Glossary

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ABBREVIATIONS

Shortened forms of a set of words, consisting of initial letters pronounced separately, for example, invitation to tender (ITT).

ABC CLASSIFICATION

A system of prioritizing different types of inventories based on their value or importance to the business.

ACCEPTANCE

The act of accepting by an authorized representative; an indication of a willingness to pay; the assumption of a legal obligation by a party to the terms and conditions of a contract.

ACCEPTANCE CRITERIA

Indicators or measures used to assess whether a product or service meets the standard required.

ACCEPTANCE SAMPLING

A measure, using the number of defects detected, that determines whether a batch of manufactured products meets the standard required.

ACCREDITATION

A process of external verification to provide evidence that a standard of quality has been achieved, for example, competency, authority or credibility.

ACCRUALS

An adjustment made to the accounts of a company that has the effect of putting aside money for future use. It can be an adjustment to sales or an adjustment to costs.

ACTIVITY-BASED COSTING (ABC)

An accounting method in which indirect costs are assigned to activities used in the production of a product or delivery of a service. These activities are then used to apportion those costs to products and services in a way that gives a clearer understanding of the total cost of a product or service.

ACQUISITION

The act of acquiring goods and services (including construction) for the use of a governmental activity through purchase, rent, or lease. Includes the establishment of needs, description of requirements, selection of procurement method, selection of sources, solicitation of procurement, solicitation for offers, award of contract, financing, contraction administration, and related functions.

ADDENDUM

An addition or supplement to a document; e.g., items or information added to a procurement document.

AD-HOC PURCHASE

An item bought for a single and non-recurring use or purpose.

ADAPTIVE

Having the ability or tendency to adapt to different situations.

ADVERTISE

To make a public announcement of the intention to purchase goods, services or construction with the intention of increasing the response and enlarging the competition. The announcement must conform to the legal requirements imposed by established laws, rules, policies and procedures to inform the public.

AEROSOL

Solid particles that remain suspended in air as fog or smoke.

AGREEMENT

A duly executed and legally binding contract; the act of agreeing.

ALGORITHM

The process or rule used by an IT system to perform calculations, data processing or automated tasks.

ALLOCATED OVERHEAD

Overheads are the cost of things that are needed to manufacture an item or deliver a service but are not associated with just one product. The total overhead cost is spread among all products or services, and this is the allocated overhead.

ALP

Authority for Local Purchase: granted by the commissioner of Administration to an individual who has successfully completed all requirements established by the Office of State Procurement.

ALTERNATE RESPONSE

A substitute response; an intentional substantive variation to a basic provision or clause of a solicitation by a vendor.

AMENDMENT/CHANGE ORDER

A written modification to a contract or purchase order or other agreements.

AN INDIVIDUAL WITH CAPACITY

A person who is legally able to enter into a contract because of their appropriate age and state of mind.

APPROPRIATION

Sum of money from public funds set aside for a specific purpose.

APPROVED SUPPLIER LIST

A list of suppliers whose basic credentials have been checked. This would normally cover financial stability, compliance with any laws or licenses needed to operate, adequate insurance, health and safety policies and the like. There is no contract with the suppliers, but there is some assurance as to their appropriateness for specified categories. This list may restrict what types of order (by category, value or geographical location) can be placed with each of them.

ARM’S-LENGTH TRADING RELATIONSHIP

A relationship between two parties who trade with each other in which there is no involvement other than the trade itself.

ARO

After Receipt of Order.

AS

Australian Standards contracts.

ASSETS

The value of everything an organization owns.

AUDIT

A systematic inspection of a process or procedure to assess compliance with requirements or regulations.

AUDIT TRAIL

A record, history or series of documents that provide evidence of a sequence of processes that led to an outcome.

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