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Procurement Policy Template (ISO 20400 Sustainable Procurement)

Thresholds, approval matrix, sourcing methods, single-source grounds, evaluation, sustainable procurement, ethics, public sector rules, KPIs

EinkaufVollständigISO 20400:2017; ISO 37001:2025 (cited only)policy

Anleitung: Use it when an organisation needs one rulebook for sourcing and supplier selection up to contract award. Fill the competition thresholds and the approval matrix first, aligned with the delegation of authority, then the single-source grounds. The main pitfall is measuring thresholds per order instead of total contract value, which invites split purchases.

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Procurement Policy: [Organisation name]

Organisation-wide policy for buying goods, services and works: who may commit spend, how much competition each purchase needs, when a single supplier may be used, how sustainability and ethics are built into sourcing, and how exceptions are recorded. The sustainability sections are structured in line with ISO 20400:2017 Sustainable procurement, Guidance (cited by name and clause number only), and the ethics sections link to the anti-bribery controls of ISO 37001:2025. It is written for private organisations; public bodies follow their procurement law first (section 13). Replace every [bracketed] value and every row marked Example. This is a documentation format, not legal advice: check the current official text and a qualified professional.

Document control

FieldValue
Document ID[POL-PRC-NNN] Example: POL-PRC-001
Version[1.0]
Status[Draft / In review / Approved]
Owner[@head-of-procurement]
Approvers/reviewers[@cfo], [@general-counsel], [@head-of-sustainability], [@internal-audit]
Entities in scope[Legal entities] Example: Corvanna Instruments Ltd (UK), Corvanna Instruments B.V. (NL), Corvanna Instruments Inc. (US)
Systems[Source-to-contract tool, ERP purchasing module, contract repository]
Exception authority[Role] Example: CFO for value exceptions, head of procurement for process exceptions
Effective dateYYYY-MM-DD
Last updatedYYYY-MM-DD
Next reviewYYYY-MM-DD (at least annually, or after a change in law or structure)
Classification[Internal]

Approvals

RoleNameDecisionDate
Policy owner[@name][Prepared]YYYY-MM-DD
General counsel[@name][Reviewed]YYYY-MM-DD
Head of sustainability[@name][Reviewed]YYYY-MM-DD
CFO[@name][Approved]YYYY-MM-DD

Revision history

VersionDateAuthorChange summary
0.1YYYY-MM-DD[@name]First draft
1.0YYYY-MM-DD[@name]Example: Approved; thresholds aligned with DoA v3, sustainable procurement section added

Contents

  1. Purpose and scope
  2. Principles
  3. Roles and responsibilities
  4. Planning and the business need
  5. Competition thresholds
  6. Approval authority
  7. Sourcing methods
  8. Single-source and direct award
  9. Evaluation and award
  10. Contracts and purchase orders
  11. Sustainable procurement
  12. Ethics, conflicts and anti-bribery
  13. Public sector and legal requirements
  14. Supplier management after award
  15. Exceptions, breaches and monitoring
  16. Glossary and references

1. Purpose and scope

This policy sets the rules for acquiring goods, services, software and works from external suppliers on behalf of [Organisation name]. It applies to every employee, contractor and agent who identifies a need, engages suppliers, negotiates, commits spend or signs a contract, in every entity listed in Document control.

The policy aims to achieve value for money over the whole life of a purchase, fair and transparent treatment of suppliers, compliance with law, and measurable progress on the organisation's sustainability commitments.

In scopeOut of scope (covered elsewhere)
Direct materials and componentsEmployment of staff (HR policies)
Indirect goods and services, including software and cloudIntercompany charges (transfer pricing policy)
Professional services and contingent labour through agenciesTreasury instruments and bank products (treasury policy)
Capital equipment and worksProperty acquisition and leases above [value] (real estate policy)
Marketing services and mediaDonations and sponsorships (community investment policy)

Purchases made on corporate cards remain subject to sections 5 and 12 of this policy; card administration is in the procure-to-pay policy.

2. Principles

IDPrincipleWhat it means in practice
PR-01Value over priceAward on total cost of ownership and quality, not unit price alone
PR-02Proportionate competitionThe effort of competing grows with value and risk (section 5)
PR-03Fair treatmentAll bidders receive the same information at the same time and are evaluated against published criteria
PR-04Separation of dutiesThe person who defines the need does not alone select the supplier, approve the spend and receive the goods
PR-05Sustainability by designEnvironmental, social and ethical impacts are assessed at planning, not after award
PR-06IntegrityConflicts of interest are declared, gifts and hospitality follow the anti-bribery rules
PR-07RecordsEvery sourcing decision leaves an auditable record that a third party could follow

3. Roles and responsibilities

RoleResponsibilities
Budget holderConfirms the business need and budget, raises the requisition, approves within delegated authority
RequesterDescribes the requirement, takes part in evaluation, confirms receipt
Procurement (category manager or buyer)Chooses the sourcing route, runs competitions above [GBP 10,000], negotiates, keeps the sourcing record
LegalApproves non-standard contract terms and all contracts above [GBP 250,000]
FinanceConfirms budget, checks approval authority, owns payment controls
Information security and privacyAssess suppliers that handle data or connect to systems
Sustainability leadSets sustainability criteria per category and reviews high-impact sourcing
Sourcing committeeApproves award recommendations above [GBP 250,000] and all single-source cases above [GBP 50,000]
Internal auditTests compliance with this policy on a risk basis

4. Planning and the business need

Before engaging any supplier above [GBP 10,000] the requester and procurement confirm:

  1. Need: the outcome required, quantity and timing, and whether the need can be met by an existing contract, internal capacity or a framework agreement already in place.
  2. Budget: approved budget and cost centre, including running costs over the expected life.
  3. Specification: written in terms of function and performance, naming a brand only with the words "or equivalent" and a reason.
  4. Category strategy: the purchase follows the approved category strategy where one exists (procurement/category-strategy).
  5. Risk and sustainability screen: the impact screen in section 11 and the supplier risk tier in procurement/supplier-onboarding-due-diligence.
  6. Make or buy: for software and services, whether to build, buy or reuse (see architecture/build-vs-buy-analysis).

Large or complex projects record these in a procurement plan (project/procurement-plan).

5. Competition thresholds

The estimated contract value is the total payable over the whole term, including optional extensions, renewals and all lots bought for the same need, excluding VAT or sales tax. Splitting a requirement to avoid a threshold is a breach of this policy (section 15).

BandTotal contract value (excl. tax)Minimum competitionRun by
ABelow [GBP 10,000]One quote; catalogue or card permittedRequester
B[GBP 10,000 to 49,999]Three written quotesRequester with procurement check
C[GBP 50,000 to 249,999]Competitive request for quotation or proposal, at least three invited suppliersProcurement
D[GBP 250,000] and aboveFormal tender (RFP) with published criteria and an evaluation panelProcurement, sourcing committee approval

Values in other currencies are converted at the [monthly budget rate] on the date the requisition is raised.

Example: Corvanna needs a calibration service for three years with an optional fourth year, estimated at GBP 70,000 per year. The contract value is 4 x 70,000 = GBP 280,000, so the purchase falls in band D and needs a formal tender, even though each annual purchase order would be in band C.

6. Approval authority

Approval to commit spend follows the Delegation of Authority Matrix (finance/delegation-of-authority-matrix). The table below is a summary; where the two differ, the matrix prevails.

Total contract value (excl. tax)Approves the requisitionApproves the awardSigns the contract
Below [GBP 10,000]Budget holderBudget holderBudget holder (PO only)
[GBP 10,000 to 49,999]Budget holderDepartment headDepartment head
[GBP 50,000 to 249,999]Department headFinance directorFinance director
[GBP 250,000 to 999,999]Finance directorSourcing committeeCFO
[GBP 1,000,000] and aboveCFOSourcing committee and CEOCEO, or the board where the matrix requires

Nobody may approve a requisition, award or contract in which they have a declared conflict of interest, or approve their own spend.

7. Sourcing methods

MethodUse whenTemplate
Catalogue or marketplace purchaseBand A, standard itemsNot needed
Request for quotation (RFQ)Specification is complete, price is the main differentiatorprocurement/purchase-requisition-po for the order
Request for information (RFI)Market or solution options are unclearbusiness/rfi
Request for proposal (RFP)Bands C and D where quality, method or risk differ between suppliersbusiness/rfp, business/rfp-compliance-matrix
Mini-competition under a frameworkAn existing framework agreement covers the needFramework terms
Electronic reverse auctionLeverage categories with several qualified suppliers and a complete specificationProcurement procedure [ID]
Negotiation with one supplierOnly under section 8Single-source justification

Procurement chooses the method and records the reason in the sourcing record.

8. Single-source and direct award

A purchase above band A may be awarded without the competition in section 5 only on one of these grounds, recorded in a single-source justification and approved by the sourcing committee above [GBP 50,000] or by the head of procurement below it:

GroundEvidence required
SS-01 Only one capable supplier (technical exclusivity, intellectual property)Market check or RFI showing no alternative
SS-02 Compatibility with installed equipment or software where a change would cause disproportionate costCost of change estimate
SS-03 Genuine emergency (safety, legal compliance, unforeseeable event), not caused by late planningDescription of the event; follow-up competition planned
SS-04 Extension of an existing contract within its termsContract clause reference
SS-05 Regulated or monopoly supplier (utilities, regulators)Not needed

Single-source awards are reported quarterly to the CFO with value, ground and the plan to restore competition at the next renewal.

9. Evaluation and award

  1. Criteria and weights are approved and issued with the invitation. Quality, total cost of ownership, risk and sustainability each appear, with pass or fail gates for mandatory requirements (licences, insurance, security, sanctions screening).
  2. Each evaluator signs a conflict of interest declaration before seeing bids (see compliance/conflicts-of-interest-register).
  3. Evaluators score independently, then meet to moderate. Procurement records the moderated scores and the reasons.
  4. Clarifications are put in writing and shared with all bidders when they change the meaning of the requirement.
  5. The award recommendation states the winning bid, the scores, the value and the approval needed under section 6. Use the Vendor Evaluation Scorecard (business/vendor-evaluation-scorecard) for the scoring sheet.
  6. Unsuccessful bidders receive a short written debrief on request.

Example: Corvanna's calibration tender weighted technical capability 40%, total cost over four years 30%, service levels 15% and sustainability 15%, with ISO/IEC 17025 accreditation as a pass or fail gate.

10. Contracts and purchase orders

  • Band A and B purchases use a purchase order on the organisation's standard terms of purchase (procurement/purchase-requisition-po).
  • Band C and D purchases, and any purchase involving personal data, system access or on-site work, use a written contract approved by legal. Use the master services agreement outline (legal-lite/master-services-agreement-outline), a data processing agreement (legal-lite/dpa) where personal data is processed, and a statement of work (business/statement-of-work).
  • Supplier terms are accepted only after legal review against the contract review playbook (legal-ops/contract-review-playbook).
  • Every contract above band A is entered in the contract register within [5] working days of signature, with its renewal and notice dates (procurement/contract-register).
  • No goods may be ordered or work begun before the order or contract is approved and issued.

11. Sustainable procurement

ISO 20400:2017 is a guidance standard (not certifiable). Its public structure runs from fundamentals (clause 4), through integrating sustainability into procurement policy and strategy (clause 5) and organising the procurement function (clause 6), to integrating sustainability into each step of the procurement process (clause 7: planning, specification, supplier selection, contract management and review). This policy follows the same sequence in original wording.

StepRule in this policyResponsible
Policy and strategySustainability commitments are set for each high-impact category in its category strategySustainability lead, category manager
OrganisingBuyers complete [sustainable procurement training] within [6] months of joiningHead of procurement
PlanningEvery band C and D purchase completes the impact screen belowProcurement
SpecificationUse functional specifications that allow lower-impact solutions (reuse, refurbishment, service models)Requester, procurement
Supplier selectionSustainability criteria carry at least [10%] of the weighting for categories rated high impactProcurement
Contract managementSustainability commitments become contract obligations with KPIs reviewed in supplier performance reviewsContract owner
ReviewLessons learned at contract end feed the next category strategyCategory manager

Impact screen (answer yes or no, any "yes" means sustainability criteria are mandatory for the purchase):

QuestionYes or no
Does the category carry a high carbon footprint (materials, freight, energy, travel)?[ ]
Are there known labour or human rights risks in the supply chain (for example raw materials, low-wage assembly, cleaning, security, logistics)?[ ]
Does the purchase generate hazardous waste or packaging at end of life?[ ]
Is the supplier a small business, social enterprise or diverse supplier that the organisation has committed to support?[ ]
Does the purchase affect the organisation's reported greenhouse gas inventory (finance/ghg-emissions-inventory)?[ ]

All suppliers accept the Supplier Code of Conduct (procurement/supplier-code-of-conduct) before award above band A.

12. Ethics, conflicts and anti-bribery

  • Everyone involved in a sourcing event declares any personal, financial or family interest in a bidder before the event starts, and again if circumstances change.
  • During an open competition, buyers and evaluators accept no gifts or hospitality from bidders, of any value.
  • Outside competitions, gifts and hospitality follow the limits and register of the anti-bribery programme (compliance/iso-37001-anti-bribery, aligned with ISO 37001:2025 clause 8.7 on gifts, hospitality and similar benefits).
  • Due diligence on suppliers proportionate to bribery risk is carried out at onboarding (ISO 37001:2025 clause 8.2; procurement/supplier-onboarding-due-diligence), and suppliers in higher-risk tiers give anti-bribery commitments in the contract (clauses 8.5 and 8.6).
  • No supplier is engaged if it, or its owners, appear on a sanctions list that applies to the organisation (compliance/sanctions-compliance-procedure).
  • Concerns are raised through the speak-up channel (compliance/whistleblowing-policy); retaliation is prohibited.
  • Employees follow the Code of Business Conduct (compliance/code-of-business-conduct).

Legal context (examples, check the current text): the UK Bribery Act 2010 section 7 offence of failure to prevent bribery, the UK Economic Crime and Corporate Transparency Act 2023 failure to prevent fraud offence (in force 2025-09-01), and the US Foreign Corrupt Practices Act.

13. Public sector and legal requirements

Private organisations are free to set their own rules, but some purchases are regulated:

SituationRequirementWhere to check
UK contracting authorityProcurement Act 2023 regime. From 2026-01-01, threshold amounts (including VAT) for supplies and services are GBP 135,018 for central government and GBP 207,720 for sub-central authorities, and GBP 5,193,000 for works (SI 2025/1200)legislation.gov.uk; gov.uk Procurement Act guidance
EU contracting authorityDirective 2014/24/EU as transposed nationally. For 2026 and 2027 the thresholds (excluding VAT) are EUR 140,000 (central government supplies and services), EUR 216,000 (sub-central) and EUR 5,404,000 (works), set by Delegated Regulation (EU) 2025/2152EUR-Lex; national procurement authority
US federal contractsFederal Acquisition Regulation, under revision through the Revolutionary FAR Overhaul; check the current FAR part and agency deviationsacquisition.gov
Grant-funded purchasesFunder conditions (for example US 2 CFR 200 procurement standards)Grant agreement
Supply chain transparencyUK Modern Slavery Act 2015 section 54 statements, EU forced labour product ban (Regulation (EU) 2024/3015, applies from 2027-12-14), US Uyghur Forced Labor Prevention Act import presumptionprocurement/supplier-code-of-conduct

Figures were checked on 2026-10-30 and are revised every two years; check the official source on the date your procurement starts.

14. Supplier management after award

  • Each contract has a named contract owner in the contract register.
  • Suppliers are segmented by spend and risk; tier 1 suppliers have a quarterly performance review, tier 2 half-yearly, tier 3 annually (procurement/supplier-performance-review).
  • Supplier risk is re-assessed on renewal, on a change of control, and on any adverse event (sanctions designation, data breach, labour allegation, insolvency signal).
  • Renewal decisions are taken before the notice deadline recorded in the contract register, with a fresh competition where section 5 so requires.

15. Exceptions, breaches and monitoring

Exceptions to this policy are requested in writing before commitment and approved by the exception authority named in Document control. Breaches found afterwards (no PO, split orders, missing competition, undeclared conflict) are reported to the head of procurement and the budget holder's line manager and may lead to disciplinary action.

MetricDefinitionTarget
Spend under managementSpend sourced by or with procurement / total addressable spend[above 80%]
Competitive award rateValue awarded after competition / value awarded in bands B to D[above 90%]
Single-source shareValue of single-source awards / total awarded[below 10%]
Retrospective ordersPOs dated after invoice, count and value[below 2% of POs]
Contracts in registerActive contracts above band A recorded with notice dates[100%]
Sustainability criteria useBand C and D awards in high-impact categories with weighted sustainability criteria[100%]

Example: in the first half of 2026 Corvanna awarded GBP 6.2 million in bands B to D, of which GBP 5.7 million after competition (91.9%) and GBP 0.5 million single-source (8.1%).

16. Glossary and references

TermMeaning in this policy
Total contract valueAll amounts payable over the full term, including extensions and options, excluding VAT or sales tax
CategoryA group of goods or services with a common supply market
Single-sourceAward to one supplier without the competition in section 5 although others exist
Sole sourceOnly one supplier can meet the need
Framework agreementAn agreement setting terms for future orders from one or more suppliers
Total cost of ownershipAcquisition, operation, maintenance and disposal costs over the life of the purchase
ReferenceVersion or dateOfficial source
ISO 20400, Sustainable procurement, Guidance2017 (current, as listed by BSI as BS ISO 20400:2017, checked 2026-10-30)Official text: ISO and national standards bodies, purchase or licensed access: https://www.iso.org/standard/63026.html
ISO 37001, Anti-bribery management systems, Requirements with guidance for use2025Official text: ISO, purchase or licensed access: https://www.iso.org/standard/85816.html
UK Procurement Act 2023 and Threshold Amounts (Amendment) Regulations 2025 (SI 2025/1200)Thresholds from 2026-01-01https://www.legislation.gov.uk/ukpga/2023/54
Commission Delegated Regulation (EU) 2025/2152 amending Directive 2014/24/EU thresholds2026 and 2027https://eur-lex.europa.eu/eli/reg_del/2025/2152/oj/eng
Federal Acquisition RegulationCurrenthttps://www.acquisition.gov/far
UK Bribery Act 2010Currenthttps://www.legislation.gov.uk/ukpga/2010/23

Standard and licence note

Structure aligned with ISO 20400:2017 Sustainable procurement, Guidance and ISO 37001:2025, cited by name, edition and clause number only; no text of either standard is reproduced. Official text: ISO and national standards bodies, purchase or licensed access via the links in section 16. UK, EU and US public procurement figures are taken from the official instruments named above and must be checked on the date of use. Corvanna Instruments and all figures are fictional. The text is original and is not legal advice. Template licence: MIT.

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