Procurement terms

Question 1

Contracts

Answer 1

An offer and consideration. Contracts are backed by the court system

Question 2

Cost reimbursable contracts

Answer 2

Risk is with the buyer as the buyer pays for cost overruns

Question 3

Fixed-price (lump-sum contracts)

Answer 3

Risk is with the seller as seller pays for cost overruns

Question 4

Time and materials contract

Answer 4

The buyer pays for the time and materials of the vendor. Must have a not-to-exceed clause

Question 5

Purchase order

Answer 5

A unilateral form of a contract

Question 6

Letter of intent

Answer 6

: The buyer tells the vendor they intend to do business with them; not a binding
agreement.

Question 7

Letter contract

Answer 7

Generally short-term purchase used as a stopgap or emergency response.

Question 8

Bidder conference

Answer 8

Vendors all meet with the buyer to discuss the details of the statement of work
so they may ask questions for details

Question 9

Contract closure

Answer 9

contracts are closed according to the terms of the contract. This includes payment
and possible contract cancellation