No one likes to be confused by procurement jargon and buzzwords. Whether you’re new to procurement or just feel like brushing up on your terminology, we’re busting all the procurement jargon you might hear.
Aggregation
This is when different departments — or even different organisations — team up to place one big order instead of several small ones. By buying in bulk, you can often negotiate better deals and save money.
Asset management
Asset management is about keeping track of everything your organisation owns, including buildings, equipment and infrastructure. Strategic asset management helps you manage it all in a way that maximises value and aligns with your business goals. This could include acquiring new assets, maintaining existing ones, or disposing of them efficiently.
Award criteria
These are the things you use to decide who wins a contract. It’s usually a mix of cost and quality, and sometimes includes things like environmental impact or how well a supplier supports local jobs.
Awarded
When the buyer has evaluated all supplier bids, they’ll decide who to choose for the work. The successful supplier will be “awarded” the project.
Bid
A bid is when suppliers compete for a contract to supply an asset, product or service. It will include information about how they will supply the buyer (such as price, quantity, timelines, etc.)
Bid evaluation
Scoring the bids you receive against your award criteria. Buyers usually want to find the bid that gives the best value — not always the cheapest.
Call-off contract
When a buyer and supplier already have a framework agreement in place, the buyer can use a call-off contract to repurchase from the supplier without needing to set new terms.
Category management
Rather than treating every purchase as a one-off, this approach organises procurement into categories (like ICT, facilities, or catering) and manages each strategically. It helps identify trends, reduce duplication, and improve value.
Centre of Expertise (CoE)
A specialist organisation or team that provides expert advice, support, and resources to help other organisations buy more effectively. In public sector procurement, CoEs often create and manage framework agreements and set best practice standards. In the UK, organisations like Crown Commercial Service (CCS) or Scotland Excel are Centres of Expertise.
Competitive flexible procedure
The competitive flexible procedure replaces many of the previous more prescriptive procedures. It provides contracting authorities with more opportunity and flexibility to design their own competitive tendering procedure.
However, in designing and carrying out their procedure, contracting authorities must have regard to the procurement objectives and meet the procedural requirements applicable to the competitive flexible procedure, such as those relating to time limits and transparency.
Competitive tendering
The formal process of inviting multiple suppliers to compete for your business. It helps ensure fairness and transparency while also encouraging competitive pricing.
Corporate Social Responsibility (CSR)
CSR means thinking about the social and environmental impacts of what you’re buying. For example, are the suppliers paying fair wages? Are the products sustainably sourced?
Covered Procurement
Covered procurement means the award, entry into and management of a public contract. A public contract is a contract entered into by a contracting authority with a value above the relevant procurement threshold.
Debarment List
A list of suppliers excluded from participation due to mandatory or discretionary exclusion grounds. The length of the debarment may vary in each case and is decided by a Government minister. An appeal process to the newly established Procurement Review Unit (PRU) is available to suppliers.
Direct award
When a contract is given to a supplier without running a full competitive tendering process. This can happen when there is only one specialist supplier who can provide the goods or services or if there’s an urgent need and no time for a full process.
As an example, a council might make a direct award to a supplier already on a framework for IT support if they urgently need extra capacity and the framework allows it.
Dynamic Purchasing System (DPS)
A Dynamic Purchasing System is an electronic live list of suppliers you can buy from. Unlike frameworks, new suppliers can join at any time, which keeps the list fresh and competitive. It’s often used for lower-risk or frequently purchased goods and services. DPS’s are still in existence, but no new DPS’s can now be awarded, as they have been replaced by Dynamic Markets in the new Procurement Act legislation.
Dynamic Market
Effectively the replacements for Dynamic Purchasing Systems. Dynamic Markets will work in a very similar manner, although contracts will be awarded using the Competitive Flexible Procedure within the Dynamic Markets. It is also recognised that Dynamic Markets are applicable for a wider range of goods and services than DPSs were intended for.
E-procurement
Using digital tools to manage the procurement process, from searching for suppliers and issuing tenders to placing orders and making payments.
Expression of Interest (EOI)
Before launching a full tender, you might invite suppliers to express interest by providing a set of high-level requirements.
For example, a university’s procurement team may be planning to buy a high-spec scientific imaging system for its research department. Before starting the formal procurement process, they want to find out what’s available on the market and who the key suppliers are.
Frameworks
A contract between a Contracting Authority with one or more suppliers which provides for the future award of contracts either following a Competitive Selection Process or an Award Without Competition.
Find a Tender (FTS)
The UK’s main portal for advertising high-value public sector contracts. It replaced OJEU after Brexit and is where suppliers go to find public procurement opportunities.
Incoterms
Short for “International Commercial Terms,” these are standard terms used in global trade to spell out who’s responsible for things like shipping, insurance, and customs.
Invitation to Tender (ITT)
The official document inviting suppliers to bid. It usually includes specifications, timelines, and evaluation criteria.
Just-in-Time (JIT)
A strategy where you order goods to arrive only when you need them, cutting down on storage costs but increasing the risk if deliveries are delayed.
Key Performance Indicator (KPI)
Targets built into contracts to measure how well a supplier is doing. For example, “deliver 95% of orders on time” could be one. Under the new Procurement Act, all contracts over £5m in total value will be mandated to include at least 3 KPIs which must be reported on annually.
Most Economically Advantageous Tender (MEAT)
This was the way for buyers to assess suppliers before awarding them the contract under the previous procurement regulations (PCR2015). It involved looking beyond the price to make sure you choose the best value option, rather than the cheapest, assessing factors including the quality of the product or service, the suppliers’ technical ability to deliver, and the sustainability impact.
This has now been superseded by MAT (Most Advantageous Tender) under the new Procurement Act regulations.
Most Advantageous Tender (MAT)
This is the new way for buyers to assess suppliers before awarding them the contract under the new Procurement Act regulations.
It still involves looking beyond the price to make sure you choose the best value option, rather than the cheapest, assessing factors including the quality of the product or service, the suppliers’ technical ability to deliver, and the sustainability impact.
The reason for the slight change in terminology is to reinforce the Government’s perspective that buyers should be considering total impact - e.g. environmental, social etc as well as price.
Net zero
Balancing the harmful carbon emissions going into the atmosphere with the carbon removed from it.
Open procedure
A procurement process where any supplier can submit a bid for the framework agreement or contract. This process is a single stage process, meaning that there is no qualification stage, and all bids received will be evaluated.
Outsourcing
Hiring another company to do something for you (like catering, cleaning, or IT support) rather than doing it in-house.
Pre-market engagement
This is a process where buyers engage with suppliers of a good or service prior to issuing a formal tender. The process is intended to allow the buyers to become more aware of the latest technologies, processes, or legislation which might inform how they wish to tender for their requirement.
It’s also intended to be used as an opportunity to discuss the potential tender requirements with the supply chain, and ask for feedback. Pre-Market engagement is a key focus of the new Procurement Act, and mandated within the legislation.
Procurement
Unlike under the previous regulations, ‘procurement’ is now defined by the Procurement Act to mean not only the award of a contract, but specifically “the award, entry into and management of a contract.”
The requirement to have regard to the objectives therefore applies throughout the life of the contract, not just to the procedure to award.
Procurement consultancy
Sometimes, organisations hire external experts to help improve how they buy things; this is called procurement consultancy. Consultants can help build strategies, run complex tenders, or find cost savings across the procurement process.
Procurement Objectives
The new Procurement Act (at section 12) replaces those ‘principles’ with certain procurement ‘objectives’ which a contracting authority must have regard to, namely:
● delivering value for money;
● maximising public benefit
● sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions; and
● acting, and being seen to act, with integrity.
Product
Something you can buy, like office equipment or a vehicle. There’s no continuous contract involved with buying a product as it’s a one-off purchase.
Product and a service
This involves purchasing a service alongside the product. An example might be finding a company to offer IT services when you buy laptops for the office.
Purchase Order (PO)
A Purchase Order is an official document generated by the buyer that confirms the products or services they’d like to purchase from the supplier. It includes order details as well as quantities, costs, delivery dates, delivery locations and any terms and conditions. Once the supplier accepts the PO, it becomes a legally binding agreement.
Request for Information (RFI)
Now outdated terminology, an RFI allowed buyers to gather insights from the market to gain a deeper understanding before writing up requirements for a tender.
Request for Proposal (RFP)
This has since become outdated, but an RFP happened at the launch of a project. It was a detailed document that describes your requirements and asks for proposals from qualified contractors who can help complete the project. It’s also called Invitation to Tender.
For example, a community centre might have been looking for a supplier to help them refresh their website. Their RFP would have defined the project and its goals, but suppliers will have some room for creativity in their responses.
Request for Quotation (RFQ)
Also now outdated, a RFQ was when a buyer knew exactly what they needed, so they’d use an RFQ to gather quotes from potential suppliers. The goal was to find the best supplier and establish a price. As an example, a construction company may have needed to buy cement, so it would have sent out an RFQ to several cement suppliers.
Service Level Agreement (SLA)
As part of the contract between a buyer and supplier, the SLA will lay out expectations, including things like how quickly the work will be completed and how often the supplier will check in with the buyer.
Small Medium Enterprises (SME)
Small and medium enterprises are businesses with fewer than 250 employees.
Social value
Making buying choices that are about more than money and do some good. This could mean supporting local jobs, reducing carbon emissions, or buying from small businesses.
Supplier
Organisations that provide the goods or services the buyer needs. They can be large businesses, SMEs, or even social enterprises. Also known as bidder or tenderer.
Supplier due diligence
Researching a potential supplier before agreeing to work with them.
TCO or Total Cost of Ownership
Stands for Total Cost of Ownership, which means looking at the complete cost of an asset from the point of purchase (including costs to maintain and dispose of the asset).
Tender
A tender is a formal offer from a supplier to provide goods, services, or works in response to a request (usually an ITT[3]) from a buyer. Usually, a tender includes details of the product or service, prices, timelines, evidence of experience and commitments to quality, sustainability, or social responsibility.
Vertical Arrangement
A Contract between a Contracting Authority and a person that is controlled by that Contracting Authority or with other Contracting Authorities acting jointly.
Voluntary, Community, and Social Enterprise (VCSE)
Organisations dedicated to creating social value or that use profits to enhance local communities.
How can Procurement Hub help you?
We know how important it is to get the procurement process right, especially when working in the public sector.
Our experienced, CIPS-qualified team can provide you with a range of procurement consultancy services designed to support buyers throughout the entire procurement process. We’ll help get you the best possible outcomes while guiding you through the new changes under the UK Procurement Act.
We can also customise procurement solutions to fit your organisation’s goals, finding a solution that will maximise efficiency while maintaining flexibility.
Let us help you find a procurement solution that matches your organisation’s needs.