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Glossary of Procurement Terminology

Looking for a term 
we haven't defined?

Unless otherwise specified,
these terms are defined according to 
their common usage within the 
public procurement world in Canada.

see note

- A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z -

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- N -

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

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.

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. NIGP can be found at http://www.nigp.org.

NISO - National Individual Standing Offer

NMSO - National Master Standing Offer

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/.

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/.

- 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.

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.

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 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.

Price Fixing - illegal collusion by tendering suppliers to avoid competition in prices. Also referred to as Bid-rigging.

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 process of obtaining materiel and services which includes the determination of requirements and acquisition from a supply system or by purchase from the trade.

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.

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.

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

Purchasing - the buying process within the procurement cycle.

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

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 -

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

- R -

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.

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 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.

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.

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

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.

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.

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.

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.

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.

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

SMEs - small and medium-sized enterprises.

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.

Specification - a concise statement of requirements to be satisfied for materiel, a product or service, including the identification of test methods or the procedures which will determine whether the requirements have been met.

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.

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.

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.

- T -

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.

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).

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.

- 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.

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

- V -

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

- 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.

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.


Additional sources of information:

PWGSC Glossary www.pwgsc.gc.ca/sos/text/sm/en/text/ch12a-01.html 


NOTE

This glossary is provided as a source of general information about terms commonly heard or found in procurement-related documents and is published on this website in good faith. We would caution, though, against making business decisions based exclusively on these definitions. 

Your interests are best served by also referring to other resources, including dictionaries, government websites and contractual documents, and by discussing the terms with the other parties involved in the business venture and with your lawyer.


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