A procurement policy states the mandatory principles and authority for buying goods and services. It defines who may commit the organization, which purchasing routes apply, how competition and conflicts are handled, and what evidence must be retained.
What should a procurement policy cover?
Typical subjects include scope, delegated authority, approval thresholds, competitive requirements, supplier due diligence, conflicts of interest, contract review, emergency purchases, records and policy exceptions.
Policy versus procedure
The policy explains the rule and required outcome. A procedure explains the steps, roles and systems used to comply. Keeping them separate makes it easier to update operational instructions without weakening governance.
How should thresholds be designed?
Thresholds should reflect value, risk and transaction type, with clear treatment of aggregation and split purchases. A low-value purchase can still require specialist review when it involves sensitive data, regulated goods or unusual terms.
How are exceptions managed?
Require a stated reason, named approver, duration and supporting evidence. Review patterns of exceptions because repeated use may reveal an impractical rule or an attempt to bypass competition.
How is the policy kept usable?
Use plain language, link each rule to its procedure, train affected roles and test actual transactions. Publish the current version and archive superseded versions with effective dates.
