7.8. Key Terms

Key Terms

  • Bidders: are people or organizations capable of providing the materials or performing the work required for the project.
  • Cost-reimbursable contract or Cost-Plus contract: the organization agrees to pay the contractor for the cost of performing the service or providing the goods. Cost-reimbursable contracts are most often used when the scope of work or the costs for performing the work are not well known.
  • Evaluation of bids: is in response to RFQs for commodity items and services is heavily graded for price. In most cases, the lowest total price will win the contract.
  • Fixed-Price Contract: is a legal agreement between the project organization and an entity (person or company) to provide goods or services to the project at an agreed-on price.
  • Procurement management: plan details how the procurement process will be managed.
  • Project Procurement Cycle: reflects the procurement activities from the decision to purchase the material or service through to the payment of bills and closing of procurement contracts.
  • Request for Proposal or RFP: accounts for price but focuses on meeting the project quality or schedule requirements.
  • Request for Quote or RFQ: focuses on price; type of materials or service is well-defined and can be obtained from several sources.
  • Solicitation: is the process of requesting a price and supporting information from bidders. The solicitation usually takes the form of either an RFQ or an RFP.



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