Following on from part one, we continue our series of posts about the language and jargon of procurement. This time we get to grips with procurement definitions including CPV codes, collusion and contingent liability.
A mid/long-term contract awarded to a supplier or number of suppliers where requirements are standardardised and required on an ongoing basis.
Groups of suppliers illegally collaborating to influence the market price of goods or services.
Central Government Authority
An authority which procures at central government rather than local level.
Centralised Purchasing Activities
Procurement activity conducted by organisations which buy products or services on behalf of more than one public body.
Central Purchasing Body
Organisations that buy products or services on behalf of more than one public body.
Civil Financial Penalty
A fine payable by a contracting authority in breach of procurement legislation where the contract has already begun.
An arrangement between organisations – often not competing in the same industry – to leverage procurement purchasing power.
An often-illegal arrangement between parties (which appear to be rivals in the same market) for their mutual benefit.
The process of ensuring that all systems, premises and equipment of an operation are suitable for the nature of the business concerned.
Common Law Damages
Monetary awards to a person or organisation to compensate for loss due to proven breach of contract.
Common Procurement Vocabulary (CPV)
Common Procurement Vocabulary or CPV codes are made up of (usually) 9 digits to define the subject of contracts. ‘Supplementary vocabulary’ codes are sometimes added for specific detail. EU-developed system for ease of publishing tenders in the OJEU.
This is used only in particularly complex procurement situations – usually where the buyer needs the help of suppliers to develop a suitable solution. Suppliers able to meet the established requirements are then invited to tender.
The process of requesting bids (or tender submissions) from more than one supplier to encourage fairness and competition.
Competitive Procedure with Negotiation
Following the receipt of initial tender responses, the tenderer can now choose to negotiate with more than one before a final contract award is made. This might be beneficial where the requirement is complex or required innovative solutions.
Loss occurring from circumstances outside of the terms of the contract – e.g. as a result of theft or damage. Whether these losses are recoverable depends on insurance policies rather than contractual agreements.
A partnership between organisations sharing a common goal. In procurement, this may refer to suppliers pooling skills or resources to respond to a tender.
A professional (person or organisation) providing specialist and impartial knowledge or expertise.
A liability that may be incurred by an organisation depending upon the outcome of a future event, such as a court case.
A legally binding agreement between parties.
Contract Award Notice
A formal public announcement of the outcome of a public procurement exercise in the OJEU. Manadatory for all contracts above the EU advertising threshold, and to be made within 48 hours of contract award.
Documents relevant to a contract, such as the tender package, associated drawings or appendices, received tender submissions, and contracted supplier agreements.
Contract Management Plan
This lays out key information about the way in which the contract will be managed throughout its duration. It is drawn up as part of the initial contract, and developed during the contract’s life.
The way in which a public body notifies potential suppliers of a contract opportunity. Published on websites, in newspapers/periodicals, and on the OJEU.
The full monetary value of a contract as agreed following any negotiations.
Described in EU Directives as either ‘public authorities’ or ‘bodies governed by public law’.
A person or organisation undertaking a contract to provide goods or services at an agreed price.
A government search tool to identify previous, existing, and potential future contracts worth over a specific value.
Exclusive rights by national law granted to the creator of an original work to prevent reproduction or misuse. Copyright is a common form of Intellectual Property.
A contract between buyer and supplier where a cross-departmental requirement is fulfilled.
Cost of Ownership
A comprehensive cost representation taking into account direct (eg. initial outlay) costs as well as indirect (eg. operating) costs in determining the value of an investment.
A system of payment whereby a supplier’s expenses are guaranteed to be covered, plus an agreed profit paid on top.
See ‘Common Procurement Vocabulary’.