Corporate Procurement

Jargon Buster

This list identifies some of the more common used words and phrases. (It is by no means an exhaustive list).

Agreement

A legally binding terms and conditions between the parties involved. It is also another word for a Contract.

Approved List

An Approved List is a publicly advertised list of organisations (e.g. contractors or consultants) that have demonstrable experience of providing relevant services and that have satisfied our minimum requirements across a range of general criteria including financial standing, equality, track record and health and safety. Many local authorities use approved supplier lists for their smaller contracts and requests for quotes. Suppliers have to qualify to be on these lists. Being on a list does not guarantee you will be awarded a contract.

Audit Trail

System or paper generated evidence showing how and why and by whom certain processes and functions were carried out.

Auctions

Allow suppliers to compete for Council business by out-bidding each other in terms of quality, price and/or other criteria. The Auction allows this to take place in 'real-time' on the internet.

Best Practice

The most effective and desirable method of carrying out a function or process derived from experience rather than theory.

Best Value Review / BVR

A duty of Best Value is placed on the Council by part 1 of the Local Government Act 1999. What and how we buy, and whether to buy-in services 'in house' are procurement decisions at the heart of Best Value. Best Value is part of the Government's agenda to modernize local government. Best Value is one of the key drivers behind our need to secure value for money in all procurement exercises.

Call off contract

An enabling agreement with one or more suppliers for a defined range of works, goods or services covering terms and conditions (including price) which users 'call off' to meet their requirements.

Commissioning

Another word for procurement. This means the process of buying or purchasing goods or services.

Competitive Tendering

Awarding contracts by the process of seeking competing tenders from the public, voluntary and social enterprise sector.

Contractor

A firm or person who has made a contract to supply goods and/or services.

Contract

A binding agreement made between 2 or more parties, which is intended to be enforceable at law.

e-Procurement

A term for a wide range of technologies that can be used to automate internal and external sourcing and purchasing processes. E-Procurement removes paper and makes traditional processes simple.

e-Sourcing

Barking and Dagenham is moving towards electronic submission of tenders and are implementing an electronic system known as Oracle e-Sourcing.

European Union or EU

The European Union (EU) procurement directives, and the Regulations that implement them in the UK, set out the law on public procurement. Their purpose is to open up the public procurement market and to ensure the free movement of goods and services within the EU. The rules apply to purchases by public bodies and certain utilities which are above set monetary thresholds. They cover all EU member states and, as a result of international agreements, their benefits also extend to a number of other countries worldwide. Where the regulations apply, contracts must be advertised in the Official Journal of the EU and there are other detailed rules that must be followed. The rules are enforced through the courts, including the European Court of Justice (ECJ).

Evaluation

Detailed assessment and comparison of supplier offers.

Framework Agreement

A framework agreement is a general term for agreements with providers which set out terms and conditions under which specific purchases (call-offs) can be made throughout the term of the agreement.

Invitation to Tender / ITT

An invitation to suppliers to bid for the provision of works, goods and services.

Invitation to Negotiate / ITN

This is a document that is used in the tendering process where the nature of goods and services is such that the specification cannot be established.

Key Performance Indicator / KPI

These are tools that help to measure the performance of suppliers against their contractual obligations. They are normally detailed in the service specification document. They are commonly referred to as outputs/outcomes.

Letter of Acceptance

A letter that creates an immediate binding contractual relationship between the council and the successful tenderer prior to entering into a formal contract.

Leverage

The process by which your project brings in other money.

Marketplace

A marketplace is an internet based facility that enables trade between one or more buying organisations and a variety of suppliers. Marketplaces use the internet instead of paper based systems to place an order with a supplier.

Method Statement

The document used in a Tender process which sets out questions for the suppliers to answer which helps the purchaser or procurement officer to understand how the goods or services will be delivered.

Most Economically Advantageous Tender / MEAT

The Tender that will bring the greatest benefit.

Official Journal of the European Union or OJEU

According to EU legislation, all contracts from the public sector which are valued above a certain threshold must be published in the Official Journal of the European Union (OJEU). The legislation covers organisations and projects which receive public money. Local authorities, NHS trusts, central government departments, port authorities are all covered by the legislation and must advertise in OJEU if their contract is covered. Some privately funded / managed contracts will also be covered - if a project is in receipt of more than 50% public funds, it would also be covered by the European Union legislation.

Parent Company Guarantee

A legal guarantee required on award that ensures that the parent company will meet any costs of maintaining levels of service and/or the cost of re-letting the contract in the event of the subsidiary company being unable to meet the requirements of the contract.

Procure to Pay

The purchasing cycle from identification of requirement through to payment.

Public Private Partnership / PPP

A form of partnership between the private and public sector principally for the service delivery of higher value projects.

Purchase Cards

Purchase Cards work in a similar way to personal credit cards. They are used by Council staff to buy goods and services.

Pre Qualification Questionnaire PQQ

When responding to an advertisement Suppliers can apply for tender documents. If the restricted procedure is being used and or you are not registered with Construction Line you may be asked to fill in a 'Pre-Qualification' Questionnaire' or 'Request for Information (RFI)'. If you meet the minimum criteria you will be sent the complete tender documents. The Restricted Procedure and PQQ (or RFI) are used to help to shortlist suppliers.

Request for Quote or RFQ

Request for quotes are a type of mini electronic tender where the Council buys goods and services often from pre-negotiated framework contracts.

A Tender, which will usually be used for requirements of a total contract value over £50,000 (excluding VAT).

Requisition

A formal application by one officer to another for things needed in the public service. The initial document listing the goods or services required.

Shortlist

A list of suitable prospective suppliers that has been drawn up through a preliminary evaluation exercise for a particular contract or procurement activity.

Small and Medium Size Enterprise or SME

SME's are companies that employ less than 250 people, have a turn over of less than £34 million (or a balance sheet total of less than £29 million), and not more than 25% owned by a non-SME. Can also mean local businesses.

Sourcing

The researching and gathering of product or service information - specifications, costs, service delivery, etc.

Specification

A detailed explanation of what the client requires from a contractor.

Sustainability

Sustainable procurement - in short using procurement to support wider social, economic and environmental objectives, in ways that offer real long-term benefits.

Tender

An official written offer to an invitation that contains a specification of the service or supplies required and is provided in response to a Tendering Exercise.

TUPE

The Transfer of Undertakings (Protection of Employment) Regulations. The purpose of TUPE is to preserve continuity of employment and to safeguard employment rights of all employees whose employment transfers to a new employer as a result of a relevant transfer.

Value for Money or VFM

This principle underpins all public sectors purchasing activity. Value for money is not about achieving the lowest initial price: it is defined as the optimum combination of whole life costs and quality.