Dictionary of Procurement Terms

The upkeep of property that neither adds to its permanent value nor prolongs its intended life appreciably, but instead keeps it in an efficient operating condition.

A surety guarantee that protects the purchaser against Defects or inferior materials or workmanship for a specified period of time following the expiration of the initial warranty or guarantee period; an extended warranty guaranteed by a surety.

Refers to the equipment, tools, and activities associated with the daily operations of an entity.

A procurement decision that examines the cost/benefit of producing an item in-house vs. externally. Two factors that stand out at the tactical level are total cost of ownership and the availability of production capacity.

A strategy used to determine the most advantageous alternative, including the cost benefits of each alternative, when considering whether to obtain a good or service by buying it from a third-party or by producing it in-house using the entity’s resources.

A process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment.

An audit conducted to determine the degree of management efficiency and effectiveness.

The purchase of an existing business by an individual manager or management group from within the business. (Business 2002)

A technique used to measure progress or control procurement activities based on collected data. These reports enable both procurement officials and managers to assess progress and readjust activities to accomplish the goals and objectives of the organization.