Sourcing and Procurement
Glossary
Your trusted guide to exploring sourcing and procurement terms & definitions,
from the world’s leading procurement experts and companies
Moral Hazard
The prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.
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Multi-Sourcing
The division of activities or services involved in the execution of an essential business function among a combination of providers, both internal and external.
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Multilateral trade agreements
An exchange agreement between more than two nations or trading groups that gives each group favoured trade status connected to certain goods obtained from the signatories
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Multiple Award
A Multiple Award is an award of a contract to more than one supplier who meets the requirements of a specification, where the multiple award is made on the grounds set forth in the bid document in order to satisfy multiple factors and needs of authorized users. Those factors may include complexity of items, various manufacturers, differences in performance required to accomplish or produce required end results, production and distribution facilities, price, compliance with delivery requirements, geographic location or other pertinent factors.
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Most Desirable Outcome (MDO)
The best possible outcome for the negotiating team.
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Multi-Year Contract
A multi-year contract means a contract for the purchase of supplies or services for more than 1, but usually no more than 5, program years. A multi-year contract may provide that performance under the contract during the second and subsequent years of the contract is contingent upon the appropriation of funds, and (if it does so provide) may provide for a cancellation payment to be made to the contractor if appropriations are not made. The key distinguishing difference between multi-year contracts and multiple year contracts is that multi-year contracts buy more than 1 year's requirement (of a product or service) without establishing and having to exercise an option for each program year after the first.
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Multilateral
Involving more than one party (often used in politics to refer to negotiations, talks, or proceedings involving several nations).
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NAICS (North American Industry Classification System) code
Classification of business established by type of activity for the purpose of facilitating the collection, tabulation, presentation, and analysis of data collected by various agencies of the united states government, state agencies, trade associations, and private research organizations for promoting uniformity and comparability in the presentation of statistical data relating to those establishments and their fields of endeavor.
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