Procurement terms

Question 1

Constracts

Answer 1

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

Question 2

Cost reimbursable constracts

Answer 2

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

Question 3

Fixed cost

Answer 3

Fixed cost also known as lump sum contracts. Risk is with the seller as seller pays for cost overruns.

Question 4

Time and material

Answer 4

Buyer pays for the time and materials of the vendor. Must have a not-to-exceed (NTE) clause.

Question 5

Letter of intent

Answer 5

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

Question 6

Letter contract

Answer 6

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

Question 7

Bidder conference

Answer 7

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

Question 8

Contract closure

Answer 8

Constracts are clsoed according to the terms of the contract. This includes payment and possible contract cancellation.

Question 9

Purchase order

Answer 9

A unilateral form of a contract.