DEFINITIONS OF TERMS
TYPICALLY USED IN PROCUREMENT AND CONTRACTING ACTIVITIES
Administration Lead Time (CALT)
Lead Time (CLT)
Contracts and Materials Inspections
for Bid (IFB)
Award and Instructions to Proceed
Penal Sum or
Lead Time (SLT)
Disadvantaged Business Concern
Lead Time (SLT)
Small Business and Women’s Business Enterprise
act of an authorized representative of Purchaser by which Purchaser for itself
or as agent of another assumes ownership of existing identified supplies
tendered or approves specific services rendered as partial or complete
performance of the contractual agreement.
A form of security that
accompanies a proposal and assures that the proposer will not withdraw its
proposal within the period specified and will execute a written contract and
furnish such bonds as may be required within the period specified in the
proposal (unless a longer period is allowed) after receipt of the specified
vendor or contractor responding to solicitations. This term is interchangeable
with such terms as bidder, offeror, and subcontractor.
A person who solicits, either
orally or by written solicitation, prices for various types of supplies,
equipment, or services. The buyer performs all necessary steps to prepare,
negotiate, formulate, and issue a purchase order. The buyer may place oral
orders followed by a confirming purchase order.
written instrument changing or otherwise modifying a contract or purchase
acknowledgement by a surety that its bond given in connection with a contract
continues to apply to the contract as modified.
general terms, a contract and/or agreement includes any bilateral agreement
(contract or purchase order) issued for supplies, equipment, materials,
services, or construction that is a mutually binding legal relationship
obligating the contractor to furnish items or services and the buyer to pay for
them. A contract becomes enforceable when it is formally acknowledged or
accepted by a responsible representative of the contractor or work is initiated
(which constitutes acceptance).
employee who administers a contract on behalf of Purchaser. This person is the
primary contact between Purchaser and the contractor. For simplicity, the term
Contract Administrator as used throughout the manual refers to any person with
specific contract administration authority, e. g., buyer, Contract
Administration representative, contract specialist, or Contract Administrator.
A Contract Administrator prepares solicitations of various types of contracts.
The administrator performs all the necessary steps involved in the preparation,
negotiation, formulation, administration, and closeout of contractual
agreements. The Contract Administrator also oversees the performance of the
contract and ensures that both parties meet the various obligations set forth
in the contract.
the time between receipt of a Contract Inquiry Package from Project Management
by the Contract Administrator and the time a contract is awarded to the
to the contract administration organization that is part of Purchaser Corporate
Management. The terms such as “Home Office Contracts” and “Corporate
Contracts” refer to operations within Corporate Contract Administration.
person designated by Purchaser Project Manager to provide technical assistance
to the Contract Administrator assigned to the project. The contract
coordinator will monitor the work as it progresses. Specific duties, responsibilities,
and authority are limited.
Provider of goods or services.
This term is interchangeable with such terms as subcontractor, vendor, seller,
time between issuing a notice of award with instructions to proceed and
completion of the contracted services or delivery of the product to the
disadvantaged individuals whose ability to compete in the free enterprise
system is impaired due to diminished opportunities to obtain capital credit as
compared to others in the same line of business that are not socially
disadvantaged. Individuals who certify that they are members of named groups
(Black Americans, Hispanic Americans, Native Americans, Asian-Pacific
Americans, Asian-Indian Americans, etc.) are to be considered socially and
mean United States citizens whose origins are in India, Pakistan, or
“Asian-Pacific Americans” mean
United States citizens whose origins are in Japan, China, the Philippines,
Vietnam, Korea, Samoa, Guam, the U. S. Trust Territory of the Pacific Islands,
the Northern Mariana Islands, Laos, Cambodia, or Taiwan.
“Native Americans” means
American Indians, Eskimos, Aleuts, and native Hawaiians.
“Affiliates” are business
concerns, which are affiliates of each other if, directly or indirectly, either
one controls or has the power to control the other, or another concern controls
or has the power to control both. In determining whether affiliation exists,
consideration is given to all appropriate factors including common ownership,
common management, and contractual relationships; provided that restraints
imposed by a franchise agreement are not considered in determining whether the
franchiser controls or has the power to control the franchisee, if the
franchisee has the right to profit from its effort, commensurate with
ownership, and bears the risk of loss or failure. Any business entity may be found
to be an affiliate, whether or not it is organized for profit or located inside
the United States.
and testing of materials, equipment, supplies, and services (including, when
appropriate, raw materials, components, and intermediate assemblies) to
determine whether they conform to the contractual requirements.
document used to solicit written and in some cases sealed bids from prospective
contractors. The IFB is a method of acquisition that employs competitive bids,
formal opening of sealed bids, and awards. IFB’s are only used when (1) time
permits the solicitation, submission, and evaluation of bids; (2) the award
will be on the basis of price and other price-related issues; (3) all
clarifications are sent to all bidders; and (4) there is a reasonable
expectation of receiving more than three bids.
a business concern that at least 51 percent is unconditionally owned by one or
more individuals that have been subjected to racial or ethnic prejudice or
cultural bias because of their identity as a member of a group without regard
to their qualities as individuals. This also includes any publicly owned
business having at least 51 percent of its stock unconditionally owned by and
whose management and daily business is conducted by one or more such
written instrument changing or otherwise modifying a contract or purchase
notice to the successful offeror that the offer submitted (as is or as modified
through discussions) is accepted and award is made. Completion and execution
of the contract is required before work can begin unless a supplementary
“Instructions to Proceed” is also included. Authorization to proceed with the
work before contract execution is only issued when it is otherwise not possible
to complete the usual contract forms in time to allow the contractor to
commence work within the time required.
item that has been developed and produced to governmental or commercial
standards and specifications, is readily available for delivery from an
industrial source, and may be acquired without change to satisfy a requirement.
bond which is executed in connection with a contract agreement and which
secures the payment of all persons supplying labor and material in the
performance of the work provided for in the contract.
dollar amount shown in a bond, representing the maximum payment for which the
surety is obligated.
bond that is executed in connection with a contract to secure the performance
and fulfillment of all the undertakings, covenants, terms, conditions, and
agreements contained in the contract.
person designated by Purchaser management to manage and be responsible for a
capital project and/or property site support. The Project Manager also
provides technical assistance to the Contract Administrator assigned to the
package from the Project Manager or Design Team containing all the documents
required to adequately convey to all bidders the scope of work being contracted
out. Typically, the following documents are supplied with the RFC:
Listing of services, materials, and equipment to be supplied by
Schedule and work breakdown structure (if applicable)
Special instructions to bidders
Technical documents (specifications, drawings, standards, etc.)
Engineering data need dates
Field completion dates
Special certification and testing requirements
document used to communicate requirements to and solicit written proposals,
both sealed and unsealed, from prospective contractors. The RFP shall be used
only when there is a definite intent to award a contract. A proposal received
in response to an RFP is an offer that can be accepted to create a binding
contract, either following negotiations, or when authorized, without
discussions. An RFP shall not be used as a solicitation for information or
document used to obtain information about a prospective contractor in order to
verify that the prospective contractor is fully licensed and qualified to
perform the work at hand.
document used to obtain price, delivery, or other market information used for
planning purposes only when there is no intent to award a contract based on the
request. A quotation received in response to an RFQ is not an offer and cannot
be accepted by the Contract Administrator to create a binding contract unless
the bidder formally acknowledges that the price is firm.
time required for delivery from the origination or FOB point to the point of
a concern, including its affiliates, that is independently owned and operated,
is not dominant in the field of operation in which it is bidding, and qualifies
as a small business by applicable Federal Regulations.
a small business concern that is at least 51 percent unconditionally owned by
one or more socially and/or economically disadvantaged individuals, or a
publicly owned business having at least 51 percent of its stock unconditionally
owned by one or more socially disadvantaged individuals and whose management
and daily business is conducted by one or more such individuals. (Also see
Economically Disadvantaged Individuals.)
who have been subjected to racial or ethnic prejudice or cultural bias because
of their identity as a member of a group without regard to their qualities as
A request for proposal, request
for quotation, or request for qualification.
Provider of goods or services.
This term is interchangeable with such terms as contractor, vendor, seller, and
time between the contractor/vendor’s notice of award and completion of the
contracted services or delivery of the product to the FOB point.
who has established a mutual relationship with one or more parties whom jointly
have contractual responsibilities to the other parties in the agreement in
accordance with the terms of the agreement or contract.
bilateral contractual relationship that defines the legal responsibilities of
two or more business entities (partners) for the purpose of obtaining a
contract with a third party (client) to provide supplies or services of any
kind. After the award of the prime contract, the document that defines the
relationship is called the teaming contract.
That element of inspection that
determines the properties or elements, including functional operation of
supplies or their components, by the application of established scientific
principles and procedures.
A promise or affirmation given by
a contractor or supplier to a buyer regarding the nature, usefulness, or
condition of the supplies, services, or construction furnished under a contract
or purchase order. The warranty also certifies that the end product will be
“Fully Functional and Operational for the intended Purpose.”
small business that is at least 51 percent unconditionally owned by a woman or
women who are U. S. citizens and who also control and operate the business.