Procurement Services 203: Purchase Orders

Purpose

To provide the method of procurement for large-value supplies or services or the purchase of items that do not qualify for one of the small-value purchasing methods

Reference

University of Alaska Procurement Manual (not available online) Board of Regents Policy & Regulation R05.06

Definitions

Purchase Order: A purchase order is a contract document, issued and signed by persons with delegated procurement authority, specifying supplies or services ordered from a specific vendor, and the price, terms, and conditions of that order. 

Policy

Requirement
Because of competition and capitalization requirements, purchase orders (PO's) are the only way that purchases over $5,000 can be made at the University of Alaska Anchorage. Purchase orders under $5,000 may also be issued where a procurement card or other method of purchase is not practical.

Process
Once a requisition has been entered into Banner the requisition is assigned to a procurement officer, usually based his or her expertise in purchasing the requested goods or services. If the purchase does not require further competition or other considerations, a purchase order is issued by Procurement Services to place the order. The purchase order, when accepted by the vendor, becomes a binding contract between the seller and the university.

After the assignment of the purchase to a procurement officer, the processing sequence proceeds as follows:
  1. The Banner system assigns the purchase order number to the requisition automatically upon request.
  2. A procurement officer obtains quotes or initiates a competitive bidding process.
  3. The procurement officer confirms the terms, pricing, shipping cost, among other specifics, with the vendor.
  4. The confirmed purchase order is prepared and printed.
  5. An individual with delegated procurement authority signs the confirmed purchase order.
  6. The Banner system automatically encumbers the funds when the purchase order is completed.
  7. The Procurement Services Department distributes the signed PO as follows:
    1. The original copy is sent to the vendor. It includes the university's terms and conditions of the purchase and may include other backup or information, such as registration forms, needed by the vendor.
    2. A copy is sent to Accounts Payable (with any necessary backup) for payment when the goods have been received or services rendered. Payment terms are typically 30 days after receipt of invoice.
    3. Procurement Services maintains a file with copies of pertinent backup and attachments for later reference.
Departments may determine the purchase order number when the purchase has been completed by accessing Banner form FOIDOCH and entering in the known requisition number.

There are other types of purchase orders that can be created from a requisition entered into Banner including open purchase orders (Procurement Services 204) and a cash pay or prepaid purchase order (Procurement Services 205).