Blanket Purchase Order

(Sample)

"A blanket order is a method of buying which applies to one or more specific commodities, the usage requirements of which may vary considerably over a period of time and the quantity required is, therefore, difficult to predict. The particular items to be ordered are clearly known in advance although the purchaser may have only an approximate idea of the total usage of each item for a given period. Prices may be established as a result of competitive bidding or negotiation and are incorporated into the order. They may also be established by an annual volume contract or by a general requirements pricing arrangement. As a general rule, no subsequent orders are written for the particular deliveries made under the order, and billings, which frequently are on a monthly basis rather than for separate deliveries, refer to the original order number. Thus, the blanket order can accomplish very definite savings in paper work."
(National Association of Educational Buyers)

GUIDELINES:

"Blanket Purchase Orders" can be used for consumable goods or services to be released as needed or on a specified schedule reducing inventories. They are general written for a specific period of time and/or a "not to exceed dollar amount" (whichever is reached first) , with monthly payment rather than individual invoice remittances.

They are best used:

a) For repetitive, specified services or items, or categories of items from the same vendor over periods of less than a year (generally one month)
b) For ordering standard materials or maintenance supplies which require numerous shipments.
c) When it enables the buyer to obtain more favorable pricing through volume commitments.

-Blanket Purchase Orders generally should not be used when:

1) No benefit will be derived over and above a regular purchase order.
2) Prices are unknown at ordering time or subject to change later without notice.
3) Quality of vendor or service is questionable.
4) Control over college expenditures would be weakened significantly.

In all cases, "Blanket Purchase Orders" must have the approval of the Director of Purchasing prior to their actual placement. This will allow Purchasing to determine when it is appropriate to issue a blanket purchase order. Note: Blanket Purchase Orders do not encumber a department’s budget.


PROCEDURES:

1. A "Blanket Purchase Order Requisition" will be sent to the Department of Purchasing for a "Blanket Purchase Order" number. (See Blanket Purchase Order Requisition below.)

2. Purchasing assigns a "Blanket Purchase Order" number and returns a copy of the "Blanket Purchase Order Requisition" with the new "Blanket Purchase Order" number on it.

3. Purchasing will file the "Blanket Purchase Order Requisition" in a section created for "Blanket Purchase Orders".

4. Purchasing will send out a form letter with the new Blanket Purchase Order number. The letter will contain all the elements of the standard Purchase Order however with new conditions/ instructions. (This letter will always bear the signature of the Director of Purchasing.)

5. When invoices come in for "Blanket Purchase Order", the department secretary (where the "Blanket Purchase Order" is being used) will verify within the department the receipt, correctness and condition of the items.

6. The secretary will then forward the clearly marked "approved" invoice to the Department of Purchasing for final approval before sending to Accounts Payable. NOTE: It is highly recommended that the department utilizing the "Blanket Purchase Order" maintain a spreadsheet to track each vendor along with dollars to determine when another "Blanket Purchase Order" is needed.

7. When the invoice is a final one (Time period reached OR ALL dollars spent) the final invoice will be stamped "COMPLETED" and forwarded to the Purchasing Department.

8. The department will send another "Blanket Purchase Order Requisition" to the Department of Purchasing to begin the process again.




The Requisition Form - The originator of the "Blanket Purchase Order" requisition will fill out the form as completely as possible by providing the following information:

a. The complete vendor name, address, phone number, and name of contact person of the vendor, if known. (Vendor's Number)
b. The date originated.
c. The period of time to be covered and/ or a "not to exceed total dollar amount".
d. The full account number. (Object and department code.)
e. Personnel authorized to issue "order releases".
f. A signature of the Department Head or administrative officer is required to indicate the proposed blanket purchase order is approved.

LETTER TO VENDORS RE: BLANKET PURCHASE ORDERS
(example below)

The letter to vendors will be the official communication of the establishment of each "blanket purchase order" and the renewal of each "Blanket Purchase Order Number."

It will contain the following information along with procedures:

1. The complete name and address of the vendor.

2. Be addressed to a particular vendor determined person in their company.

3. State the -period of time to be covered and/or a "not to exceed total dollar amount".

4. Request invoice on a particular date (negotiable / 15th of month)

5. Request duplicate invoices

6. Monthly invoice of all transactions for a given "Blanket Purchase Order."

7. Procedures for issuing new "Blanket Purchase Order" numbers

8. Cancellation statement.

9. "Blanket Purchase Order" number must appear on the invoice

10. Reference #, = activity for the month
In all cases, "Blanket Purchase Order Letters" must have the approval and signature of the Director of Purchasing prior to their actual placement.