# 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.