Purchase Orders (Obligations, Maintenance and Closure)

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Home
Financial Resources Management
Expense Management
Purchase Orders (Obligations, Maintenance and Closure)

Main navigation

Inventory Management
- Inventory Management
Cash Banking and Investment
Financial Closure of Development Projects and Trust Funds
Financial Management and Implementation Modalities
Financial Operations Management
- Corporate Operations and Information Management
- Statutory Financial Reporting
Pipeline and Revenue Management
Expense Management
Resource Planning and Cost Recovery
Working with External Auditors
- Working with External Auditors

Focal Point

Adam Phillion

Effective Date

01/02/2021

Planned Review Date

01/02/2024

Version

8.0

Latest updates

June 09, 2023 -

The policy and the procedures have been updated to reflect UNDP's transition to its new cloud-based management platform Quantum in January 2023, replacing its previous ATLAS system.

February 22, 2022 -

The Purchase Orders (Commitments, Maintenance and Closure) policy is now available in French. To access the document, click on the French language tab.

February 08, 2021 -

Minor updates were made to the Purchase Orders (Commitments, Maintenance and Closure) policy to

June 09, 2023 -

The policy and the procedures have been updated to reflect UNDP's transition to its new cloud-based management platform Quantum in January 2023, replacing its previous ATLAS system.

February 22, 2022 -

The Purchase Orders (Commitments, Maintenance and Closure) policy is now available in French. To access the document, click on the French language tab.

February 08, 2021 -

Minor updates were made to the Purchase Orders (Commitments, Maintenance and Closure) policy to specify that duty travel expenses are not committed via PO.

March 27, 2020 -

The International Commercial Terms (INCOTERMS) 2020 has been linked in steps two and eight of the Purchase Order (Commitments, Maintenance and Closure) procedure table.

Differences between Incoterms 2010 and 2020:

The Incoterms FCA (Free Carrier) now provides the additional option to make an on-board notation on the Bill of Lading prior loading of the goods on a vessel.
The costs now appear centralized in A9/B9 of each Incoterms rule.
CIP now requires at least an insurance with the minimum cover of the Institute Cargo Clause (A) (All risk, subject to itemized exclusions).
CIF requires at least an insurance with the minimum cover of the Institute Cargo Clause (C) (Number of listed risks, subject to itemized exclusions).
The Incoterms rules Free Carrier (FCA), Delivered at Place (DAP), Delivered at Place Unloaded (DPU) and Delivered Duty Paid (DDP) now take into account that the goods may be carried without any third-party carrier being engaged, namely by using its own means of transportation.
The rule Delivered at Terminal (DAT) has been changed to Delivered at Place Unloaded (DPU) to clarify that the place of destination could be any place and not only a “terminal”.
The Incoterms 2020 now explicitly shifts the responsibility of security-related requirements and ancillary costs to the seller.

March 13, 2020 -

The Purchase Orders (Commitments, Maintenance and Closure) policy is now available in Spanish. To access the document, click on the Spanish language tab.

February 05, 2020 -

UNDP has changed its asset capitalization threshold from US $1,500 to US $5,000. This policy change will significantly reduce the volume (i.e. quantity) of assets in the asset register, thereby allowing UNDP to focus attention on higher value items. The change in policy should also result in a more effective verification and certification process. Clause 17 of the policy has been updated to reflect the new asset capitalization threshold.

October 31, 2018 -

Approval limits have been updated as per approved ICF ones.

October 24, 2018 -

The threshold for the use of E-requisitions where a PO is also not required was increased from USD 2,500, to USD 5,000 in section 17 of the Purchase Orders policy, as well as step 1 of the Purchase Orders procedures. For all travel related transactions see POPP Duty Travel.

As per UN Board of Auditors recommendation, the use of multi-year POs is reflected for projects for greater efficiency and better track of activities with a supplier (this update was made in November 2016). Content reviewed and edited (without changing substance) in December 2015.

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Relevant Regulations and Rules

UNDP Financial Regulations and Rules

Policies

Main Policy

Purchase Orders (Obligations, Maintenance and Closure)

DOCX (251.03 KB)

View Download

Related Policies

Quantum Financial Closure Instructions

Procedures

Main Procedures

1

Step

Generate/Create Contract/Purchase Order

Responsible Party

Template/Guideline

Explanatory Notes

1.1

Step

Three Document Styles exist for Orders:

Purchase Orders
Contact Order
Contract Work Order

Document Style or Outcome	Description
Purchase Order	Purchase Order similar as in Atlas. Includes obligation of funds, schedules and distributions. Supporting amount / fixed price, rate based and quantity based lines. The Purchase Order lines may be associated to or created from Agreements / LTAs.
Contract Order	The Contract Order is a new concept in Quantum which combines the contract legal templates and deliverables with the obligation of funds of the Purchase Order. Meaning no additional Purchase Order is needed for a Contract Order. Supporting amount / fixed price, rate based and quantity based lines. Includes start and end date for contract in addition to the defined deliverables on the schedules.
Contract Work Order	Contract Work Order is similar to Contract Order but tailored for civil works and service only contracts, e.g. for Individual Contractors. No Incoterms or shipping information Only supporting line type “Fixed Price” Schedule description is editable. This enables buyers to create or process often a single line from Solicitation or Requisition only representing what to buy, e.g. “Consultant”, and enter detailed deliverable information in the schedule. Future option: Work confirmation from suppliers in the Supplier Portal with approval and automatic receipt.

Responsible Party

Procurement Buyer

Template/Guideline

Explanatory Notes

1.2

Step

When completed, the Contract or Purchase Order must contain enough information to make it legally valid, to reserve funds and to enable reporting.

Responsible Party

Procurement Buyer

Template/Guideline

Explanatory Notes

2

Step

Apply Contract Terms

The buyer must add Contract Terms to create a legally viable Contract.

Responsible Party

Procurement Buyer

Template/Guideline

Explanatory Notes

3

Step

Approve Contract and Purchase Order

All Contract and Purchase Orders are sent for approval. The process serves multiple purposes:

Validation of Data
Budget check override
Financial / budget approval
Purchasing approval
Supplier change order control

The buyer can pre-view the Approval flow and future approvers using the “Manage Approvals” setting.

The process includes data validation controls which should be done prior to submission for approval:

Requestor must have a value
Requestor not have a buyer

Responsible Party

PO Approver

Template/Guideline

Explanatory Notes

United Nations
Development Programme

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