - See "Contract," "Purchase Order," and the Uniform Commercial Code.

ALL-OR-NONE BID - A bid submitted for a number of different items, services, etc., in which the bidder states he will not accept a partial award, but will accept only an award for all the items, services, etc., included in the Invitation for Bids. Such bids are acceptable only if provided for in the Invitation, or if the bidder quoted an individual price for each of the items, services, etc., as listed and is the low bidder on each item.

ALTERNATE BID - (1) A response to a call for alternative bids. See "alternative Bid, Call For." (2) A bid submitted in knowing variance from the specifications, terms, conditions, or provisions of the solicitation. Such a bid is acceptable only when the variance is deemed to be immaterial.

ALTERNATE BID, CALL FOR - An Invitation for Bids for a need that can be filled by items of varying materials, dimension, styles, or other characteristics; bidders are invited to submit one or more bids as specified, but only one award will be made based on an assessment of what is most advantageous for the government, taking price and other factors into consideration.

ALTERNATE PROPOSAL, CALL FOR - A request for Proposals in which offerers are encouraged to exercise ingenuity and innovation in proposing how the need of the jurisdiction may be met.

ANTITRUST LEGISLATION - Laws that attempt to prevent or eliminate monopolies or oligopolies and to prevent noncompetitive practices.

APPROPRIATION - Legislative authorization to expend public funds for a specific purpose. Money set apart for a specific use.

APPROVED BRANDS LIST - See "Qualified Products List."

ARBITRARY, CAPRICIOUS, OR FRAUDULENT ACTION - Action by whim or caprice (or in case of fraud, in reasoned action); ungoverned action; the only grounds for a court to overrule or remand an administrative decision or ministerial action of a public purchaser.

ARBITRATION - A process by which a dispute between two contending parties is presented to one or more disinterested parties for a decision. Resolution of a disagreement by such a process.

ARCHITECT-Engineer and Land Surveying Services - Those professional services within the scope of the practice of architecture, professional engineering or land surveying as defined by the laws [of the jurisdiction].

ARRIVAL NOTICE - A notice sent by a carrier to a consignee advising of the arrival of a shipment.

AS IS - A term indicating that goods offered for sale are without warranty or guarantee, and that the purchaser takes the goods at his own risk without recourse against the seller for the condition or performance of the goods.

ASSIGNMENT - (1) Legal transfer of a claim, right, interest or property. (2) Subcontracting. See "Subcontractor."

AUTHORIZED PRICE LIST - A price list of the products and/or services covered in a contract which contains minimum essential information needed by users for placing orders.

AWARD - The acceptance of a bid or proposal; the presentation of a purchase agreement or contract to a bidder.

BACK-DOOR SELLING - Direct, undue marketing effort to induce preference on the part of program managers or using agencies for a particular product, service, or seller with intent to constrain competition.

BACK ORDER - That portion of an order which a vendor does not deliver at the scheduled time and has re-entered for shipment at a later date.

BEST INTERESTS OF THE (STATE, COUNTY, MUNICIPALITY) - The rationale granting a purchasing official discretion in taking action most advantageous to the jurisdiction when it is impossible to delineate adequately a specific response by law or regulation. Case law affirms this discretion. See "Arbitrary, Capricious, Fraudulent Action."

BID - The executed document submitted by a Bidder in response to an Invitation for Bids, a Request for Quotation or a multi-step bidding procedure.

BID-Award File - A file divided into commodity and item sections listing those solicited for individual bids, what each response was, and other information. The bid-award file is used to compare past bids for award patterns that might reveal collusive agreements or to make other comparisons of data.

BID BOND - An insurance agreement in which a third party agrees to be liable to pay a certain amount of money in the event that a specific bidder, if his bid is accepted, fails to accept the contract as bid. See "Bid Deposit," "Bid Security."

BID DEPOSIT - A sum of money or check deposited with and as instructed by the prospective purchaser to guarantee the bidder (depositor) will, if selected, accept the contract in accordance with the bid. If the bidder does not accept the contract, he forfeits the amount of the deposit. See "Bid Bond," "Bid Security." See also "Forfeiture of Deposit of Bond."

BID OPENING - The formal process through which bids are opened and the contents revealed for the first time to the jurisdiction, other bidders and usually, to the public. See "Public Bid Opening."

BID SAMPLE - A sample required of a bidder for examination, comparison, testing, and evaluation by the prospective purchaser.

BID SECURITY - A guarantee, in the form of a bond or deposit, that the bidder, if awarded a contract, will accept the contract as bid, otherwise the bidder (in the case of a deposit) or his/her guarantor (in the case of a bond) will be liable for the amount of the bond or deposit. See "Bid Bond," "Bid Deposit."

BIDDER - Any person submitting a competitive bid in response to a solicitation. See "Bid," "Proposal," "Proposer."

BIDDERS LIST - A list maintained by the purchasing office setting out the names and addresses of suppliers of various goods and services from whom bids, proposals, and quotations can be solicited. See "Pre-Qualification of Bidder," "Qualified Bidder."

BILL - A list of charges or costs presented by a vendor to a purchaser, usually enumerating the items furnished, their unit and total costs, and a statement of the terms of sale: an invoice.

BILL OF MATERIALS - A list specifying the quantity and character of materials and parts required to produce or assemble a stated quantity of a particular product.

BLANKET ORDER - An arrangement under which a purchaser contracts with a vendor to provide the purchaser's requirements for an item or a service, on an as-required and often over-the-counter basis. Properly prepared, such an arrangement sets a limit on the period of time it is valid and the maximum amount of money which may be spent at one time or within a specified period. See "Open-end Contract," "Price Agreement," "Requirements Contract."

BLANKET PURCHASE - See "Blanket Order."

BLIND TRUST - An independently managed trust in which the beneficiary has no management rights and in which the beneficiary is not given notice of alteration in, or other dispositions of, the property subject to the trust.

BOILER PLATE - Colloquial designation for standard terms and conditions, usually preprinted, incorporated in an Invitation for Bids, Request for Proposals, or a contract or purchase order. See "General Provisions."

BONA FIDE - In good faith.

BRAND NAME - A product which serves to identify a product of a particular manufacturer. A trade name.

BRAND NAME OR EQUAL SPECIFICATION - A specification that cites brand names, model numbers, or other identifications as representing quality and performance called for, and inviting bids on comparable items or products of any manufacturer.

BRAND NAME SPECIFICATION - A specification that cites the brand name, model number, or some other designation that identifies a specific product to be offered exclusive of others.

BREACH OF CONTRACT - A failure without legal excuse to perform any promise which forms a whole or part of a contract. See "Forfeiture of Deposit or Bond."

BREACH OF WARRANTY - Infraction of an express or implied agreement as to the title, quality, content, or condition of a thing sold.

BULK PURCHASING - Purchasing in large quantities to seek a lower price per unit; volume purchasing.

BUSINESS - Any corporation, partnership, individual, sole proprietorship, joint stock company, joint venture, or any other private legal entity.

BUY AMERICAN - A policy, usually expressed in law, requiring purchase of American-made products, products with a substantial percentage of American-made components, or extending a percentage price advantage to American-made products. See "Preference."

BUYER - An industrial purchasing designation connoting limited scope and authority as a purchaser. Commonly but improperly used in public purchase.

BUYER'S MARKET - Market conditions in which goods can easily be secured and economic forces of business end to cause goods to be priced at the purchaser's estimate of value.

CALENDAR DAY - Every day shown on the calendar, Saturdays, Sundays, and holidays included.

CASH DISCOUNT - A discount from the purchase price allowed by the seller to the purchaser when payment is made within a designated period. A cash discount should not be considered as a factor a award since it is predicated on future and uncertain action.

CASH ON DELIVERY (COD) - Payment due and payable upon delivery of goods.

CATALOG - A listing of item identifications arranged systematically.

CAVEAT EMPTOR - "Let the buyer beware." A maxim stating the buyer should be careful in making a purchase because the burden of defective goods rests with him. In contravention, the seller can be held responsible for certain defects by means of suitable specifications, warranties, and contractual terms and conditions.

CAVEAT VENDITOR - "Let the seller beware." A maxim relating to situations where the vendor bears the responsibility for defects in the goods he sells.

CENTRAL PURCHASING AUTHORITY - The administrative unit with the authority, responsibility, and control of purchasing activities.

CENTRALIZED PURCHASING - A system of purchasing in which authority, responsibility, and control of activities is concentrated in one administrative unit.

CERTIFICATE OF COMPLIANCE - A supplier's certification that the supplies or services in question meet certain specified requirements.

CERTIFICATE OF NON-Collusion - A statement signed by a bidder and submitted with his bid affirming that his bid is made freely, independently and without consultation with any other bidder.

CHANGE ORDER - A written order signed by the Procurement Officer, directing the contractor to make changes which the Changes clause of the contract authorizes the Procurement Officer to order without consent of the contractor.

CLAIM - The aggregate of the operative facts which serve as a basis for a demand for payment, reimbursement, or compensation for injury or damage under law or contract; the assertion of such a demand.

CODE OF ETHICS - Written guidelines within which judgments and considerations of professional ethics and behavior should be made for all elected, appointed and classified employees of a jurisdiction.

COLLUSION - A secret agreement or cooperation between two or more persons to accomplish a fraudulent, deceitful, or unlawful purpose.

COLLUSIVE BIDDING - The response to bid invitations by two or more vendors who have secretly agreed to circumvent laws and rules regarding independent and competitive bidding.

COMBINATION SPECIFICATIONS - Contain elements of both design and performance specifications. Some features of each are included to allow a vendor to use ingenuity to meet the performance needs of the government and also to require certain necessary design characteristics. This is probably the most common type of specification.

COMMERCIAL LAW - The branch of law that designates the rules that determine the rights and duties of persons engaged in trade and commerce.

COMMODITY - An article of trade, a movable article of value, something that is bought or sold; any movable or tangible thing that is produced or used as the subject of barter or sale.

COMPETITION - The process by which two or more vendors vie to secure the business of a purchaser by offering the most favorable terms as to price, quality, delivery and/or service.

COMPETITIVE BIDDING - The submissions of prices by individuals or firms competing for a contract, privilege, or right to supply merchandise or services.

COMPETITIVE NEGOTIATION - A method for contracting for goods and services, whereby proposals are solicited from qualified suppliers, following submission of which changes in proposals and prices by allowed, and the offer deemed by the awarding authority to be most advantageous in terms of criteria as designated in the Request for Proposals is accepted; a negotiated procurement.

COMPETITIVE QUOTATIONS - The customary, and usually prescribed, method for making purchases involving dollar amounts less than that for which competitive sealed bidding is required. Such competition is often called for by law, with the transactions designated as "informal bidding," or "small purchases."9

COMPETITIVE SEALED PROPOSALS - A term used by the ABA Model Procurement Code for competitive negotiation as a source selection.

CONFIDENTIAL INFORMATION - (1) Any information which is available to an employee only because of the employee's status as a public employee and is not a matter of public knowledge or available on request. (2) Information, such as trade secrets and test data, which may be kept confidential in the purchasing process.

CONFIRMING ORDER - A de facto purchase order issued to a vendor listing goods or services procured verbally and/or outside established purchasing procedures. Since a confirming order precludes competition it may be illegal under certain laws/ordinances.

CONFLICT OF INTEREST - A situation where the personal interests of a contractor, public official or classified employee are, or appear to be, at odds with the best interests of the jurisdiction.

CONSIDERATION - Acts, promises, or things of value exchanged by two parties that validates a contract between them.

CONSPICUOUSLY - Written in such special or distinctive format, print, or manner that a reasonable person against whom it is to operate should have noticed.

CONSTRUCTION (WORK) - The process of building, altering or repairing a public structure or building, or other improvements to any public real property. It does not include routine operation, routine repair or routine maintenance of existing structures, buildings or real property. A project usually requiring the professional services of an architect or engineer.

CONTINGENCY - A possible future event or condition arising from presently known or unknown causes, the outcome of which is indeterminate at the present time.

CONTRACT - (1) A deliberate verbal or written agreement between two or more competent persons to perform or not to perform a specific act or acts. Also, an "Agreement." (2) All types of [government] agreements, regardless of what they may be called, for the procurement or disposal of supplies, services, or construction.

CONTRACT ADMINISTRATION - The management of various facts of contracts to assure that the contractor's total performance is in accordance with the contractual commitments and obligations to the purchaser are fulfilled. In governments, this management may include responsibility delegated by the central purchasing authority to using agencies.

CONTRACT MODIFICATION - Any written alteration to specifications, delivery point, rate of delivery, period of performance, price, quality, or other provisions of any contract accomplished by mutual action of the parties to the contract.

CONTRACT RECORD - A record providing particulars regarding the orders or releases placed for delivery of goods against a contract so the volume of contract purchases can be determined.

CONTRACT RELEASE ORDER - A purchase document or order issued by a Using Agency consistent with the prices, terms and conditions established by a contract issued by the Central Purchasing Authority.

CONTRACTOR - Any person having a contract with a governmental body.

CONTRACTUAL SERVICES - Services furnished under a contract in which the nature and basis for charges and other pertinent contractual terms and conditions are defined.

CONVENIENCE TERMINATION CLAUSE - A contract clause which permits the government to terminate, at its own discretion, the performance of work in whole or in part, and to make settlement of the vendor's claims in accordance with appropriate regulations and applicable contractual conditions.

COOPERATIVE PURCHASING - (1) The combining of requirements of two or more political entities to obtain the advantages of volume purchases, reduction in administrative expenses, or other public benefits. (2) Procurement conducted by, or on behalf of, more than on Public Procurement Unit, or by a Public Procurement Unit with an External Procurement Activity.

COPYRIGHT - A grant made by a government to a writer/artist which recognizes sole authorship/creation of a work and protects the creator's interest(s) therein. U.S. Copyright case law on computer programs remains unclear.

CORRUPT COMBINATION, COLLUSION OR CONSPIRACY IN RESTRAINT OF TRADE - Terms referring to an agreement between two or more businesses to stifle, control, or otherwise inhibit free competition in violation of state and/or federal antitrust laws or regulations.

COST PRINCIPLES - Under regulations, the principles used to determine the allowability of incurred costs for the purpose of reimbursement under contract provisions

COST-Reimbursement Contract - A contract under which a contractor is reimbursed for costs which are allowable and allocable in accordance with the contract terms and the provisions (of the purchasing law), and a fee, if any.

DAMAGES - Compensation, usually in money, for injury to goods, persons, or property.

DATA - Recorded information, regardless of form or characteristic.

DEBARMENT - A shutting out or exclusion (through due process) for cause, as a bidder from a list of qualified prospective bidders.

DEBT - Any obligation to pay money. Ordinarily the term debt means a sum of money due by reason of a contract expressed or implied. Broadly, the word may include obligations other than to pay money, such as the duty to render services or deliver goods.

DECENTRALIZED PURCHASING - A system of purchasing in which there is a (varying) degree of delegation of authority, responsibility, and control of purchasing activities to the several Using Agencies. Delegation does not relieve the Central Purchasing Authority from accountability.

DEFAULT - Failure by a party to a contract to comply with contractual requirements; contractor failure to perform.

DEFECT - A non-conformance of an item with specified requirements.

DELIVERY SCHEDULE - The required or agreed time, or rate, of delivery of goods or services.

DELIVERY TERMS - Conditions in a contract relating to freight charges, place of delivery, time of delivery, or method of transportation.

DESCRIPTIVE LITERATURE - Information, such as illustrations, charts, drawings, and technical data which shows the characteristics or construction of a particular product or explains its operations, furnished by a bidder as part of his bid to describe the items he offers. The term refers only to information required to evaluate a product, and need not include other information such as that related to the qualifications of a bidder or operating or maintaining equipment.

DESIGN-Build - The district and the design/build contractor enter into a specific contract wherein the contractor undertakes the responsibility to provide for the design and construction of the project in conformance with basic requirements which have been set forth by the district. The contract may be lump sum, cost plus a fee or guaranteed maximum, lease or lease-purchase. The contract is generally entered into after project definition but before substantial design work has been done.

DESIGN SPECIFICATIONS - A type or manner of writing a purchase description characterized by detail as to how the product is to be manufactured or work is to be performed; generic specification. Appropriate for a unique product or custom work.

DESIGNATION OF SPECIAL PURPOSE - A term referring to special use for which no items of the kind needed are regularly produced (e.g., sewing machines for teaching blind people to sew), and purchase is accomplished through an Invitation for Bids using a broad specification for a standard market item with a description of the special purpose for which the item will be used together with a questionnaire asking what modifications bidders will make to their standard product to meet the particular need.

DESIGNEE - A duly authorized representative of a person holding a superior position.

DETERMINATION - A decision made by a public official or employee which shall be in writing and based on written findings.

DIRECT OR INDIRECT PARTICIPATION - Involvement through decision, approval, disapproval, recommendation, preparation of any part of a purchase request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity.

DIRECTIVES - Laws, rules and regulations, policy and procedures which affect the conduct of a contract and are cited by reference in the solicitation for the guidance of bidder/offerers.

DISADVANTAGED BUSINESS - A small business which is owned or controlled by a majority of persons, not limited to members of minority groups, who have been deprived of the opportunity to develop and maintain a competitive position in the economy because of social disadvantage.

DISCOUNT - An allowance or deduction from a normal or list price extended by a seller to a buyer to make the net price more competitive.

DISCOUNT SCHEDULE - A list of discounts applying to varying quantities of goods, or applicable to differing classifications of purchasers.

DISPOSITION - Transferring, trading-in, selling, or destroying goods that are excess, surplus or scrap.

DISPUTE - A difference between a contractor and a jurisdiction over performance or other elements of a contract calling for appropriate administrative action with the intent of achieving a remedial result.

ECONOMIC ORDER QUANTITY (EOQ) - The stock level reorder point based on costs of acquisition, storage, handling, and inventory investment to determine the most cost effective time and quantity to reorder.

EMERGENCY PURCHASE - A purchase made without following normal purchasing procedures in order to obtain goods or services to meet an urgent and unexpected requirement where health and public safety or the conservation of public resources is at risk.

EMPLOYEE - An individual drawing a salary from a governmental body, whether elected or not, and any uncompensated individual performing personal services for any governmental body.

EQUAL EMPLOYMENT OPPORTUNITY PROGRAM - A plan to include minority groups or other disadvantaged persons in the work force of businesses affected by the plan.

EQUAL, OR EQUAL - A phrase used to indicate the acceptability of products of similar or superior function, purpose, design, and/or performance.

EQUIPMENT - Personal property of a durable nature which retains its identity throughout its useful life.

ESCALATION CLAUSE - See "Price Adjustment Provision."

ESTABLISHED CATALOGUE PRICE - The price included in a catalogue, price schedule or other form that: (a) is regularly maintained by a manufacturer or contractor; (b) is either published or otherwise available for inspection by customers; and (c) states prices at which sales are currently or were last made to a significant number of any category of buyers, or to the general buying public, for he supplies or services involved.

ETHICS - See "Code of Ethics," "Purchasing Ethics."

EVALUATION COMMITTEE - A committee which advises and assists the purchasing office in evaluation and award, usually employed in high tech and purchase of services transactions.

EVALUATION OF BID - The process of examining a bid after opening to determine the bidder's responsibility, responsiveness to requirements, and to ascertain other characteristics of the bid that relate to determination of the successful bidder.

FIDELITY BOND - A bond which secures a employer up to an amount stated in the bond for losses caused by dishonesty or infidelity on the part of the employee.

FIRM BID - A bid that binds the bidder until a stipulated time of expiration.

FISCAL YEAR - A period of 12 consecutive months selected as a basis for annual financial reporting, planning, or budgeting.

FIXED PRICE CONTRACT - A contract which provides for a firm price, subject to any contractual conditions allowing price adjustment, under which the contractor bears the full responsibility for profit or loss.

FIXED PRICE CONTRACT WITH ECONOMIC PRICE ADJUSTMENT - A contract which provides (usually after an initial period) for price increase/decrease based upon an objective price index incorporated into the contract.

FIXED PRICE SALE - An offering at a price established by the seller and not subject to negotiation.

FORMAL ADVERTISING - The placement of a notice in a newspaper or other publication according to legal requirement to inform the public that the government is requesting bids on a specific purchase it intends to make.

FORMAL BID OR OFFER - A bid which must be submitted in a sealed envelope and in conformance with a prescribed format, to be opened at a specified time.

FORWARD PURCHASING - The purchasing of quantities exceeding immediate needs, e.g., in anticipation of a price increase of future shortage.

FORWARD SUPPLY CONTRACT - A contract for future supply of definite quantities of materials or services over a fixed period. Quantity specified may be obtained by "draw-off orders," or be delivered at a fixed and predetermined rate set out in the contract.

GRATUITY - A payment, loan, subscription, advance, deposit of money, service, or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.

IDENTICAL BID - A bid that is the same in all salient respects with another bid.

INELIGIBLE BIDDER - A supplier or prospective supplier who, by reason of financial instability, unsatisfactory reputation, poor history of performance, or other deficiency, does not meet the qualifications for placement on the bidder list or for award; also non-responsible bidder.

INFORMAL BID - An unsealed competitive offer conveyed by letter, telephone, telegram, or other means and under conditions different from those required for formal bidding.

INITIAL PRICE - Outlay of money necessary to buy something. Initial price is a proper determinant for award only when the products or services offered, and to be furnished, are essentially identical irrespective of which bidder or offeror receives the award.

INSPECTION - Critical examination and/or testing of items to determine whether they have been received in the proper quantity and condition and conform to the applicable specifications.

INVITATION FOR BIDS (IFB) - (1) The solicitation document used for competitive sealed bidding, the customary method used by state and local governments for the purchase of equipment, materials, supplies, and construction. (2) All documents, whether attached or incorporated by reference, utilized for soliciting bids.

LATE BID PROPOSAL - A bid or proposal received at the place specified in the solicitation after the time designated for all bids or proposals to be received.

LATENT DEFECT - A defect not apparent by ordinary and reasonable inspection at time of receipt or beginning use of a product.

LEASE-Purchase Agreement - A lease contract containing a purchase option in which the lessee's periodic payments or parts thereof may be applied to serve both as the rental obligation and as installments for acquiring ownership of the property upon lessee exercising the purchase option; a conditional sales contract.

LEASE-Purchase Agreement - A lease contract containing a purchase option in which the lessee's periodic payments or parts thereof may be applied to serve both as the rental obligation and as installments for acquiring ownership of the property upon lessee exercising the purchase option; a conditional sales contract.

LEGAL NOTICE - Notice of a proposed purchase as required by law. Depending upon the legal requirement, notice may be satisfied by posting an announcement of the purchase in a public place, notification of the appropriate bidders from the bidders list, formal advertisement in a newspaper or newspapers, or a combination of these methods.

LIFE-Cycle Costing - A procurement technique which takes into account demonstrable and documented operating, maintenance, the cost of money, and other costs of ownership and usage, and resale or residual value in addition to acquisition price in making an award on low total cost.

LINE ITEM - A procurement item specified in an invitation for bids for which the bidder is asked to tender an individual price and which, under the terms of the invitation, is usually susceptible to a separate contract award.

LOCAL PURCHASE - A purchase made directly by an agency, apart from the central purchasing office, for its own use or for the use of another agency logistically supported by it.

LOWEST (RESPONSIVE AND) RESPONSIBLE BIDDER - Originally, the bidder submitting the lowest initial price and capable of performing the proposed contract. Under modern purchasing concepts, often construed as generally the same as the "lowest responsive and responsible bidder," or the bidder who submits the "lowest and best bid," or the "most advantageous bid, price, and other factors considered." For clarity and accuracy, the recommended provision for determining award is the "responsive and responsible bidder whose bid is most economical for the purpose intended, according to criteria set forth in the solicitation.”

MANUFACTURER - One who (1) controls the design and production of an item, or (2) produces an item from crude or fabricated materials, or (3) assembles materials or components, with or without modification, into more complex items.

MISREPRESENTATION - A manifestation by words or other conduct that, under the circumstances, amounts to an assertion not in accordance with the facts.

MISTAKE (IN BID) - A miscalculation in composing a bid resulting in an incorrect price or other term, especially in affecting the bidder's eligibility to be awarded a contract.

MULTIPLE AWARD - The award of contracts to two or more bidders for the same or essentially similar items. Appropriate only in situations where the award of a single contract would be impossible or impractical and awards are limited to the least number of suppliers necessary for a workable contract.

MULTI-STEP COMPETITIVE BIDDING - A competitive process calling for separate submissions of a technical proposal (which may be negotiated) as the first step or steps of the process followed by a call for non-negotiable competitive price bid as the final step.

NONRESPONSIVE BID - A bid that does not conform to the essential requirements of the invitation for Bids; nonconforming bid; unresponsive bid.

OFFER - the act of one person that gives another person the legal power to create a contract to which both of them are parties; to perform such an act.

OPEN-ACCOUNT PURCHASE - A purchase made by a buyer who has established credit with the seller. Payment terms are usually stated to require payment of invoice on or before a specific date or dates; also, to require payment of invoice in full, or less a certain percentage for prompt payment. Such terms are agreed upon between buyer and seller prior to or at the time of establishing the account.

OPEN-END CONTRACT - A contract in which quantity, duration, or both are not specified.

OPEN-MARKET PURCHASE - A purchase made other than under a schedule or term contract, or made by negotiation following rejection of all bids when satisfactory bids cannot be obtained.

OPTION - The right, acquired for consideration, to buy or sell something at fixed price within a specified time.

OPTION TO RENEW - A contract clause that allows a party to elect to re-institute the contract for an additional term; in public contracting, where competitive bidding is a required exercise of the option must rest solely with the purchaser.

PERFORMANCE BOND - A contract of guaranty executed subsequent to award by a successful bidder to protect the government from loss due to contractor inability to complete the contract as agreed.

PERFORMANCE RECORD - Record to indicate a supplier's ability to keep delivery promises and reliability, together with consistency of quality and performance of the products and services furnished.

PERFORMANCE SPECIFICATIONS - Where the goods and/or services are described in terms of required performance. they may include such details as required power, strength of material, test methods and standards of acceptability and recommended practices.

PRE-Bid Conference - A meeting scheduled in a solicitation for the purpose of providing clarification as needed. Substantive questions raised at a pre-bid conference are answered in writing and may modify the solicitation. In some jurisdictions, the conference may be mandatory at the discretion of the Purchasing Manager.

PREFERENCE - An advantage in consideration for award of a contract granted to a bidder by reason of the bidder's residence, business location, origin of product offered, business classification (e.g., small business), or other reason; generally inconsistent with impartiality in awarding public contracts.

PRICE COMPETITION - The basis for awarding a contract solely on the consideration of price as submitted on competitive bids or as negotiated under competitive proposals.

PRICE FIXING - Agreements between competitors to sell at the same price, to adopt formulas or the computation of selling prices, to maintain specified discounts, to maintain predetermined price differentials between different quantities, types, or sizes of products, or other means of setting prices charged to purchasers.

PRICE PROTECTION - An understanding or agreement between a purchaser and seller, or extended by a seller to a purchaser, to maintain a price against increase, or to grant the purchaser any reduction in price the vendor may establish on the goods in question, prior to shipment of the purchaser's order.

PROCUREMENT - The procedures for obtaining goods or services, including all activities from the planning steps and preparation and processing of a requisition, through receipt and acceptance of delivery and processing of a final invoice for payment. The acts of preparing specifications, evaluating bids or proposals, making awards, and administering contracts are involved; in some contexts property management is implied.

PROFESSIONAL SERVICES - Infrequent, technical, and/or unique functions performed by independent contractors whose occupation is the rendering of such services. While not limited to licentiates, the services are considered "professional," and the contract may run to partnerships, firms, or corporations as well as individuals. Examples of professional services include medicine and the medical arts, architectural and engineering services, management and systems consultation, research, and the performing arts.

PROPOSAL - The executed document submitted by an offeror in response to a Request for Proposal [and the basis for subsequent negotiation].

PROPOSAL EVALUATION CRITERIA - Factors, usually weighted, relating to management capability, technical capability, manner of meeting performance requirements, price and other importance considerations used to evaluate which proposer in a competitive negotiation has made the most advantageous offer.

PUBLIC BID OPENING - The process of opening and reading bids, conducted at the time and place specified in the Invitation for Bids and/or the advertisement, and in the presence of anyone who wishes to attend.

PURCHASE ORDER - A purchaser's document to formalize a purchase transaction with a vendor. The purchase order should contain statements as to the quantity, description, and price of the goods or services orders; applicable terms as to payment; discounts, date of performance, and transportation; and other factors or suitable references pertinent to the purchase and its execution by the vendor. Acceptance of a purchase order constitutes a contract.

PURCHASE REQUEST - (1) Information transmitted by a using agency requesting the central purchasing office to effect a contract for a particular need or group of needs. The request may include, but is not limited to, a performance or technical description of the requested item, delivery schedule, transportation mode, criteria for evaluation, suggested sources of supply, and information related to the making of any written determination required by policy or procedure. (2) That document whereby a Using Agency requests that a contract be entered into for a specified need, and may include, but is not limited to, the technical description of the requested item, delivery, criteria for evaluation, suggested sources.

PURCHASING AGENT - An administrator vested by law to review appropriateness of purchase requests, prepare solicitations, obtain bids or proposals, evaluate and award. However, in some jurisdictions this administrator is the Secretary of Administration, Secretary of General Services, or similar appointee who, while vested by law with the responsibility/accountability for the purchasing program, delegates the operational responsibility/authority to a designee.

PURCHASING CYCLE - The full cycle of activities carried out by a purchasing department in the acquisition of goods and services.

PURCHASING ETHICS - Moral Concepts And Practices Based On The Principle That The public interest is paramount, applicable to the personnel of the purchasing department and all other persons involved in the purchasing process, particularly with respect to the expenditure of government funds and relationships between public employees and sellers.

QUALIFIED BIDDER - A bidder determined by the government to meet standards of business competence, reputation, financial ability, and product quality for placement on a list of prospective bidders.

QUALIFIED PRODUCTS LIST - A specification developed by evaluating brands and models of various manufacturers of an item and listing those determined to be acceptable as eligible to be offered on the next invitation for bids; on approved brands list.

QUALITY ASSURANCE - A planned and systematic series of actions designed to provide adequate confidence that a product purchased or to be purchased will perform satisfactorily in service.

QUALITY CONTROL - Practices and procedures necessary to ensure appropriate quality and performance of goods produced or received.

QUOTATION - A statement of price, terms of sale, and description of goods or services offered by a prospective seller to a prospective purchaser, usually for purchases below the amount requiring formal bidding; the stating of the current price of a commodity, or the price so stated.

REORDERING LEVEL - The stock level at which a requisition for the replenishment of the stock should be initiated.

REQUEST FOR INFORMATION (RFI) - The document used in informal, uncompetitive solicitation of information, data, comments, or reactions from possible suppliers preceding the issuance of a Request for Proposals or a multi-step bidding procedure.

REQUEST FOR PROPOSAL (RFP) - (1) All documents, whether attached or incorporated by reference, utilized for soliciting (competitive) proposals. The RFP procedure permits negotiation of proposals and prices as distinguished from competitive bidding and an Invitation for Bids. (2) The solicitation document used in the competitive negotiation process. The procedure allows changes to be made after proposals are opened and contemplates that the nature of the proposals and/or prices offered will be negotiated prior to award.

REQUISITION - An internal document by which a using agency requests the purchasing department to initiate a procurement. May also be a form used for obtaining supplies from a storeroom or warehouse.

RESPONSIBLE BIDDER OR OFFEROR - A person who has the capability in all respects to perform in full the contract requirements, and the integrity and reliability which will assure good faith performance.

RESPONSIVE BIDDER - (1) a person who has submitted a bid which conforms in all material respects to the Invitation for Bids. (2) One whose bid conforms in all material respects to the terms and conditions, the specifications and other requirements of the IFB.

SCHEDULE PURCHASE - a purchase for which a bid opening date is prescheduled, such as quarterly, so that using agencies' requirements for the period covered by the ensuing contract can be consolidated for volume purchasing under one Invitation for Bids.

SEALED BID - A bid which has been submitted in a sealed envelope to prevent its contents being revealed or know before the deadline for the submission of all bids: usually required by law or rule on major procurements, to enhance fair competition.

SHIPPING LIST - A memorandum listing all items included in one shipment or shipped at one time.

SOLE-SOURCE PROCUREMENT - An award for a commodity or service to the only know capable supplier, occasioned by the unique nature of the requirement, the supplier, or market conditions. (Senate Bill Number 623)

SPECIFICATION - A description of what the purchaser seeks to buy, and consequently, what bidder must be responsive to in order to be considered for award of a contract. A specification may be a description of the physical or functional characteristics, or the nature of, a supply of service. It may include a description of any requirements for inspecting, testing, or preparing a supply or service item for delivery. A purchase description.

SPOT PURCHASE - A one time purchase occasioned by a small requirement, an unusual circumstance, or to take advantage of a favorable market condition.

STANDARD - A characteristic or set of characteristics for an item that, for reasons of performance level, compatibility or interchangeability with other products, etc., is generally accepted by producers and by users of the item as a required characteristic of all items for the designed purpose.

STANDARD SPECIFICATION - A specification established through a prescribed process and used for all or most purchases of the item involved.

STANDARDIZATION (OF SPECIFICATIONS) - The process of examining characteristics and need for items of similar end usage and developing a single specification that will satisfy the need for most or all purchases for that purpose.

SUBCONTRACTOR - Any person undertaking part of the work under the terms of the contract, by virtue of an agreement with the contractor, who, prior to such undertaking, receives the written consent of the surety and approval of the jurisdiction.

SUPPLIES - (1) Customarily, items that are consumed or expended in the course of being used, as distinguished from equipment and materials; but in some purchasing terminology, all items except construction and services. (2) All property, including but not limited to equipment, materials, printing, insurance, and leases of real property, excluding land or a permanent interest in land.

TABULATION OF BIDS - A recording of bidders and abstract of their bids listing items offered, prices, deliveries, etc., in response to a specific solicitation, made for purposes of comparison and recordkeeping; an abstract.

TERMS AND CONDITIONS - A general reference applied to the provisions under which bids must be submitted and which are applicable to most purchase contracts.

TERMS OF PAYMENT - Purchase transactions require payment for the goods or services received, and with exception of an unusual exchange or barter agreement there are three basic payment terms: cash, open account, and secured account.

TESTING - Determination of the physical, chemical, or performance characteristics of items. Testing may be conducted in connection with developing specifications and standards, making comparative evaluations of products offered on bids, and ascertaining compliance with specifications before or after a contract award.

TITLE - The means whereby a person's ownership of property is established.

TOTAL SUPPLY - A concept of purchasing with the objective of advanced planning which provides for the broadest scope of purchasing and purchasing-related activities to reduce costs, improve effectiveness, and increase operational efficiency. Total supply is concerned not only with acquisition, but with requirements planning, logistics, and property management.

UNIFORM COMMERCIAL CODE - Uniform statute law adopted by states for consistency and modernity in law governing commercial transactions.

UNSUCCESSFUL BIDDER OR OFFEROR - One whose bid proposal is not accepted and award is made to another.

VENDOR FILE - The accumulated record maintained by the central purchasing authority of information relevant to a bidder's or contractor's business relationship with the jurisdiction, including application for inclusion on the bidders list, record of performance under contracts, pertinent correspondence, and the results of any inquiries or analyses made for specific purposes.

WAIVER OF BID(S) - A process authorized by law or rule whereby a government purchasing office may procure items without competitive bidding procedures because of unique circumstances related to a particular need or procurement.

WARRANTY - A representation of utility, condition, and durability made by a bidder or offeror for a product offered.