Commonly Used Terms and Definitions

Commonly Used Public Purchasing Terms & Definitions


Click word of choice to see its definition


 

Advertising

 

 

Major Repairs

 

 

Request for Information

 

 

Assembled

 

 

Manufactured

 

 

Request for Proposal

 

 

Bid

 

May (should)

 

Request for Quotation

 

 

Bidding, Competitive

 

 

Negotiations, Competitive

 

Requisition

 

Brand Name Specification

 

 

Open Market Purchase

 

Sealed Bid

 

Competition

 

 

Produced

 

Services

 

Contract (Agreement)

 

 

Proposal

 

Shall (will or must)

 

Emergency Purchase

 

 

Proprietary Purchase

 

Sole Source Procurement

 

Equal, Or Equivalent

 

 

Public Bid Opening

 

Solicitation

 

Equipment

 

Public Work

Specification

 

Formal Bid

 

Purchase Description

Supplies

 

Informal Bid

 

Quotation

Term Contract

 

Invitation to Bid

 

   

 

 

Terms And Definitions

Advertising

A form of public notice of an intended purchase. The placement of a notice in a news-paper or other publication according to legal requirements to inform the public that the government is requesting bids on a specific purchase it intends to make.

 

Assembled

The process of putting together all component parts of an item of equipment by the manufacturer where the assembly plant is located within the territorial borders of the state of Louisiana. "Assembled" shall not mean the reassembly of parts packed for shipping purposes. Reference LA R.S 39:1591(9) Also means the assembly of computers and related equipment when such assembly takes place in Louisiana. Reference LA R.S. 38:2251.A(1)

 

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.

 

Bidding, Competitive

The submission of prices by individuals or firms competing for a contract, privilege, or right to supply merchandise or services.

 

Brand Name Specification

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

 

Change Order A written order directing the contractor to alter, deviate, add or delete to a preexisting purchase order or contract.

 

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.

 

Contract

All types of state agreements, regardless of what they may be called for the purchase of supplies, services or major repairs. Also, an "Agreement".  It includes awards and notices of award, leases, letter contracts, and purchase orders.

 

Emergency Purchase

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

 

Equal, or Equivalent

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

 

Equipment

Items that are tangible non-consumable property, as distinguished from supplies. For purposes of expensing, tangible non-consumable items valued in excess of $100.

 

Formal Bid

A bid which must be submitted in a sealed envelope and in conformance with a prescribed format, and to be opened at a specified time. See " Sealed Bid".

 

Informal Bid

 

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

 

Invitation to Bid(ITB)

or

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.

Major Repairs

Those repairs made to movable or immovable equipment with the purpose of fixing the item to an operational status.

 

Manufactured

The process of making a product suitable for use from raw materials by hand or by machinery. Reference 38:2251.A(3)

 

May

Denotes the permissive (desired characteristics). Also, the use of "should" means the same.

 

Negotiations, Competitive

A method for contracting for goods and services, whereby proposals are solicited from qualified suppliers, and the offer deemed by the awarding authority to be most advantageous in terms of criteria as designated in the Request for Proposals, may be further revised with the successful offeror in terms and non-mandatory requirements, but not price.

 

Open Market Purchase

A one-time purchase made non-competitively or after solicitation of competitive quotes/ bids other than under a term contract.

 

Produced

The process of manufacturing, planting, cultivating, growing, or harvesting. Reference LA R.S. 38:2251.A(7)

 

Proposal

The executed document submitted by an offeror in reponse to a Request for Proposal (and the basis for subsequent negotiation).

 

Proprietary Purchase

A purchase of an item that is available from only one manufacturer. Differentiated from a sole source in that the manufacturer may distribute item through one or more distributors.

 

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, andin the presence of anyone who wishes to attend.

 

Public Work

Theerection, construction, alteration, improvement, or repair of any public facility or immovable property owned, used, or leased by a public entity.

 

Purchase Description

The words used in a solicitation to describe the supplies, services, or construction to be purchased, and includes specifications attached to, or made part of, the solicitation. Unless the context requires otherwise, the terms "purchasing description", "purchase specification" and "specification" may be used interchangeably.

 

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.

 

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 terms 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 terms offered will be negotiated most responsive offeror prior to finalizing a contract.

 

Request for Quotation (RFQ)

The document generally used for seeking competition on small purchases or on any purchase lower than the amount that requires competitive sealed bidding. Can be used for obtaining price and delivery information for sole-source and emergencies.

 

Requisition

(1) An internal document by which a using department or agency requests the purchasing department to initiate a procurement. May also be a form used for obtaining supplies from a storeroom or warehouse. (2)The information transmitted by a using department or 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.

 

Sealed Bid

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

 

Services

The furnishing of labor, time, or effort by a contractor, not involving the delivery of a specific end product other than reports which are merely incidental to the required performance.

 

Shall

Denotes the imperative (mandatory requirements). Also, the use of "will" and "must" means the same.

 

Sole Source Procurement

An award for a commodity or service to the only known capable supplier, occasioned by the unique nature of the requirements, the supplier, or market conditions.

 

Solicitation

The process of notifying prospective bidders or offerors that the jurisdiction wishes to receive bids for furnishing goods and services. The process may consist of public advertising, mailing Invitations for Bids, posting notices, telephone or facsimile messages to prospective bidders, or all of these.

 

Specification

A description of what the purchase seeks to buy, and consequently, what a 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 or service. It may include a description of any requirements for inspecting, testing, or preparing a supply or service item for delivery. A purchase description.

 

Supplies

Items that are consumed or expended in the course of being used, as distinguished from equipment.

 

Term Contract

A technique by which a source of supply is established for a specific period of time. Term contracts characteristically are established through competitive sealed bidding and usually are based on indefinite quantities to be ordered "as needed", although such contracts can specify definite quantities with deliveries extended over the contract period.

 



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