Official Order

What is an Official Order?

An official order (also called a purchase order or PO) is a formal document issued by a government agency to a supplier that authorises and commits to the purchase of specified goods or services. Once accepted by the supplier, it forms a binding contract. Official orders are the mechanism by which most routine government purchases are executed.

How Do Official Orders Work in Government Procurement?

Official orders are typically used for straightforward purchases that do not require a full contract document. The process follows a standard pattern:

• The agency identifies a need and obtains internal approval for the expenditure
• A purchase order is raised in the agency’s financial system, referencing any applicable Standing Offer Arrangement or Panel Arrangement
• The order is issued to the supplier, specifying the goods or services, quantities, agreed pricing, and delivery requirements
• The supplier delivers against the order
• The agency verifies receipt and processes payment

When is an Official Order Used vs a Contract?

The distinction depends on complexity and value:

• Official orders are used for lower-value, straightforward purchases — typically commodity goods, standard services, or call-offs from existing arrangements
• Formal contracts are used for higher-value, complex, or longer-term engagements that require detailed terms and conditions
• Many Framework Agreements use official orders as the call-off mechanism for individual work packages

Key Features of an Official Order

• Unique order number — used for tracking, invoicing, and payment
• Authorised signatory — issued by an officer with appropriate financial delegation
• Budget allocation — linked to a specific cost centre or project code
• Standard terms — often incorporates the agency’s general conditions of purchase by reference

Tips for Suppliers

• Never commence work without a valid order number — verbal instructions are not official commitments.
• Check the order details — verify quantities, pricing, and delivery dates match what was agreed.
• Reference the order number on all invoices — this is essential for timely payment processing.
• Keep records — official orders are auditable documents that form part of the procurement trail.