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208

CHAPTER 8

Commodity

exchange:

Specialised markets in which titles to ownership of commodities are

freely traded. Physical exchange of commodities in general does

not take place, although samples of these may be examined. Many

of the well organised exchanges now provide for spot and futures

trading. Tenders/offers for these commodities might not show prices,

but only the percentage of the surplus asked for by the tenderer

on top of the market price fixed on the day the contract comes into

effect. See also Futures and Spot purchase.

Common-use item:

Material that is often used by a number of users and fulfills certain

standards set up. The term is generally used in the context of

government procurement of such items as stationery, vehicles,

typewriters, and other office equipment, machines or accessories.

Compatibility:

The suitability of products or systems to be used together under

specified conditions to fulfil the relevant requirements without

causing unacceptable interactions.

Compensation trade:

See Buy back.

Competitive

tendering:

If responsive tenders were received by the buyer in response to an

invitation to tender where the tender is global (open to everyone) or is

restricted (open to a selected number of tenderers) and where there

is no evidence that the tenderers have had a secret understanding.

See also Collusive Tenders/offers, Bid, Offer and Tender.

Composite price

index:

Weighted price indices for major inputs entering into the composition

of a finished item of procurement. Sometimes incorporated and

made use of in a contract as a basis for price revision. See also

Price revision.

Concealed damage:

Damage that is not apparent at the time of delivery and which

may be discovered only after a package has been opened and the

contents examined.

Concealed discount:

A discount not in the form of a straight percentage deduction on

list price but in some other form with the same effect on the net

price, e.g. 90 days credit (i.e., payment to be made after 90 days

of delivery). See also Cash discount, Quantity discount and Trade

discount.

Confirmed letter of

credit:

A letter of credit in which the negotiating bank guarantees payment

to the beneficiary after all conditions mentioned therein are fulfilled.

See also Letter of credit.

Conflict of interest:

A situation where personal or business interests of a party could

affect the outcome of a business transaction through the non-

declaration of that interest. For example, tenderers should never

be involved in the preparation of tender invitation documents or

evaluation of the same tender.

GLOSSARY