This type of public contract has a certain number of advantages for the public that has difficulty in quantifying its need for services. This type of contract also entails constraints for the public body, and we are going to discuss both sides just to have a better idea of the subject matter.
Advantages And Inconvenience Related To Public Procurement With Purchase Orders
The public purchase order contract is a contract “concluded with one or more economic operators and executed when the purchase orders are issued”.
A buyer can thus make purchases with a repetitive nature, by organizing a single complete procedure of competition of the potential suppliers.
The public contract can be concluded without a maximum or minimum, which gives more freedom to the public purchaser who is not obliged to guarantee a minimum of expenses.
However, it is always in the interest of the contracting authority, if possible, to conclude purchase order contracts with a minimum and maximum value or quantity.
This allows it to obtain economically more advantageous offers:
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The setting of a minimum allows economic operators to secure their order books and, consequently, to rationalize their production tool, by anticipating economies of scale or by guaranteeing the financing of the investments necessary for its extension.
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By fixing a maximum, it is possible to indicate to economic operators the level of mobilization of their production tool, where appropriate, the conditions of availability of this tool in order to meet the demands of other customers.
In return, the contracting authority will have to bear the contractual consequences of the more favorable conditions, which may be granted to it.
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If the public purchaser does not reach the minimum stipulated in the contract, he will have to compensate the other party for the damage suffered.
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If the public purchaser exceeds the maximum, he cannot compel his co-contractor to assume the corresponding share of the services, without making an amendment to the contract. The holder of the contract is, in fact, only committed to the maximum. Any additional order is therefore subject to his approval. Like any amendment, the contract holder cannot upset the general market economy by altering its object or scope.
There are more advantages of government procurement with public order, but the concerned parties must ensure that everything they want is mentioned in the contract so as to avoid any confrontations later on.