Dictionary of Procurement Terms

contract provision that levies a punitive monetary amount or action to be taken that is unrelated to the actual cost or seriousness of the harm caused by the defaulting party. See also: Liquidated Damages.

1. Paid by the day, based on use or service. 2. A daily allowance for business expenses, including travel, meals, hotel, car rental, etc.

A policy of adding a fixed percentage to the bid price of a non-preferred business unit.

A market in which no buyer or seller has market power. This market contains a large number of buyers and sellers of approximately equal importance.

The technical, operational, and quality characteristics of the end item.

A contract administration tool that contains specific information on how the contract administration team will observe and evaluate performance according to the standards required by the contract, as negotiated. May also be referred to as "surveillance.”

A systematic and objective examination of evidence to provide an independent assessment of the management and activities of an organization related to the economic, efficient, and effective achievement of outcomes against objective criteria. May also include assessments that lead to best practices.

1. An instrument executed, subsequent to award, by a successful offeror that protects the public entity from loss in the case of the offeror’s inability to complete the contract as agreed. 2. A risk mechanism that secures the fulfillment of all contract requirements. May be referred to as a completion bond.

A budget that links the consumption of resources (inputs) to outputs/outcomes of services for each unit of an entity. This type of budget is commonly used by the government to show the link between the funds provided by the public and the outcome of these services. Decisions made on these types of budgets focus more on outputs or outcomes of services than on decisions made based on inputs.

ool used to measure performance and quantitatively evaluate progress toward planned targets.