Purchase Requisition Form (Page 22 of 23) in pdf

Purchase Requisition Form Page 22

Lump Sum Pricing vs. Line Item Pricing

Definitions

Lump Sum Pricing:

The total dollar amount or the 'not-to-exceed' dollar amount of a purchase is entered as a 'lump sum' price

in one line item.

Example:

Item #1, Qty = 1, Lump Sum Price = $1,000.

Line Item Pricing:

The quantity and unit pricing are entered for one or more line items.

Example:

Item #1, Qty = 5, Unit Price = $1,000 each,

and Item #2, Qty = 1, Unit Price = $50 each.

Instructions

When entering a Standing Order, users should always use the "Lump Sum" distribution option in

IBIS. Failure to use this option may result in your Standing Order being rejected by Purchasing.

On other regular Purchase Orders, users should enter pricing at the line item level when possible. This is

beneficial in processing the order, verifying and approving invoices and maintaining price history for

future reference.

However, there may be situations that are better suited to 'lump sum' pricing. A 'lump sum' price is the

total price for all items on the order. When using the lump sum pricing option, the 'lump sum' price is

entered at the first line item. All other line items will have a zero unit price.

Lump Sum pricing may be used in those situations where line item pricing is not known or is impractical

to record.

Examples may include:

When purchasing a computer system with accessories, options, peripherals, etc., through one of

the Penn State University preferred computer suppliers, the user may use lump sum pricing to

reflect the total system price and identify the system by including the main component description

and referencing the supplier's quote number. The individual components do not need to be listed

Purchase Requisition Form Page 22