What is a Commitment in the context of the procurement process?

In the context of the procurement process, a commitment refers specifically to a reservation of funds that reflects an obligation to pay for goods or services that will be received in the future. This action ensures that the necessary financial resources are allocated in advance, following the organization's procurement directives, to prevent overspending and to maintain budgetary control.

When a commitment is made, it signals an intention to procure and sets aside the funds needed for that purchase. This is a critical part of the procurement cycle as it provides a financial framework within which purchasing decisions can be made with confidence, knowing that the funds required are already secured.

While other options touch on different aspects of the procurement process—such as agreements, purchase orders, or contracts—none encapsulate the specific act of obligation and reservation of funds that a commitment does. Therefore, it is this particular focus on establishing a financial obligation that identifies commitment as a key concept in procurement.