This article originally appeared in the January 2003 issue of The Rational Edge E-zine on-line magazine, copyright 2002-2003 IBM and Max Wideman.

The Rational Unified Process (RUP) is a rigorous software development process advocated by the Rational Software Corporation.

The downloadable PDF file of the paper on this site is the one prepared by the Rational Edge editorial staff with the special assistance of Ms Marlene Ellin.

Published here October, 2003.

PART IV | Recap | Progressive Acquisition Workflow
Specifying the Work | Selecting or Pre-Qualifying Suppliers
Making the Solicitation | Evaluating Submissions | Negotiating the Contract
Administering the Contract and Controlling the Supplier's Work
Terminating the Contract | Understand Progressive Acquisition
Appendix: Glossary of Terms for Progressive Acquisition

Appendix: Glossary of Terms for Progressive Acquisition

As a project manager, you have probably found that arriving at common definitions for the terminology used in software development projects can be problematic. It becomes even more so when people of different backgrounds are involved. And the challenge is even greater when you are introducing a new discipline, such as progressive acquisition, to contract procurement and legal professionals. Here are some definitions that you can use as a starting point for promoting a common understanding of progressive acquisition.

Acquirer -- Also known as the purchaser or buyer. An organization that acquires or procures a system, software, or software service from a supplier.

Acquisition -- The process of obtaining a system, software product, or software service through contract. Also known as buying, contracting, procurement, or purchasing. Note that acquisition is not restricted to obtaining standard, "off-the-shelf" software.

Agreement, Legal Agreement -- A legal document setting out the terms of a contract between two parties.

Bid -- See Offer.

Change Order (CO) -- A formal document issued by the organization's contracting officer, directing the contractor to make a change that is specified in the governing contract as permissible, even without the contractor's consent.

Contemplated Contract Work Order -- A proposed Contract Work Order (CWO) issued by the acquirer with a view to initiating and negotiating, if necessary, the technological content of a specific project phase and obtaining the supplier's price for that part of the work

Contract -- A document that represents a binding agreement between two parties, enforceable by law, for the supply of a software service or the development, production, operation, and/or maintenance of a software product. In contract law, the most common terms used to designate the parties to a contract are "buyer" and "seller."

Contract Work Order (CWO) -- A short-term contract defining specific deliverables. Multiple CWOs are specifically linked to a longer-term Head Contract.

Contracting Officer -- An individual with an official position within the acquiring organization and with the organizational authority to conduct the acquisition process.

Contractor -- See Supplier.

COTS Software -- Customizable, off-the-shelf software.

Developer Organization -- An organization that performs software development activities, including requirements analysis, design, testing through to acceptance, during the software life cycle process.

Evaluation -- A systematic determination of the extent to which a product or part of a product meets its specific criteria. Evaluator - A person who conducts an evaluation.

Head Contract -- A longer-term contract that contains the basic terms of the supplier-acquirer relationship, such as payment cycles. The Head Contract is formulated before work begins on the project and is then linked to a number of Contract Work Order (CWOs) specifying a series of deliverables to the client. These are formulated in conjunction with specific milestones, as the work progresses.

Increment -- A simple term used to refer to the deliverables covered by a specific Contract Work Order (CWO). Each increment evolves the existing functionality as necessary and adds new value to the product under development.

Monitoring -- The process of examining the status of activities that are the responsibility of a performing organization (supplier) to determine progress toward product delivery.

Offer -- Also called a tender, bid, proposal, or quotation. A document prepared by a supplier that responds to a solicitation. If accepted, the offer binds the supplier to the terms of the resulting contract. However, quotation sometimes refers to an approximate estimate rather than a firm price. Note that an acquirer can also make an offer in response to a supplier's offer; this is usually termed a counter offer.

Procurement -- This refers to all stages involved in the process of acquiring supplies or services, beginning with the determination of a need for supplies or services and ending with contract completion or closeout.

Progressive Acquisition (PA) -- A strategy to acquire a large and complex software system, the specifications for which will predictably change during the development lifecycle. The objective of PA is to minimize many of the risks for both parties associated with such projects. The final system is realized through a series of operational increments that advance the system capability.

Project Director -- Also known as the project owner, owner's representative, or project sponsor. The individual in the acquiring organization who has authority and responsibility for directing the project -- and the business process that the new product will support. The project director provides overall direction to the supplier's project manager within the terms of the governing contract.

Project Manager -- The person responsible for the project management process -- in other words, for executing the project work day by day. In practice this is not a discrete responsibility, because often both the acquirer and the supplier have their own project managers. Ideally, the person responsible for the project within the acquirer's organization should have the title project director, while the equivalent position in the supplier's organization should be called project manager.

Proposal -- See Offer.

Purchase Order (PO) -- A formal document issued by the acquirer to a supplier that commits the organization to the purchase according to specified terms and conditions. A PO becomes a contract when accepted by the supplier but typically contains much less legal language than a formal contract. Generally, a PO is used only for the acquisition of "off-the-shelf" products, or if the work to be done is of a minor nature; most companies place limits on the cost of work that can be performed under a PO. A PO is different from a change order, although it may be modified to double as a change order.

Purchaser -- See Acquirer.

Quotation -- See Offer.

Request for Information (RFI) -- A formal document prepared by the acquirer and presented in the marketplace, typically to elicit "expressions of interest," from suppliers that have the capacity, capability, and availability to undertake and bid on, or tender for, work described in the request. The work description is typically a preliminary version of an eventual request for proposal.

Request for Proposal (RFP) -- A formal solicitation prepared by the acquirer to elicit proposals from potential suppliers. An RFP generally consists of a solicitation letter, instructions to suppliers, evaluation criteria, a statement of requirements, and/or a product performance specification. Selection of the supporting technology for the product may be left to the supplier.

Request for Quotation (RFQ) -- A formal solicitation similar to an RFP but commonly used for simplified acquisition procedures. An RFQ is appropriate for acquiring a standard "off-the-shelf" item that may be purchased in varying quantities (e.g., software licenses) and requires little or no customization. May also be used if the work to be done is of a minor nature. The corresponding contract document is a Purchase Order (PO).

Request for Tender, Request for Bid (RFT, RFB) -- Also known as an invitation to tender, or tender invitation. A formal solicitation prepared by the acquirer to obtain firm prices from potential product suppliers for a product based on a technical specification. An RFT or RFB typically consists of a letter of invitation, instructions to bidders (suppliers), a specification about the form of contract (the accepted offer becomes part of the contract), a system specification and/or statement of work, and possibly other technical documentation. This form of solicitation demands the most thorough legal and technical specifications from both acquirer and supplier. The supplier is selected on the basis of best price.

Scope, Contract Scope -- A document used by the acquirer to describe the product to be delivered under the contract, along with the product's attributes. These may include such considerations as functionality, performance, quality, operability, maintainability, and so on.

Seller -- See Supplier.

Solicitation -- The process of issuing a document requesting submission of an offer, quote, or information. Solicitation may also refer to the document itself.

Statement of Work (SOW) -- A document used by the acquirer to describe and specify the tasks to be performed by the supplier under the terms of the contract.

Subcontract -- A contract between the prime contractor and another supplier. Whereas a subcontract is also a contract in the legal sense, a contract is not a subcontract unless there is a "main" or Head Contract in place. That is, unless there is a contract between the original acquirer and a supplier. Even though an acquirer may parcel out separate pieces of work in a project, the use of the term subcontract in this context is incorrect.

Supplemental Agreement -- A document that sets out terms to modify an existing contract, reached by mutual agreement between the acquirer and supplier. Generally used for changes that fall outside the contract's change provisions. The Supplemental Agreement must cover both the work to be done and the price to be paid.

Supplier -- Also known as the contractor or seller. Any organization, including contractors and consultants, that supplies services or products to the acquirer.

Tender -- See Offer.

User (End User) -- The individual or group who will use the system when it is deployed in the intended environment. Note that users do not necessarily have the same interests as official acquirers, and their specific areas of interest -- or indeed their involvement -- are not always spelled out in the contract. Failure to involve end-users may lead to poor acceptance of the product and consequently a less-than-successful project.

Understand Progressive Acquisition, but Work with Experts  Understand Progressive Acquisition, but Work with Experts

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