PO vs. Contract

A purchase order (PO) is a commercial document issued by a buyer (in this case, the University System) to a seller (the Supplier), which typically indicates types, quantities, scope, and agreed prices for products or services as well as applicable terms and conditions. The Purchase Order typically serves as an official offer to purchase the referenced goods or services, which becomes a binding agreement once the seller (Supplier) confirms the purchase order or provides/ships any portion of the goods or services described in the PO.

For information about Purchase Orders, contact your departments UShop Requester or SPA representative who can support your day-to-day procurement needs.

A signed contract is a formal agreement between two parties that is legally binding once both parties have signed the contract document(s). It is a more complex and comprehensive legal document that outlines the specific terms and conditions of a business agreement between two parties. Signed contracts are typically used for significant service engagements, complex contracts, or ongoing relationships, where there are more complicated requirements, larger sums of money, higher risk, or long-term commitments involved.

Request a contract

Purchase orders are the preferred method to obtain most types of goods and services and can include purchases from UShop catalogs as well as non-catalog based purchases resulting from a suppliers quote or proposal. They are typically ideal for the one-time procurement of goods and services or services that have a performance period of less than 1 year. When requesting a quote or proposal from a supplier, you can confirm with them that they will accept a purchase order, which is the fastest and simplest method.

Signed contracts are typically more detailed and are used when the procurement is more complex,  involves a longer-term relationship, involves substantial risk (including financial, legal, reputational, etc.), is required to fully define the requirements or relationship, and in some cases when the supplier will not accept a purchase order and there is no alternative source of supply.

Contracts follow the same competitive bid requirements as all other procurement which require that all contracts of $35,000 or more are awarded through a competitive bid process unless a valid Exception to Bid (ETB) is approved. You can learn more about these requirements on the “How to Buy” section of this page or request a bid via TDx ticket.