Bidding for government contracts has always been about technical qualifications and the lowest bidder. This is not usually the case for private corporations. In the private sector, there are other factors which are considered for purchases.
In most instances, large purchases are sourced out to more than one vendor. In smaller batches, the purchase order might be given to the nearest vendor, or the fastest delivery, or even to a vendor who has the longest support term. It is not unusual to choose vendors for different reasons for different purposes.
This is where a purchase order management system comes into play. With a centralized accounting system and multiple points of purchases, operational managers can have their criteria for buying a product which would meet the needs of their department.
A PO management system keeps the purchase and inventory process sane. Even if expediency were needed, such a system would still maintain the lowest bid price for the purchase order, along with the reasons for purchase. This would explain the purchase to the satisfaction of other stakeholders as well as for accounting and audit.
In a world where there are multiple vendors, accounting and purchasing would want to keep tabs of all the purchases and their suppliers. There are several reasons for this. First off, in case of an audit, it is easy to track who supplied what item and at what price.
Additionally, if there is a need to buy additional units of the same item, the purchasing department can look up the information and order directly. A formal bidding might no longer be needed, but it is the responsibility of the purchasing department to canvass for the lowest bidder, starting with the latest supplier. The system also helps assure the expedient processing of payment.
For any company, monitoring its purchases is a matter of priority. It is not a matter of working on a shoestring budget, but more of a judicious use of resources to get the biggest return on investment. Monitoring purchases, suppliers, products and payments, including cash flow and payment schedules is a matter of policy and business practice. With purchases coming from every direction, an automated management system becomes a vital piece of running a business.