| GLOSSARY |
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Account Value
A six-digit number assigned to a specific type of service or commodity. Correlates to the Category code. |
Buying Green
Procurement Services supports and encourages University of Michigan faculty and staff to buy products made from recycled or remanufactured materials. |
Commodity
An article of trade or commerce. Similar goods or services purchased within the University community are commonly grouped to facilitate proper analysis of individual costs and various market factors. |
Conflict of Interest
A Conflict of Interest situation occurs when a University employee is in a position to influence the conduct of a project for personal gain due to responsibilities or to arrangements with an outside entity. See the Conflict of Interest Policy for more information. |
Contract
An agreement between two or more parties, that is written and enforceable by law. |
Customs-Duty Free Entry
The process to procure an instrument or apparatus from another country that must pass through US customs. |
Demurrage Charges
Fees assessed for the detention of goods. Example: a monthly fee charged for the rental of compressed gas tanks. |
Dispatch
The process of releasing a purchase order to the vendor. Dispatch methods include printing the purchase order for mailing, faxing the purchase order, or placing the order by phone. |
ePro Requisition
The ePro Requisition (ePro req) is used to purchase goods and services not available through Internal Service Units or University Contracts, or to release against an M-Pathways contract. The ePro req is the only transaction that you complete in M-Pathways to order goods and services. |
F.O.B.
A delivery term meaning "free on board" at a named place. The named place is where merchandise title passes from the seller to the purchaser. This is an important, and often negotiated, aspect of the purchase agreement because whoever holds title in transit is responsible for damages and losses and the filing of claims. |
F.O.B. Destination
The most desirable term for the purchaser. Title is held by the vendor until merchandise is delivered to the purchaser or dock area. The vendor is responsible for damages and losses and the filing of claims up to the time of delivery. A separate freight bill will be submitted for payment. |
F.O.B. Destination, Freight Prepaid, and Charged Back
Title of merchandise passes to purchaser at time of delivery; however, transportation and freight charges are prepaid by vendor and added to the invoice. |
F.O.B. Origin
Title of the merchandise passes from the vendor to the purchaser at the moment of delivery to the freight carrier. Purchaser is liable for freight charges, and must file all claims for loss or damage. |
F.O.B. Origin, Freight Prepaid
A delivery term which places liability with the purchaser once the freight leaves the dock, but the vendor is going to pay the shipping costs. |
Fair and Reasonable
A determination that a price is fair and reasonable is really a conclusion that the proposed price is fair to both parties, considering the quality and delivery and other factors. |
Freedom of Information Act (FOIA)
As a public institution in the State of Michigan, the University of Michigan is subject to provisions of the state's Freedom of Information Act (FOIA): "all persons are entitled to full and complete information regarding the affairs of government and the official acts of those who represent them as public officials and public employees." Consequently, any individual or organization has the right to inspect and/or receive copies of public records maintained by the University. |
Grant
Funds awarded by a sponsor to achieve a specific goal; a grant entails obligations to sponsor, although they are less stringent than those in a contract. |
Guarantee
A promise or assurance as to the quality or durability of a product or service. |
Indirect Cost
Also known as Facilities and Administrative Costs. The costs of operations which cannot be assigned to specific projects, such as electricity and central administrative services; sometimes referred to as "overhead." |
Internal Service Unit
University of Michigan units that provide goods and services to other University units and departments. Internal Service Units handle a large part of the buying process, such as auditing invoices; setting product specifications and standards; negotiating pricing; delivery; etc. |
Invoice
A detailed list of goods shipped, or services rendered, with an account of all costs. |
Negotiation
An exploratory and a bargaining process (planning, reviewing, analyzing, compromising) involving a buyer and seller, each with their own viewpoints and objectives, seeking to reach a mutually satisfactory agreement on all phases of a procurement transaction - including price, service, specifications, technical and quality requirements, freight and payment terms. |
Non-Competitive Purchase Award
A purchase from the only available supplier of a product or service. Therefore, no bids or proposals can be obtained. Formerly known as Sole Source. |
Non-PO Voucher
Used for payments that do not originate from a purchase order or when a supplier will not accept a purchase order or a P-Card. Non-PO voucher should not be used in lieu of the other procurement methods. They should be used only when no other payment method will work. |
P-Card
MasterCard used for low dollar transactions that cost $5,000 or less and for hosting functions, dues, memberships, conference registration, subscriptions, and travel expenses. |
Payment Terms
The time interval in which the University should pay an invoice. |
Procurement
Procurement is all of the processes involved in requesting, ordering, auditing, and paying for goods and services. |
Purchase Order
The authorizing document for provision of goods or services from a supplier. The Purchase Order becomes a legally binding contract on acceptance by the supplier. |
Quote
To state a price for securities, goods, and services. |
Regent Reporting
The Board of Regents requires Procurement Services to report quarterly all non-competitive purchase transactions in excess of $5,000 (see SPG 507.1). |
Request for Information (RFI)
Vendors are asked to provide information on a particular commodity or service. RFI's are often used as 'brain-storming' tools to meet a particular situation (example: "provide audio/visual system for auditorium") and rely more on the expertise of the vendors to meet a need. |
Request for Proposal
Vendors are asked to meet a need or set of needs. Unlike the request for information, criteria are more developed and specifications are given which the proposed commodity or service must meet or exceed. Most, but not all of the proposals will spell out the equipment/labor/services needed to complete the project. |
Request for Quotation (RFQ)
Vendors are asked to provide specific pricing and delivery information on listed products or services. Quotations are requested for exact quantities, and products may be specified by make/model number, batch number, industry specification, etc. |
Service Unit Billing
Service Unit Billings (SUB) are automated Transfer Vouchers used by authorized University of Michigan Service Units. Service Unit Billing charges appear on the monthly Statement of Activity. |
Ship to Code
Number assigned to each University address. |
Short Code
The ShortCode is an abbreviated six-digit code, which represents a department's chart of accounts, including Fund, Department, and Class. Program and Project/Grant may also be defined. |
Single Source
Single source is a purchase from a supplier who is the only respondent to a competitive bid request (e.g., Request for Quotation). It is still important for the University to demonstrate that the pricing received is fair and reasonable. For example, the vendor can show that the University is receiving an educational discount from its standard price list. |
Sole Source
A purchase from the only available supplier of a product or service. Therefore, no bids or proposals can be obtained. Also referred to as a Non-Competitive Purchase Award. |
SpeedChart
The SpeedChart is an abbreviated six-digit code, which represents a department's chart of accounts, including Fund, Department, and Class. Program and Project/Grant may also be defined. This term is used in the M-Pathways system and is synonymous with ShortCode. |
Supply Chain Management
The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer. The development and integration of people and technological resources are critical to successful supply chain integration. |
Tax Exempt
Not subject or liable to taxation. |
Terms and Conditions (Ts and Cs)
Specific requirements a buyer makes upon a supplier in the performance of work. |
Total Cost of Ownership (TCO)
The purchase price of a product and its transportation cost, plus indirect handling, inspection, quality, rework, maintenance, and all other "follow-on" costs associated with the purchase, including costs of disposal. |
Uniform Commercial Code (UCC)
A codification of law, which clarifies and regulates the rights and obligations of buyers and sellers engaging in commercial transactions. It has been adopted by all states except Louisiana. |
Unit of Issue
A unit of measurement in which an item is issued from stock. |
Vendor
A reactive source that delivers specified goods on time. Although this term is still widely used, it is preferable to use the term "supplier" to refer to a source that proactively suggests savings opportunities and improvement ideas. |
Vendor Certification form
A form completed by vendors, which supplies the University with key information, including taxpayer ID, remit to address, type of business, and minority status. The forms are processed by the Vendor Maintenance team. |
Voucher
A document that serves as proof that the terms of a transaction has been met. |
Warranty
A promise made by a seller that is legally enforceable. |
