A purchase order (PO) is basically a price agreement between a builder and a subcontractor. With a PO system, subs and suppliers who find they need to do something on the job that will incur extra cost have to clear it with the builder first. Although POs take time to create (up to a week for a large custom home), most professional builders insist on them. POs provide a valuable level of predictability.
Home Building Success 101 – How Are Purchase Orders Used?