Dictionary of Procurement Terms

Payments that are due to an entity per the contract terms and conditions.

A financial ratio calculated by subtracting the value of inventory from the current asset amount and dividing by current liabilities. (Schiller 2000)

Written or electronic communication sent by the supplier to the entity that indicates that the supplier has accepted the order (Purchase Order). This may be a form of acceptance and may create a bilateral contract. See also: Battle of the Forms.

A global nonprofit organization founded in 1970 that serves the insurance and related industries. ACORD facilitates fast, accurate data exchange and more efficient workflows through the development of electronic standards, standardized forms, and tools to support their use. (ACORD 2015)

1. The process of obtaining supplies, services, or construction through purchase, lease, or grants. 2. As defined under FAR 2.101, acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the federal government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. (U.S., FAR 2005)

An unforeseen occurrence beyond human control caused by nature, such as a tornado or hurricane. Not attributable to the negligence of the contractor. See also: Force Majeure. (Harney 1992)

The specific right to perform acts and make decisions or prescribe rules governing the conduct of others as given to an agent by a principal. See also: Apparent Authority. (Garner 2004)

All direct and indirect costs incurred for services, supplies, or construction as distinguished from estimated or forecasted costs.

Real damage that can be precisely measured for which compensation is awarded for actual loss or injuries as a consequence of another’s wrongdoing.

A committee created for a specific purpose that is in place for a short period of time. They are now being replaced by cross-functional teams in less formalized settings. See also: Cross-Functional Team.