Categories of Purchases

Goods are generally defined as tangible items such as supplies, materials or equipment. Commonly purchased goods at the university include office supplies and research or lab materials. Certain goods should be purchased through pre-negotiated supplier relationships available through the university’s catalog ordering systems (i.e., SmartMart Catalog Suppliers)  to ensure the best pricing and terms. In addition, some goods require special consideration or treatment to ensure regulatory and compliance needs are met.

The Purchase Goods page provides the recommended purchasing method and related guidance for:

• Capital equipment 
• Office and home office equipment and furnishings
• Office supplies
• Computers, laptops, printers, and mobile devices
• Lab, life science, research, or medical supplies
• Stanford-branded merchandise

Services are generally defined as a transaction where work or action is performed and there may not be a physical good involved. At the broadest level, this includes labor, maintenance, consulting, business services, and venue or facility rentals. Some services require special consideration or treatment to ensure regulatory and compliance needs are met.

The Purchase Services page provides the recommended purchasing method and related guidance for:

• Professional services, performed by an independent contractor or consultant, include the following:
  • Proofreading/Editing/Copywriting/Publishing/Indexing services
  • Graphic Design/Branding/Illustration services
  • Transcription/Translation services
  • Video/Photography services 
  • Equipment repair
  • Indexing services
  • Legal related services (e.g., notary, fingerprinting, document scanning). Please note: Hiring an attorney requires a contract and must be approved by Stanford’s Office of the General Counsel.
     
• Temporary staffing services
• Speaker (non-Honoraria)
• Cloud computing
• Internet services
• File sharing and storage services
• Software
• Website or application development
• Shipping, freight, importing, and customs services
• Advertising on social media network
• Office or lab moving services
• Event venues and catering
• Lab-coat rental or cleaning
• Commissioned work
• Construction services
   

A subaward is when a portion of Stanford's sponsored project is passed through to another entity in order to complete a portion of the sponsored project's scope of work. It does not include payments to a contractor or payments to an individual that is a beneficiary of a program.

Subawards are administered by the Office of Research Administration (ORA) but payments are made using iProcurement Purchase Orders. For information, refer to Subawards at the Office of Research Administration. 

The university pays directly or reimburses individuals for expenses that are necessary and appropriate to conduct university business. Expenditures must be consistent with the university’s purchasing policies and guidelines as well as the guiding principles and IRS regulations with regard to Business and Travel Expense policies.

Travel Bookings and Expenses

It is highly encouraged that Stanford travelers use Stanford Travel booking channels when booking flights, hotels, and rental cars for university-sponsored travel. Stanford Travel booking channels streamline the reimbursement process, offer discounts, benefits, and perks to travelers, and automatically register itineraries and any booking updates to the Travel Registry. In addition, the Stanford Travel team can provide specialized assistance as needed to travelers who book through Stanford Travel.

Types of Business Expenses

Common types of business expenses include business and travel meals, lodging, and transportation. Additional common expenses, such as conference, training fees, and employee morale, are covered in the Topic Overview: Other Reimbursable Business Expenses.

The Stanford Purchasing Card (PCard) is the preferred payment method for local business meals. Alternatively, personal funds may be used and a request for reimbursement submitted. The same policies must be followed regardless of payment method. To support administrative efficiency, the Stanford Travel Card (TCard) is the preferred payment method for travel costs unless the traveler will choose the per diem reimbursement method. Alternatively, personal funds may be used and a request for reimbursement can be submitted after the trip concludes.

Note: Per the updated gift policy as of July 20, 2023, for non-performance-related activities, (e.g., significant milestones or holidays) the non-taxable limit that departments may purchase an occasional gift for an employee is now up to $100 per individual, per calendar year. This is an increase from the prior amount of $50.

At the discretion of each department or school, gifts or awards may be made to regular, benefits-eligible university employees [50% full-time equivalent (FTE) or more] for non-performance related recognition, such as to acknowledge years of service or celebrate retirement. 

Some high level guidance for employee gifts includes:

• Depending on the purpose/occasion for the gift, the taxable threshold will vary. Tax and shipping costs are excluded from the thresholds.
• All gift cards (cash equivalent or non-cash equivalent) are taxable for the entire value when provided as gifts, regardless of amount or type.
• Purchases of Stanford-branded merchandise or other tangible items, including food, are strongly encouraged by the university over the use of gift cards.

Learn more about types of gifts, tax considerations, and appropriate tracking and processing of gift purchases on Topic Overview: Employee Gifts.

Gifts, including electronic gift cards, can be provided in support of an identified university business purpose such as for human subject payments, conference meals, event or research study prizes, or employee or appreciation gifts. Stanford-branded merchandise or other tangible items, including food, are strongly encouraged instead of gift cards as employee gifts. In addition, gift cards can present a potentially unnecessary financial loss when they are not used by the recipient.

Gift cards are prohibited to be issued to businesses/organizations in lieu of payment for goods or services. All university goods or services must be purchased only with university-initiated payment methods.

Tax Implications and Reporting

All gift cards, regardless of type or amount, are taxable for the entire value, even when given as employee gifts. The university strongly encourages departments to purchase tangible goods, such as Stanford-branded merchandise. This minimizes the tax burden for the recipient and the risks such as loss or theft associated with storing and handling gift cards.

Purchasing Methods

It is recommended that purchases of gift cards of a total amount of $4,999 or less be made using a Purchasing Card (PCard). Other methods of purchasing gift cards for university business include using personal funds and getting reimbursed through an expense report, requesting an advance (for human subjects only), or a non-PO payment request. Please note that Stanford’s Amazon Business account does not support the purchasing of gift cards.

Refer to the table below for specific gift card use cases and appropriate purchasing methods. 

Bulk Gift Card Purchases of $5,000 or more

Departments may need to purchase gift cards in bulk for later distribution to individuals for human subjects participating in forthcoming research studies. When purchasing bulk gift cards for human subjects totaling $5,000 or more, departments may use an iProcurement Non-catalog Requisition.

Bulk purchases of gift cards for employees are highly discouraged. If bulk purchases for employee gift cards are still required, those may be purchased with a PCard (if $4,999 or less)  but please note that each gift card must have an intended recipient and the recipient’s information must be included with the transaction. 

Storage of large purchases of gift cards presents a risk to the university. Gift cards must be appropriately secured and tracked in the same manner as cash. Departments must ensure proper local controls are in place for dual custody of the gift cards, throughout the purchasing, storage and distribution processes. 

Optional Gift Card Supplier - Blackhawk Network Inc 

There are many programs available for departments to purchase gift cards. Procurement Services has worked with Blackhawk Network Inc to support bulk purchases of gift cards for human subjects. To set up a Blackhawk Network Inc account, departments need to contact the Stanford Account Manager, Cathy Goetz, to receive login credentials for the Hawk Marketplace website to put in an order and obtain an invoice document. To process this transaction, departments should create an iProcurement Non-catalog Requisition. Once the purchase order (PO) is created, departments will need to upload the invoice document to the PO for processing and payment.

Gift Card Best Practices 

To safeguard university assets, the following best practices are recommended when purchasing and stewarding gift cards:

• Funding source: Departments should confirm the source of funding, whether sponsored or non sponsored, allows for the purchase of gift cards and complies with any requirements of that funding source.
• Storing and Tracking: Store gift cards securely as these are treated as cash. Each gift card should be distributed to its intended recipient shortly after purchase. Track all gift card recipients and include the name of recipient and amount received in backup documentation to be stored locally and attached to applicable transactions. This enables purchasing traceability and alignment with financial stewardship expectations. 
• Documentation: For human subject gift card payments, follow guidance on paying human subjects to appropriately purchase and tax report in these instances.

Leasing equipment 

An equipment lease is an agreement to rent, borrow, or use equipment, such as a medical device, vehicle, or copier. For accounting purposes, Stanford considers the agreement a lease when Stanford will pay for the use of the equipment for longer than one year, with total payments of $5,000 or greater. Refer to Equipment Leases for more information.

Purchasing capital equipment

Equipment is considered capital equipment if the purchase meets all of the following criteria:

• The equipment cost or value is $5,000 or more.
• The useful life of the equipment is more than one year.
• The equipment is a tangible item that is stand-alone and moveable (not a “fixed asset” that is permanently attached to a building).

Equipment can be purchased, fabricated, leased, or donated. Purchasing is the most common method of acquiring property at Stanford University. Requisitions for property are placed online, using the iProcurement application within Oracle Financials. Refer to Purchase Capital Equipment for more information. 

Leasing real estate

Real Estate Leases are contracts in which a party agrees  to pay for the use of real estate for a specific period of time. Real Estate leases are considered long-term financial obligations of the university. Refer to Lease or Rent Real Estate for more information.

Purchasing real estate

Lands and buildings (as defined as real estate) are purchased for a variety of reasons, including to generate income for the university’s operations, to fulfill the university’s mission and long-range vision and to increase the availability of housing for faculty and staff. Refer to the Real Estate department of Land, Buildings & Real Estate (LBRE) for more information.