Glossary of Terms

Contract
A legal document binding two or more parties to an agreement. Mostly used for purchases in excess of $5,000 or when there is construction or major repair.

Fiscal Year
The City runs its business on a fiscal year (July 1 through June 30) rather than calendar year (January 1 through December 31) basis.

Informal Quote
The process used most frequently when seeking pricing on goods or services in the $5,000-$25,000 range. May be done orally or in writing. Should follow procedures set by the Purchasing Department. At least three vendors who customarily sell the requested product or provide the requested service must be contacted with this type of solicitation. (Contact Purchasing for approved form.)

Lease
A type of contract used primarily to procure equipment that spreads out the payments over a specified period. A term of greater than three years requires additional approval by either the City Council or School Committee.

PO or Purchase Order
The official document used by the Purchasing Department to notify a vendor of a purchase. Mostly used for supplies or services costing under $5,000 but over $1,000.

Request for Proposal (RFP)
This is the type of document used to solicit bids where cost is not the most important factor. There are very specific rules that must be followed when using this process. Use of this process generally takes longer to determine the outcome.

Requisition
The document used by departments to convey their requests to Purchasing. For certain purchases, the requisition number may be used for vendor notification on orders up to $1,000 or for goods or services covered under contract.

Sealed Bid
The process used whenever procurement is expected to exceed $25,000. In the case of construction or repair of a structure, that threshold is $10,000. Requires written specifications as well as advertising in a periodical having local distribution. May also require advertising in a state publication depending upon what is being requested and the anticipated cost.