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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