A
Acceptance Letter
Letter that creates an immediate binding contractual relationship between the purchaser and the successful tenderer prior to entering into a formal Contract.
Act of God
An event that was not only unforeseen but also had catastrophic consequences and, could not have been prevented. Typically, a natural disaster that impacted on the ability of parties to fulfil their contractual obligations.
Added Value
A phrase often used to classify non-cash releasing benefits realised through the procurement process. The "added value" from the procurement process may include risk reduction, stakeholder training, exclusivity, preferential access to resources etc., all of which would be classified as 'added value' benefits.
Addendum
Additional information about the tender, provided to all registered potential suppliers after the initial advertising date.
Aggregation
Adding together the value of separate linked Contracts for the same supply / service over a maximum of 4 years.
Appraisal
A detailed assessment of the general capacity of a contractor, supplier or service provider to meet certain general criteria or standards.
Asset Fixed
Fixed assets are assets that are not to be sold to customers, cannot be quickly converted to cash and are used to create economic benefit by use in the production or service process in the longer term.
Asset Tangible
Tangible assets can be seen and touched and have physical form.
Audit Trail
System or paper generated evidence showing how certain processes and functions were carried out and by whom.
Award Criteria
The criteria set out in the Invitation to Tender which indicates how a contracting authority will evaluate and score tenders received. It will usually be a mixture of prices, responses to quality/technical questions and added/social value.
B
Balance Sheet
When companies publish their financial accounts, one of the most valuable sources of information about the company's status is the balance sheet or statement of financial position. The report details the company's assets, liabilities and equity, and is a snapshot of the company's financial condition at a time.
Battle of the Forms
The battle of the forms describes the situation that results when parties involved in a commercial transaction exchange documentation with differing terms and conditions. In the event of a dispute between the parties, the courts have to decide what was agreed between the parties and, in the absence of a Contract, the courts in some jurisdictions will seek the last unchallenged counter offer. In practice this often favours the supplier, as the quotation, order acknowledgement, proof of delivery and invoice all supersede buyer communications.
Benchmarking
Comparison of performance and / or pricing against other providers of similar services, particularly those recognised as adopting Best Practice or Best Value.
Best Practice
The most effective and desirable method of carrying out a function or process derived from experience rather than theory.
Best Value
Best value is a trade-off between price and performance that provides the greatest overall benefit under the specified selection criteria. The term is closely associated with value for money. Seeking best value involves considering the quality of the solution proposed, the total life costs, service and support issues, sustainability etc. In higher value procurement projects, the bid evaluation criteria and their respective weightings will give expression to the perception of what represents the best value.
Bid Rigging
Bid rigging occurs when suppliers communicate with each other before lodging their bids and agree amongst themselves who will be the successful bidder and at what price.
Bid Rotation
A form of collusion in which a relatively stable set of bidders for contracts which are routinely awarded to the lowest bidder collude between themselves as to which of the bidders should win which contract. For example, bidder A may submit the lowest bid for contracts let over a particular time period or for a particular scope of work. The other bidders will deliberately inflate their bids on the express understanding that their turn will come. On the expiry of their turn, bidder A will inflate their subsequent bid in order for it to become bidder B's turn to win the contracts. Bid rotation relies upon a relatively stable community of bidders, regular tenders and predictable behaviour by the buyer.
Blanket Order
A blanket order is an order raised with a supplier for a specific range or category against which individual requirements will be drawn down over a period. Typically, the overall quantities are not known precisely at the start of the arrangement, so a commitment is given to fix the terms of the agreement for a specified period, for example, six months or 12 months.
Boilerplate Clause
The phrase 'boilerplate clause' refers to those terms within an agreement which are standard to many agreements and which are included within draft Contracts as a means of reducing organisational risk.
Breach of Contract
When parties have entered into a legally binding agreement and one party fails to fulfil their obligations under the terms of that agreement, they are said to be in breach of the agreement.
C
Capital Expenditure
Capital expenditure [CAPEX] is an amount spent by an organisation to either acquire or upgrade a long-term asset and which is considered a major investment by that organisation, having value to be used over several years.
Carbon Footprint
The carbon footprint is the total greenhouse gas emissions caused by an organisation, event, product or person. Organisations commission an emissions assessment in order to assess their carbon footprint so that a strategy can be developed to reduce it.
Cartels
A group of suppliers acting illegally in concert to artificially influence the price and/or quantity of supply.
Call-Off Contract
A Contract made following a formal tendering process with one or more contractors, suppliers or service providers for a defined range of works, goods or services covering terms and conditions (including price) which users 'call-off' to meet their requirements. See Framework Agreement.
Chartered Institute of Procurement & Supply (CIPS)
CIPS is a not for profit professional body working for the purchasing and supply professions. With an objective of "leading excellence in procurement and supply", it aims to promote good practice and provides services for the benefit of a procurement community. CIPS have designed a level based qualification program as follows:-
Professional diploma in procurement and supply (CIPS level 6)
Advanced diploma in procurement and supply (CIPS level 5)
Diploma in procurement and supply (CIPS level 4)
Advanced certificate in procurement and supply operations (CIPS level 3)
Certificate in procurement and supply operations (CIPS level 2)
Upon completion of the professional diploma and with sufficient procurement experience, candidates can acquire full membership (MCIPS). Before acceding to full membership, students hold associate member status (ACIPS). Higher status may also be achieved through recommendation and achievement in the form of a fellowship (FCIPS).
Collaboration
An arrangement under which bodies operate together to procure goods / services. Combined buying power can improve services and prices and share the administrative overhead.
Collusion
A fraudulent arrangement between two or more parties whereby prices or service requirements are manipulated to get around competitive tendering.
Common Procurement Vocabulary (CPV)
The numerical system of identifying goods and services in the tendering process. Also used as part of the procurement process to identify services offered by the tendering organisation.
Competitive Flexible Procedure
One of two procedures for procurement under the Procurement Act 2023, in which suppliers are invited to tender in a multi-stage procurement process which includes stages of down-selection to reduce suppliers to a final list of tenderers, whose tender submissions will be evaluated and from which an award of contract will be made. Also see 'Open Procedure'.
Consultant
An organisation or individual employed for specific tasks, usually where specialist knowledge or objective review is required.
Contract
A contract can be written or verbal. It's a binding agreement made between two or more parties to perform specific acts and is enforceable by law.
Contract Award Notice
A mandatory notice required under the Procurement Act 2023 which communicates the outcome of a procurement exercise (following the provision of feedback to participating suppliers) and commences a mandatory Standstill Period. It is required for any tenders conducted in accordance with either the open or competitive flexible procedure, or when an above-threshold call off contract has been tendered through an Act-compliant framework. It is also a mandatory notice for the award of contract required under the Public Contracts Regulations 2015 (for legacy framework call-off contracts).
Contract Change Notice
A mandatory notice under the Procurement Act 2023 published prior to a qualifying modification taking place (and must include a copy of the modified contract for Public Contracts of £5million or greater in value). Section 74 of the Procurement Act stipulates permissible modifications and sets out the grounds for qualifying modifications.
Contract Details Notice
A mandatory notice required under the Procurement Act 2023, providing details of an awarded contract following the mandatory standstill period and must be published within 30 days of contract signature (or 120 days under the Light Touch Regime). It must also include a copy of the redacted contract and KPI information, for any contracts of £5million or greater in value.
Contract Management
Good contract management is critical over the life of a contract to ensure: -
That value for money is achieved through full compliance with the contract requirements;
That the terms and conditions of contract are met in full;
That the goods and / or services provided by the supplier meet the members specified requirements.
Contract Performance Notice
A mandatory notice required under the Procurement Act 2023. It is used to report:
(a) annual KPI scores for public contracts exceeding £5m; or
(b) poor supplier performance / breach of contract (within 30 days of event)
Contract Termination Notice
A mandatory notice required under the Procurement Act 2023, published when a Public Contract comes to an end. This includes contracts which come to a natural end or are replaced with a new iteration of the same requirement, not just contracts which may be terminated early due to supplier performance, non-qualifying modifications or changes in requirements.
Contract Value
The total monetary value of a contract over its full duration. Also see 'Aggregation'.
Contract Variation
An addition or alteration to the terms of Contract that is mutually agreed to by both parties to the Contract. A Contract variation can be documented by letter or a deed of variation.
Contracting Authority
Any organisation or institution which is a public authority; having functions of a public nature and either wholly or mainly funded from public funds, or subject to oversight by another contracting authority, and not operating on a commercial basis.
Cost Plus
The method of payment for contracts for which tenderers quote a lump sum or % addition to their costs.
Counter Offer
A counter offer is a conditional response to an offer made by the other party in a negotiation. If the seller offers to sell at a price of £100, and the buyer responds with 'I will offer you £90', that is a counter offer. Legally, a counter offer supersedes the original offer, so the buyer may subsequently say 'OK, I will accept the offer of £100', but the original offer is no longer capable of acceptance and the buyer's comments are themselves an offer which the seller may choose to accept.
D
Default
A breach of a contract condition e.g. a delay in the promised delivery.
Deliverables
A collective name for the tangible goods and /or services that the supplier or contractor is required to supply under an agreement.
Direct Award
Direct awards can be made under multi-supplier Framework Agreements framework arrangements which set out all the terms under which contracts may be called off without further agreement.
Dutch Auction
In procurement terms the phrase is sometimes used for the discouraged practice of 'price shopping'. For instance, supplier A quotes a price of £100 and supplier B quotes £105. The buyer then approaches supplier B and invites them to re-quote in the light of the fact that another supplier has quoted a price of £100. If supplier B offers a price of £95, the buyer then approaches supplier A, and so on. This is seen as unprofessional as it involves disclosing confidential information and undermines trust in the relationship.
Dynamic Purchasing System (DPS)
An electronic process for making commonly used purchases which meet the requirements of the contracting authority, and which is limited in duration, open throughout its validity to any economic operator that satisfies the selection criteria and has submitted an indicative tender that complies with the specification. It is to be run as a completely electronic process and should be set up using the restricted procedure. This is a legacy procedure under the Public Contracts Regulations 2015 and individual dynamic purchasing systems will not be replaced on expiry.
E
Education Subcontracting
The process of subcontracting the delivery of education provision in accordance with ESFA rules. Such subcontracts are treated as any third-party supplier contract and subject to Procurement Act 2023 regulation. They are also subject to the higher light touch threshold.
Electronic Submission of Tenders
All communication and information exchanged in tender processes for contract values exceeding the relevant threshold must be carried out electronically including the submission of tenders. Also see 'Thresholds'.
Evaluation
Detailed assessment and comparison of contractor, supplier or service provider offers against award criteria.
F
Find a Tender Service (FTS)
The UK e-notification service re-launched on 24th February 2025 for the publication of notices concerning procurements subject to the Procurement Act 2023, and legacy notices subject to the former Public Contracts Regulations 2015. See: www.find-tender.service.gov.uk
Framework
An arrangement under which a contracting authority establishes with a provider of goods, works or services, the terms under which contracts subsequently can be entered into or 'called off' (within the limits of the agreement) when needs arise.
Further Competition
Process of running a competitive procurement exercise under a framework to select a supplier of supplies, services or works as provided for under that framework.
G
GDPR - General Data Protection Regulations
The UK GDPR is the United Kingdom General Data Protection Regulation, which became effective on the 1st January 2021. The law covers the key principles along with rights and obligations when processing personal data in the United Kingdom and sits alongside the Data Protection Act 2018. It applies to any organisation who offers goods and services to individuals in the UK and/or monitors behaviour of any individuals in the UK.
I
Input Specification
Input specifications describe the technical standards which need to be met.
Invitation to Tender
An invitation to contractor, suppliers or service providers to bid for the provision of works, goods or services. Also known as an 'ITT'.
K
Key Performance Indicator
A key performance indicator (KPI) is a term for a performance measure that is important to the organisation, business unit or individual who is being measured. In procurement, KPIs are typically used as measures of supplier performance and may be part of a contract or service level agreement and are now mandatory for any contract with a value exceeding £5million (including VAT) awarded in accordance with the Procurement Act 2023.
L
Leasing - Operating Lease
An operating lease is a lease in which all risks and rewards related to asset ownership remain with the lessor for the leased asset. In this lease, the asset is returned by the lessee after using it for lease term agreed upon. The ownership of the asset remains with the lessor for the entire lease period.
Leasing - Finance Lease
In a financial lease the risks and rewards related to ownership of asset leased are transferred to the lessee. Ownership transfer option at the end of the lease period is there with the lessee. The title might or might not be transferred eventually.
Light Touch (Regime)
Light touch or light touch regime (LTR) is a specific set of rules for certain service contracts that tend to be of lower interest to cross-border competition. Those service contracts include certain social, health and education services, defined by Common Procurement Vocabulary (CPV) codes, as set out in Schedule 1 of the Procurement Regulations 2024.
M
Most Economically Advantageous Tender (MEAT)
The tender that best satisfies the Contracting Authority’s requirements and best satisfies the Award Criteria set out in the Invitation to Tender.
N
National Procurement Policy Statement
The National Procurement Policy Statement (NPPS) is a document that sets out the strategic priorities for public procurement and how a Contracting Authority can support their delivery. It requires a Contracting Authority to have due regard to a set of national strategic priorities when exercising their functions relating to procurement ad setting out its own policy in respect of Social Value.
O
Offer
In a legal context an offer is 'an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed'. Typically, suppliers make offers in the form of bids, quotations or tenders, which may then be accepted by the buyer. The offer defines the terms upon which the supplier is willing to be bound, which normally include price, date of delivery, payment terms and a description of the category. One of the essential prerequisites for the formation of a Contract is the existence of an offer.
Open Procedure
One of two procedures for procurement under the Procurement Act 2023, in which suppliers are invited to tender in a single-stage procurement process. Also see 'Competitive Flexible Procedure'.
Order Acknowledgement
Historically, suppliers would issue an 'order acknowledgement' to advise the buyer that a purchase order had been received. The order acknowledgement can become part of the Battle of the Forms. The practice of issuing order acknowledgements has declined in some sectors, as individual transactions occur within a broader business framework, such as an over-arching contractual agreement.
Output Specification
Output specifications, such as performance or functional specifications, describe the function that needs to be performed and the outcomes that need to be met by the solution.
P
Parent Company Guarantee
A parent company guarantee binds the guarantor (the 'parent company') to fulfil and complete a subsidiary company's obligations and liabilities in the even of failure by that subsidiary to fulfil and complete its obligations and liabilities under a contract.
Pipeline Notice
A mandatory notice required under the Procurement Act 2023 for organisations with third-party supplier spend exceeding £100m+ per annum. If provides a 12-month forward-look at planned procurements individually of £2m+ value. Most of CPCs members will be exempt from publishing this notice by virtue of annual third party spend volumes.
Planned Procurement Notice
An optional notice required under the Procurement Act 2023 which is recommended best practice, and which advises the supply market of an upcoming procurement. A qualifying planned procurement notice can reduce tender timescales by up to 10 days if your tender timescales are tight.
Preliminary Market Engagement Notice
A mandatory notice where pre-market engagement is anticipated or has taken place. If you intend to run a full Open or Competitive Flexible Procedure tender process you are encouraged to advise the supply market in advance through the publication of this notice and will have to otherwise explain why preliminary engagement was not conducted in any tender notice which forms the commencement of procurement activity.
Procurement Specific Questionnaire
A questionnaire included in either an above-Threshold tender process which obtains information regarding a supplier’s capacity to be considered suitable either for inclusion in a subsequent invitation to tender (Competitive Flexible Procedure) or for evaluation of that supplier’s submitted tender (Open Procedure).
Procurement Termination Notice
A mandatory notice required under the Procurement Act 2023, when, after publishing a Tender Notice, the tender process is terminated without awarding a contract.
Public Contract
Any contract awarded by a Contracting Authority which has a value in excess of the relevant Threshold.
Public Procurement Regulations (2015)
Usually abbreviated to 2015 PCRs. Legacy regulations governing public sector procurement, superseded on 24th February 2025 by the Procurement Act 2023. Requirement for adherence to the 2015 PCRs is limited to Call Off Contracts awarded from frameworks established under this legacy legislation.
Public Sector Buying Organisation (PSBO)
A PSBO is a contracting authority working in the public sector, including the education sector, that provides frameworks allowing contracting authorities to more easily, quickly and cheaply access supply markets.
S
SMEs
Small and medium sized enterprises, a term used to refer to smaller private sector companies with less than 250 employees.
Social Value
The process of obtaining addition value to your community through public sector expenditure with third party suppliers. Both the Social Value Act 2012 and the National Procurement Policy Statement requires that all contracting authorities must consider how what they are proposing to buy might improve economic, social and environmental wellbeing.
Specification
A description of requirements and standards to which the goods, works or services should conform. Its purpose is to present prospective suppliers with a clear, accurate and full description of the organisation's needs, to enable them to propose a solution to meet them.
Standstill Period
Following evaluation of tenders and prior to completing the award of a contract award, the Procurement Act 2023 obliges for all above-Threshold value contracts, a mandatory eight working day standstill period to permit challenges from the supply market to the award decision. This includes the award of a call off contract from a framework, when then value of such is above threshold. Working days excludes weekends and bank/public holidays in any one of the four UK nations. When calculating the eight-working day standstill period, day one is the date of notification of proposed contract award published on the Find a Tender Service. Any public holiday in England, Wales, Scotland or Northern Ireland must be excluded from the period of calculation, irrespective of the nation in which the contract is being awarded. Saturdays and Sundays must also be excluded.
Sub-Contracting
The process where a contractor assigns part of the contract to another contractor(s).
T
Tender Notice
A mandatory notice required under the Procurement Act 2023 when undertaking an Open or Competitive Flexible Procedure, including procurement through a Dynamic Market. This is the direct replacement for a contract notice under the Public Contracts Regulations 2015.
Threshold/s
The VAT-inclusive values above which application of the Procurement Act 2023 is mandatory for the procurement of supplies, services or works contracts and above which a contract is officially defined as a Public Contract. The threshold values are updated biennially on 1st January of even-dated years. There are different thresholds for central and sub-central contracting authorities. Schools, MATs and FE Colleges are classified as sub-central contracting authorities. There are three threshold values relating to supplies/services, light touch, and works contracts.
Transparency Notice
A mandatory notice required under the Procurement Act 2023 when undertaking a direct award above threshold (published prior to award). This must be published prior to entering into a contract and requires a mandatory standstill period in which suppliers have a chance to challenge the planned award. It is a replacement for the voluntary ex-ante transparency (VEAT) notice publishable under the Public Contracts Regulations 2015.
TUPE Regulations
The 'Transfer of Undertakings (Protection of Employment) Regulations 2006'. TUPE applies to organisations of all sizes and protects employees' rights when the organisation or service they work for transfers to a new employer. TUPE has impacts for the employer who is making the transfer (also known as the outgoing employer or the transferor) and the employer who is taking on the transfer (also known as the incoming employer, the new employer or the transferee). Seek advice from your organisation’s Human Resources (HR) team when planning for the re-tender of any outsourced services contract, the procurement of an outsourced arrangement for a service currently provided in-house or the decision to bring an outsourced service back in-house.
V
Voluntary and Community Organisation (VCO)
A general term used to refer to registered charities, non-charitable non-profit organisations, associations, self-help and community groups whose activities are charitable in nature.
W
Whole Life Costs
The systematic consideration of all relevant costs and revenues associated with the acquisition, ownership and disposal of an asset.