Contract Management Terms Glossary

Published: 24 Jan 2011 Average Rating: unrated Print

Author: IACCM

Contract Management Terms Glossary

Contract Management Terms Glossary

Abstract Resource: Imaginary resource introduced so that its availability and activity requirement gives an extra means of control. For example, two jobs not being worked upon simultaneously in order to obviate an accident hazard.

Abstraction: The creation of a view or model that suppresses unnecessary details to focus on a specific set of details of interest.

Acceleration: The use of methods for completing work in a shorter time than previously planned or required by the contract.

Acceptability (or Acceptance) Criteria:

1 - A limit or limits placed upon the degree of non-conformance permitted in material expressed in definitive operational terms.

2 - A prioritised list of criteria that the final product(s) or service(s) must meet before the customer will accept them; a measurable definition of what must be done for the final product to be acceptable.

Acceptable Quality Level (AQL): The maximum percent defective (or the maximum number of defects per hundred units) that, for the purpose of sampling inspection or actual operational experience, can be considered satisfactory as a process average.

Activity: A task or set of tasks that are carried out in order to create a deliverable �
The smallest unit of work identified in the Project Work Plan. In some methodologies this may be equivalent to a task but in other methodologies an activity may be broken down further into tasks.

Adhesion Contract: Boilerplate contract, prepared entirely by the party with preponderant bargaining power, and offered to the weaker party on (in effect) a 'take it or leave it' basis. Most insurance policies and small business loans, and some contracts of employment (although legal), are contracts of adhesion because they provide little or no opportunity to negotiate the terms. If the disadvantaged party finds some provisions unacceptable, it cannot suggest changes and must do without the loan or service. In case of a dispute, courts scrutinize such contracts to ensure their terms are not oppressive or unconscionable, and frequently refuse to enforce the contract. The name comes from the reality that the stronger party draws up the contract and the weaker party simply 'adheres' to the terms. Also called contract of adhesion.

Anti-bribery, Anti-corruption: A growing body of national and international laws

Arbitration: A method of Dispute Resolution under which the parties to a contract undertake to commit disputes to a process of arbitration. The arbitration may be undertaken by one or several arbitrators, either mutually or independently appointed, and the results may be deemed binding or non-binding under the terms of the contract. (see also Dispute Resolution, Litigation and Mediation).

Availability: Capable of being used. Usually refers to resources and/or funding. Contracts frequently include a stated availability level as a specific measure of performance.

Back charge: The cost of corrective action taken by the purchaser, chargeable to the supplier under the terms of the contract.

Backward Pass:

1 - Calculation of the latest finish times by working from finish to start for the uncompleted portion of a network of activities.

2 - Calculation of late finish times (dates) for all uncompleted network activities. Determined by working backwards through each activity.

3 - Calculation of latest finish and start dates. Used in Critical Path Method scheduling.

4 - A procedure within time analysis to calculate the late start and late finish dates of all activities in a project.

Balanced Scorecard: An aid to organisational performance management. It helps to focus, not only on the financial targets but also on the internal processes, Customers and learning and growth issues. The term 'balanced' is used because the scorecard should place weightings on the individual measurement areas to reflect their relative importance to achieving a successful outcome.

Baseline: A term used to describe the start point for future measurements.

BATNA - Best Alternative To A Negotiated Agreement: An analysis undertaken during negotiation planning to assist in determining walk-away positions and overall negotiation strength.

Battle of the Forms: Battle of the forms refers to the debate over who's form, contract, document, format, etc. that the contract will ultimately end up using. It comes from corporations pushing their form over the other sides, for various reasons.

Benefits: The positive outcomes, quantified or unquantified, that the contract is required to deliver, and that justify the investment.

Benefits realization: The practice of ensuring that the outcome of a project produces the projected benefits claimed in the Business Case.

1. Ready made content, design, or format that fits a variety of uses.

2. Standard legal language (the fine print) used by many companies, organizations or standard-setting bodies to simplify their contracting procedures. Boilerplate clauses are drawn from the long legal experience of big firms, and normally cannot be negotiated by the client or customer. See also adhesion contract and template.

Business Case: A type of decision-making tool used to determine the effects a particular decision will have on profitability, versus alternative course of action. A business case should show how a decision will alter cash flows over a period of time, and how costs and revenue will change. Specific attention is paid to internal rate of return (IRR), cash flow and payback period.

Change authority: An individual or group which has delegated responsibility for the consideration of requests for change. The change authority is given a budget and can approve changes within that budget.

Change budget: The money allocated to the change authority to be spent on authorised requests for change.

Change control: The procedure to ensure that the processing of all Project or contract issues is controlled, including the submission, analysis and decision making.

Checkpoint (may also be called Milestone or Gateway Review):

1 - A team-level, time-driven review of progress, usually involving a meeting.

2 - A point at which status is taken and reported. This can be a stop/go decision point or just a status update point.

Checkpoint Report: A progress report of the information gathered at a checkpoint meeting, which is given by a team to the Sponsor, Project Manager or other relevant management authority and provides reporting data as defined in the Work Package.

CMBOK - Contract/Commitment Management Body of Knowledge: The current body of knowledge around the topic.

Communication Plan: A formal, documented plan developed by each party to the contract both individually (to ensure communication within their organization) and together (to ensure consistency of the messages to be communicated). The Communication Plan may, or may not, be viewed as part of the contract.

Commodity: Common, off the shelf, or standard goods or services.

Concession: An Off-Specification that is accepted by the Change Control Board without corrective action or direct consequence for the other party (for example, a change in price or availability date).

Configuration audit: A comparison of the latest version number and status of all products shown in the configuration library records against the information held by the product authors.

Configuration management: A discipline, normally supported by software tools, that gives management precise control over its assets (for example, the products of a project), covering planning, identification, control, status accounting and verification of the products.

Configuration Management Tool: A software product providing automatic support for Change, Configuration or version control.

Configuration Structure: A hierarchy of all the Configuration Items that comprise a configuration.

Consortium: A group of independent entities or organizations that join together for the purpose of delivering a particular agreed outcome or opportunity. This may be for a specific, one-time contract or project, or could be to address a series of opportunities.

Contingency budget: A funded plan that provides an outline for defining decisions and steps to be taken if unforeseen circumstances occur.

Contingency plan:

1 - This is the line connecting the start of a planning network with the final activity in that network through those activities with the smallest float. Often this is a line through the network connecting those activities with a zero float, i.e. those activities where any delay will delay the time of the entire network.

2 - Planning to address unwanted or unexpected occurrences that may happen at a later time. This may include set-aside of funding and may also specify certain rights or obligations on the parties to address specific risks that may result from such occurrences.


1 - An agreement between two or more parties, especially one that is written and enforceable by law.

2 - The writing or document containing an agreement between two or more parties.

Contract Brief: A description of what the contract is agreeing to, the actions required for its objectives to be met and the timeline for its performance.

Contract management: The planning, monitoring and control of all aspects of the contract and the motivation of all those involved in it to achieve the contract objectives on time and to the specified cost, quality and performance.

Contract Owner: A specific individual – identified either by name or by title – who has ultimate responsibility to ensure the implementation and oversight of the contract and successful delivery of its expected Deliverables or Outcomes.

Control: The process of comparing actual performance with planned performance, analyzing the differences, and taking the appropriate corrective action.

Crisis management: The processes by which an organisation manages the wider impact of a disaster, such as a major disruption in supply, sudden loss of funding or adverse media coverage.

Critical path: Critical path is a string of Activities of which any schedule change will change the timeline of the entire project. This is the line connecting the start of a planning network with the final activity in that network through those activities with the smallest float. Often this is a line through the network connecting those activities with a zero float, i.e. those activities where any delay will delay the time of the entire network.

Definitive Software Library (DSL): The library in which the definitive authorised versions of all software CIs are stored and protected. It is a physical library or storage repository where master copies of software versions are placed. This one logical storage area may in reality consist of one or more physical software libraries or file stores. They should be separate from development and test file store areas. The DSL may also include a physical store to hold master copies of bought-in software, e.g. fire-proof safe. Only authorised software should be accepted into the DSL, strictly controlled by Change and Release Management.

The DSL exists not directly because of the needs of the Configuration Management process, but as a common base for the Release Management and Configuration Management processes.

Deliverable: A specific and defined obligation within the contract to deliver a particular item, which may be tangible (e.g. a manual, a product), or intangible (e.g. an idea or a service). 'The Deliverables' lie at the heart of most contracts.

Dependency: The reliance, either direct or indirect, of one process or activity upon another.

Dispute Resolution: Within contract, the method by which the parties to an agreement will reach resolution on disagreements. The dispute resolution process may involve a series of steps through which escalation of the dispute will occur. These may include internal forums (for example, executive management within each company) as well as external methods, such as Mediation, Arbitration or Litigation.

End stage assessment: A report given by the Contract Owner or Project Manager to the relevant oversight or Project Board at the end of each management stage of the contract or project. This provides information about the performance during the stage and the status at stage end.

Escrow: A process whereby certain critical items are placed in deposit with a third party by the supplier of goods or services, with conditional release to the customer if specific conditions apply. Escrow most commonly occurs in the case of software programs or complex designs on which the customer's business depends, but which are the unique intellectual property of the supplier.

Exception: A situation where it can be forecast that there will be a deviation beyond the tolerance levels agreed. This is likely to result in some form of Change or Renegotiation, unless a Concession is agreed.

Exception Plan: This is a plan that often follows an Exception Report. For a Stage Plan exception, it covers the period from the present to the end of the current stage. If the exception were at a project level, the Project Plan would be replaced.

Exception Report: A report that describes an exception, provides an analysis and options for the way forward and identifies a recommended option. The Contract/Project Manager presents it to the Change Board.

Export Control: National – and in some cases international – regulations that impose rules around the provision of certain goods or services, typically related to issues of national security.

FCPA - Foreign Corrupt Practices Act: US legislation relating to anti-bribery and anti-corruption.

Feasibility study: A feasibility study is an early study of a problem to assess if a solution is feasible. The study will normally scope the problem, identify and explore a number of solutions and make a recommendation on what action to take. Part of the work in developing options is to calculate an outline Business Case for each as one aspect of comparison.

Financial Viability: The extent to which a program or project can be justified or sustained financially.

Firm Fixed Price Contract: An alternative term for a Fixed Price Contract.

Fixed Price Contract: A type of contract in which the amount to be paid is fixed for a specified amount of work or specified deliverables.

Gantt chart: A graphical representation of the duration of tasks against the progression of time, often used for planning and scheduling projects and when monitoring a project's progress.

Gate (or Gateway) review: A generic term meaning a point at the end of a stage or phase where a decision is made whether to continue with a project. In PRINCE2 this would equate to an end stage assessment.

Hand-Over: A process of transfer of responsibility for all or part of a project or its deliverables. Typically, this takes place at the end of a project or a major part thereof. See also Completion and Project Closeout.

Hand-Over Phase: The fourth phase in the generic project life cycle covers completion of the project to the satisfaction of the sponsor. It includes management of the introduction of the product or service being delivered by the project. During Hand-Over, project records together with an audit trail documentation are completed and delivered to the sponsor. This documentation will be required at the post project evaluation review. All documentation should include any operations and maintenance plans. If not to be conducted in a post-project evaluation review, there should also be a review of the original business case, i.e. a Benefits Assessment.

Highlight Report: A report prepared by the project manager at intervals determined by the project board. It reviews progress to date and highlights any actual or potential problems which have been identified during the period it covers.

A highlight report reviews progress to date and highlights any actual or potential problems. The project manager prepares this report at intervals determined by the project board.

IACCM - The International Association for Contract and Commercial Management.

Import Control: Regulations that govern the importing of goods or services into a particular country or trading bloc. These include tariffs, taxes and health and safety rules. They are subject to international scrutiny under the rules of the World Trade Organization (WTO).

Inco terms: A series of international sales terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions. Their scope is limited to matters relating to rights and obligations of the parties to the contract with respect to the transportation and delivery of goods sold and they are used to divide transaction costs and responsibilities between buyer and seller.

Intellectual Property / Intellectual Property Rights (abbreviated as IP/ IPR): A term referring to a number of distinct types of creations of the mind for which property rights are recognized and may be enforceable under law. Owners may be granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property include copyrights, trademarks, patents, industrial design rights and trade secrets.

Issue Log: A log of all Contract/Project Issues including requests for change raised during the project, showing details of each issue, its evaluation, what decisions about it have been made and its current status.

Job Evaluation: A systematic assessment of job content. It establishes the worth of a job in terms of salary or wage compared to other jobs. Many elaborate schemes have been developed and applied with varying degrees of success. While some structure is necessary on a project, pay is more likely to be governed by market conditions, scarcity, individual knowledge, performance or trade agreements. These factors generally also recognize such project aspects as higher stress, cyclical work loading and potential for termination upon completion. See also Job Description.

Joint Venture: A new entity formed to achieve specific objectives agreed by two or more separate and pre-existing entities. These entities will inject resources, which may be in the form of know-how, funding, personnel etc., but the new entity operates independently of its owners. Research indicates that two out of five JV arrangements last less than four years.

Lessons Learned Report: A report that describes the lessons learned in undertaking the project and that includes statistics from the quality control of the management products. It is approved and then held centrally for the benefit of future contracts.

Litigation: The resort to formal lawsuits and ultimately to the Law Courts as a means of resolving a dispute between the parties.

Make or Buy: A process, typically linked to business case analysis, whereby an evaluation is undertaken in respect of the relative benefits of making a product or service internally, versus turning to the external market for its supply.

Mediation: A method of dispute resolution that may be used in conjunction with, or instead of, a resort to arbitration or litigation. The parties to a contract may agree to use the services of a mediator to assist in resolving possible disputes and they may designate the mediation outcome as binding or non-binding.

Metric: Measurable element of a process or function.

Milestone: A specific and defined goal or objective that is agreed will be met during the execution of the contract or project. Milestones may have a particular time or date associated with them and may be linked to a Gateway Review or other specific consequences linked to their achievement.

Most Favored Customer: A term or clause in contract that guarantees preferential pricing or charging relative to other customers. It may relate to all customers, present and future, or to specific sub-sets of them.

Outcome: The term used to describe the totality of what the contract is set up to deliver. For example, this could be an installed computer system with trained staff to use it, backed up by new working practices and documentation; a refurbished and equipped building with all the staff moved in and working; or the provision of repair and maintenance services that ensure high levels of product or service availability, compliance with safety regulations and on-going cost reductions.

Peer review: Peer reviews are specific reviews of a project or any of its products where personnel from within the organisation and/or from other organisations carry out an independent assessment of the project. Peer reviews can be done at any point within a project but are often used at stage-end points.

Phase: A part, section or segment of a process or a project, similar in meaning to a PRINCE2 stage. The key meaning of stage in PRINCE2 terms is the use of management stages, i.e. sections of the project to which the Project Board only commits one at a time. A phase might be more connected to a time slice, change of skills required or change of emphasis, as in the structure of the IACCM Operational Guide to Contract Management.

PMBOK - The Project Management Body of Knowledge.

Prime Contract: The agreement under which a prime contractor will have direct responsibility for achieving contractual outcomes and overseeing the performance of all other parties (sub-contractors) on which those outcomes may depend.

Prime Contractor: The lead supplier under a Prime Contract.

Prime cost: The total cost of direct materials, direct labour and direct expenses. The term prime cost is commonly restricted to direct production costs only and so does not customarily include direct costs of marketing or research and development.

PRINCE2: The acronym stands for Projects In Controlled Environments. A method that supports some selected aspects of project management. It covers the management, control and organisation of a project. "PRINCE2" refers to the second major version of this method and is a registered trademark of the Office of Government Commerce (OGC), an independent office of HM Treasury of the United Kingdom.

Priority: Sequence in which an Issue or Problem needs to be resolved, based on impact and urgency.

Process: That which must be done to bring about a particular outcome, in terms of information to be gathered, decisions to be made and results that must be achieved.

Product Breakdown Structure: A list of the major products of a plan, plus key dates in their delivery.

Product Description: Written or verbal communication that includes the benefits, form, presentation, price, purpose, etc. of a product.

Product Flow Diagram: A diagram showing the sequence of production and interdependencies of the products listed in a Product Breakdown Structure.

Programme / Program: A portfolio of contracts/projects selected, planned and managed in a coordinated way.

Project: A project is a temporary endeavor, having a defined beginning and end (usually constrained by date, but can be by funding or deliverables), undertaken to meet unique goals and objectives, usually to bring about beneficial change or added value. The temporary nature of projects stands in contrast to business as usual (or operations), which are repetitive, permanent or semi-permanent functional work to produce products or services.

An endeavor in which human, material and financial resources are organized to undertake a defined scope of work of given specification, within constraints of cost and time, so as to achieve unitary, beneficial change, through delivery of quantified and qualitative objectives.

Project Control:� A project management function that involves comparing actual performance with planned performance and taking corrective action (or directing or motivating others to do so) to yield the desired outcome when significant differences exist. See also commitment.

Controlling a project's time, resources, quality, etc.

Project Initiation Document (PID): A logical document which brings together the key information needed to start the project on a sound basis and to convey that information to all concerned with the project.

Project Plan: A high-level plan showing the major products of the project, when they will be delivered and at what cost. An initial Project Plan is presented as part of the Project Initiation Document. This is revised as information on actual progress appears. It is a major control document for the Project Board to measure actual progress against expectations.

Project records: A collection of all approved management, specialist and quality products and other material, which is necessary to provide an auditable record of the project.


1. General: A measure to gauge excellence or state of being freeform defects, deficiencies, and significant variations. The ISO8402-1986 standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs."

2. Manufacturing: Strict and consistent adherence to measurable and verifiable standards to achieve uniformity of output that satisfies specific customer or user requirements.

3. Objective: Measurable and verifiable aspect of a thing or phenomenon, expressed in numbers or quantities, such as lightness or heaviness, thickness or thinness, softness or hardness, frequency or duration.

4. Subjective: Attribute, characteristic, or property of a thing or phenomenon that can be observed and interpreted, and may be approximated (quantified) but cannot be measured, such as beauty, feel, flavor, taste, user satisfaction.

Request for Change: A means of proposing a modification to the current specification of a product, service or contracted method or outcome.

Requirement: A description of a condition or capability to which a system must conform; either derived directly from user needs, or stated in a contract, standard, specification, or other formally imposed document.


Any personnel, material or equipment required for the performance of an activity. 
Note: - Time is not a resource. It is the measure of the duration for which a resource is needed or used. Also, money is better not thought of as a resource, except in financing. It is better seen as the basis of evaluation of the resources used by an activity or task.

An item required to accomplish an activity. Resources can be people, equipment, facilities, funding or anything else needed to perform the work of a project.

Any factors, except time, required or consumed to accomplish an activity. Any substantive requirement of an activity that can be quantified and defined, e.g. manpower, equipment, material, etc.

Project input (time, money, labor, machinery, etc.)

Anything that is assigned to an activity or needed to complete an activity. This may include equipment, people, buildings, etc.

Any variable capable of definition that is required for the completion of an activity and may constrain the project. Resources can be people, equipment, facilities, funding or anything else needed to perform the work of a project.
Note 1: A resource may be non-storable so that its availability has to be renewed for each time period (even if it was not utilized in previous time periods).
Note 2: A resource may be storable so that it remains available unless depleted by usage. Such a resource may also be replenished by activities producing credited and storable resource.

RFx: RFx is a generic way of describing the various "Request For" varieties. RFQ = Request for Quote, RFB=Request for Bid, P = Proposal, I = Information, etc. These items are typically documents, which may be available in physical or virtual (on-line) form and they set forth the buyer's requirements for supplier input either a) to collect information (that may result in a Request For Bid, Proposal etc) or b) to obtain specific quotes / offers from a designated group of potential suppliers.

Risk: A measure of the exposure to which an organisation may be subjected. This is a combination of the likelihood of a disruptive event occurring (probability) and the possible loss that may result from such an event (consequence). Risk should be measured in terms of both exposures to the planned contract or project outcomes (downside loss) and also to the failure to realize possible incremental opportunities (upside loss).

Risk Analysis: The identification and assessment of the level (measure) of the risks calculated from the assessed values of assets and the assessed levels of threats to, and vulnerabilities of, those assets.

Risk Log (also known as a Risk Register): A document that provides identification, estimation, impact evaluation and countermeasures for all risks to the Contract. It should be created during the start-up of the project and developed and maintained during the life of the contract. There may or may not be a mutual version of the risk log that is shared between the parties.

Risk Management: The identification, selection and adoption of countermeasures justified by the identified risks to assets in terms of their potential impact upon services if failure occurs, and the reduction of those risks to an acceptable level.

Risk reduction measure: Measures taken to reduce the likelihood or consequences of a business disruption occurring (as opposed to planning to recover after a disruption).

Risk Register: Same as Risk Log.

Services: Intangible products that are not goods (tangible products), such as accounting, banking, cleaning, consultancy, education, help desks, insurance, know how, medical treatment, repair and maintenance, transportation. Sometimes services are difficult to identify because they are closely associated with a good; such as the combination of a diagnosis with the administration of a medicine. No transferor possession or ownership takes place when services are sold, and they (1) cannot be stored or transported, (2) are instantly perishable, and (3) come into existence at the time they are bought and consumed.

Service Description: Written or verbal communication that includes the benefits, form, presentation, price or charge, purpose, etc. of a service.

Service Level Agreement (SLA): Written agreement between a service provider and the Customer(s), that documents agreed Service Levels for a Service.

Service Level Management: The process of defining, agreeing, documenting and managing the levels of customer service, that are required and cost justified.

Specification: Exact statement of the particular needs to be satisfied, or essential characteristics that a customer requires (in a good, material, method, process, service, system, or work) and which a vendor must deliver. Specifications are written usually in a manner that enables both parties (and/or an independent certifier) to measure the degree of conformance. They are, however, not the same as control limits (which allow fluctuations within a range), and conformance to them does not necessarily mean quality(which is a predictable degree of dependability and uniformity). Specifications are divided generally into two main categories:

(1) Performance specifications: conform to known customer requirements such as keeping a room's temperature within a specified range.

(2) Technical specifications: express the level of performance of the individual units, and are subdivided into (a) individual unit specifications which state boundaries (parameters) of the unit's performance consisting of a nominal(desired or mandated) value and tolerance(allowable departure from the nominal value, (b) acceptable quality level which states limits that are to be satisfied by most of the units, but a certain percentage of the units is allowed to exceed those limits, and (c) distribution specifications which define an acceptable statistical distribution (in terms of mean deviation and standard Deviation) for each unit, and are used by a producer to monitor its production processes.

Spec sheet: Specifies in detail what the customer wants (external) and what consequences this has for the service provider (internal) such as required resources and skills.

Stakeholders: Anyone with an interest in the execution and outcome of a project/contract/product. They would include, but are not limited to business streams affected by or dependent on the outcome of a project, end users, sponsors, implementers, etc.

Standard cost: A pre-determined calculation of how much costs should be under specified working conditions. It is built up from an assessment of the value of cost elements and correlates technical specifications and the quantification of materials, labour and other costs to the prices and/or wages expected to apply during the period in which the standard cost is intended to be used. Its main purposes are to provide bases for control through variance accounting, for the valuation of work in progress and for fixing selling prices.

Sub-contract: Agreement, purchase order, or any such issued under a prime contract(by the prime contractor to a third party the subcontractor), calling for the performance of a defined piece of work or production and/or delivery of specified goods or services. Subcontracts contain special terms and conditions that are unique to the prime contract, and flow-down provisions that proceed from it (it is therefore distinct from an Underpinning Contract, which may or may not be specific to a particular prime contract).

Sub-contractor: A third party engaged by a Prime Contractor through a sub-contract.

Supplier: An external entity that supplies goods or services. In some definitions, the term is used to describe an entity that provides relatively common, off the shelf, or standard goods or services ('commodities'), as opposed to a contractor or subcontractor who commonly adds specialized input to deliverables. Also called vendor.

SWOT Analysis: An activity to identify Strengths, Weaknesses, Opportunities and Threats related to a particular project or undertaking. Frequently undertaken as a tool in market analysis; can also be used in both project and negotiation planning.

Team Manager: A role that may be employed by the Project Manager or a specifically appointed alternative person to manage the work of team members.

Teaming Agreement: An agreement under which a group of companies or organizations will pool their resources to jointly satisfy the needs of a prospect or customer.

Template: Design of an item (or a group of items) that serves as a basis or guide for designing or constructing similar items. In the world of contracting, the template may be a specific term, group of terms, section of an agreement (e.g. Service level agreement, specifications) or entire model contract. Unlike boilerplate agreements, template agreements may allow a certain degree of freedom in making alterations or modifications.

Terms Audit: Periodic process by which an organization assesses and validates the quality of its standard terms and conditions and templates to establish the degree of alignment with market norms and the needs of its trading partners.

Tolerance: An agreed range of variability in acceptable levels of performance.

Top Ten Negotiated Terms: An annual study undertaken by IACCM to identify the terms that are the most frequent source of negotiation.

Total Cost Of Ownership (TCO):

1. General: Estimate of all direct and indirect costs associated with an asset or acquisition over its entire life cycle.

2. Computer systems: Total of direct capital investment in hardware and software plus indirect costs of installation, training, repairs, downtime, technical support, and upgrading. Also called cost of ownership or ownership cost.

UNCISG: United Nations Convention on Contracts for the International Sale of Goods. A standard for the interpretation of international contracts dealing with imports and exports, developed and adopted by the United Nations in 1980. UNCISG is an attempt to delineate responsibilities of all parties to trade contracts, but its use remains limited and it is typically excluded by the terms of major corporate contracts.

Underpinning contract: A contract with an external supplier covering delivery of goods or services that support the performance of the master Agreement or contract.

User: The person or group who will use the final deliverable(s) of the project/product/ service.

Variance analysis: A variance is the difference between planned, budgeted or standard cost and actual cost (or revenues). Variance analysis is an analysis of the factors that have caused the difference between the pre-determined standards and the actual results. Variances can be developed specifically related to the operations carried out in addition to those mentioned above.

Vendor: Alternative term for supplier.

Vulnerability: A weakness of the system and its assets, which could be exploited by threats.

Waterline: The lowest level of detail relevant to the customer.


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