Glossary of Terms


Bid	‘Bid’ also known as ‘offer’ is usually made by a trader, investor or dealer as an indication of interest to either buy or sell goods or provide a service within a specific timeframe and for a specific price. It is usually processed via an electronic auction.
Bid security (bid bond)	A ‘bid bond’ or ‘bid security’ is a way for the bond owner to have a form of guarantee if the bidding company fails to commit to the obligations set during the bidding process. It serves as a guarantee to the bond owner that the bidder will complete the work and helps to avoid instances such as 1) changing or withdrawing an offer after submitting the offer 2) the bidding company failing to sign the contract or provide the security after the offer would have been confirmed/accepted 3) the bidding company failing on any terms stipulated on the original contract.
Bill of quantities	Often referred to as a ‘BoQ’ or ‘BQ’, a ‘bill of quantities’ is a detailed estimate of all materials, labour and parts needed to fulfil a project. It is most commonly used within the construction industry. It is usually supplied to bidders so that when each entity prepares their pricing, they are referring to the same list of requirements.
Expression of interest	An ‘expression of interest’ or EOI document helps to indicate to the bid owner that a buyer is indicating serious interest to fulfill a contract or solicitation. It is often one of the first stages in a bidding process.
Fixed price	‘Fixed price’ refers to a locked price of a product or service that is not subject to discussion or bargaining – a price that will not change after it has been agreed. It is generally only subject to change should the purchaser of the bid (the project owner) make a change to the specifications of the project which in turn will impact the suppliers ability to retain the same price.
Intellectual property	‘Intellectual property’ is the term used to depict intangible ‘creations of the mind’. These can vary from designs, literary work, art and music all the way to identity trademarks (logos, names) and patents (such as medicinal treatments or machine inventions).
Procurement	A term used to explain the process of purchasing goods, services, buying or leasing property, or even intellectual property for a business. Procurement is often used as an all-encompassing word to cover the whole method of finding, selecting the vendors, negotiation and the final purchase.
Quotation	A ‘quotation’ or as it is more commonly referred to a ‘quote’ is an offer in the form of documentation which lists detailed pricing, as well as other information and is sent by the supplier (bidding company) to the buyer (bid owner). This is usually in response to a ‘ request for quotation’ or RoQ.
Request for information	‘Request for information’ or ‘RoI’ is a mechanism to source data from the market to ascertain which of the potential providers has the right solution for the project. The document usually requests details on services, goods, production timeframes and pricing levels.
Request for proposal	An ‘RFP’ or Request for Proposal is a document issued to potential suppliers by the project owner, usually but not exclusively from a government entity or LE (large enterprise), which asks for a formal proposal for the supply of services, work or goods. RFP documentation lists exactly what the project owner is looking for including the project specifications and the scope of work. An RFP is more commonly used when the requirements for the project are rather complex, or cannot be clearly defined or even when the price isn’t the main criteria in which a bid is judged.
Request for quotation	Generally used when a procurement project is below the standard threshold of more formal tenders. A ‘request for quotation’ is a competitive bidding document whereby the supplier is asked to provide a quotation with details on their products/services, timeframes and pricing to complete a project.
Statement of work	A ‘statement of work’ describes in detail the specifics relating to the project such as what needs to be delivered and by when, with all relevant activities to be undertaken by the contractor. This might also include information on the level of service required. It is often part of the master service agreement which would include a Bill of Quantities (BoQ) and any detailed drawings/sketches/designs.
Subcontractor	A ‘subcontractor’ refers to a person or a company that is engaged to perform specific tasks on behalf of the main contractor. Subcontractors are different to ‘contractors’ in that it is the contractor that establishes a relationship with the client or project owner, whilst the subcontractor works directly for the contractor.
Addendum	An ‘addendum’ refers to an additional document which is attached to a contract. It is often used when information or items need to be changed on the original contract. However it can also be used for general purposes to attach supporting documentation.
Consideration	Within a contract ‘consideration’ refers to both or all parties involved receiving what has been agreed to. In more technical terms it is the ‘bargained for exchange’ explaining the benefit that each party expects from an agreement.
Contract	A ‘contract’ is a legally binding agreement between two parties (people or entities) with ensuing legal obligations. Whether verbal, written or electronic in format, it is a promise which is enforceable by law.
Contract administration	Before and once a contract has commenced, ‘contact administration’ is performed. Initially it is the activity to check that there will be full compliance from both parties to be able to fulfill the terms of the contract and once the contract is signed and in place, it is the process of monitoring the contract from delivery till completion.
Key Expert	A person who’s professional skills, qualifications, experience and knowledge are critical to the delivery of any project tender by the supplier. This person’s CV is usually taken into consideration during the technical evaluation of a bid.
Meat	MEAT is an acronym for ‘Most Economically Advantageous Tender’. It’s an assessment method used during the selection process and helps the project owner award the contract to a bidder without price being the main criteria on which to award the bid.
Contractor	A ‘contractor’ is the person or company that has been employed to deliver services, goods or materials at a certain price and within a specific timeframe. It can sometimes also refer to the subcontractor, the main difference being it is the contractor that liaises with the client and the subcontractor usually only liaises with the main contractor.
Debarment	‘Debarment’ refers to a person or company being excluded or disqualified from receiving invitations to bid, quote or tender for work by a governing body for a specific amount of time, depending on the seriousness of an event. This might be an offence by the company in areas such as fraud and mismanagement on a previous project.
Mandatory
Joint venture	A ‘Joint venture’ is the way in which two (or several) businesses join together and pool in their resources to achieve a specific task – such as in order to win a bid.
Option to extend/renew	An ‘option to renew or extend’ part of an agreement whereby the contract can be continued or renewed as needed for an additional time frame – so long as it is within the terms of the contract.
Response	A ‘response’ refers to the submission sent by the bidding company, which might be a quote, bid, offer or proposal.
Terms and conditions	‘Terms and conditions’ is the governing document in any contract or agreement. They list and clearly explain all the rules that the bidding companies must adhere to and are issued by the project owner for the vendors.
Balanced scorecard	A ‘balanced scorecard’ is a mechanism in which performance can be measured across numerous variables. It’s important to note that these variables might or might not be of equal importance.

Glossary of Terms

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