purchase order

A purchase order in public procurement is a binding document issued by a contracting authority to a supplier, confirming the purchase of goods or services under agreed terms. Once a procurement procedure is completed and a contract is signed, the purchase order is the operational step that triggers delivery and payment.

How does a purchase order work?

A purchase order begins with an identified need. Before the order can be placed, the responsible budget authority must confirm that sufficient funds are available and that the purchase falls within the approved budgetary framework. This serves as a financial safeguard — ensuring that every public expenditure has proper authorisation before it is committed.

The order can be placed verbally, in writing, or electronically. In practice, most public sector organisations use electronic ordering systems that comply with standards such as EHF and transmit orders through the Peppol network, ensuring standardised communication across the supply chain.

A purchase order should include:

• Description of the goods or services
• Quantity and delivery address
• Price and payment terms
• Reference to the underlying contract or framework agreement

When the order is a call-off under a framework agreement, it must reference the specific agreement.

Verification and goods receipt

Upon delivery, the contracting authority must verify that the goods or services match the purchase order. This verification forms the basis for approving the supplier's invoice. Any defects or discrepancies must be reported to the supplier within a reasonable timeframe.

Tools like Cobrief can help track purchase orders and ensure that deliveries are matched against contract terms.

Multi-year procurement authorisation

For large-scale acquisitions — particularly in the defence sector — national parliaments may grant special procurement authorisations that allow contracting authorities to commit to purchases spanning multiple budget years. In Norway, this is known as a bestillingsfullmakt, granted by the Storting (Norwegian Parliament).

The purchase order is the link between contract and delivery. Sound ordering practices ensure that public funds are spent within budget, that deliveries can be verified, and that invoices are matched against what was actually agreed.