Procurement glossary
Procurement and sourcing terms, in plain language
Clear definitions of the RFx, tendering, and sourcing terms you will meet on VEXORS and across procurement.
ProcurementSourcingRFQRFPRFIRFxTenderingE-sourcingBill of QuantitiesBidBid scoringAwardSupplier discoverySupplier catalogTrust scoreProcurement networkPurchase orderPrequalificationBill of materialsMROLanded costTotal cost of ownershipThree-bid ruleSpend analysisMaverick spendE-procurementProcure-to-paySource-to-payVendor managementFramework agreementSingle sourcingSole sourceBid bondPerformance bondEvaluation matrixLocal purchase orderVariation orderIncotermsSourcing cycle timeCategory management
- Procurement
- The end-to-end process of sourcing and acquiring the goods and services a business needs, from identifying a requirement and finding suppliers to comparing offers and awarding the work.
- Sourcing
- The part of procurement focused on finding, evaluating, and selecting suppliers for a specific need. VEXORS covers sourcing through award; raising the purchase order and paying the supplier stays in your ERP or accounting system.
- RFQ (Request for Quotation)
- A structured request asking suppliers to price a clearly defined list of items or services. Because every supplier quotes the same line items, the responses come back comparable side by side.
- RFP (Request for Proposal)
- A request inviting suppliers to propose how they would meet a need, covering approach, scope, and price. Used when the solution is not fully defined and you want to compare methods, not just unit prices.
- RFI (Request for Information)
- An early-stage request used to gather information about suppliers and their capabilities before running a formal RFQ or RFP. It shortlists the market rather than awarding work.
- RFx
- A collective term for the family of structured procurement requests: RFQ, RFP, and RFI. Which RFx you choose depends on how well the requirement is defined and what you need to compare.
- Tendering (e-tendering)
- Running a competitive request where multiple suppliers respond to the same brief against a shared deadline. E-tendering does this through a platform instead of email, so bids arrive in one comparable structure with a clean record.
- E-sourcing
- Running sourcing, RFQs, RFPs, and RFIs, through one structured online platform rather than email and spreadsheets, so offers are comparable and every decision is recorded.
- Bill of Quantities (BoQ)
- An itemized list of the goods or work required, broken into line items each with a description, unit of measure, and quantity, so every supplier prices exactly the same thing and bids line up for comparison.
- Bid
- A supplier's structured response to a buyer's request, pricing the requested line items and addressing the stated terms. On VEXORS, bids are submitted against the buyer's exact specification.
- Bid scoring (bid evaluation)
- Ranking competing bids against defined criteria such as price, delivery, and terms, so the strongest offer is clear. VEXORS offers AI-assisted scoring that applies the same criteria to every bid consistently.
- Award
- The point at which a buyer selects the winning bid and commits the work to a supplier. It is the final step VEXORS covers in the sourcing workflow.
- Supplier discovery
- Finding suppliers that can meet a requirement by category and capability, not only the few you already know. VEXORS matches on what suppliers actually offer rather than the label they use.
- Supplier catalog
- A supplier's published list of the products or services they offer, with descriptions and reference pricing, so buyers can find them and add items straight to a request.
- Trust score
- A reputation signal built from completed contracts and the ratings buyers and suppliers give each other after real work. It travels with a company, so a new partner can see a track record instead of guessing.
- Procurement network
- A platform where many buyers and suppliers connect, run structured requests, and build portable reputation, as opposed to a one-off marketplace listing or a closed supplier list inside one company's ERP.
- Purchase order (PO)
- A document a buyer issues to confirm an agreed purchase from a chosen supplier. VEXORS stops at award and does not raise POs or process payments; those stay in your ERP or accounting system.
- Prequalification
- Screening suppliers before they are allowed to bid: capturing references, certifications, and capability up front so only credible bidders reach the pricing stage. On VEXORS, buyers prequalify with structured onboarding forms and supplier trust scores.
- Bill of materials (BOM)
- The list of raw materials, components, and quantities needed to manufacture a product. Manufacturing buyers often source directly from a BOM by turning its line items into a structured RFQ.
- MRO (maintenance, repair, and operations)
- Purchases that keep a business running (spare parts, consumables, tools, and services) as opposed to direct materials that go into the product itself. MRO is a common category for recurring RFQs.
- Landed cost
- The full cost of getting an item to your door: unit price plus freight, duties, insurance, and handling. Comparing supplier quotes on landed cost rather than list price is how distributors protect margin.
- Total cost of ownership (TCO)
- The complete cost of a purchase over its life: price plus delivery, operation, maintenance, and switching costs. Bid evaluation that weighs lead time, terms, and quality alongside price is a practical step toward TCO-based buying.
- Three-bid rule
- The common policy of collecting at least three comparable quotes before awarding a purchase. Structured RFQs make the rule cheap to follow: one request, many comparable bids, one documented decision.
- Spend analysis
- Reviewing what a company buys, from whom, and at what price to find savings and risk. A documented sourcing trail (requests, bids, and awards in one place) is the raw material spend analysis needs.
- Maverick spend
- Purchases made outside the agreed process or preferred suppliers, usually invisible until the invoice arrives. Routing purchases through structured requests is the standard way to reduce it.
- E-procurement
- The digital handling of the transactional half of procurement: purchase orders, receiving, invoice matching, and payment — usually inside an ERP or P2P system. Distinct from e-sourcing, which digitizes the decision half (finding suppliers, collecting bids, awarding). Most companies own e-procurement through their ERP long before they structure their sourcing.
- Procure-to-pay (P2P)
- The end-to-end transactional flow from requisition to payment: request, purchase order, goods receipt, invoice match, pay. P2P systems execute decisions that sourcing already made — the supplier and the price arrive as inputs. Strong P2P with weak sourcing administers mediocre deals very accurately.
- Source-to-pay (S2P)
- The full chain combining sourcing (find suppliers, collect bids, evaluate, award) with procure-to-pay (order through payment). Enterprise suites sell S2P as one integrated product; most mid-market companies assemble it from a sourcing platform in front of their existing ERP, connected at the award.
- Vendor management
- The ongoing discipline of onboarding, qualifying, monitoring, and evaluating the companies you buy from — documents and compliance, performance against commitments, risk concentration, and relationship health. On VEXORS this runs on living supplier profiles, qualification questionnaires, and trust scores built from completed work.
- Framework agreement
- An umbrella agreement fixing terms, prices, or rates with one or more suppliers for a period, against which individual orders are placed without re-tendering each time. It trades a bigger up-front competition for faster repeat purchasing — and quietly expires into price drift if nobody diarizes its re-competition.
- Single sourcing
- Choosing to buy a category from one supplier even though alternatives exist — for volume leverage, consistency, or relationship depth. Legitimate as a conscious, recorded decision with a periodic competitive check; expensive as a habit that formed because comparison felt like work.
- Sole source
- A purchase where only one supplier can actually deliver — a proprietary part, an exclusive license, a unique capability. The competition step is genuinely impossible, so the control shifts to documenting the justification and negotiating from the best available position.
- Bid bond
- A guarantee submitted with a bid — typically a small percentage of bid value — that the bidder will honor the bid and sign if awarded. Common in construction and public tenders; it filters unserious bidders and compensates the buyer if a winner walks away.
- Performance bond
- A guarantee provided by the winning supplier — often around ten percent of contract value — that the work will be completed per the contract. If the supplier defaults, the buyer claims against the bond. The cost of bonding is real and belongs in bid comparison.
- Evaluation matrix
- The scoring table used to compare bids: criteria as rows, weights summing to 100%, one column per bid, weighted totals at the bottom. Built before bids arrive, it turns 'best bid' from an argument into arithmetic — and the completed matrix becomes the award record.
- Local purchase order (LPO)
- The purchase-order document as commonly named in Gulf business practice — the buyer's formal, numbered commitment to purchase specified goods or services at agreed prices and terms. An LPO executes a sourcing decision; it is the transaction artifact, not the competition.
- Variation order
- A formal change to an awarded contract's scope, quantities, or terms — common in construction and projects. Variations priced after award face no competition, which is why vague original scope is expensive: every gap becomes a variation negotiated from weakness.
- Incoterms
- The standardized international trade terms defining who pays for and carries risk of transport, insurance, and customs at each leg of delivery — Ex-Works, FOB, CIF, DDP, and others. Two bids on different Incoterms are pricing different products; comparison requires normalizing to one basis.
- Sourcing cycle time
- The elapsed time from identifying a need to awarding it. Long cycles cost money twice: teams buy off-process to avoid the wait, and good suppliers deprioritize slow buyers. Structured requests and comparable bids compress the evaluation stage, which is usually the longest.
- Category management
- Organizing procurement by category of spend — packaging, freight, IT, MRO — with each category getting a strategy: supplier base, competition cadence, consolidation opportunities. The practical entry point is spend analysis: find the three categories carrying most of the money and manage those first.