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What are the benefits of using a Sub-Contract instead of a Purchase Order?

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The benefits of using a Sub-Contract instead of a Purchase Order is that, there is a lot of clarification on Sub Contract in terms of Terms & Conditions. Besides Default Terms, there will be Scope of Work, Inclusions, Exclusions and Clarifications which gives more clarity about the work that is included and not included.

The level of Terms on a Sub Contract is much higher. Purchase Orders are used more for purchasing materials etc. Also, Change Orders can be added to Sub Contracts which isn’t possible on the Purchase Order.

Retention is also possible with Sub Contract which isn’t possible with Purchase Orders. If these are not required, then Purchase Order will serve better.

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