Is it Possible to issue a Purchase Order with unit cost only (i.e. without quantity and without Total Value)?

There are (3) major factors which should not be ignored in any agreement (PO or Contract); Price, Quantity &/ Duration (assuming Quality is agreed to).

Failure of indicating any of the above would impact both legal & procedural issues.

For example, you need open authority to approve the agreement?!

This is a violation of the Authority Matrix as there are no open authority except for the BOD in some organizations.

Open quantity or duration will lead to an uncontrolled supply and will leave the company wide-open for future liability?! who will be ready to take the risk?

In addition, it will deviate from the basic principle of Procurement, which is commitment of the agreement from Vendor side. He can easily draw back at any time if he feels harmed by such agreement since there are no commitment to quantity or duration.

Therefore, at least two of the (3) factors have to be specified in any agreement.

As for Blanket Purchase Order, Total Value alone can be acceptable but not unit rate alone in my opinion.

I can see very limited cases where only Unit rate is used that is (Cost-Plus) work provided a detailed and quantitative scope of work is defined.

 Even in such cases, you may run into the authority issue.

Yes this can be done and such orders are known as Blanket Purchase Orders.

A blanket purchase order involves a purchaser agreeing to purchase particular goods or services from a specific vendor, but not at any specific quantity. Pricing may or may not be confirmed in a blanket purchase order. This type of order is typically used for repetitive procurement of a specific set of items from a supplier such as basic materials and supplies. This a preferable option if the quantity required is not clear.

I agree with the concept of blanket purchase order to make the repetitive procurement hassle free.

In blanket purchase order for repetitive procurement, unit cost is mentioned  and maximum  total value that can be ordered in this PO within a given time frame is also mentioned.

The total value must correspond to the delegated authority of the person who signs the purchase order.

The total value is mentioned in Purchase Order to prevent mistake or misuse, so that system will prompt when the total value is going to exceed. In case of necessity, PO is amended again with higher total value by the appropriate authority/signatory

THIS IS AN OPEN PURCHASE ORDER WHERE UNIT RATE IS AGREED. THE RATE SHALL BE VALID UNTIL FURTHER AMENDMENT. MATERIAL SHALL BE PROVIDED BY SUPPLIER UPON EMAIL REQUEST FROM COMPANY AND INVOICE CAN BE SUBMITTED AGAINST THIS PURCHASE ORDER.

I have not seen this done, so I am going to say...no. A purchase order is in itself, a binding contract. If it is incomplete or has holes in it, then you may be shutting the door for compensation if things go wrong.

If you are looking to secure a volume of product at a certain fixed rate, then go to contact or fixed price agreement. These would be the safer option.

it can be possible to place the purchase order with unit cost with following condition

1. If the product or the service to be purchase frequently (monthly/weekly) for certain period of time(for example: 6 months/1 year).

2. Terms of payment to be fixed (by cash against each order / invoice every month / invoice yearly once)

No its not possible; even if you do so the PO will be incomplete.

May I suggest, you can have a PO without Qty, but it should have a price or total price as it maybe a preliminary cost and the price is not to exceed a certain value, however, it would not have a qty at the initial stage as long as it said so on the PO.

i think that current trading environment does not accept such proposal , because quantity affect on cost , in the same time you got best cost according to big volume and vise versa

for your example labour is another issue because service provider may fix one labour cost , so quantity not affect < daily or weekly or monthly cost you will be charged >

You want to purchase a service... therefore you can issue a service PO...

This PO does not state the total value in the system till it is received ... it also has other draw backs ...

It does not show what you have spend torwards your budget ... your Controller may not like this type of PO and forbits it to issue ... reciving it is not an issue, however for an unexperienced A/P Clerk it may issues....

Blanket PO's are not recomanded for this kind of purchase.

I would do a regular PO issue it with qty 1 and the total price ... if you can not issue a  Service PO

I have added a link to read up on this type of PO..please see below... Please  be aware this looks different on differerent "ERP-systems"

Service Purchase Order - Guru99

Yes it's possible in cases when you don't know the exact quantity you need and you agreed on a price with the supplier. 

N.B :  - Price isn't related to quantity purchased. 

           - Large quantities are available at the suppliers stock