(With thanks to Voluntary Norfolk for their collation of these definitions)

Commissioning: the strategic activity of assessing needs, resources, and current services, and developing a strategy to make best use of available resources to meet identified needs. That is: assessing need, identifying resources available, planning how to use the resources, arranging service delivery, then reviewing the service and reassessing need. 

For effective commissioning it needs to be a cyclical activity of monitoring, evaluating and improvement; with collaboration and partnership working.

Joint Commissioning is 2 or more agencies within same geographical area pooling their resources to implement a common strategy to provide services.  This can lead to a more integrated delivery and better value for money for agencies.

Some service delivery will require a full commissioning cycle with formal competitive tendering; while others can have an adapted and abbreviated as necessary.

Procurement: is the acquisition of goods and services from third party suppliers under legally binding contractual terms where all the conditions necessary to form a legally binding contract have been met.  Such acquisitions are for the direct benefit of the contracting authority, necessary for the delivery of the services it provides or for the running of its own business.

This is different to Grants as grant givers are not contracting for a service which forms part of its own business rather it is offering financial support in an area of work designed and proposed by the voluntary organisation which it wishes to sponsor.

Most grant awards are covered by some form of written grant agreement, these are often non-legally binding agreements (called grant agreements or service level agreements), but sometimes legally binding contracts. 

A contract is a formal agreement between at least two parties. In law, contracts can be formed between any two or more individuals or organisations by them agreeing to do certain things, usually in return for payment. Contracts can be formed verbally and by custom and practice – where normal practice is to do a certain thing for a certain fee, for instance.

Where a voluntary organisation has a contract with a public body, this will usually mean that the voluntary group is contracted to deliver specified activities and/or services in return for a specified sum of money from the public body. These contracts will normally be formal written documents, signed by senior members of both organisations, with all the terms and conditions written down.

A contract is a commercial agreement and, as such, the income from it may be liable for tax and VAT.

Best value for money means, in the context of a procurement process, choosing the bid that offers “the optimum combination of whole life costs and benefits to meet the customer’s requirement”.  This is not the lowest initial price option and requires assessing the ongoing revenue/resource costs as well as initial capital investment.  The council’s requirements can include social, environmental and other strategic objectives and is defined at the earliest stages of the procurement cycle.

Tender:   An official written offer to an invitation that contains a costed proposal to perform the works, services or supplies required, and is provided in response to a tendering exercise. This normally involves submission of the offer in a sealed envelope to a specified address by a specified time and date. 

Competitive tendering:  Awarding contracts by the process of seeking competing bids from more than one potential supplier.