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DICTIONARY OF TRADE TERMS

The intent of this dictionary was to produce a broad listing of terms, which are commonly used in trade negotiations and especially within the context of the Free Trade Area of the Americas (FTAA) with a view to providing an information tool for the public at large. The dictionary is presented in the four official languages of the FTAA: English, Spanish, Portuguese and French.

The compilation does not attempt to present the entire universe of terms used nor does it seek to prejudge or to affect in any way definitions or approaches currently proposed by any country in any trade negotiation. In fact, many of the definitions included in the publicly-available Draft FTAA Agreement which are still the subject of difficult debates have been excluded from this dictionary. The definitions are based on widely available source material including other trade agreements.

An alphabetical listing of the terms is included to facilitate the use of the dictionary. The terms and their definitions are presented by general negotiating theme found in the FTAA and in other trade negotiations.

An electronic version of this document can be found on the following websites: IADB, OAS,  and ECLAC.


 


IADB
 


OAS
 

ECLAC


GOVERNMENT PROCUREMENT
TERM DEFINITION
Award The formal acceptance of a supplier's bid or proposal by a government agency. Following such acceptance, the agency usually issues a purchase order to the vendor reflecting the award.
Bid An offer or proposal for goods and/or services submitted in response to a government agency’s invitation.
Bidding documents The set of documents issued by a government agency that establish the object of the bidding (the technical specifications), specify proposed contract conditions and establish the bidding procedure to be followed. In a broader sense, this is the group of documents that determines the contractual conditions to be established between the supplier or contractor and the agency.
Contractual/Procurement methods Government procurement takes place through different types of methods or tendering. There are three main types of tendering: open (or unlimited) procurement, selective procurement (restricted to pre-selected categories of suppliers, invited to bid) and limited (or negotiated) procurement, including individual, sole-source, single-source or direct tendering. In addition to formal tendering procedures, countries also use “informal” methods, such as requests for proposals and requests for quotations (where procuring entities seek detailed technical and cost proposals, on the basis of which they hold negotiations with prospective providers) or novel methods of procurement, such as purchase cards or electronic catalogues, brought forward by the increasing use by national administrations of information and communication technologies.
Government Procurement The formal process through which official government agencies obtain goods and services, including construction services or public works. It also includes all functions that pertain to the obtaining of any goods, service, or construction, including description of requirements, selection and solicitation of sources, evaluation of offers, preparation and award of contract, dispute and claim resolution and all phases of contract administration. In GATT language, government procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale, or use in the production or supply of goods or services for commercial sale or resale.
Government Procurement Agreement (GPA) A plurilateral agreement negotiated during the Tokyo Round to ensure that government purchases of goods and services entering into international trade are based on specific, published regulations that prescribe open procedures for submitting bids; to improve transparency in national procurement practices; and to ensure effective recourse to dispute settlement procedures. The agreement was renegotiated during the Uruguay Round, becoming effective 1 January 1996.
Limited tendering/ Direct contracting Contracting with a firm that is selected without competition.
Notice of invitation (Solicitation) The process used to communicate procurement requirements and to request responses from interested suppliers.
Open tendering Also referred to as “public bidding,” the formal, public, and competitive procedure during which offers are requested, received and evaluated for goods or services and after which the related contract is awarded to the bidder that complies with the conditions specified in the notice of invitation. It involves a series of stages, acts or steps that must follow rules prescribed in the bidding documents. The procedure consists of: (i) a public invitation directed to all those with a possible interest in presenting offers; followed by (ii) an evaluation stage to select the offer most advantageous to the owner and finally (iii) the award of the corresponding contract.
Selective tendering A method similar to open/public tendering, except that the invitations to bid are not issued to the public in general but only to firms selected by the procuring agency. In general, the same procedures are used as for competitive bidding. It may include a prequalification, this is a step in the bidding process in which the agency first selects the firms to whom invitations to bid will later be issued.
Procuring entities Government agencies that obtain goods and services by methods subject to the procurement provisions of the Agreement. Countries may not subject all entities to the rules of the agreement, but usually maintain exclusions with respect to entities within sensitive sectors and those carrying out special programs.
Performance requirements Special conditions imposed on tenders by government agencies, sometimes requiring commitments to purchase given supplies locally, or to ensure the employment of a specified percentage of local labor and management. See Investment, page 34 and Tariff and Non-tariff Measures, page 44, where this text may have a slightly different meaning.
Public bid opening A formal date, time, and location where and when sealed bids requested by a agency will be opened, announced, and available for review by the public.
Technical specification A specification that lays down the characteristics of goods to be procured or their related processes and production methods, or the characteristics of services to be procured or their related operating methods, including the applicable administrative provisions, and a requirement relating to conformity assessment procedures that an entity prescribes. A technical specification may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements, as they apply to a good, process, service or production or operating method.
Transparency provisions Provisions related to procedural steps, such as, but not exclusively, the initial announcement and dissemination of information about a tender; the definition and dissemination of criteria for prospective bidders; the establishment of timelines and guidelines for preparation and submission of bids; information about the type of award procedure being used; the definition and dissemination of criteria used to evaluate the quality and competitiveness of a given bid; and the availability of avenues for challenging given awards.
Thresholds In most national legislations, the determination of the type of tendering applicable to a specific procurement is based on the value of the procurement. Thresholds often differ for goods, services and public works. Some international agreements use thresholds to determine procurement subject to the provisions of the Agreement.