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Purchasing Definitions
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Construction Management Contract Contract, Cost-Plus-A-Fixed-Fee Contract Officer, Purchase Officer, Buyer Payment Bond, For Labor and Material
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Appeal: Action taken by a bidder, offer or (actual or prospective) or by a vendor to seek a hearing before a disinterested person or panel or in an appropriate circuit court challenging a decision. Bid: A competitively priced offer made by an intended seller, usually in reply to a Request for Proposal (RFP) or a Request for Response (RFR). Bid Bond: An insurance agreement in which a third party agrees to be liable to pay a certain amount of money in the event a selected bidder fails to accept the contract as bid. Bidder: One who submits a competitively priced offer in response to Request for Proposal (RFP) or a Request for Response (RFR). Blanket Purchase Order: An arrangement under which a purchaser contracts with a vendor to provide the purchaser's requirements for an item(s) or a service, on an as-required and over-the-counter basis. Properly prepared, such an arrangement sets a limit on the period of time it is valid and the maximum amount of money which may be spent at one time or within a specified period and specifically identifies these persons authorized to accept goods. Competitive Bidding: The offer of vendor bids by individuals or vendors competing for a contract, privilege, or right to supply specified services or goods - over $2,000. Competitive Sealed Bid: A bid submitted in a sealed envelope to prevent disclosure of its contents before the deadline set for the receipt of all bids. Sealed bidding procedures are required on procurements construction projects exceeding $10,000. Competitive Negotiation: A method for purchasing goods and services, usually of a highly complex and technical nature whereby qualified individuals or vendors are solicited by means of a Request For Proposals. Negotiations are conducted with selected offerors and the best proposal, as judged against criteria contained in the Request For Proposals, is accepted and an award issued. Confirming Purchase Order: A purchase order issued after the fact by a procuring agency to a vendor for goods or services ordered orally or by some other informal means. The order should be marked "CONFIRMING ORDER. DO NOT DUPLICATE". Consideration: Something of value given for a promise to make the promise binding. One of the essential elements of a legal contract. Construction: Construction shall mean building, altering, repairing, improving or demolishing any structure, building or highway, and any draining, dredging, excavation, grading or similar work upon real property. Construction Management Contract: A contract in which a party is retained by the owner to coordinate and administer contracts for construction services for the benefit of the owner, and may also include, if provided in the contract, the furnishing of construction services to the owner. Consulting Services: Advice or assistance of a purely advisory nature provided for a predetermined fee to an agency by an outside individual, vendor, or organization under contract to that agency. Contract: When used as a noun in this manual, contract refers to an agreement enforceable by law, between two or more competent parties, to do or not to do something not prohibited by law, for a consideration. Any type of agreement or order for the procurement of goods or services. As a verb, contract has its usual legal sense, signifying the making of an agreement for consideration. Contract Administration: The management of all facets of a contract to assure the vendor's total performance is in accordance with the contractual commitments and that the obligation of the vendor under the terms and conditions of the contract are fulfilled. Contract, Cost-Plus-A-Fixed-Fee: A cost-reimbursement type contract that provides for the payment of a fixed fee to the vendor. The fixed fee, once negotiated, does not vary with the actual cost but may be adjusted as a result of any subsequent changes in the scope of work or services to be performed under the contract. Contract, Requirements Type: (open-end contracts) A form of contract covering long-term requirements used when the total quantity required cannot be definitely fixed, but can be stated as an estimate or within maximum and minimum limits, with deliveries on demand. Such contracts are usually for one year or more in duration. Contract, Service: A contract for work to be performed by an independent vendor wherein the service rendered does not consist primarily of the acquisition of equipment or materials, or the rental of equipment, materials and supplies. Contract, Time and Material: A contract providing for the procurement of supplies or services on the basis of direct labor hours at specified fixed hourly rates (which include direct and indirect labor, overhead, and profit) and material at cost, or at some bid percentage discount from manufacturer's catalog or list prices. Contract Officer, Purchase Officer, Buyer: A state employee whose primary assignment is purchasing goods or services. Contractor: An individual or vendor which has entered into an agreement to provide goods or services to the commonwealth. Cure Notice: A notice either oral or in writing that informs the vendor that he or she is in default and states what the vendor has to do to correct the deficiency. If the notice is oral it shall be confirmed in writing. Default: Failure of a vendor to comply with the terms and conditions of a contract. Design-build Contract: Means a contract between an institution and another party in which the party contracting with the institution agrees to both design and build the structure, roadway or other item specified in the contract. Design Specification: A purchase specification setting forth the essential physical characteristics that an item bid must possess to be considered for award. Designated Public Area: An area that is available to the public during normal business hours and is the area designated by an agency for the posting of procurement solicitations and notices. Emergency: An occurrence of a serious and urgent nature that demands immediate action. Ethics: Chapter 268A of the General Laws governs the conduct of public officials and employees. It limits what public officials and employees may do on the job, what they may do after hours, or on the side, and what they may do after they leave public service. Evaluation of Bids: The process of examining a bid after opening to determine the bidder's responsiveness to requirements, responsibility, and other characteristics of the bid relating to selection for award. General Terms and Conditions: Standard clauses and requirements incorporated into all solicitations (RFR/RFP) and resulting contracts which are derived from laws or administrative procedures of the government agency (Also called "Boiler Plate"). Goods: Material, equipment, supplies, printing, and automated data processing hardware and software. Informality: A minor defect or variation of a bid or proposal from the exact requirements of the invitation for bids, or the request for proposals, which does not affect the price, quality, quantity, or delivery schedule for the goods, services or construction being procured. Inspection: Examination and testing of goods and services to determine whether the goods and services furnished conform to contract requirements. Late Bid or Proposal: A bid or proposal, which is received at the place, designated in the invitation for bids or request for proposals after the deadline established by the solicitation. Latent Defect: A deficiency or imperfection that impairs worth or utility that cannot be readily detected from visual examination of a product. Examples would be the use of non-specification materials in manufacture, or missing internal parts such as a gasket, gear, or electrical circuit, etc. Liquidated Damages: A sum stated in a contract, to be paid as ascertained damages for failure to perform in accordance with the contract. The damage figure stipulated must be a reasonable estimate of the probable loss to the agency and not calculated simply to impose a penalty on the vendor. Multiple Award: The award of contracts to more than one bidder. When a solicitation in its terms and conditions so provides, awards may be made to more than one vendor. Appropriate in situations where the award of a single contract would be impractical and awards are limited to the least number of suppliers necessary to satisfy program requirements. Negotiation: A bargaining process between two or more parties, each with its own viewpoints and objectives, seeking to reach a mutually satisfactory agreement on, or settlement of, a matter of common concern. Non-Competitive Negotiation: The process of arriving at an agreement through discussion and compromise when only one source is practically available. Nonprofessional Services: Any services not specifically identified as professional services in the definition of professional services. Notice of Award: A Notice of Award is written notification to a vendor stating that the vendor has received an award. Notice of Intent to Award: The Notice of Intent to award is a written notice, or bid tabulation sheet publicly displayed, prior to award, that shows the selection of a vendor for the award of a specific contract or purchase order. This decision may be changed prior to the actual award of a contract or purchase order. Offeror: A person who makes an offer in response to a request for proposals. Payment Bond, For Labor and Material: A bond required of a vendor to assure fulfillment of the vendor's obligation to pay all persons supplying labor or materials in the performance of the work provided for in the contract. Performance Bond: A contract of guarantee executed in the full sum of the contract amount subsequent to award by a successful bidder to protect the government from loss due to his/her inability to complete the contract in accordance with its terms and conditions. Performance Specification: A specification setting forth performance requirements that have been determined necessary for the item involved to perform and last as required. Potential Bidder or Offeror: A person who, at the time an agency awards or proposes to award a contract, is engaged in the sale or lease of goods, or the sale of services, insurance or construction of the type to be procured under such contract, and who at such time is eligible and qualified in all respects to perform that contract, and who would have been eligible and qualified to submit a bid or proposal had the contract been procured through competitive sealed bidding or competitive negotiation . Pre-bid Conference: Meeting held with prospective bidders or offerors prior to submission of bids or proposals, to review, discuss, and clarify technical considerations, specifications, and standards relative to the proposed procurement. Pre-qualifications: A procedure to prequalify products or vendors and limit consideration of bids or proposals to only those products or vendors which have been prequalified.
Procurement: The procedures for obtaining goods or services, including all activities from the planning steps and preparation and processing of a requisition, through receipt and acceptance of delivery and processing of a final invoice for payment. Professional Services: Work performed by an independent vendor within the scope of the practice of accounting, actuarial services, architecture, land surveying, landscape architecture, law, dentistry, medicine, optometry, pharmacy, or professional engineering. Proposal: An offer made by one party to another as a basis for negotiations for entering into a contract. Proprietary Specification: One that restricts the acceptable products or services to those of one manufacturer or vendor. A common example would be a specification by brand name which excludes consideration of proposed "equals". Although all sole source specifications are proprietary, all proprietary specifications are not sole source. Proprietary items may be available from several distributors through competitive bidding. Protest: A written complaint about an administrative action or decision brought by a bidder or offeror to the appropriate administrative section with the intention of receiving a remedial result. Public Bid Opening: The process of opening and reading bids at the time and place specified in the RFR/RFP and in the presence of anyone who wishes to attend. Public Posting: The display of procurement notices in an area or on a board designated and regularly used for that purpose that is available to the public during normal working hours. Purchase Order: A document the institutions use to execute a purchase transaction with a vendor. It serves as notice to a vendor that an award has been made and that performance can be initiated under the terms and conditions of the contract. Regular Dealer: A person or vendor that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. Request for Proposals (RFP): All documents, whether attached or incorporated by reference, utilized for soliciting proposals; the RFP procedure requires negotiation with offerors (to include prices) as distinguished from competitive bidding when using an invitation for bids. Reasonable Bidder or Offeror: A person or vendor who has the capability, in all respects, to perform fully the contract requirements and the moral and business integrity and reliability which will assure good faith performance, and who has been prequalified, if required. Responsive Bidder: A person or vendor who has submitted a bid, which conforms in all material, respects to the RFP/RFR. Sealed Bid: A bid which has been submitted in a sealed envelope to prevent its contents from being revealed or known before the deadline for the submission and opening of all bids Services: Services means any work performed by an independent vendor wherein the service rendered does not consist primarily of acquisition of equipment or materials, or the rental of equipment, materials and supplies. Software: Software includes all applications software, whether packaged or requiring development, and all systems software such as assemblers, compilers, CPU performance measurement systems, data base management systems, file back-up and recovery, job accounting, operating systems, programming aids and development systems and soft-merge utilities. Sole Source: A product or service which is practicably available only from one source. Solicitation: An invitation for bids, a request for proposals or response (RFP/RFR), telephone calls, or any other document issued by the Commonwealth to obtain bids or proposals for the purpose of entering into a contract. Surplus Property: Property which is in excess of the needs of an agency and which is not required for its foreseeable need. The property may be used or new, but possesses some usefulness for the purpose for which it was intended or for some other purpose. It includes scrap, which is material that is damaged, defective, or deteriorated to the extent that it has no value except for its basic material content. Technical Proposal: An unpriced proposal which sets forth in detail that which a vendor proposes to furnish in a response to a solicitation. Technical Specifications: Specifications that establish the material and performance requirements of goods and services. Term Contracting: A technique by which a source of supply is established for a specific period of time. Term contracts are established based on indefinite quantities to be ordered "as needed", although such contracts can specify definite quantities with deliveries extended over the contract period. Termination For Convenience: The termination by a Commonwealth purchasing office, at its discretion, of the performance of work in whole or in part and makes settlement of the vendor's claims in accordance with appropriate policy and procedures. Termination For Default: Action taken by the purchasing office to order a vendor to cease work under the contract, in accordance with the contract's terms and conditions. Unsealed Bid: An unsealed written offer conveyed by letter, telegraph or other means. The bids are normally opened and recorded when received. Used Equipment: Equipment which has been previously owned and used and is offered "where is" "as is". It does not include demonstration or factory rebuilt or remanufactured equipment marketed through normal distribution outlets Vendor: One who sells goods or services. |
Last Modified: April 27, 2010
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