Glossary of Terms
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
The City runs its business on a fiscal year (July 1 through June 30) rather
than calendar year (January 1 through December 31) basis.
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.)
A type of contract used primarily to procure equipment that spreads
out the payments over a specified period. A term of greater than three
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.
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.
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.