Glossary of Terms
Any written or electronic document containing the elements of offer, acceptance and considerations, that legally bind two or more parties.
Agreement on Internal Trade (AIT)
A national agreement that regulates trade between the provinces to ensure equal access to public sector procurement for all Canadian suppliers. The Agreement aims to reduce barriers to the movement of persons, goods, services and investments within Canada.
A vendor who meets minimum performance criteria with respect to service, delivery, quality and other criteria and has been added to the University’s data base of Approved Suppliers.
A proposal, quotation or tender submitted in response to a solicitation from a contracting authority. A bid covers the response to any of the three principal methods of soliciting bids, i.e., Request for Proposal, Request for Tender and Request for Quotation.
A dispute raised against the methods employed or decisions made by a contracting authority in the administration of a proposal, tender, or quotation process.
Bill of Lading
Written receipt given by a carrier (e.g. courier), for goods accepted for transportation. When expediting or tracing a shipment from a supplier, it is important to obtain the Bill of Lading number along with other information about the shipment.
Broader Public Sector (BPS) Procurement Directive
The Broader Public Sector Accountability Act, 2010 provides the authority for the Management Board of Cabinet to issue directives governing the procurement of goods and services by designated broader public sector organizations.
The Broader Public Sector (BPS) Procurement Directive provides consistent procurement practices for BPS organizations to:
- improve accountability and transparency for procurement decisions and processes, and
- maximize the value that BPS organizations receive from the use of public funds.
The BPS Procurement Directive is based on the Supply Chain Guideline developed in consultation with BPS organizations.
A capital asset is any asset (excluding real estate) bought with University funds (i.e. operating, capital, research, ancillary, and special purpose). This includes items purchased with grant and research funding.
Capital Asset Disposal
The process of disposing of any capital asset which is no longer of use to the University.
Change Order (CO)
A written modification to a contract, purchase order, or agreement.
Code of Ethics
A written set of guidelines issued by an organization to its employees and management to help them conduct their actions in accordance with its primary values and ethical standards.
Set of procedures for developing a procurement contract through a bidding or proposal process. The intent is to solicit and award based on a fair, impartial, competitive bid process.
A person or entity that under an agreement, other than an employment agreement, provides expert or strategic advice and related services for consideration and decision-making.
The provision of expertise or strategic advice that is presented for consideration and decision-making.
Conflict of Interest
A situation in which financial or other personal considerations have the potential to compromise or bias professional judgment and objectivity. An apparent conflict of interest is one in which a reasonable person would think the professional’s judgment is likely to be compromised. It is important to note a conflict of interest exists whether or not decisions are affected by a personal interest; a conflict of interest implies only the potential for bias, not a likelihood.
An obligation, such as an accepted offer, between competent parties upon a legal consideration, to do or abstain from doing some act. It is essential to the creation of a contract that the parties intend their agreement shall have legal consequences and be legally enforceable. The essential elements of a contract are an offer and an acceptance of that offer; the capacity of the parties to contract; consideration to support the contract; a mutual identity of consent or consensus ad idem; legality of purpose; and sufficient certainty of terms.
A person or entity retained under a fee-for-service arrangement to perform specific tasks under an organizations’ direction for a limited period of time.
A web-based system that provides suppliers access to information related to open competitive procurements. The University of Toronto uses MERX.
Benchmark, standard or yardstick against which accomplishment, conformance, performance, and suitability of an individual, alternative, activity, product or plan is measured, to select the best supplier through a competitive process. Criteria may be qualitative and/or quantitative in nature.
A tool allowing the evaluation team to rate supplier proposals based on multiple pre-defined evaluation criteria.
A group of individuals designated/responsible to make award recommendation. The evaluation team would typically include representatives from the University and subject matter expert(s).
Fair Market Value
The price that would be agreed to in an open and unrestricted market between knowledgeable and willing parties dealing at arm’s length who are fully informed and not under any compulsion to transact.
F.O.B. (Free On Board)
Free On Board indicates the geographical point where ownership (title) passes from a supplier to the University. The supplier is responsible for all costs up to the destination mentioned immediately after the letters F.O.B. on the purchase order. The University is responsible for all costs after that point.
The purchase of environmentally preferable goods and services, and the integration of environmental performance considerations into the procurement process, including planning, acquisition, use and disposal. Environmentally preferable goods and services are those that have a lesser or reduced impact on the environment over the life cycle of the good or service, when compared with competing goods or services serving the same purpose. Environmental performance considerations include, among other things: the reduction of greenhouse gas emissions and air contaminants; improved energy and water efficiency; reduced waste and support of reuse and recycling; the use of renewable resources; reduced hazardous waste; and reduced toxic and hazardous substances.
Group Purchasing Initiatives (GPI)
A buying group created to achieve efficiencies and economies of scale by combining the purchasing requirements and activities of multiple organizations into one joint procurement process.
Invitational Competitive Procurement
The contractual acquisition (purchase or lease) by and organization of any good or service, which enables some but not all suppliers to compete in a fair and open environment. Three or more invitations are sent to qualified suppliers to submit written proposals to supply goods or services as specified by the organization.
An award of a procurement contract without organizing a competitive process. A non-competitive procurement is only appropriate under certain special circumstances.
Fairness in treating suppliers and awarding contracts without prejudice, discrimination or preferred treatment.
A promise or a proposal made by one party to another, intending the same to create a legal relationship upon the acceptance of the offer by the other party.
Open Competitive Procurement
The contractual acquisition (purchase or lease) of any good or service, which enables all suppliers to compete in a fair and open environment. Open competitive procurement ensures the highest level of fairness, impartiality and transparency, maximizing suitability and value for money.
An oral quotation from an approved supplier, used primarily for low value purchases of off-the-shelf commodities where availability and quality are equal and price is the deciding factor.
Acquisition by any means, including by purchase, rental, lease or conditional sale, of goods, services or construction.
The estimated total financial commitment resulting from a procurement, taking into account optional extensions.
Any individual, firm, company or corporation submitting a Proposal in response to an RFP.
Purchase Order (PO)
A purchaser’s written offer to a supplier formally stating all terms and conditions of a proposed transaction.
Purchasing Card (PCard)
The Purchasing Card (PCard) is a method of acquiring low value goods and services directly from suppliers for University related business only.
Purchasing Requisition (PR)
The purchasing requisition is the document created in FIS that the unit completes to communicate its need to Procurement Services. This document number, once received by Procurement Services, initiates the process of creating a Purchase Order.
Request for Expressions of Interest (RFEI)
A document used to gather information on supplier interest in an opportunity or information on supplier capabilities/qualifications. This mechanism may be used when the University wishes to gain a better understanding of the capacity of the supplier community to provide the services or solutions needed. A response to a RFEI must not pre-qualify a potential supplier and must not influence their chances of being the selected proponent on any subsequent opportunity.
Request for Information (RFI)
A document issued to potential suppliers to gather general supplier, service or product information. It is a procurement procedure whereby supplier are provided with a general or preliminary description of a problem or need and are requested to provide information or advice about how to better define the problem or need, or alternative solutions. A response to an RFI must not pre-qualify a potential supplier and must not influence their chances of being the selected proponent on any subsequent opportunities.
Request for Proposal (RFP)
A document used to request suppliers to supply solutions for the delivery of complex products or services or to provide alternative options or solutions. It is a process that uses predefined evaluation criteria in which price is not the only factor.
Request for Supplier Qualification (RFSQ)
A document used to gather information on supplier capabilities and qualifications, with the intention of creating a list of pre-qualified suppliers. This mechanism may be used either to identify qualified candidates in advance of expected future competitions or to narrow the field for an immediate need. Terms and conditions built into the RFSQ contain specific language to disclaim any obligation on the part of the University to actually call on any supplier as a result of information gathering activities to supply such materials or services.
Request for Quotation (RFQ)
A document used to request supplier responses to supply goods or services based on stated delivery requirements, performance specifications, terms and conditions. An RFQ usually focuses the evaluation criteria predominantly on price and delivery requirements.
Second Stage Selection Process
An invitation from the University to Suppliers to provide quotations or proposals in writing based on RFSQ thresholds for the applicable Approved Supplier category.
Segregation of Duties
A method of process control to manage conflict of interest, the appearance of conflict of interest, and errors or fraud. It restricts the amount of power held by any one individual. It puts a barrier in place to prevent errors or fraud that may be perpetrated by one individual.
More than one supplier is capable of meeting end user requirements and specifications; however, only one is available to meet specific criteria.
Only one supplier is capable of meeting end user requirements and specifications; no other supplier in the market.
An institutional procurement process that continuously improves and re-evaluates purchasing activities within an organization. At the University of Toronto it is a systematic and fact‐based approach used by Procurement Services to optimize the University’s supply base and maximize overall value. This process is typically used for acquisitions greater than $100,000.
Any entity who, based on an assessment of that person’s financial, technical and commercial capacity, is capable of fulfilling the requirements of a procurement.
A practice of informing a supplier why their bid was not selected upon completion of the contract award process.
Supply Chain Management
The full range of processes that manage the flow of goods and services, information, and dollars between suppliers, customers and end users, as well as the supporting infrastructure required to enable these processes.
Supply Chain-Related Activities
Any activity, whether directly or indirectly related to an organization’s plan, source and procure, move and pay processes. It includes everything, starting from research, scoping and defining needs by end users until the final payment/asset disposal.
Total Cost of Ownership/Total Life-Cycle Costs (TCO)
An estimate or calculation that considers all direct and indirect costs of an asset, good or service over its useful life, from acquisition to disposal. Total cost of ownership includes items such as the purchase price, implementation fees, upgrades, maintenance contracts, support contracts, licence fees and disposal costs.
Value for Money/Best Value
A foundational objective of the University is to maximize the value it receives from the use of public funds. A value for money approach aims to deliver products and services with a lower total life cycle cost while maintaining high performance and satisfaction standards.
Written Quotation (Request for Quotation)
A written quotation or bid from an approved or qualified supplier, used for purchases of goods and services where criteria including service, quality, delivery, will be evaluated as well as price.