Blanket Order

Posted on April 20, 2010 by

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No, this does not mean that you just saw the commercial for the increasingly-popular SnuggieTM, (the blanket with sleeves) and called the number at the bottom of the screen to purchase some for your friends and family.

A Blanket Order is a procurement term that project managers on longer-term projects are especially likely to see. The vendor provides their products or services on an on-demand basis for a specified period of time under agreed-upon terms and conditions. As an everyday example, Mr. Brown has three children who are eager to make him brownies for a small fee. He is tired of the rigmarole that occurs each time he is hungry for brownies—each child wants to make them and they argue over the amount of money they should be paid. He decides that he’ll have a 6-month agreement with just one of them. He decides which child based on a taste test of their brownies and their desired fee.  After selecting which child to offer the contract, they enter into a contract called a Blanket Order. Mr. Brown is unsure exactly how many times in the next six months that he’ll want brownies, but they have the fee and brownie specifications already settled in the contract. The benefit of the Blanket Order is that for the next six months Mr. Brown does not have to bother with the details of separate purchases or agreements each time he wants a warm pan of brownies.