Procurement Glossary

Acceptance: Confirmation that delivered goods, services or deliverables meet the agreed requirement; it may occur after physical receipt.
Backorder: Ordered quantity not yet supplied and still expected from the supplier.
Bid: A supplier response submitted under a competitive procurement process; exact legal meaning varies.
Buyer: Person or function responsible for purchasing or procurement activity under the organization’s authority structure.
Commitment: An expected obligation against budget created before payment, such as an approved purchase order.
Incoterms®: ICC trade rules used in contracts for sale of goods to allocate specified delivery obligations, costs and risk.
Landed cost: Planning estimate of an imported item’s cost after purchase price and relevant logistics or border costs.
MOQ: Minimum order quantity a supplier will accept under stated conditions.
P&A: Price and availability information; in some organizations this means indicative planning information rather than a formal solicitation or firm quote.
Purchase order (PO): An authorized purchasing document issued to a supplier describing goods or services, quantity, price and terms.
Requisition: An internal request to purchase goods or services.
RFI: Request for Information, commonly used for market learning before a defined purchase solicitation.
RFP: Request for Proposal, generally used when suppliers may propose how to meet an objective and evaluation goes beyond price.
RFQ: Request for Quotation, generally used for a sufficiently defined requirement where suppliers provide pricing and commercial details.
Sole source: A situation described by an organization as having only one feasible supplier; definitions and approval requirements vary.
Single source: A sourcing choice to use one supplier even though alternatives may exist; terminology varies.
Three-way match: Comparison of purchase order, receipt or acceptance evidence, and supplier invoice before payment.
Total acquisition cost: Purchase price plus direct costs needed to acquire and place the item or service into intended use.
Vendor: Common synonym for supplier, though organizations may distinguish the terms.
Weighted score: A structured evaluation in which criteria scores are multiplied by pre-established weights.