To make the process even more straightforward, here’s some useful information, decoded jargon and abbreviations you might come across in your procurement exercises.


CPV Codes

Developed by the European Union as a classification system, CPV (Common Procurement Vocabulary) codes have been developed to help suppliers find relevant contract and to help procurement professionals classify their contract notices.

BiP Solutions have created an online tool for browsing the latest CPV–2007 code hierarchy. Simply enter the description of the products or services you are interested in and view the relevant CPV codes.

Free CPV Tool


Procurement Jargon Buster

Added Value Features and benefits that you offer which exceed the specification for the contract.
Best Practice The most effective and desirable method of performing a task or completing a service. The preferred way of working.
Call off Contract An enabling agreement (framework) with one or more suppliers for a defined range of works, goods or services covering terms and conditions from which users ‘call off’ to meet their requirements using a simplified contract form.
Contract A binding agreement to perform a certain service or provide a certain product in exchange for valuable consideration, usually money.
Equality Equality is about making sure people are treated fairly and given fair chances. Equality is not about treating everyone the same way but it recognises that their needs are met in different ways.
E-tendering The process of using any online system in procurement to view and submit tenders electronically.
European Union Regulations (EU Regs) There are rules and regulations set by the European Union with regard to procurement for public sector organisations – these rules and regulations are set to protect suppliers and must always be followed by all public sector organisations.
Evaluation The process of assessing each bidders tender so as to be able to select the best option suitable to the requirements of the contract.
Feedback Discussion with a public sector organisation to find the reasons for success or failure of a tender so as to learn how to respond effectively in future.
Framework agreement An arrangement where a purchaser selects suppliers and fixes terms and prices for a period in advance (often 4 years as the max), and then calls on the suppliers to deliver as and when required. There is never a guarantee of work even if you are part of a framework agreement.
Invitation to Tender A formal communication from a public sector organisation to a supplier inviting it to submit a tender. The ITT will usually also include a specification for the contract, instructions for submitting the tender, and the terms and conditions, which will govern the contract once it is active.
Lot Some contracts are divided into a number of parcels of work (called lots) and suppliers are invited to state whether they are bidding for the whole contract or just parts of it.
OJEU (Official Journal of the European Union) The Official Journal of the European Union, where all contract notices must be published for tenders that fall within the European procurement laws.
Prior Information Notice This gives advance notice that a contract may be advertised at some point – perhaps later in the year.
SQ A questionnaire used by public sector organisations to check the suitability of suppliers and shortlist the ones to be invited to tender.
Procurement The process of buying goods and services.
Purchasing The buying of goods and services.
UK Regs The Public Contracts Regulations 2015
Value for Money Public sector organisations strive to achieve ‘value for money’ and this is not necessarily the lowest price.
Variant bid Variant bids can be used to deliver innovation and enhance value for money. They are a useful tool to promote innovative approaches, but ensure you take advice to manage the opportunities and risks.

Procurement Abbreviation Index

1PL First Party Logistics
2PL Second Party Logistics
3PL Third Party Logistics
4PL Fourth Party Logistics
5PL Fifth Party Logistics


ACH Automatic Clearing House
ADR Alternative Dispute Resolution
ARR Average Rate of Return or Accounting Rate of Return


BAFO Best and Final Offer
BATNA Best Alternative to a Negotiated Agreement
BAU Business as Usual
BOOM Contract Builds, Owns, Operates and Maintains Contract
BOOT Contract Builds, Owns, Operates and Transfers Contract
BPO Business Process Outsourcing


CAPEX Capital Expenditure
CBA Cost Benefit Analysis
CCA Competition and Consumer Act 2010
CFR Cost and Freight
CIF Cost, Insurance and Freight
CIP Carriage and Insurance Paid
CIPS Chartered Institute of Procurement and Supply
CIPSA Chartered Institute of Procurement and Supply
CLAN Centre Led Action Network
CO Certificate of Origin
COGS Cost of Goods Sold
CPO Chief Procurement Officer
CPT Carriage Paid To
CSR Corporate Social Responsibility


DAP Delivered at Place
DAT Delivered at Terminal
DDP Delivered Duty Paid
DIFOT Delivery In Full and On Time
DMAIC Define Measure Analyse Improve Control


EAN European Article Number or International Article Number
EBIT Earnings Before Interest and Tax
ECR Efficient Consumer Response
EDI Electronic Data Interchange
EOI Expression of Interest
EOQ Economic Order Quantity
EPC Engineer Procure and Construct
EPCM Engineering Procurement and Construction Management
EPIC Engineer Procure Install and Commission
EPICOM Engineer Procure Install Commission Operate and Maintain
ERP Enterprise Resource Planning
EXW Ex Works


FAS Free Alongside Ship
FCA Free Carrier
FCL Full Container Load
FIFO First in, First Out Costing
FMEA Failure Mode and Effects Analysis
FOB Free on Board


GHG Greenhouse Gases


HAZCHEM Hazardous Chemical Alert


IMF Intermodal Freight Containers
INCOTERMS International Commercial Terms
IP Intellectual Property
ITO Invitation to Offer


KPI Key Performance Indicator


LC Letter of Credit
LCCS Low Cost Country Sourcing
LCL Less than Container Load
LIFO Last In First Out
LOI Letter of Intent


MRO Maintenance Routine Operating Categories or Maintenance, Repair and Overhaul
MRP Materials Requirements Planning
MRP II Manufacturing Resource Planning
MSDS Materials Safety Data Sheet
MTBF Mean Time Before Failure
MTBUR Mean Time Before Unscheduled Removal
MTO Make to Order
MTS Make to Stock


NPV Net Present Value


PCard Procurement Card
PEST Analysis Political, Economic, Social and Technological Environments Analysis
PO Purchase Order
PPCA Profit, Price and Cost Analysis
PPP Public Private Partnership


RFI Request for Information
RFID Radio-Frequency Identification
RFP Request for Proposal
RFQ Request for Quotation
RFT Request for Tender
ROCE Return on Capital Employed
ROI Return on Investment
RONA Return on Net Assets


SBR Supply Base Reduction
SLA Service Level Agreement
SME Small and Medium Sized Enterprises or Subject Matter Expert
SRM Supplier Relationship Management


TPS Toyota Production System


UNSPSC United Nations Standard Products and Services Code


WACC Weighted Average Cost of Capital


[1] Source – Public Expenditure Statistical Analyses (PESA) 2015, using 2014-15 figures. This is the National Accounts definition of current procurement, so includes defence spending on Single Use Military Equipment (SUME).

[2] GOV.UK, Big opportunities for small firms: government set to spend £1 in every £3 with small businesses,

[3] Source: BiP Solutions Research team, 2015

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