Purchase orders in construction
A purchase order (PO) is a document that is issued by a buyer to a seller, indicating their intention to purchase certain products or services. On construction projects, POs are typically used to control the purchasing of products and services from suppliers, and are then retained for record keeping.
A PO may include the following information:
- The PO number.
- A description of the products and / or service being purchased.
- Technical details if required.
- Quantities.
- Any discounts to be applied.
- Agreed prices.
- Payment terms.
- Shipment dates.
A PO may be a legally-binding agreement where there is no existing contract, it is only when the supplier accepts the PO that it become a legal contract.
Invoices are documents issued by a suppliers to buyers, summarising the products or services that they have purchased (or have agreed to purchase). Invoices invoice will usually reference a PO number (if there has been one) to assist with record keeping and avoid confusion.
NB A blanket purchase order is: 'A special purchase order typically designed to leverage repetitive requirements and emergency repairs involving low value goods and services, while reducing the administrative workload.' Ref UN Procurement Practitioner's Handbook, produced by the Interagency Procurement Working Group (IAPWG) in 2006 and updated in 2012
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