Understanding Procurement Terminology

posted on: 20th May 2021 by EasyPQQ

Some of the terms within procurement can be complex. The number of abbreviated terms out there can make it confusing, so we have simplified this by breaking down what common terms mean. This blog will give an overview of the most common terms used in procurement, supply chain management, logistics and tender activities and documents. 

Contract Lifecycle Management

This process is the management of supplier relationships and performance using contracts. Organisations will digitise their contracts and have them stored in one, secure central hub. These processes can notify staff as to when contracts are up for renewal and manage all the contracts in one place.

Direct procurement

Direct procurement is the acquisition of resources and materials for resources. Direct spend relates to goods and services that are directly related to making products. This could include labour costs and raw materials.

Dynamic Purchasing System – DPS

There are similarities between this and an electronic framework agreement, except new suppliers can join at any time and the process is completely digital. It is used exclusively by public sector organisations. 

E-Tenders – Electronic Tendering

This is the process of tendering in an electronic, paperless format. This saves suppliers and buyers time, effort and money as the whole process is done electronically. 

EOI – Expression of Interest

An Expression of Interest (EOI) is used to gauge interest in a particular tender. Potential bidders are invited to express an interest in a future ITT (Invitation to Tender) for early discussions. 

Framework Agreement

A framework is an agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement. Usually, several suppliers are appointed to a framework, but there are also single-supplier frameworks. Under public sector procurement, framework agreements are usually four years long.


Forecasting is the process of making predictions based on past and present data. In procurement, spend forecasting is the estimation of future spend to predict demand and cost changes.

Green Procurement

Under green procurement, resources and products are assessed for sustainability and environmental compatibility. There are binding framework conditions associated with this type of procurement. 

ITT – Invitation to Tender

This is the initial step of a competitive tendering process, where suppliers and contractors are invited to submit offers for supply or service contracts.

Lean Procurement 

Lean procurement is designed to find and implement best practices, automated workflows, and find ways to reduce repetitive work and avoiding waste. 


Tender categories of products, works or services are commonly known as Lots.

Open Tendering

An unlimited number of companies are invited by the contracting authority to submit tenders. The contracting authority then evaluate the bids and the contract is usually awarded to the most economical tender. 

PQQ – Pre-Qualification Questionnaire

This is a questionnaire that suppliers and contractors must fill out when bidding for work. It is designed to identify the most suitable supplier, to invite to tender for contracts, and helps make shortlisting potential suppliers easier.

Public Procurement 

This process is for public organisations, such as municipalities and ministries to acquire resources in a contractually regulated manner, from companies that they have selected. 

RFI – Request for Information

An RFI is a formal process to obtain service and resource information from potential suppliers of a product or service.  It is a fact-finding document which helps determine which suppliers can best meet a buying organisation’s needs, to narrow down a list of candidates.

RFP – Request for Proposal

Designed to level the playing field for businesses that want to work with a particular organization, an RFQ is a document that solicits proposal, often made through a bidding process, by a company interested in procurement of a commodity, service, or asset, to potential suppliers to submit business proposals.

RFQ – Request for Quotations

An RFQ is a document that an organisation will use to invite one or more potential suppliers to submit a quote for the completion of a specific job or project.

RFT – Request for Tender

An RFT is a formal request or invitation that asks suppliers to submit a bid to supply products or services.

SQ – Standard Selection Questionnaire

An SQ is used to collect information to help decide which suppliers should be selected to participate in a tender exercise above EU thresholds.


Knowing the procurement terminology will make your tender writing a lot easier. What will also make it easier is making sure you have the best bid management software! To find out more about how EasyPQQ can help your business win more work, book a demo below!

Understanding Procurement Terminology
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