Contract or Blanket Orders

1. Purpose
    To define how contract or blanket purchase agreements (orders) are created and used to purchase goods and services from a vendor.

2. Definition

A contract order, also known as a periodic or blanket order, is a purchase order (document) that permits tracking of multiple transactions related to a single vendor and/or agreement. A contract order must be supported by quotation, price agreement or by a formal contract. A contract order is a purchasing arrangement with a vendor and does not encumber University funds.

3. Conditions for Use
  1. Contract purchase orders may be used when the ordering department:
    1. Must purchase repetitive purchases of specific items over a specified period not less than one (1) calendar year.
    2. Must purchase low dollar supplies or materials when a supplier will not take a procurement card for payment.
  2. Contract purchase orders should not be used:
    1. When a price agreement or business terms are not pre-negotiated with the vendor.
    2. As a means to manage an internal budget or grant spending
    3. When ordering, receiving & invoicing reconciliation responsibilities and processes are not in place within a department to manage invoice payments against a blanket order.
4. Contract or Blanket Order Format
  1. A uniform blanket purchase order format should include the following information:
    1. Prices, payment terms and billing arrangements as referenced by a quotation or price agreement
    2. The period of the order including the beginning and end date of the vendor contract or price agreement.
    3. The “Not to Exceed” (NTE) amount on all copies (of the requisition) except for the final blanket order document that will be sent to the vendor. The NTE amount should be for the entire period of the order or the total amount of the contractual commitment with the vendor
    4. Departments or personnel authorized to issue order releases
  2. Time or dollar extensions of a previous blanket purchase order with a vendor will reference the same purchase order number with an updated revision/alteration number.
5. Responsibilities
  1. It shall be the responsibility of Accounts Payable to pay vendor invoices referencing a blanket purchase order. Departments placing orders in excess of the NTE amount or past the term of a blanket order are responsible for payment of received goods or services within agreed upon vendor payment terms.
  2. It shall be the responsibility of the Sourcing & Procurement department to issue purchase/contract/blanket orders on behalf of Boston University. At no time should any individual, department or school contractually obligate Boston University funds by faxing or sending a copy of a blanket order to a vendor.
  3. It shall be the responsibility of the ordering department to monitor the orders placed, prices and terms of their blanket purchase order.
6. Annual Review
  1. Each fiscal year during March-June or thirty (30) days prior to issuing a new blanket order, the ordering department or buyer should review the requisitioned blanket purchase order for changes.

 

News »