Implement
If a vendor and an institution want to establish a more regular purchasing cadence, they might consider establishing a standing purchase order. This is a recurring purchase made at a specified time interval.[10] The purchasing amount can be for a monetary amount (e.g., $500), an exact numerical quantity (e.g., 3 cases of potatoes), or for a quantity by weight (e.g., 10 pounds). The specified interval can be any length of time (weekly, semesterly, quarterly, or seasonally). Generally, the vendor will charge the institution as orders are fulfilled;[11] however, some vendors may be interested in other payment arrangements. In particular, new or beginning vendors may benefit from advance payment as part of the commitment’s payment arrangement. [12] Standing orders are often a good way for institutions and vendors to demonstrate accountability.
Like single purchase orders, standing orders should include clear terms, be tailored to the vendor’s needs, and promote accountability. Regular communication and a collaborative relationship are essential to ensure both parties are benefiting.
In deciding to establish a standing purchase order, an institution should consider the following:
The following recommendations provide model language and alternatives for effective standing purchase orders.
Standing purchase orders are easiest to set up through informal procurement. Accordingly, the recommendations here assume that no formal solicitation is issued to find a vendor. If a formal solicitation is required, it can still be tailored to ensure bidders align with the institution’s values (see Values-Based Purchasing When a Formal Solicitation is Required).
When creating standing purchase orders, there are three main steps:
The following recommendations provide model language and alternatives for how the answers to these questions can be represented in effective standing purchase orders. Throughout these model recommendations, the term “Vendor” refers to a producer or food hub.
Before establishing a standing purchase order, an institution must first identify a vendor with whom it has a solid working relationship. Standing purchase orders require coordination and flexibility to meet both parties’ needs. As such, an existing relationship is incredibly useful for a standing purchase order.
Individual purchase orders provide opportunities for parties to develop a relationship and demonstrate accountability before entering into a standing purchase order. Therefore, an institution should consider first the vendors with which it already has a purchasing relationship.
[Institution] will assess food hubs and producers that meet its values-based food purchasing guidelines to determine potential candidates for a standing purchase order.
Potential candidates are vendors that:
An institution may consider entering into a standing purchase order with a vendor it has not previously used. Although this carries some risk—because the parties have not yet established a working relationship built on trust—these risks can be reduced when:
This step prompts an institution and vendor to identify what product and amount are suitable for a standing purchase order based on need, production capacity, and pricing. This requires assessing:
Each of these components will guide conversations between the institution and vendor.
Standing purchase orders can be based on one product or on an aggregate of products. When purchasing from a food hub or other aggregator, the standing order may apply generally to all of the hub’s producers or specify particular producers.
[Institution] and [Vendor] will use the following guide to develop and negotiate the terms of the standing purchase order.
Quantity. Setting an amount by quantity works best when applied to a singular product because of the variation across products (25 pounds of lettuce versus 25 pounds of potatoes). Even when using quantity as the defining metric, an institution must still consider setting parameters for unit pricing to prevent confusion, surprises, and disputes that can derail parties’ relationships.
4. What installment frequency is appropriate?
[Institution] and [Vendor] will determine delivery frequency, in consideration of [Institution]‘s budget, calendar, and expected needs, and [Vendor]‘s costs, production plans, and anticipated availability.
Examples of installment frequency include:
By completing these steps, the institution and vendor will have a shared understanding of the standing order’s goals, what is appropriate, and what is feasible.
This step prompts the parties to finalize the standing purchase order in writing.[13] To ensure an effective standing order, institutions and their values-based vendors need to include specific components and details.
This template is just one example for establishing a standing purchase order. It provides a reference and starting point for parties that can be used to inform and guide their specific process.
Standing purchase orders should incorporate the following:
Administrative Components:
Order Components:
More details about each order component are included below. A full template with all sample language is also available.
A standing purchase order should contain the committed amount, a detailed list of items and required quality, and unit price parameters. [14] This section is critical, as it defines what will be purchased in each installment.
[Institution] will purchase [insert set dollar amount] dollars per installment of the standing purchase order with [Vendor]. Installments will be comprised of [insert type and quality of product]. Individual pricing of product(s) will adhere to the following:
Unit pricing options include:
| Product | Quality & Description | Pricing Per Unit |
|---|---|---|
| [Insert product number if available or name of product] | [Insert quality requirement and any additional description] | [Insert set price/range/standard] |
ABC Corporation will purchase 400 dollars per installment of the standing purchase order with XYZ Food Hub. Installments will be comprised of U.S. No. 1 or No. 2 vine-ripe tomatoes. Pricing per unit of product will adhere to the following:
The product, quality, and pricing breakdown can also be conveyed in a chart:
| Product | Quality & Description | Pricing Per Unit |
| Vine Ripe Tomatoes | U.S. No. 1 or U.S. No. 2 | $16.00-$20.00 per 10-pound flat |
| Vine Ripe Tomatoes | U.S. No. 1 or U.S. No. 2 | 10-pound flat at market price set by USDA Market News on day of delivery. |
| Vine Ripe Tomatoes | U.S. No. 1 or U.S. No. 2 | 10-pound flat within 2% deviation from USDA Market News market price on day of delivery. Price per unit will not exceed $22.00. |
An institution and vendor may prefer a standing purchase order that states the total dollar amount committed for each installment but does not specify a product. This is best suited for institutions and vendors that want to preserve flexibility. However, this alternative requires regular communication about institutional needs, vendor product availability, and pricing for each installment.
Option for Indicating Dollar Amount Without Product Specification:
[Institution] will purchase [insert total set dollar amount] dollars of product from [Vendor] per installment of the standing purchase order. [Vendor] will provide [Institution] with product availability X days before each installment, and [Institution] will make product selections Y days before each installment.
The model recommendation provides a set dollar amount. However, an institution may instead specify a numerical product quantity. This quantity is typically measured via weight or package method (e.g., case, bushel, box, flat).
Option for Indicating Amount by Quantity:
[Institution] will purchase [insert weight/quantity amount] of [insert type of product and quality] from [Vendor]. Individual pricing of product(s) will adhere to the following:
| Product | Quality & Description | Weight/Quantity | Unit Amount | Pricing Per Unit |
|---|---|---|---|---|
| [Insert product number if available or name of product] | [Insert quality and any additional description] | [Insert set weight/package unit quantity] | [Insert number of units] | [Insert set price/range/standard] |
ABC University will purchase two (2) ten-pound flats of U.S. No. 1 or U.S. No. 2 vine-ripe tomatoes from XYZ Farm. Pricing per unit of product will adhere to the following:
This information can also be conveyed in a chart:
| Product | Quality & Description | Weight/Quantity | Unit Amount | Pricing Per Unit |
| Vine Ripe Tomatoes | U.S. No. 1 or No. 2 | Ten-pound (10 lb.) flat | 2 | Market price set by USDA Market News; maximum of $22.00/flat |
A standing purchase order should identify both: (1) the recurring interval in which purchases are made, and (2) the total duration of the standing purchase order. Committing to a specific duration is not necessarily required, and the parties can agree to an indefinite timeframe if they wish.
[Institution] will purchase the specified amount and product(s) listed on this purchase order form [insert recurring order interval (e.g. weekly, bi-weekly, every [X number] of weeks, monthly, bi-monthly)]. The agreement is for [insert duration of commitment]. There will be [number of deliveries] deliveries beginning [insert start date] and ending [insert end date].
Duration of the standing order options include:
An institution may sometimes need to exclude or reduce certain installments in a standing purchase order. Often, this arises during short-term periods where the institution knows there is a decreased need, such as during school breaks or holiday weeks.
Any exclusions or reductions should be clearly stated upfront in the standing purchase order and communicated to the vendor. They should not be added routinely during the agreement period, as vendors rely on consistency to plan production and assess feasibility.
If frequent exclusions or reductions are anticipated, the parties may be better served by scaling down the standing order or using individual purchase orders until greater consistency is possible.
Option for Exclusion/Reduction for Specified Installments:
Exclusion: There will be no installment purchase or delivery for [insert date of recurring interval excluded from the standing purchase order].
Reduction: Installments for [insert date of recurring interval with reduced purchasing] will adhere to the following amounts:
A standing purchase order must specify payment terms, including when payment is due and in what form.
Installment payment from [Institution] is due to [Vendor] on [date]. Payment should be delivered in the form of [insert form of payment] addressed to [Vendor].
Options for the payment date include:
Options for form of payment include:
For some vendors—particularly beginning producers, those new to institutional markets, and hubs that work with them—advance payment may be a desired component in a standing order. [17] An advance payment can support pre-production costs and provide more financial stability to fulfill the standing order.
If feasible, institutions should discuss advance payment terms with vendors. The amount will depend on the institution, vendor, and the agreed-upon product quality and quantity, and may be calculated as a percentage of the total anticipated cost. Institutions using management companies may require more planning and negotiation to offer advance payment options.
A standing purchase order must contain information about the delivery method, delivery address, expected delivery dates, and any special instructions for delivery.
[Vendor’s] deliveries will be made on [insert day] at [insert time] every [insert recurring interval]. If an installment is delayed or will not be fulfilled, [Vendor] will notify [Institution] at the earliest opportunity. [If there are excluded installments, list the dates where there will be no delivery.]
A standing purchase order for values-based procurement should include a cancellation provision allowing either party to withdraw without cost or obligation. This flexibility differentiates this type of purchasing from a formal contract.
Management companies often require a cancellation provision, and self-operated institutions typically prefer them to maintain flexibility and ensure their dining needs are met. Vendors, especially beginning farmers and new food hubs, may also want the option to cancel if they cannot fulfill an order.
The tradeoff, however, is less certainty. To mitigate this risk, institutions and vendors should follow a deliberate process of assessing, developing, and scaling their relationship, so they can enter the standing order with the mutual trust necessary to feel confident in the arrangement.
[Institution] and [Vendor] reserve the right to cancel this order at any time without cost or obligation for any items not released against this order.
A standing purchase order may contain additional terms and conditions. These include any specific terms or conditions related to the purchase, such as return policies, warranties, or other stipulations. [16]
Other terms and conditions and their model language may include, but are not limited to:
[10] Mark Saltarelli, Understanding Open Purchase Orders, Order.co, https://www.order.co/blog/purchasing-process/open-purchase-order/. These orders are sometimes called “set it and forget it” orders because the purchases recur automatically.
[11] Gracie Tidwell, Standing Orders: Pros and Cons for Restaurant Orders, BlueCart, https://www.bluecart.com/blog/standing-orders.
[12] While this Toolkit recommends documenting the order in writing as a best practice, many successful standing orders are based on “handshake” deals and are never memorialized in writing. However, oral agreements require a great deal of trust between the two parties, and having a document that records all the specifics of the purchase order can help clarify any confusion later on.
[13] Purchase Orders: All You Ever Need to Know, Procurify (Apr. 1, 2025), https://www.procurify.com/blog/purchase-orders-all-you-need-to-know/.
[14] Although advance payment arrangements may be present in standing purchase orders, they are more likely to be desired and useful in forward purchasing commitments, given the vendor’s production planning based on an institution’s specific need.
[15] Purchase Orders: All You Ever Need to Know, Procurify (Apr. 1, 2025), https://www.procurify.com/blog/purchase-orders-all-you-need-to-know/.