Eskom Procurement Book 2015

GLOSSARY

Ex works (EXW):

Incoterm ‘Ex works’ means that the supplier fulfills his obligation to deliver when he has made the goods available at his premises (i.e., works, factory, warehouse, etc.) to the buyer. In particular, he is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the supplier’s premises to the desired destination. This term thus represents the minimum obligation for the supplier. This term should not be used when the buyer cannot carry out directly or indirectly the export formalities. In such circumstances, the FCA term should be used. See also Incoterms. The buyer grants technical acceptance upon expiry of the guarantee period provided the supplier has met all his obligations. For items replaced, repaired or modified, the guarantee period shall be prolonged by a period equal to that during which they are unavailable. See also Acceptance and Provisional Acceptance. A definite price proposal as differentiated from an estimated cost tender/offer. It binds the tenderer for the validity time of his tender/ offer. See also tender. See Free Alongside Ship. See Free Carrier.

FAS:

FCA:

Final acceptance:

Firm tender/offer:

Fixed price contract: See Contract, Firm/fixed price. FOB: See Free On Board. Follow-up:

In procurement, to monitor the implementation of the contract and to take necessary action if warranted. See also Contract Scheduling and Expedite.

Force majeure: A contract term which implies circumstances beyond one’s control, the occurrence of which can be pleaded as a legal excuse for non- fulfillment of contract. Previously the term referred largely to Acts of God (earthquakes, floods, etc.) However, the term is now used somewhat more flexibly to include government decrees, edicts, strikes, etc. To avoid problems of interpretation, in the event of a dispute, it will be helpful if the buyer and the supplier can agree at the contract stage itself to define what circumstances will constitute force majeure. Forward purchasing: Purchasing of quantities in excess of immediate requirements, a

procurement strategy which may be adopted when indications are that the supplies in the international market may become short and/ or when prices are expected to rise sharply. See also Economies of scale.

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