A purchase order (PO) authorizes the vendor to deliver materials or supplies in accordance with the terms and conditions specified thereon (or incorporated from a bid or other document by reference). It also acknowledges the obligation of the Town to pay for goods or services ordered, upon the receipt and proper invoice. Unless a separate contract document is executed, the purchase order establishes the contractual relationship between the Town and the vendor.
A PO is a legally binding contract. The PO is the Town’s commitment for the value of the material or service ordered.
One-time purchase orders are generally issued for a finite quantity of products, construction, or services. Once a PO has been issued, the accounting system will automatically encumber, or set aside, the monies from the department’s budget. This allows the department to more closely monitor their budget. Once the goods or service has been received, and the invoice has been received and approved; payment may be applied.
A blanket purchase order may be used for purchases that are made on an “as-needed” basis. Only items, or services, that are described on the blanket purchase order may be purchased. Control of the use of the blanket purchase order is the responsibility of the Comptroller, or designee. Blanket PO’s allow departments to order as-needed items throughout the fiscal year without having to request a new PO for each purchase as well as the ability to qualify for lower, consolidated pricing. Any authorized Town employee may issue a release for specific goods described by the blanket PO pursuant to its terms and conditions.
In certain instances, for example, purchases from utilities, PO’s may not be required. It is the responsibility of the Comptroller to make the determination as to the necessity of a PO for such purchases.