Government Purchasing happens at various levels within an Agency and it is recognized that for the day to day business operations of the agency to flow continually, there are times when it may be necessary to decentralize the public purchasing process. In these instances, procurement authority can be delegated to the various departments within an Agency as determined by their Procurement Committee.
The objective of a Procurement Policy is to provide a government or non-profit agency the requisite parameters for procuring goods and services under applicable state and federal guidelines. More specifically, a government procurement policies are adopted to,
- Simplify, clarify, and reflect the law governing procurement body
- Permit the continued development of uniform procurement policies and best practices regarding applicable procurement laws;
- Provide public confidence by ensuring fair and equitable treatment towards all participants in procurement process;
- Increase efficiency by avoiding unnecessary and unwarranted purchases;
- Increase free, fair and open competition;
- To ensure that full accounting is available and given for all procurements.
Often, we hear several procurement jargons used by various government procurement professionals that might sound complicated. But once we understand the basic terms, it makes it much easier to do business with government. We have listed few such jargons with explanation below.
“Best Value”: Best combinations of quality, services, time, and cost over the useful life of the acquired item. One of the most important aspects of best value procurement is looking at the return value of a product or service which can be achieved based on the total life cycle cost of the item. A Best Value Procurement is a procurement method that emphasizes value over price and may not be the lowest bid price.
“Bidder“: Any person or a company that submits a bid in response to an Invitation to Bid.
“Buyer” or “Procurement Professional”: A person designated by an agency who will be responsible for all procurement activities.
“Component Purchases”: Purchases of a part (component) of an item that in normal purchasing practices would be purchased in a whole.
“Contract“: A legally binding agreement between an agency and a vendor or contractor; or a legally binding agreement between a contractor and a subcontractor.
“Contractor“: any person, vendor, or entity having a contract with an agency.
“Contract Administrator”: A buyer or contract manager responsible for the administration of a contract.
“Designated Authorizing Party“: Agency’s designated representative to authorize and approve purchases based upon dollar amount and internal organizational structure.
“Disadvantaged Business Enterprise” (“DBE“): A for-profit corporation in which at least 51% of all classes of the shares of stock is owned by one or more persons who are economically and socially disadvantaged because of their identification as members of certain groups, including but not limited to African Americans, Hispanic Americans and women, as determined and classified by the Small Business Administration (SBA).
“Historically Underutilized Business” (“HUB”): A corporation formed for the purpose of making a profit in which at least 51 percent of all classes of the shares of stock is owned by one or more persons who are socially disadvantaged because of their identification as members of certain groups, including black Americans, Hispanic Americans, women, Asian Pacific Americans, and American Indians, who have suffered the effects of discriminatory practices or similar insidious circumstances over which they have no control;
“Minority Business Enterprise” (“MBE”): A small business concern wherein at least 51% is owned or controlled by management and daily operations by women or minorities, including but not limited to, “blacks, Hispanics, Asian-Americans, American Indians and Alaska natives.
“Procurement”: Buying, purchasing, renting, leasing, or acquiring of any supplies, equipment or services.
“Purchase Order” (“P.O.”): A type of procurement contract and is a legally binding agreement between an agency and a vendor.
We will discuss more such jargons in our next blog.
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