Procurement Policy for Purchases Under a Threshold
Standardise buying decisions and approvals.
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Draft a purchasing policy. Organisation: [ORGANISATION]. Spend bands: [SPEND_BANDS]. Approvers: [APPROVERS]. Common purchases: [COMMON_PURCHASES]. For each spend band define how many quotes are needed, who approves, whether a purchase order is required and who records it. Add rules on splitting orders, urgent purchases, conflicts of interest, recurring subscriptions and supplier changes. Return the policy in plain language with a table of bands and approvals, two worked examples with invented amounts, and a one-page flow for requesters. Mark tax and public procurement requirements for professional review [VERIFY] for [JURISDICTION] where they apply. Add a short template for a purchase request with fields for item, reason, cost, budget code, quotes attached and approver. Provide guidance on keeping a register of contracts with renewal dates so subscriptions do not renew unnoticed, and a quarterly review of recurring spend. Include a worked example of three quotes of 450, 520 and 480 and how the choice and reason are recorded.
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Invented bands: under 500, one quote and manager approval; 500 to 5,000, three quotes and director approval; over 5,000, committee approval and purchase order. Example 1: laptops, three quotes of 1,100, 1,250 and 1,180. Lowest 1,100 falls in the middle band, so three quotes and director approval are needed. Chosen supplier recorded with reason. Example 2: two orders of 300 and 280 to the same supplier on one day for the same item. Combined 580 enters the middle band; splitting the order to avoid the rule is not permitted.
Illustrative only, made-up data. Your results will differ and must be reviewed.