Eskom Procurement Book 2015

GLOSSARY

Contractor, prime:

In a large project contract involving supply of materials, machinery, equipment, construction works etc., a buyer may prefer to appoint a prime contractor who may sub-contract parts of supplies, or fabrication of machinery to other sub-contractors, with overall responsibility for project execution remaining with the prime contractor. See also Contractor. A cost estimate prepared by the buyer for goods, works or services which provides a benchmark or a basis for evaluation and/or negotiation when tenders/offers are received from tenderers. It also serves as an instrument of project planning and budgeting. Incoterm ‘Cost and Freight’ means that the supplier must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the supplier to the buyer when the goods pass the ship’s rail in the port of shipment. The CFR term requires the supplier to clear the goods for export. This term can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the CPT term is more appropriate to use. See also Incoterms. Incoterm ‘Cost, Insurance and Freight’ means that the supplier has the same obligations as under CFR but with the addition that he has to procure marine insurance against the buyer’s risk of loss or damage to the goods during the carriage. The supplier contracts for insurance and pays the insurance premium. The buyer should note that under the CIF term the supplier is only required to obtain insurance on minimum coverage. The CIF term requires the supplier to clear the goods for export. This term can only be used for sea and inland waterway transport. When the ship’s rail serves no practical purposes such as in the case of roll-on/roll-off or container traffic, the CIP term is more appropriate to use. See also Incoterms. The acceptance of a tenderer’s offer by the buyer but with a modification in one of more terms and conditions of offer. In legal terms it amounts to a new proposal to the tenderer which will be construed as a contract only if he accepts the revised proposal of the buyer without any qualifications. See also Acceptance of tender/offer.

Cost estimate:

Cost and freight (CFR):

Cost, insurance and freight:

Counter offer:

CPT:

See Carriage Paid To.

Customs clearance:

See Clearance of goods.

Customs duties:

Taxes levied upon goods on entry into (import duties) or exit from (export duties) the country. See also Customs tariff and Import duties.

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