15

Confusing Terms in
PROCUREMENT

Saheena Parween Ansari

#procurementholic
1 Request for Proposal (RFP) vs Request for Quote (RFQ)

2 Purchase Order (PO) vs Contract

3 Procurement vs Purchasing

4 Supplier vs Vendor

5 Single Sourcing vs Sole Sourcing

6 Competitive Bidding vs Negotiated Procurement

7 Direct vs Indirect Procurement

Contracting Officer (CO) vs Contracting Officer's

8 Representative (COR)
9 Blanket Purchase Order (BPO) vs Standing
Purchase Order (SPO)

10 Procurement Strategy vs Procurement Plan

11 Fixed Price vs Cost Reimbursement Contract

12 Goods vs Services Procurement

13 Purchase Requisition vs Purchase Order

14 Quality Assurance vs Quality Control

15 Contract Management vs Contract Administration

RFP is a solicitation document used to request proposals from potential suppliers
for complex goods or services. It typically includes detailed specifications and
requirements for the goods or services being procured, as well as instructions on
how to submit a proposal.
RFQ, on the other hand, is used to request pricing information from potential
suppliers for goods or services that are relatively straightforward and have well-
defined specifications.

A Purchase Order (PO) is a document issued by a buyer to a supplier that

authorizes the purchase of goods or services at a specified price and quantity.
It serves as a legally binding agreement between the buyer and supplier for the
purchase of goods or services. A contract, on the other hand, is a more formal
agreement that outlines the terms and conditions of a business relationship
between two parties. It can include provisions for pricing, delivery, warranties, and
other important terms that govern the business relationship.

Procurement refers to the overall process of acquiring goods and services,

including activities such as market research, supplier selection, contract
negotiation, and supplier management.
Purchasing, on the other hand, refers specifically to the act of buying goods or
services from a supplier.

Both terms refer to a company or individual that provides goods or services to a

buyer.
However, the term "supplier" is generally used in the context of a longer-term
business relationship, while "vendor" is often used to refer to a one-time
purchase or a less formal relationship.

Single sourcing and sole sourcing are both procurement strategies that involve
using a single supplier to provide a particular good or service. However, the terms
are not interchangeable. It refers to using a single supplier for a particular good or
service, but other suppliers may still be used for other goods or services.
Sole sourcing, on the other hand, refers to using a single supplier for a particular
good or service to the exclusion of all other suppliers.
Competitive bidding involves soliciting proposals from multiple suppliers and
selecting the one with the best overall value.
Negotiated procurement, on the other hand, involves direct negotiations between
the buyer and supplier to arrive at mutually acceptable terms.

Direct procurement refers to the acquisition of goods or services that are directly
related to a company's core business operations, while
indirect procurement refers to the acquisition of goods or services that are not
directly related to a company's core business operations, such as office supplies or
utilities.

Contracting Officer (CO) is responsible for the overall management of a

contract, including negotiating and awarding the contract and ensuring that the
supplier meets the terms and conditions of the contract.
Contracting Officer's Representative (COR) is a designated individual who serves
as a liaison between the CO and the supplier, and who is responsible for
monitoring the supplier's performance under the contract.

A Blanket Purchase Order (BPO) is a long-term contract with a supplier for the
repeated purchase of a particular good or service over a specified period of time.
Standing Purchase Order (SPO) is similar to a BPO, but it is used to purchase a
variety of goods or services from a supplier over a specified period of time.

procurement strategy is a high-level plan that outlines the overall approach to

procurement for an organization, while
procurement plan is a more detailed document that outlines specific actions and
timelines for executing the procurement strategy.
A fixed price contract sets a specific price for a product or service that is agreed
upon before the work begins, while
a cost reimbursement contract allows the supplier to be reimbursed for actual
costs incurred, with a markup for profit.

Goods procurement involves the purchase of physical goods, such as raw materials
or finished products, while
services procurement involves the purchase of intangible services, such as
consulting or maintenance.

A purchase requisition is a document used to request a purchase, while

a purchase order is a formal document used to place an order for a specific good
or service.

Quality assurance involves preventing defects before delivering a product or

service, while
quality control involves detecting and correcting defects during production.

Contract management involves ongoing monitoring and enforcement of contract

terms, while
contract administration is the administrative aspect of managing contracts, such
as record-keeping and compliance.
 Saheena Parween Ansari

#procurementholic

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