Writing a procurement policy that protects your team
How to write a clear NGO procurement policy: principles, thresholds, quotation steps, conflict-of-interest rules and records that satisfy donors.
Short answer
A procurement policy sets fair, documented rules for buying goods and services. Define principles, name who may request, approve and buy, set value thresholds with the number of quotes needed, require written selection criteria and records, ban split orders, manage conflicts of interest, and say how exceptions are approved. Check each donor's own thresholds before you fix yours.
Key points
- Use higher value thresholds for stricter steps: quotes, then formal tenders.
- Select suppliers on written criteria and record why you chose one.
- Never split a purchase to stay under a threshold.
- Separate who requests, who approves, who buys and who pays.
- Donor thresholds override yours when they are lower.
Why does an NGO need a procurement policy?
Buying is where much of a project budget goes, and where many audit findings begin. Without clear rules, staff do not know how many quotes to ask for. Suppliers do not know how they are judged. Donors cannot see whether you paid a fair price.
A procurement policy protects three things: the donor's money, your organisation's reputation and your staff. When a staff member follows a written rule, they are protected if someone later questions a purchase.
What principles should the policy state?
The UNHCR guidance for implementing partners and the HIAS procurement policy share common principles. In plain words:
- Value for money. The best combination of price, quality and delivery, not only the lowest price.
- Fair competition. Suppliers get the same information and the same chance.
- Transparency. Rules and criteria are written before you ask for offers.
- Ethics. No gifts, no favours, no hidden interests.
- Documentation. Every decision is recorded.
- Proportionality. Bigger purchases get more steps.
How should you set thresholds?
A threshold is a purchase value that triggers a stricter method. Set bands by value, in your local currency, and decide the steps for each.
| Purchase size | Typical method | Records |
|---|---|---|
| Very small | One price check, receipt | Receipt and approval |
| Small to medium | At least three written quotes | Quote comparison sheet, approval |
| Large | Formal tender or request for proposals | Public or invited call, sealed offers, evaluation panel, contract |
The UNHCR guidance says informal buying uses a request for quotation, inviting as many vendors as possible to obtain no fewer than three valid quotes unless lower competition is justified. It also says quotes should be written and opened only after the deadline. For formal buying, offers are sealed, due by an announced deadline, and judged against stated criteria.
Set your own bands from your size and risk. Then compare with each donor. UNHCR says a partner's formal threshold should not be materially higher than the donor's. HIAS says its thresholds apply unless a funder requires a lower one. Use the same logic: the lower rule wins.
What steps should every purchase follow?
- Request. The budget holder submits a purchase request with a specification, budget line and needed date.
- Check the budget. Finance confirms funds are available.
- Choose the method. Use the threshold table.
- Invite offers. Send the same specification to all suppliers, with a deadline.
- Open and compare. Two people open offers. Use a comparison sheet with written criteria such as price, quality, delivery time and supplier record.
- Approve. The person with authority for that value approves the selection and signs.
- Order and receive. Issue a purchase order or contract. A person who did not request the purchase checks goods on delivery.
- Pay and file. Pay against the invoice and delivery note. File all papers together.
Separate the roles: the person who requests should not be the sole person who selects, receives and pays.
How do you prevent split orders and conflicts?
- Ban splitting. State that a need must not be broken into smaller buys to avoid a threshold. Look at total spend per supplier per period.
- Declare interests. Every person involved in a purchase declares any link to a bidder. A conflicted person leaves the decision. See managing conflict of interest.
- Limit gifts. Set a rule: no gifts or hospitality from bidders during a procurement, and record small courtesy gifts above a stated value.
- Rotate roles. Avoid a single buyer working with the same supplier for years without review.
How should exceptions work?
Emergencies, single-supplier items and remote areas make competition difficult. Do not ban exceptions. Control them. A sole-source or waiver form should state the reason, what was tried, the price check you did and who approved. Report all exceptions to the board or finance lead regularly. If the same exception recurs, the policy needs a better rule.
In Myanmar, access limits, banking limits and local market conditions can make written quotes hard to obtain. Allow photos, messages or call notes as evidence if you record who gave the price and when.
What records should you keep?
Keep, for each purchase: the request, the specification, all quotes, the comparison sheet, the approval, the contract or order, the delivery note and the invoice. Link the file to a budget line. Auditors will test a sample. See how to prepare for a donor audit.
How EMPO can help
EMPO is a reliable, trusted training and consultancy provider and one of Myanmar's leading names in practical NGO training, with 1,200+ people trained and 15 partner organisations. Based in Yangon, we offer supply chain management and organisational development support in English and Burmese, online and in person across Myanmar. See our services or contact us.
Sources
- Implementing Partners Procurement Guidelines (Guidance Note No. 4) — UNHCR, 2018
- HIAS Procurement Policy — HIAS, 2021
Questions people ask
How many quotes do we need?
Many organisations ask for at least three written quotes for mid-value purchases, and a formal tender above a higher threshold. The right numbers depend on your size and your donors' rules, so write them into your policy and check your grant agreements.
What is a sole-source purchase?
It is a purchase from one supplier without competition. Allow it only for clear reasons, such as a single available supplier or an emergency, and require a written justification approved by a senior person.
Can we buy from a staff member's relative?
Only if the interest is declared, the person with the interest takes no part in the decision, and the purchase still follows competition rules. Many organisations simply avoid it. See our guide on conflict of interest.