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What Is an Emergency Purchase?

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  • Written By: Mary McMahon
  • Edited By: Shereen Skola
  • Last Modified Date: 20 November 2016
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    Conjecture Corporation
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An emergency purchase is one that must be made to reduce the risk of loss of life or property associated with an unexpected event. In emergency situations, normal purchasing rules may be suspended to allow people to access goods or services they need to immediately mitigate the emergency. Typically they must submit documentation to support the purchase, with specific information about the situation, the need, and the vendor who ultimately supplied the necessary materials. Review may later determine that the situation didn’t qualify for special handling.

In conventional circumstances, purchases are structured into a budget. For major purchases, comparison shopping or solicitation of bids needs to occur. A college, for example, asks for bids from several plumbing companies to determine which can best meet its needs, and awards a contract to the best one. If a plumbing emergency, like a sudden stoppage that threatens to flood a building or release waste on campus, occurs, the college can sidestep this process with an emergency purchase to get the problem fixed.

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The purchase must contribute directly to a rapid resolution of an emergency. Hiring a plumber to fix a stoppage is permissible, for example, while paying a rug cleaning company may not be considered an emergency. Requests to make emergency purchases may be denied if the problem was preventable or foreseeable. An information technology department, for example, should have plans to replace obsolete equipment, along with backups for emergency failures. If it does not and the network is threatened, the emergency was created through negligence, and it may not qualify for an emergency purchase.

Careful protocols are usually put in place to define and monitor emergency purchases. The goal is to prevent situations where people use this method of last resort to meet basic needs. An emergency purchase can be more expensive, especially if it is related to a disaster larger than the organization’s immediate needs. In a hurricane, for instance, generators can get extremely expensive, and companies that need to buy them to keep services going will spend more than they would have by purchasing a generator in advance to prepare for emergencies.

Special authorization forms may be used for an emergency purchase. The form explains the nature of the situation, defines the emergency, and provides justification to show how the expense was necessary. A supervisor or head of department may need to sign off on the form, indicating that it has been reviewed and approved. Accountants with concerns can request an audit, and may recommend activities like better emergency planning in the future to prevent such situations from happening again.

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