Purchasing Terminology

Agreement

A written contract between two or more parties, which creates legally binding obligations.

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

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. For more information see the Ferris State University Conflict of Interest Policy.

Ferris State Contracted Vendors

Contracts that contain details of the Agreement between the supplier and the University: description of services, pricing, length of Agreement etc. To view our current contracts click here

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 supplier until merchandise is delivered to the purchaser or dock area. The supplier is responsible for damages and losses and the filing of claims up to the time of delivery.

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 supplier and added to the invoice.

F.O.B. Origin

Title of the merchandise passes from the supplier 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 supplier is going to pay the shipping costs.

Freedom of Information Act (FOIA)

As a public institution in the state of Michigan, Ferris State University 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.

Invoice

A detailed list of goods shipped, or services rendered, with an account of all costs. They should be sent directly to Accounts Payable from the vendor. Having an invoice prior to a PO # results in an un-authorized purchase and is against Ferris State University Purchasing Policy.

Negotiation

A bargaining process involving a buyer and seller, 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.

P-Card

A University issued visa credit card. The Purchasing Card may be used for any purchase excluding a few exceptions and should be used at all times when appropriate on purchases that are under $2,000. For more information visit the Disbursements Office website.

Purchase Order

Authorizing document for provision of goods or services from a supplier; becomes a legally binding contract on acceptance by the supplier.

Requisition

Ferris State University utilizes the Banner Finance System to facilitate acquisitions. To start the process of procuring products or services you must enter a requisition in Banner, have the document flow through the appropriate FOAP owners, then landing in purchasing for final approval and conversion to a purchase order.

Request for Information (RFI)

A proposal requested from potential suppliers to determine what products and services are potentially available in the marketplace to meet University needs and to know the capability of a supplier in terms of offerings and strengths of the supplier. An RFI, however, is not an invitation to bid, is not binding on either the University or suppliers, and may or may not lead to an RFP or RFQ. A RFQ/RFP is required to make a purchase $10,000.00 and above.

Request for Proposal (RFP)

An invitation from the University to potential suppliers to submit a proposal based on specific requirements for products and / or services through a bidding process. The competitive bidding process is one of the best methods for leveraging the University’s negotiating ability and purchasing power with suppliers. The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified. A formal RFQ/RFP is required to make a purchase $5,000.00 and above.

Request for Quotation (RFQ)

The RFQ is used where the specifications of a product or service are already known, and price is the main factor in selecting the successful bidder. A formal RFQ/RFP is required to make a purchase $10,000.00 and above.

Request for Vendor Identification & Certification (Ferris W-9)

A form completed by vendors/supplier, which supplies the University with key information, including taxpayer ID, remit to address, type of business, and minority status.

Sole Source Vendor Award

A non-competitive purchase is a procurement request which restricts solicitation to one source.

Warranty

A promise made by a seller that is legally binding.