Dictionary of Procurement Terms

A term denoting that transportation charges have been or are to be paid at the point of shipment.

A shipping term in which the shipper pays the freight costs and then adds that cost to the invoice for the goods. See also: Free on Board Destination, Freight Collect, Freight Collect and Allowed, Freight Prepaid and Added, Freight Prepaid and Allowed, Free on Board Origin, Freight Prepaid and Charged Back.

The current value of an amount of money, rather than some future value it will have after being invested.

The combination of a basic hourly rate or payment and any fringe benefit to workers set by regulatory agencies, specific to various job classifications.

Planned activities undertaken to retain equipment or material in a serviceable condition; includes scheduled inspection, testing, servicing, classification as to serviceability, repairs, rebuilding, and reclamation.

1. A value placed on an object or service provided by a seller to a buyer. 2. The money value of a unit of a good, service, or resource. 3. The total amount, in money or other consideration, to be paid or charged for a commodity; normally includes all costs (direct labor, overhead, materials) and profit or fee.

A clause in a contract allowing for an adjustment in price in accordance with circumstances that may arise during the term of the contract.

A contractual agreement in which a purchaser contracts with a supplier to provide the purchaser’s requirements at a predetermined price. See also: Open-End Contract, Requirements Contract, Blanket Order.

The evaluation of price data without consideration of elements such as cost components and profit.

A term used in sales contracts when market prices are so volatile that the supplier will not give a firm price or use an escalator clause, but will only agree to charge the same price to all customers for similar purchases on the day of shipment or delivery of goods. See also: Open-End Pricing, Price Prevailing at the Date of Shipment.