Purchase orders

Purchase orders that are made against contracts with a definite quantity or value of items ought to not be disclosed in the contracts section of OCDS, due to the risk of double counting items on the purchase order and the contract it relates to.

Example: Double counting contracts and purchase orders

The UK's Department for Transport awards a £1.2m, 12-month contract to KPMG to provide the Project Management Office function for a project to construct a new highway bypass. The contract specifies that payment will be made quarterly in arrears in four equal amounts. The contract is represented in the contracts section of OCDS as follows:

contracts/0/id

contracts/0/awardID

contracts/0/value/amount

contracts/0/title

DFT-2019-C78967

DFT-2019-78967-A78678

1200000

Provision of PMO function

Calculating the sum of the contract value in the above example gives the correct result of £1.2m.

The Department for Transport issues a purchase order on the final day of each quarter of the contract term, each for £300k.

If purchase orders were also disclosed in the contracts section of OCDS, by the end of the contract term, the contracts section of OCDS would be populated as follows:

contracts/0/id

contracts/0/awardID

contracts/0/value/amount

contracts/0/title

DFT-2019-C78967

DFT-2019-78967-A78678

1200000

Provision of PMO function

DFT-2019-C78967-PO001

DFT-2019-78967-A78678

300000

Purchase order: Q1

DFT-2019-C78967-PO002

DFT-2019-78967-A78678

300000

Purchase order: Q2

DFT-2019-C78967-PO003

DFT-2019-78967-A78678

300000

Purchase order: Q3

DFT-2019-C78967-PO004

DFT-2019-78967-A78678

300000

Purchase order: Q4

Calculating the sum of the contract value in the above example gives an incorrect result of £2.4m - double the actual value of the contract.

Note

The approach for modelling purchase orders in OCDS is under discussion (GitHub issue)