Procurement and RFQs
PO (Purchase Order)
A buyer-issued commercial document authorizing the purchase of specified goods or services under stated terms. In maritime procurement, the concept helps buyers and providers define, price, compare and authorize operational requirements.
What a purchase order does
- A purchase order is the buyer’s authorization to proceed, not a request for a price.
- It restates the agreed scope, price and terms so both sides work from one reference.
- Whether it forms the contract depends on what preceded it and on the terms attached to it.
PO stands for Purchase Order.
A buyer-issued commercial document authorizing the purchase of specified goods or services under stated terms.
In maritime procurement, the concept helps buyers and providers define, price, compare and authorize operational requirements. The exact meaning may vary with the contract, jurisdiction, port practice or workflow in which it is used.
Where a PO sits in the document chain
Document
What it does
Purchase requisition
An internal request for approval to buy. It never leaves the buyer’s organization.
RFQ
Asks providers for a price against a defined scope.
Quotation
The provider’s offer of a price and terms, valid for a stated period.
Purchase order
The buyer’s authorization to proceed, issued against an accepted quotation.
Delivery note or receipt
Evidence that what was ordered actually arrived, or that the service was performed.
Invoice
The provider’s demand for payment, referencing the purchase order.
Quotation compared with purchase order
Quotation
Purchase order
Issued by the provider.
Issued by the buyer.
Offers a price for a stated scope.
Authorizes the purchase at that price.
Valid for a stated period, after which it lapses.
Stands until it is fulfilled, varied or cancelled.
Creates no obligation on its own.
Creates the commitment, subject to the terms it carries.
FAQ
FAQ
The most common questions we get about PO.
What does PO mean?
A buyer-issued commercial document authorizing the purchase of specified goods or services under stated terms.
What does PO stand for?
PO stands for Purchase Order.
Is a purchase order legally binding?
It depends on the terms and the jurisdiction. A PO is commonly an offer to buy that becomes binding once the seller accepts it. Where it follows a quotation, it may instead operate as acceptance of that quotation.
What is a PO number used for?
It is the reference that links the order to the delivery and to the invoice, so all three can be matched before payment.
Do maritime purchases always use a purchase order?
No. Spares, stores and provisions are commonly ordered on a PO, while port call services are often ordered against an accepted quotation or an agency appointment, with the disbursement account carrying the detail instead.