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Procurement Glossary

Key procurement terms and definitions for professionals.

RFP

Request for Proposal. A formal solicitation document sent to potential vendors requesting detailed proposals for products or services.

Sourcing

RFQ

Request for Quotation. A document requesting price quotations from vendors for specific goods or services.

Sourcing

RFI

Request for Information. A preliminary document used to gather information about vendor capabilities before issuing an RFP.

Sourcing

TCO

Total Cost of Ownership. The complete cost of acquiring, operating, and maintaining an asset over its useful life.

Analysis

ROI

Return on Investment. A measure of the profitability of an investment relative to its cost.

Analysis

Bid Leveling

The process of adjusting vendor bids to account for scope differences, enabling fair comparison.

Evaluation

Bid Tabulation

Organizing bid data from multiple vendors into a structured format for comparison.

Evaluation

Specification

A detailed description of technical requirements, materials, dimensions, or performance criteria for a product.

Technical

Or Equal

Contract language allowing substitution of products that meet the same performance requirements as the specified item.

Technical

Submittal

Documents submitted by contractors to demonstrate compliance with project specifications.

Construction

Change Order

A formal document modifying the original contract scope, price, or timeline.

Contract

SOW

Statement of Work. A detailed description of the work to be performed under a contract.

Contract

Vendor Scorecard

A structured evaluation tool for rating vendor performance across multiple criteria.

Evaluation

Due Diligence

The process of investigating a vendor's capabilities, financial stability, and references before contract award.

Evaluation

Sole Source

Procurement from a single vendor without competitive bidding, typically justified by unique capabilities.

Sourcing

Competitive Bid

A procurement process where multiple vendors submit proposals, with award based on evaluation criteria.

Sourcing

Award Criteria

The factors and weights used to evaluate and score vendor proposals.

Evaluation

SLA

Service Level Agreement. Contractual commitments to specific performance standards.

Contract

SSO

Single Sign-On. Authentication method allowing users to access multiple systems with one login.

Technical

SOC 2

Service Organization Control 2. A security compliance framework for service providers.

Compliance

Put These Terms Into Practice

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