Not sure what an RFP or eTendering means? Our glossary breaks down complex procurement jargon into plain language, so you can focus on making better decisions with confidence.
A contract clause that predetermines the compensation the contractor must pay if they fail to meet specific performance conditions, most commonly for delay. For example, the contract may stipulate liquidated damages of €X per day for late completion of the work. This ensures that if the contractor’s breach (like late delivery) causes inconvenience or cost to the authority, there is an agreed remedy. It’s “liquidated” because the amount is set in advance, rather than left to dispute or courts. Contractors account for this risk when bidding, as excessive delays can erode their payment via these penalties.
Portions into which a large tender is divided, essentially creating multiple smaller contracts under the same procurement. Each lot represents a specific part of the project or a category of goods/services. Bidders can often choose to bid on one, several, or all lots, depending on their capacity. The use of lots encourages participation by smaller firms (SMEs) who might not be able to deliver the whole scope, and it increases competition. For example, a tender for office furniture might be split into Lot 1: desks, Lot 2: chairs, etc., and awarded to different suppliers. Lots are evaluated and awarded separately, though they stem from one procurement process.
A contract award mechanism where the bidder offering the lowest price wins, provided their bid meets all the minimum requirements. This is in contrast to MEAT (best value) criteria. Under a Lowest Price criterion, the only factor in ranking bids is cost (after confirming the bid is responsive to the specs and terms). Many public tenders, however, now prefer a combination of quality and price – but some procurements (especially for very standard goods) might still be awarded purely on lowest price that is technically compliant.
The standard basis for evaluating bids in modern public procurement. MEAT means the best overall value is sought – not just the cheapest price. Under MEAT, the authority evaluates both price and quality (and possibly other factors like lifecycle cost, service, aesthetic, social value, etc.) to determine which bid offers the optimum combination. The specific award criteria and their weightings (e.g. 60% quality, 40% price) are defined in advance. Essentially, MEAT = best value for money.
An early engagement with the market (suppliers, experts, or industry) before finalizing a tender. The contracting authority gathers information on what products or solutions exist, or on best practices and innovation in a sector. This can be done via Request for Information, supplier meetings, or publishing a draft specification for comment. The goal is to refine the requirements and ensure the tender, when published, is well-informed and not unnecessarily restrictive. All market consultations must be conducted transparently and without favoritism.
A procurement procedure in which the contracting authority enters into negotiation with one or more bidders to refine the offers and terms. There are two main types: Competitive Procedure with Negotiation (where multiple bids are negotiated, allowed under EU rules for certain cases) and Negotiated Procedure Without Prior Publication (a non-competitive awarding, used only in exceptional circumstances like extreme urgency or absence of competition). In a negotiated procedure, unlike open or restricted tenders, the initial bids can be discussed and altered through negotiations before final offers are submitted and evaluated.
A core principle of public procurement that requires buyers to give equal opportunity to all eligible suppliers, regardless of nationality, locality, or other irrelevant factors. In the EU context, it specifically means one cannot discriminate against suppliers from other EU member states. All bidders must be treated equally and judged only on the criteria relevant to the contract. Non-discrimination, along with equal treatment, ensures a level playing field in tenders.
The official publication (in all EU languages) where EU-wide public procurement notices are published. Specifically, the Supplement to the OJEU is dedicated to public tenders. All contracts above EU thresholds must be advertised in the OJEU. These notices are accessible online via the TED website. In practice, when someone says a tender is “published in OJEU,” it means it’s an EU-wide tender open to any qualified supplier in the single market.
Another word for a bid or proposal submitted by a supplier. An offer indicates what the supplier commits to provide (in terms of goods/services) and at what price, under the conditions of the tender. In everyday language, a bidder “makes an offer” to fulfill the contract. (In formal terms, the tender documentation often states that the submitted offer is binding for a certain validity period once the deadline passes.)
A one-stage procurement process where any interested supplier may submit a full bid by the deadline. There is no pre-qualification shortlist – all qualifying bids are evaluated in one go. Under an open procedure, suitability (selection criteria) and the content of the tender (award criteria) are assessed together. It’s the simplest competitive tender procedure and is commonly used when the market is not too large or when pre-shortlisting isn’t necessary.
A set of standards and a network for electronic data exchange in public procurement. PEPPOL’s primary use is to facilitate e-invoicing and other procurement documents across different IT systems in Europe. By using PEPPOL standards, a supplier in one country can send an electronic invoice or catalog to a public authority in another country seamlessly. In short, PEPPOL is about interoperability in e-procurement, ensuring different platforms can communicate (it is not a single platform itself, but a protocol and network that many platforms connect to).
A notice published in advance of a procurement to alert the market about a forthcoming tender. A PIN (also known as a Periodic Indicative Notice) gives a brief description of the intended procurement and usually an estimated launch date. Publishing a PIN is optional, but if used, it can potentially allow the contracting authority to shorten the later tender timelines (because suppliers get earlier warning). It’s a tool for transparency and to help suppliers prepare for future opportunities.
A questionnaire previously used to pre-screen or shortlist bidders based on capability and eligibility before the bidding stage. A PQQ typically asks for information on the company’s experience, financial standing, certifications, etc., to ensure they meet the selection criteria. Under current EU rules, the standard ESPD has replaced much of the PQQ, but the concept remains: in a restricted procedure, suppliers first express interest (often via an ESPD/PQQ) and only those meeting the criteria are invited to tender. (The term PQQ is still informally used for that first-stage questionnaire in many places.)
A financial guarantee provided by the winning supplier (often from a bank or insurance company) to secure its obligations under the contract. If the contractor fails to perform or defaults on the contract, the contracting authority can claim the performance bond to recover losses or to pay for completion by others. Performance bonds protect the buyer after contract award, ensuring the contractor has a strong incentive to fulfill the contract terms properly. They are common in construction or large service contracts, typically set at a percentage of the contract value.
The process of acquiring goods, services, or works from external sources. This encompasses the entire cycle from identifying needs, specifying requirements, and tendering, to evaluating offers, awarding a contract, and managing the contract. In a general sense, “procurement” can refer to any organization’s purchasing process. In public procurement, the process must adhere to principles of transparency, competition, and value for money as set out in law.
The procurement process conducted by public sector bodies (governments, municipalities, public institutions). It refers to how public entities purchase works, goods, or services from suppliers. Public procurement is regulated by specific laws and directives to ensure openness, fairness, and that public funds are spent efficiently. It ranges from routine buys (like office supplies) to major infrastructure projects, and constitutes a significant portion of government expenditures.
A long-term collaboration between the public sector and a private company to finance, build, and/or operate a project or service. In a PPP, the private partner often invests capital and takes on some of the risk of performance, in return for payments or a revenue stream (e.g., from users or the government). PPPs are commonly used for large infrastructure or public services (like highways, hospitals, schools) where the private sector’s expertise and financing can be utilized. They are a form of procurement that goes beyond a simple purchase – it involves a partnership structure for delivering public services or facilities.
A document issued by the buyer to the supplier to confirm an order under agreed terms. In public procurement, a Purchase Order is often used for small or call-off purchases – it acts as a simplified contract. The PO will list the items or services to be delivered, quantities, prices, delivery date, and applicable contract or terms. Once the supplier accepts the PO, it becomes a binding agreement. For framework agreements or catalog purchasing, purchase orders are the typical mechanism for ordering specific goods/services as needed.
A short-form bid, usually in reply to a Request for Quotations (RFQ) for low-value or informal procurement. A quotation typically consists of a price offer (and brief details on how the supplier will meet the need). Unlike a full tender, an RFQ process is simpler – the buyer might just get a few written quotes and pick the lowest or best. “Quotation” can also generally mean the price that a supplier proposes for a defined scope.
A preliminary solicitation sent by a buyer to gather information about suppliers, solutions, or the market, before launching a formal tender. An RFI asks open-ended questions – for example about a supplier’s capabilities or how they would meet a certain need – without committing to purchasing. It’s used to help shape the upcoming procurement by understanding what is available or feasible. Responding to an RFI is not a bid; it’s an informational step and may lead to a later RFQ/RFP.
A type of solicitation document where the contracting authority describes a problem or need and asks suppliers to propose how they would solve it or fulfill it. RFPs are often used when the solution is not fully specified and the suppliers’ expertise is needed to propose detailed methods or innovation. The RFP includes evaluation criteria so that proposals can be compared on factors beyond price (e.g., methodology, design, technical merit). In response to an RFP, bidders submit a proposal, which is then evaluated to choose the best one.
A solicitation document seeking price quotes for clearly defined, standard products or services. An RFQ is usually for simpler or lower-value procurement where the main differentiator is price. The buyer specifies exactly what needs to be purchased (often in a list or specification), and suppliers respond with their price (and minor details like delivery). RFQs are typically short and the process may be less formal; the term quote or quotation refers to the supplier’s priced offer. The buyer can then select the lowest or most appropriate quote.
Essentially synonymous with an Invitation to Tender. An RFT is a formal request issued by the buyer asking suppliers to submit a tender for a contract. It usually implies that the requirements are well-defined (unlike an RFP where solutions might vary). Some regions or organizations use “RFT” interchangeably with “RFP”, while others use it to mean a more structured, price-focused solicitation. In any case, responding to an RFT means providing a complete bid as per the given specifications and evaluation criteria.
A two-stage procurement process allowed under EU rules. In the first stage, any interested supplier may submit a request to participate or an initial PQQ/ESPD, demonstrating they meet the selection criteria. The buyer then shortlists the top-qualified candidates. In the second stage, only those shortlisted candidates are invited to submit full tenders. The award is then decided among those bids. This procedure “restricts” who can bid in the second phase, which is useful when the buyer expects many responses or needs to pre-filter for capability.
A part of a service contract that specifies the performance standards and service levels the provider must meet. An SLA typically includes measurable targets (e.g., helpdesk response times, system uptime, delivery timescales) and outlines responsibilities, monitoring, and penalties or remedies if service levels are not met. The SLA ensures both parties have a clear understanding of expected service quality and is often enforced through KPIs.
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