Procurement vs Acquisition
Procurement and acquisition are often used interchangeably, though they have subtle differences. They are both nouns; acquisition originates from the Latin word “acquisitio(n-)” and has two main senses, while procurement has one main meaning. The key distinction between them lies in their usage in the English language.
What does Procurement mean?
According to Wikipedia, procurement is the acquisition of goods and services by a company to fulfill its needs and requirements from the right vendor at the right time, in the right quantity, and at the best possible rates. In this sense, procurement can be seen as a superior, refined version of purchasing, which seems more like repeat buying of items without considering vendor, quality, location, or time. The verb form of procurement is “procure.” For example, “Last defense procurement was done three months ago.” Procurement can also refer to the action or occupation of acquiring military equipment and supplies.
What does Acquisition mean?
Acquisition is a term more commonly used when one company takes over another, whether smaller or larger. However, it is also used in conjunction with the procurement process, particularly in government organizations. For instance, in the Department of Defense, acquisition is defined as the conceptualization, initiation, design, development, testing, contracting, production, deployment, logistics support, modification, and disposal of weapons and other systems, supplies, or services to satisfy Department of Defense needs. This demonstrates that procurement is just a small part of a larger acquisition process. Acquisition includes activities such as planning, preparation, processing of requisitions, solicitations, evaluations, awards, contract formations, receipt and acceptance of delivery, payment, and inventory management. The process of acquisition in governmental organizations can be explained through steps such as user requirements, concept design, definition phase, development, industrialization, production, and operation. The verb form of acquisition is “acquire.”
Key Takeaways
- Procurement deals with an existing product that can be purchased off the shelf, while acquisition, especially in the Department of Defense, refers to arms designed from scratch as specified by the client.
- Procurement is generally easier than acquisition.
- Acquisition is a much longer process than procurement, with procurement being just a part of the acquisition process.
