Building Design and Construction

Purchase Orders

Issuance of a purchase order differs from issuance of a subcontract (Art. 17.10.1).
A purchase order is issued for material on which no labor is expected to be performed in the field. A subcontract, on the other hand, is an order for a portion of the work for which the subcontractor is expected not only to furnish materials but also to perform labor in the field. An example of a purchase order form, front and back, is shown in Fig. 17.12a and b.
For the specific project, a purchase order rider (like Fig. 17.7) and list of contract drawings (Fig. 17.8) should be appended to the standard purchase order form. The rider describes special conditions pertaining to the job, options or alternates, information pertaining to shop drawings, or sample submissions and other particular requirements of the job.
Material-price solicitations are handled much in the same manner as subcontractprice solicitations (Art. 17.10.1). Material bids should be analyzed for complicated trades in the same manner as for subcontracts (Fig. 17.5).
To properly administer both the subcontract and the purchase orders, which may number between 40 and 60 on an average building job, it is necessary to have a purchasing log (Fig. 17.13) in which is entered every subcontract and purchased order after it has been sent to the subcontractor or vendor. The entry in the log is copied from the file copy of the typed document, and an initial in the upper righthand corner of the file copy indicates that entry has been made. The log serves as a ready cross reference, not only to names of subcontractors and vendors but also to the amounts of their orders and the dates the orders were sent.
Computers in Purchasing. On a large-scale construction project, which costs many millions of dollars, thousands of items may have to be procured. Also, information, shop drawings, and part lists may have to be distributed and revised, redistributed, approved, and distributed again. Systems have been developed to use computers to keep track of all equipment and materials and related purchase information, such as specifications, quotations, final orders, shipment, and delivery dates.
The systems are based on the concept of critical-path items, and the various tasks that must be performed are assigned due dates. For example, a computer report could be by project and show all open purchase-order items for one project, or by buyer name, with all open purchase-order items for each buyer, including all projects.
In negotiating and awarding either a subcontract or a material purchase, the contractor should take into account the scope of the work, list inclusions properly, note exceptions or exclusions, and, where practicable, record unit prices for added or deleted work. Consideration should be given to the time of performance of units of work and availability of workers and materials, or equipment for performing the work. Purchase orders should contain a provision for field measurements by the vendor, if this is required, and should indicate whether delivery and transportation charges and sales taxes are included in the prices.

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