Procurement Terminology Flashcards
Administer Procurements
The process of managing the relationship between buyer and seller
Bill of Materials (BOM)
A formal document showing the hierarchy of components or pieces and their sub-components or sub-pieces that make up the product
Buyer
The person or group in an organization that acquires products, services, or results
Claim
A demand for consideration, under the terms of a contract, by a buyer from a seller or by a seller from a buyer
Close Procurements
The process of completing the contract; includes settlement on any open items
Conduct Procurements
The process of receiving proposals, quotes, and bids, selecting a seller and establishing a contract for goods or services
Contract
A mutually binding agreement that requires the services provider to supply the specified services or goods and requires the buyer to pay for them per the terms of the document
Cost-plus-fixed-fee (CPFF) Contract
A contract in which the supplier receives payment for allowable costs plus a fixed fee typically based on estimated cost
Cost-plus-incentive-fee (CPIF) Contract
A contract in which the supplier receives payment for allowable costs, as well as a pre-negotiated fee and an incentive fee (if incentives are met)
Cost-plus-percentage of Cost (CPPC) Contract
A contract that reimburses the seller for cost, plus a negotiated percentage of the total costs
Cost-reimbursable (CR) Contract
A contract in which a supplier is paid for direct and indirect cost actually incurred on the project
Firm-fixed-price (FFP) Contract
A contract in which the seller provides products or services based on a well defined scope of work for a set price
Fixed-price Contract
A contract that pays a seller a fixed price for a well defined or detailed product or service
Fixed-price-incentive-fee (FPIF) Contract
A contract in which the seller provides products or services based on a well defined scope of work for a set price; also includes a fee structure that provides more payment for achieving predefined performance objectives
Issue
A project item causing confusion or disagreement, or an unresolved item needing attention
Make-or-buy Decision
An initial part of the procurement process in which a decision is made to either create the product by the company that needs it, or to outsource it and have another company create it
Plan Procurements
The process of determining what to buy, the optimum method to make the purchase and creating the documents associated with it
Point of Total Assumption
The total amount of money the buyer will pay regardless of cost overrun on the contract
Procurement
The acquisition of goods or services from an outside source (vendor)
Procurement Documents (Output/Input)
Documents involved in the bidding and proposal activities; can include request for information (RFI), request for quote (RFQ), or request for proposal (RFP)
Procurement Management Plan
The process of attaining goods and services for a project from outside the organization
Request for Information (RFI)
A request to a potential seller from the buyer for specific information
Request for Proposal (RFP)
A document that describes what the buyer wants from a potential supplier, as well as criteria for acceptability of the vendor
Request for Quote (RFQ)
A document used to get bids or quotes from possible suppliers, usually for commodity type items, with minimal customization
Retainage
A part of the payment per the terms of the contract that the buyer retains until the project is complete; used to ensure that the seller completes the work per terms of the contract
Seller
An individual or company that provides goods or services to a company or individual
Statement of Work (SOW)
A description of services, products, and work results to be accomplished on a project or other initiative
Termination Clause
A clause in the contract that allows both the buyer and the seller to end the contract
Time and Material (T&M) Contract
A contract that provides for acquiring services at specified fixed hourly rates and materials at cost.
