Dictionary of Procurement Terms

Welcome to the NIGP Online Dictionary of Procurement Terms, the comprehensive reference for public purchasing terms and concepts.

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  • A+B Bidding

    1. A method of rewarding a contractor for completing a project as quickly as possible. By providing a cost for each working day, the contract combines the cost to perform the work (“A” component) with the cost of the impact to the public (“B” component) to provide the lowest cost to the public. 2. A+B bidding is a cost-plus-time bidding procedure. The low bidder is selected based on a combination of the traditional contract unit price items based bid (A) and the time component proposed by the bidder to complete the project or a critical portion of the project (B). (WSDOT, 2015)
  • A/E (Architect or Engineer) Professional Services

    Services that require performance by a registered architect or engineer. Professional services of an architectural or engineering nature that are associated with research, planning, development, and design for construction, alteration, or repair.
  • AAA

  • ABA

  • ABA Model Procurement Code for State and Local Government (U.S. Law)

    Developed by the American Bar Association (ABA) and adopted in 1979. A collection of statutory principles and policies that provides guidance to public policy managers who wish to responsibly manage public procurement. State and larger local governments have individually codified the ABA MPC into procurement law and policy to effectively guide their procurement departments. The code was updated in 2000 and contains enhancements in the following areas: Electronic Commerce, Cooperative Purchasing, Flexibility in Purchasing Methods and Processes for Delivery of Infrastructure Facilities and Services. Also called the Model Procurement Code.
  • ABA Model Procurement Ordinance for Local Governments (U.S. Law)

    A code similar to the ABA Model Procurement Code, but intended for use by small local jurisdictions.
  • ABC

    CANADIAN Aboriginal Businesses Canada, a division of Industry Canada.
  • ABC Inventory Classification

    A means by which to categorize inventory that is applicable to any size business, regardless of industry (e.g., government, manufacturing, services, etc.). ABC classification allows for a review of the inventory based on the business’ approach to the management or review of its inventory. For some entities, the ABC of categories is based on the dollar value of the items. “A” in this application would be the top 10% of the inventory items and would account for approximately 70% of the annual inventory dollar volume. “B” would be the next 20% and would account for approximately 20% of the annual dollars in the inventory and “C” the remaining 70% of the annual inventory items with 10% of the overall monetary value of the annual inventory. The use of the terms “A,” “B,” and “C” may also be used to classify the need for accurate inventory records (tolerance) for various items, (very accurate, moderate accuracy), how often cycle counts are needed (weekly, monthly, or quarterly), or even to note who may be responsible for the inventory itself (e.g, “A” is controlled by fleet, “B” is by purchasing, and “C” by parks and recreation). Further, “A” may denote the items in the inventory that have the longest lead times (e.g., JIT extended lead times), how the items are purchased (term contract, spot buy), or levels of safety stock required (highest turnover, slow movers). Location of specific items in the inventory may also be denoted by the ABC Classification system. (Janson, 1987)
  • ABL (Approved Brands List)

  • Absolute Advantage

    The ability to produce a good or service at a lower absolute cost (the minimum costs to remain in business) per unit using a smaller number of inputs or a more efficient process than another supplier producing the same good or service.