What is threshold amount in SAP PSM-GPR - Procurement for Public Sector?

SAP Term: threshold amount

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: Amount that can be spent on purchasing. You can configure threshold checks and the related messages to identify only those contracts or purchase orders that are relevant. For example, you can define for each homogeneous product category a threshold of EUR 100,000 that cannot be exceeded in the calendar year for a purchase order without contractual reference.

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• Key Concepts: 
  Threshold amount is a feature of the SAP PSM-GPR Procurement for Public Sector component. It is a predetermined amount that is used to determine when a procurement process must be initiated. This amount is set by the organization and can be adjusted as needed. 
  
  How to use it: 
  The threshold amount is used to determine when a procurement process must be initiated. When the total cost of goods or services exceeds the threshold amount, the organization must initiate a procurement process. This process includes creating a request for proposal (RFP), evaluating bids, and awarding the contract. 
  
  Tips & Tricks: 
  It is important to set an appropriate threshold amount that meets the needs of the organization. The threshold amount should be set at an amount that is high enough to ensure that all necessary procurements are initiated, but low enough to avoid unnecessary costs. 
  
  Related Information: 
  The threshold amount is just one part of the SAP PSM-GPR Procurement for Public Sector component. Other features include contract management, vendor management, and reporting capabilities.