The Procurement Glossary » Preferred Vendor Program

Preferred Vendor Program

Suppliers & Vendors

Definition

A formal scheme designating and steering business to chosen vendors that meet quality, price and service standards.

Explanation

A preferred-vendor program channels spend to vetted vendors with negotiated terms, cutting maverick spend and simplifying choice. It sets criteria for entry and continued status, and integrates with catalogs and approval rules.

Example

The preferred-vendor program lists two approved courier firms; using others needs justification.

Related terms

• Preferred Supplier — A supplier a business has chosen to favour for a category, usually because of negotiated pricing, reliability or a framework agreement.
• Approved Supplier List (ASL) — A controlled list of suppliers that have been vetted and authorised to supply a business, often by category.
• Maverick Spend — Purchasing done outside agreed processes, contracts or preferred suppliers — 'off-contract' buying.
• Framework Agreement — An umbrella agreement setting pre-negotiated prices and terms with one or more suppliers, from which individual orders are placed as needed.

Frequently Asked Questions

What is Preferred Vendor Program?

A formal scheme designating and steering business to chosen vendors that meet quality, price and service standards. A preferred-vendor program channels spend to vetted vendors with negotiated terms, cutting maverick spend and simplifying choice. It sets criteria for entry and continued status, and integrates with catalogs and approval rules.

Can you give an example of Preferred Vendor Program?

The preferred-vendor program lists two approved courier firms; using others needs justification.

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