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Business and economics portal. v. t. e. Procurement is the process of locating and agreeing to terms and purchasing goods, services, or other works from an external source, often with the use of a tendering or competitive bidding process. [1]
Government procurement or public procurement is the procurement of goods, services and works on behalf of a public authority, such as a government agency. Amounting to 12 percent of global GDP in 2018, government procurement accounts for a substantial part of the global economy.
Purchasing is the procurement process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations.
In the United States, the processes of government procurement enable federal, state and local government bodies in the country to acquire goods, services (including construction), and interests in real property.
Examples of green procurement range from the purchase of energy-saving light-bulbs to the commissioning of a new building from renewable sourced timber or organic food being served in a workplace canteen. Sometimes, the ultimate green procurement is the avoidance of the purchase altogether.
The goods and services classified under the umbrella of indirect procurement are commonly bought for consumption by internal stakeholders (business units or functions) rather than the external customer or client. Indirect procurement categories include, but are not limited to: Marketing-related services (media buying, agencies)
As opposed to e-Tendering, e-Purchasing is used in procurement of goods and services that are of low value and high volume. It electronically simplifies the purchasing process of such goods and services. For this type of procurement, catalogues are one of the key components that often occurs.
An example of a purchase order request from a travel agent. A purchase order , often abbreviated to PO , is a commercial document issued by a buyer to a seller , indicating types, quantities, and agreed prices for products or services required. [1]
Procurement operations support tactical day-to-day transactions such as issuing purchase orders to suppliers, whereas strategic sourcing represents to strategic planning, supplier development, contract negotiation, supply chain infrastructure, and outsourcing models.
Best value procurement ( BVP) is a procurement system that looks at factors other than only price, such as quality and expertise, when selecting vendors or contractors. [1] [2] [3] In a best value system, the value of procured goods or services can be simply described as a comparison of costs and benefits.