Purchasing Control

"Purchasing Control" is 0–2 questions on the Business exam. Material is often half of an electrical job's cost, so the exam asks how a contractor commits to a purchase (purchase orders and the UCC), who bears the risk while the goods travel (F.O.B. terms), how submittals and lead times are managed, and how deliveries are received, stored and billed.

1. The purchase order — the contract for goods

• A purchase order (PO) is the contractor's written offer to buy: item, quantity, price, delivery date and place, F.O.B. term, payment terms, job name. The supplier accepts by acknowledging it or by shipping (F.S. 672.206: an order for prompt shipment may be accepted by a prompt promise to ship or by prompt shipment).
• Statute of frauds (672.201): a sale of goods for $500 or more is enforceable only against a party that signed a record — so the PO (or the supplier's signed quote) is what makes the price stick. Between merchants, a written confirmation that is not objected to within 10 days binds the recipient — read supplier confirmations the day they arrive.
• The written quantity controls; specially manufactured goods (custom switchboards) are enforceable once the seller has substantially begun even without a signed record.