Procurement terminology can be confusing. Don’t worry – acronyms are rife in the procurement sector!
Last updated: Dec 17, 2021 @ 2:01 pm
Understanding basic UK procurement terminology goes a long way when tendering!
The amount of abbreviations flying around is becoming increasingly common in the procurement world. Terms like RFQs, ITTs, PQQs, DPS and RFPs seems like they are only used to confuse us into a state of literary decline.
Let’s simplify some of the basics that you’ll undoubtedly come into contact with:
PQQ – Pre-qualification questionnaire – this is usually a stage-1 questionnaire asking about specific company details like insurance and similar contracts you’ve worked on etc., along with simple ‘yes and no’ questions making sure you’re not fraudulent and you pay your taxes etc. Click here for our blog explaining PQQs.
ITT – Invitation to Tender – we can sometimes forget the PQQ and jump straight into an ITT, which is usually where your quality and costing ratio comes in. This is where you price the job at hand and answer several technical questions about your ability to undergo the work in accordance with usually detailed specification/scopes of work. Click here for our blog explaining ITTs.
RFP – Request for Proposal – very similar to an ITT where cost and quality are assessed however RFPs are used in situations where the client either can’t – or doesn’t want to – define the scope of work up front to an adequate level of detail, meaning you need to be very descriptive and to make a clear proposal, detailing exactly what is needed.
RFQ – Request for Quotation – The RFQ is a lot like the Tender, however typically smaller in size and scope. They’re often more geared towards clients who are seeking pricing information for a defined scope of work or supply of materials or equipment. Detailed proposals are typically less often sought here.
Frameworks & DPS
Framework Agreement – A Multi-Provider Framework Agreement is predominantly an agreement between one or more businesses or organisations. If you enter into a framework agreement, usually you will be one of many suppliers contractually bound to deliver against buyer requirements. You can be a part of Single-supplier framework agreements, where call-offs/ad-hoc work is considered as part of the contract.See Tender VLE for our Frameworks video here.
DPS – Dynamic Purchasing System – A DPS is similar to an electronic framework agreement, with two exceptions, new suppliers can join at any time and it is to be run as a completely electronic process. DPS is used exclusively by public sector organisations and it can be considered as a ‘competitive supply chain’, where all chosen supply chain members regularly compete for work via ITTs and RFQs.
Remember that on Tender Documents, especially if they’re large documents, you will find a glossary of definitions from the buyer. Familiarise yourself with these so you understand certain abbreviations and terminology that are used throughout the tender.
A full list of procurement terminology that is available via the Chartered Institute of Procurement & Supply (CIPS). This includes a boatload of information relating to tenders and general procurement of goods/services.