The Procurement Glossary » Procurement Policy

Procurement Policy

Compliance & Risk

Definition

The documented rules governing how purchases must be made — thresholds, approvals, preferred suppliers and ethics.

Explanation

The policy sets the guardrails: when competition is required, who approves what, which suppliers to use, and expected conduct. Embedding it into systems (approval rules, catalogs) makes compliance the default rather than a matter of memory.

Example

Policy requires three quotes above RM10,000 and bars accepting supplier gifts over RM100.

Related terms

• Policy Compliance — The extent to which actual buying behaviour follows the organisation's procurement policy.
• Delegation of Authority (DOA) — The formal policy defining who can approve spend and up to what value, at each level of an organisation.
• Supplier Code of Conduct — A statement of the ethical, labour, safety and environmental standards a buyer expects its suppliers to uphold.
• Procurement Compliance — Adherence to the policies, contracts, laws and controls that govern how an organisation buys.

Frequently Asked Questions

What is Procurement Policy?

The documented rules governing how purchases must be made — thresholds, approvals, preferred suppliers and ethics. The policy sets the guardrails: when competition is required, who approves what, which suppliers to use, and expected conduct. Embedding it into systems (approval rules, catalogs) makes compliance the default rather than a matter of memory.

Can you give an example of Procurement Policy?

Policy requires three quotes above RM10,000 and bars accepting supplier gifts over RM100.

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