Decentralized procurement is a procurement approach in which the authority and responsibility for purchasing decisions and transactions are distributed across various departments or business units within an organization. In this approach, each department or unit is responsible for its own procurement decisions and transactions, including identifying suppliers, negotiating prices, and finalizing contracts.

The goal of decentralized procurement is to provide departments or units with greater autonomy and flexibility in their procurement activities, enabling them to respond more quickly to their specific needs and requirements. However, this approach can also lead to inefficiencies, duplication of efforts, and reduced purchasing power due to the organization's lack of coordination and standardization.

An invitation to tender (ITT) is a formal invitation to suppliers or vendors to submit a bid for the provision of goods, services, or works. An ITT typically outlines the requirements and specifications of the project, the evaluation criteria, and the submission process for interested parties.

Organizations issue an ITT when they want to procure goods, services or works through a competitive bidding process. The ITT process ensures that the organization can evaluate bids from multiple suppliers and select the best offer based on price, quality, and other factors.

The ITT typically includes information on the scope of work, technical specifications, delivery requirements, and any other relevant details. Interested parties must submit their proposals by a specified deadline, and the organization evaluates the bids based on the criteria outlined in the ITT. The organization may then negotiate with one or more suppliers before selecting the successful bidder and awarding the contract.

An ITT is a common tool used in public procurement and is often required by law or regulation. However, it may also be used by private sector organizations to ensure that they receive competitive bids and select the best supplier for their needs.

A Pre-qualification Questionnaire (PQQ) is a document organizations use to pre-screen potential suppliers or contractors before inviting them to participate in a tender process. The PQQ aims to assess the supplier's suitability and capability to meet the organization's requirements and determine whether they should be invited to participate in the tender process.

The PQQ typically includes a range of questions that evaluate the supplier's experience, qualifications, financial stability, health and safety record, and other factors relevant to the project or procurement. The questions may be scored, and the suppliers are typically required to provide evidence to support their responses.

The PQQ process allows organizations to streamline the tender process by ensuring that only qualified and capable suppliers are invited to participate. It also helps to reduce the risk of awarding contracts to suppliers who may not have the necessary skills or resources to deliver the project successfully.

The PQQ process is commonly used in public sector procurement, where it may be required by law or regulation. However, it is also used by private sector organizations as a best practice to ensure that they select the most suitable and capable suppliers for their projects.

A preferred supplier is a supplier or group of suppliers that an organization has identified as its first choice for a particular product or service. This is typically based on the supplier's ability to meet the company's needs in terms of price, quality, delivery time, and other criteria.

A preferred supplier is usually selected after an evaluation process with the status typically granted for a specified period, often with the option to renew or extend the agreement.

Having a preferred supplier can offer several benefits for the company, such as cost savings through volume discounts or negotiated pricing, improved supply chain efficiency through better communication and collaboration, and reduced risk through a more stable and reliable supplier relationship. Equally, having preferred suppliers can streamline the procurement process through automation reducing administrative burden.

It is important for the organization to continuously monitor and evaluate the performance of its preferred suppliers to ensure that they continue to meet the organization's needs and expectations.

A purchase order (PO) is a commercial document issued by a buyer to a supplier, indicating the details of goods or services to be purchased. It is a formal offer to buy goods or services from a supplier and creates a legally binding contract between the buyer and the supplier once it is accepted.

A PO typically includes information such as the type and quantity of goods or services purchased, the agreed price, delivery dates, shipping and billing addresses, payment terms, and other relevant terms and conditions. It serves as a record of the agreement between the buyer and the supplier and helps to ensure that both parties understand their obligations.

The purchase order is often generated by the buyer's procurement department, based on a purchase requisition submitted by an internal department or employee. The purchase order is then sent to the supplier, who can use it as authorization to fulfill the order and ship the goods or provide the services. It is becoming more common for eProcurement systems automatically generate POs.

A purchase requisition (PR) is a formal request from an employee or department within an organization to purchase goods or services from an external supplier. The PR details the item or service to be purchased, the quantity required, the estimated cost, and any other relevant information the supplier may need to provide a quote or fulfill the request. A PR can be in physical and electronic form based upon an organization's procurement process and systems. The PR serves as an internal authorization to make the purchase following sign-off from an authorized budget holder and initiates the procurement process.

The PR is typically submitted to the organization's procurement or purchasing department, which is responsible for reviewing and approving the request. Procurement may review the requisition for accuracy, completeness, and compliance with the company's procurement policies and procedures. Once the requisition is approved, it is used to create a purchase order, which is sent to the supplier to initiate the purchase transaction. In the case of electronic PRs, many of these processes are automated.

PRs are an important tool for managing procurement and ensuring that purchases are made in a controlled and efficient manner. They help to ensure that the purchases are made within the spend management principles set by the organization.