Forward Commitment Procurement
Imagine you want to buy a toy but you don't have enough money right now. So you talk to your mom and dad and make a deal - you will give them a little bit of money every week for the next few weeks and they will promise to buy you the toy when you have given them enough money. This is called a forward commitment.
In the same way, sometimes big companies or governments want to buy things like buildings, equipment, or services, but they don't have enough money to pay for it all at once. So they make a deal with the seller - they promise to buy the thing in the future, but they will give them a little bit of money upfront to show that they are serious. This is called a forward commitment procurement.
This is helpful because it allows the buyer to plan ahead and know that they will eventually get the thing they need, and it also allows the seller to have some guaranteed business in the future. It's like they have made a promise to each other and both sides are happy with the deal.
In the same way, sometimes big companies or governments want to buy things like buildings, equipment, or services, but they don't have enough money to pay for it all at once. So they make a deal with the seller - they promise to buy the thing in the future, but they will give them a little bit of money upfront to show that they are serious. This is called a forward commitment procurement.
This is helpful because it allows the buyer to plan ahead and know that they will eventually get the thing they need, and it also allows the seller to have some guaranteed business in the future. It's like they have made a promise to each other and both sides are happy with the deal.