County procurement glossary
54 bidding and purchasing terms, explained in plain English, with the Texas, Indiana and Iowa rules where they differ.
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- Best valueBest value is an award method where the county weighs price together with other factors such as quality, experience and delivery, instead of choosing the lowest price alone.
- Bid bondA bid bond is a guarantee, usually from a surety company, that a bidder will sign the contract and provide the required performance and payment bonds if it wins. If the winner backs out, the county can collect on the bond.
- Bid openingA bid opening is the public event where sealed bids are opened and the bidders' names and prices are read aloud at the stated date and time. Anyone can usually attend.
- Bid protestA bid protest is a formal objection by a bidder that a county's solicitation or award broke the rules. It must usually be filed in writing within a short deadline set by the county or state.
- Bid securityBid security is the guarantee a bidder includes with its bid, such as a bid bond, certified check or cashier's check, which the county can keep if the winning bidder fails to sign the contract.
- Bid tabulationA bid tabulation is the county's summary of all bids received for a solicitation, usually listing each bidder and its prices. It is generally a public record.
- Board of commissioners (Indiana)In Indiana, the three-member board of county commissioners is the county's executive body. It awards most contracts and manages county property, while a separate county council controls the budget.
- Board of supervisors (Iowa)In Iowa, the board of supervisors is the elected governing body of each county. It sets the budget, approves contracts and holds public hearings on major projects.
C
- Certificate of insurance (COI)A certificate of insurance is a one-page document from your insurance agent proving your coverage types and limits. Counties ask for it before work starts and often require the county to be named as an additional insured.
- Change orderA change order is a written amendment to a signed contract that changes the work, price or schedule, for example extra work found during construction.
- CMBL (Texas Centralized Master Bidders List)The CMBL is the Texas Comptroller's list of vendors that state agencies use to send out bid notices. Registration costs $70 a year for each business location. Texas counties don't use it; they keep their own vendor lists and post their own bids.
- Commissioners court (Texas)The commissioners court is the governing body of a Texas county, made up of the county judge and four commissioners. It approves contracts, budgets and most purchases above the competitive bidding threshold.
- Competitive quotes (informal quotes)Competitive quotes are a simpler process than formal bidding, where a county asks several vendors (often at least three) for prices on purchases in a middle dollar range set by state law.
- Conflict of Interest Questionnaire (Texas CIQ)The Conflict of Interest Questionnaire (Form CIQ) is a Texas disclosure a vendor must file with a county if it has certain business or family relationships with a county officer who decides on its contracts.
- Cooperative purchasing (co-op contracts)Cooperative purchasing lets a county buy from a contract that another government or a purchasing cooperative has already competitively awarded, instead of running its own bid.
- County purchasing agentA county purchasing agent runs the county's buying: issuing bids and quotes, registering vendors and enforcing purchasing laws. Smaller counties may give these duties to the county auditor, clerk or another office.
D
- Davis-Bacon ActThe Davis-Bacon Act is a federal law that requires contractors on federally funded construction contracts over $2,000 to pay workers at least the local prevailing wages and fringe benefits set by the US Department of Labor.
- DBE (Disadvantaged Business Enterprise)A DBE is a small business owned and controlled by socially and economically disadvantaged individuals, certified under the US Department of Transportation program used on federally funded transportation projects.
E
- E-Verify (Indiana requirement)E-Verify is the federal online system for confirming that new employees can work in the US. Indiana requires contractors on public works contracts with public agencies, including counties, to enroll and use it, and to sign an affidavit saying so.
- Emergency procurementEmergency procurement lets a county skip normal bidding to buy what it needs immediately to protect public health or safety, such as after a storm or a sudden failure of critical equipment.
- ESBD (Texas Electronic State Business Daily)The ESBD is the Texas Comptroller's website where state agencies must post purchases worth more than $25,000. It's free to search. Texas counties aren't required to post their bids there.
F
- Form 1295 (Texas Certificate of Interested Parties)Form 1295 is a Texas disclosure that a business must file with the Texas Ethics Commission and give to a county when signing certain contracts, such as those that need a vote of the commissioners court or are worth at least $1 million.
- Form 96 (Indiana Contractor's Bid for Public Works)Form 96 is the Contractor's Bid for Public Works form prescribed by the Indiana State Board of Accounts. Indiana counties ask contractors to submit public works bids, with the required financial statement and experience, on it.
- Form W-9Form W-9 is the IRS form a vendor gives a county to provide its legal name and taxpayer identification number (EIN or SSN), so the county can pay and report payments.
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- Invitation for bids (IFB or ITB)An invitation for bids (IFB), also called an invitation to bid (ITB), is a formal, sealed competition where the county awards the contract to the lowest responsive and responsible bidder.
- Iran investment certification (Indiana)Indiana requires businesses contracting with the state or local governments, including counties, to certify that they aren't engaged in investment activities in Iran, as defined by state law.
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- NAICS codeA NAICS code is a 2- to 6-digit number from the North American Industry Classification System that describes what a business does, for example 237310 for highway, street and bridge construction.
- NIGP codeAn NIGP code is a number from the NIGP Commodity/Services Code, a classification many state and local governments use to label what they buy, so vendors can register for the items they sell.
- Non-collusion affidavitA non-collusion affidavit is a sworn statement in a bid that the bidder set its price independently and didn't agree with competitors to rig the bid.
- Notice to bidders (legal notice)A notice to bidders is the official public announcement of a county bid, usually published in a newspaper and online, giving the project, where to get documents and the deadline.
P
- Payment bondA payment bond guarantees that a contractor will pay its subcontractors, workers and suppliers on a public project. Because liens usually can't be placed on public property, the bond protects them instead.
- Performance bondA performance bond guarantees that a contractor will finish the job according to the contract. If the contractor defaults, the surety pays to complete the work, up to the bond amount.
- Pre-bid meeting (pre-bid conference)A pre-bid meeting is a session where the county explains a bid and answers questions before the deadline. If it is marked mandatory, only companies that attend can bid.
- Prevailing wagePrevailing wage rules require contractors on some public construction projects to pay workers at least the locally prevailing wage rates set for each trade.
- Prompt paymentPrompt payment laws set how quickly a government must pay a vendor's correct invoice, and require interest on late payments.
- Public worksPublic works are construction, alteration or repair projects for government-owned property, such as roads, bridges, buildings and utilities. State law sets special bidding, bonding and wage rules for them.
- Purchase order (PO)A purchase order is the county's official written authorization to buy specific goods or services at an agreed price. Most counties won't pay an invoice without one.
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- Request for information (RFI)A request for information (RFI) is a county asking vendors for information, not prices or offers, usually to learn what is available before writing a bid or RFP.
- Request for proposals (RFP)A request for proposals (RFP) asks vendors to propose how they would do a job and at what price. The county scores proposals on several factors, such as experience, approach and cost, instead of choosing on price alone.
- Request for quotation (RFQ)A request for quotation (RFQ) is a county's request for prices on a clearly defined item or small job. Vendors send a price, and the county usually picks the lowest acceptable quote.
- Responsive bid (and responsible bidder)A responsive bid meets all the material requirements of the solicitation: right forms, signatures, prices and terms. A responsible bidder is one that is able to perform the contract.
- RetainageRetainage is a portion of each payment that the county holds back until the project is finished, to make sure the work is completed properly. It is released at the end.
- RFQ vs RFP vs IFBAn RFQ asks for prices on a defined need, an RFP asks for proposals scored on several factors, and an IFB is a formal sealed bid awarded to the lowest responsible bidder.
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- Sealed bidA sealed bid is a bid delivered in a sealed envelope or locked electronic system so nobody can see the price until the public bid opening. It keeps the competition fair.
- Small business preferenceA small business preference is any rule that helps small companies win public contracts, such as set-asides, price preferences, simplified quotes or outreach requirements. Counties' use of them varies widely.
- Sole source purchaseA sole source purchase is when a county buys from one vendor without competition because only that vendor can supply the item or service, for example a patented part or software upgrade from its maker.
T
- Targeted Small Business (Iowa TSB)Iowa's Targeted Small Business (TSB) program certifies small Iowa businesses owned by women, minorities, service-disabled veterans or people with disabilities, to help them win public contracts.
- Term contract (annual contract)A term contract sets prices for items or services the county buys repeatedly over a period, often one year with renewal options, and the county orders as needed.