Dictionary of Procurement Terms

Vendor File

The accumulated record maintained by the central purchasing authority on a vendor, including information on the vendor’s relationship with the purchasing authority, application for inclusion on the bidders list, record of performance under contract, and correspondence.

Vendor Managed Inventory (VMI)

A form of outsourcing whereby a Contract is initiated with a private business to manage and control the Inventory of the public entity. The Contractor is responsible for all Inventory functions, which may include re-ordering.

Vendor Rating (Evaluation)

A system for recording and ranking the performance of a supplier in terms of a range of issues, including delivery performance, service, and quality. (Business, 2002)

Vendor Supply Point Code (VSP)

CANADIAN Representation of the geographic location at which goods are manufactured or, if not known, from which the goods are shipped by the vendor, or, in the case of services, where the services are mainly performed.

Vendor Supply Point Value

CANADIAN The value in whole Canadian dollars of goods/services for each VSP reported on the document. It is mandatory only if there is more than one VSP on the document.

Vendor’s Lien

A seller’s right to retain possession of property until payment for the property is recovered.

Verbal Contract

An agreement that is oral and not in writing. Usually enforceable if under $500.00.

Vertical Equity

Economic principle that individuals with higher incomes should pay more taxes. (Bishop, 2004)

Vertical Integration

Theory describing a style of business ownership and control. Vertically integrated companies are united through a hierarchy and share a common owner. Usually, each member produces a different product, and the products combine to satisfy a common need. An important theory for procurement professionals who become involved in price/cost negotiation to understand. There are three major types of vertical integration: 1. Backward Vertical Integration, 2. Forward Vertical Integration, and 3. Balanced Vertical Integration.

Vertical Linkage Analysis

A tool that enables analysis of the value chain to determine where opportunities for enhancing competitive advantage may lie. Vertical linkage analysis extends the value chain beyond the organization to incorporate the suppliers and end users who are at either end of the chain. (Business, 2002)