synthetic_policies/procurement_policy.md

FIN-POL-016: Procurement Policy

Effective Date: 2025-03-01 Revision: 1.0 Owner: Finance Department

1. Purpose

This policy establishes the principles and procedures for the procurement of goods and services to ensure that all purchases are made in a fair, transparent, and cost-effective manner, and in the best interest of the company.

2. Scope

This policy applies to all employees and departments involved in the procurement process, from identifying a need to final payment and contract management.

3. Ethical Standards

• Conflict of Interest: All employees involved in procurement must disclose any potential conflicts of interest and recuse themselves from any decision-making where such a conflict exists.
• Gifts and Hospitality: Employees must not accept gifts, entertainment, or favors from suppliers that could be perceived as influencing a procurement decision. Please refer to the Code of Business Conduct (CORP-POL-013) for specific limits and guidelines.

4. Procurement Thresholds and Approval

The level of approval required for a purchase is determined by its total value:

• Up to $1,000: Can be approved by a Department Manager. Requires at least one informal quote.
• $1,001 - $10,000: Requires approval from a Department Head. A minimum of two competitive written quotes are required.
• $10,001 - $50,000: Requires approval from a Vice President. A formal Request for Proposal (RFP) process with at least three bids is mandatory.
• Over $50,000: Requires approval from the Chief Financial Officer (CFO). A formal RFP and a detailed business case are required.

5. Supplier Selection

• Criteria: Suppliers will be selected based on a combination of factors including price, quality, reliability, service, and alignment with our company's values (e.g., commitment to sustainability).
• Preferred Suppliers: The company maintains a list of preferred suppliers who have been vetted for quality and pricing. Employees should consult this list first.
• Diversity: We are committed to supplier diversity and will make a conscious effort to include minority-owned, women-owned, and local businesses in our procurement opportunities.

6. Purchase Orders

• A Purchase Order (PO) must be created in the financial system (NetSuite) for all purchases over $1,000 before any commitment is made to a supplier.
• The PO number must be included on the supplier's invoice to ensure timely payment.

7. Contract Management

• All contracts with suppliers must be reviewed by the Legal department before signing.
• The responsible department is accountable for monitoring the supplier's performance throughout the life of the contract.

8. Related Policies

• Code of Business Conduct (CORP-POL-013)
• Expense Reimbursement Policy (FIN-POL-014)

9. Revision History

• v1.0 (2025-03-01): Initial version.