In determining whether to use a statement of work or a purchase order, you must evaluate your goal.  Typically, a party issues a purchase order for the purpose of payment, while a statement of work is used to modify the terms of the agreement.  Purchase orders may or may not incorporate the terms and conditions relating to a main agreement between buyer and sell, but usually sets forth payment terms relating to the purchase. Moreover, a purchase order provides a legal document by which all parties are bound and illustrates the buyer’s intent to purchase a set quantity of goods and is a mechanism to facilitate collection of funds.  Statements of work usually incorporate the terms and conditions of a main agreement and specify specific terms and specifications relating to the goods or services being provided by the vendor.  Accordingly, a statement of work expressly describes the work requirements necessary to fulfill the terms of the main agreement and usually serves as the standard for determining whether a vendor has met the stated performance requirements.

This entry was posted on Friday, January 2nd, 2009 at 1:05 pm and is filed under Procurement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.