Monday, March 12, 2012

Per Item versus per line item

I had a reader ask me the different between “Per Line Item” versus “Per Item” in a quote. I thought I would share my response.

A line item in a request for quote could list a single quantity, where it would have the same meaning as per item. More frequently a line item may list a quantity and be soliciting a price for that quantity where the Per line Item reference would be the extended amount (unit price x quantity).

When the reference is to “Per Item” it means a single item. If you received a per item quote it would show the cost per item but would not show an extended amount.

To eliminate any potential confusion your request should make it clear exactly what you want for a response. For example, you could request three things.
1. The cost per item.
2. The per line cost based upon the estimated quantities included in the line item.
3. The per line item cost for a firm commitment to purchase the quantities.

As bids or quotes are frequently incorporated by reference into the contract, it’s important to make those clear just like every other part of the contract.