Supplier, Preferred

A provider of goods or services under a non-exclusive contractual arrangement, especially for indirect categories. The arrangements are usually non-binding, standing-offer agreements which offer preferential terms for a defined period of time. Preferred suppliers may be selected after a competitive evaluation as being the best value providers for a given category, and the terms of the preferred supplier arrangements are publicised to end users who are encouraged to raise purchase orders on those suppliers. The use of preferred supplier arrangements can help achieve better value and help reduce the size of the active supply base.