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Old 03-01-2012, 07:43 AM
kkraj_2001
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Default Procurement Manager

Hello Michelle,

PO is same as Contract. Please note that PO is one type of contract. Most of the organization use different terminology to term the contract.
As you rightly said, PO/Contract is required for any purchase of Goods/Services.
The key criteria for classifications of contracts are;
1. Risk Associated with impact of your organization status, brand and business.
2. Spend High or Low
3. Frequency of purchase/annum High r Low

PO is more used for low risk, spend and frequency of purchase.

Master Agreements/Master Contracts are used when the risk, spend and frequency of purchase is high.

Thanks,
Kantha
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