format_list_bulleted Topic Overview

Selecting a Supplier

This page covers the processes and best practices for selecting a supplier. Schools and units that have already selected a new supplier or one that is not currently active in Stanford’s system should refer to Topic Overview: Setting Up a New Supplier or Payee.

Stanford engages with a wide range of suppliers (also referred to as vendors) to provide the products and services necessary to support its mission.

Schools and units are generally free to choose suppliers who comply with university policy and standards for financial stewardship, ethics, and risk management.

The overarching policies governing how suppliers are selected at Stanford can be referenced in Administrative Guide Memo 5.1.1: Procurement Policies and Topic Overview: Purchasing Policies and Guidelines.

Prior to requesting a new supplier setup, schools and units should review the many potential methods to purchase required goods and/or services as these options may negate the need to onboard a new supplier. The table below includes examples of methods that do not require setting up a new supplier. Refer to Topic Overview: Categories of Purchases for other guidance on specific types of purchases.

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Purchase common goods or services   Catalog options offered by pre-onboarded suppliers:
  • SmartMart Catalog Suppliers: Stanford’s online catalog ordering system is used for purchasing goods from suppliers that have special pricing provided to Stanford.
  • Amazon Business: Stanford’s approved method of making business purchases on the Amazon platform
Purchase goods or services through existing suppliers Stanford’s supplier database has approximately 20,000 active suppliers. Schools and units can use the Supplier Query and Request tool to search for and determine if a supplier is already active in the system and then submit either a SmartMart Contracts or Non-Catalog request.
Purchase goods or services from suppliers that already have a Master Agreement with the university The Procurement Services team manages hundreds of Master Agreements with existing suppliers, which can be viewed in the SmartMart Contracts system. Schools and units can create a Statement of Work that references the Master Agreement by its contract number. The Statement of Work (SOW) contract type should be used when an MSA is already signed between Stanford and the supplier, and a preparer needs to obtain a signature on a Statement of Work document (see template SOW document). Refer to Topic Overview: Contracts for more information on MSAs. 
Reimburse a domestic visitor Domestic visitors may be reimbursed for non-tax reportable travel expenses through Digital Payments, which generally does not require setup in the university’s centralized database. 
Hire temporary labor Cardinal Temps is managed by University Human Resources (UHR) and is the centralized program for temporary labor. 
Procure departmental printing services Cardinal Print is managed by University IT (UIT) and is the centralized program for simple, secure, environmentally-friendly, and cost-effective printing solutions.
One-time payment for speakers or participants

An honorarium is typically a one-time gratuitous payment made as a gesture of goodwill and in appreciation to participants who have volunteered to provide a service (e.g., speaking) free of charge in a Stanford event (e.g., symposium, lecture, or professional convention).

Stanford employees receive honoraria as supplemental personal compensation, which must be processed through payroll. Refer to Topic Overview: Paying Honoraria for more details on this type of payment.

Small dollar purchases eligible for PCard or TCard Purchasing Card (PCard): Schools and units can use the PCard for purchases (of $4,999 or less) as long as the transaction complies with all university policies regarding use of Purchasing Cards, and is not specifically prohibited such as where there are regulatory requirements, health and safety policies, tax reporting rules or the need for a contract. Travel-related purchases should use the Travel Card where similarly aligned with university policy and not specifically prohibited. 

Stanford classifies suppliers based on the nature of their relationship to the university. Generally, there are two categories of supplier records:

  • Supplier (Vendor): An individual or organization that provides goods or services to the university on an ongoing or one-time basis. This includes:
    • Businesses or organizations: Sometimes referred to as a business-to-business (B2B) relationship; schools and units engage with businesses and organizations around the world to source products and services to support Stanford’s mission.
    • Independent Contractors/Consultants: These are individuals who are exceptionally qualified, by education or experience in a particular field, to provide services or give advice that is unavailable from an employee of the university. More information about this type of supplier and how they must meet the university’s requirements can be found on Topic Overview: Purchase Services.
  • Visitor: An individual (domestic or international) who is invited to Stanford to speak, collaborate, and/or study. Visitors may be eligible for travel reimbursements and honoraria (as specified below). Learn more on the topic overviews for inviting and paying domestic and foreign visitors. This includes:
    • Human Subject is an individual who participates in research studies. Refer to Topic Overview: Paying Human Subjects for guidelines on how human subjects can be compensated. 
    • Honoraria are one-time gratuitous payments made as a gesture of goodwill and expression of appreciation for individuals who are speakers or contributors in special Stanford events (e.g., symposia, lecture series, or professional conventions). Honoraria may be paid for in-person or virtual activities. The individual may or may not be a Stanford employee. Payment methods vary by recipient type and payments are subject to taxation. When honorarium payments are made to non-Stanford employees, a supplier setup is required because these are considered taxable. Honoraria paid to Stanford employees should be processed as personal compensation through payroll. Learn more on the Topic Overview: Paying Honoraria.

Supplier lifecycle management is a comprehensive process to ensure that the university’s suppliers deliver valuable, high-quality products and services at reasonable costs and acceptable levels of risk. Management of a supplier includes two aspects: 

  • Maintaining valid and current information within the supplier record; and
  • Maintaining and monitoring the supplier relationship, which is driven by components of the contract and purchase order process, as noted below in the following five stages:
  1. Plan the Supplier Engagement: Schools and units should identify the key business needs that are driving a potential supplier engagement. This planning stage also involves defining the scope and timing of the engagement as well as considering the university’s existing purchasing methods, which may eliminate the need to onboard a new supplier. When the purchase will require a contract or purchase order, those planning considerations are part of this stage as well.
  2. Select the Supplier: During this stage, the school or unit selects a supplier in compliance with the university’s competitive supplier selection process and purchasing policies and processes. If the selected supplier is not currently active within Stanford’s system, the school or unit must submit a request to add or reactivate the supplier in the university’s centralized supplier database before creating a purchase requisition or requesting a contract.
  3. Onboard the Supplier: During this stage, Vendor Services will validate the record to ensure it is set up appropriately and that the supplier is eligible to do business with Stanford in compliance with university procurement policies and guidelines.
  4. Manage the Supplier Relationship and Record: After the supplier is onboarded, they are available in the system and can engage with the entire university community. As such, schools and units should help ensure that the supplier's record remains valid and current and that their interactions with that supplier are meeting the university’s standards and the terms of the contract or purchase order.
  5. Exit or Terminate the Supplier Relationship: The school or unit should work within the contract or purchase order process to end their purchase order or contract with a supplier. More broadly, the university’s centralized supplier database automatically deactivates a supplier if there have been no further purchase requisitions, payments, invoices or changes to the supplier record (university-wide) for a period of 18 months. At that point, the record would need to be reactivated in order to re-engage with that supplier. 

This page reviews the planning and selecting stages of supplier lifecycle management. Refer to Topic Overview: Setting Up a New Supplier or Payee for onboarding information and Topic Overview: Managing the Supplier Relationship and Record for more guidance. 

Supplier onboarding is the first step in the university’s process for creating supplier or payee records and is necessary before any request to contract can be submitted or any purchase from, or payment to, a supplier can be processed. It includes collecting and reviewing essential business information and ensuring the supplier's compliance with university policies, as well as local, state, federal, and (where required) international laws and regulations. Once the supplier is onboarded, they are available to the entire university. The supplier onboarding process helps protect the university from fraudulent supplier-related activity.

After reviewing existing supplier options and determining that a new supplier setup is needed, schools or units should consider how long it will take to set up a new supplier and when the engagement needs to start. Generally, new supplier or payee record request processing times vary based on the following factors:

  • If a contract or purchase order will be involved as overall processing times will increase
  • Accuracy and completeness of submitted documentation and other information about the supplier
  • Supplier’s responsiveness to inquiries and requests for documentation and other information
  • Verification of the supplier’s information
  • Complicating factors, such as
    • International supplier setup
    • Policy and compliance considerations (e.g., conflict of interest, tax, policy compliance)
  • Volume of new supplier or payee requests that Vendor Services is concurrently processing

Refer to Topic Overview: Setting Up a New Supplier or Visitor Payee to learn about the supplier setup process, depending on the type of supplier.

Please note: Before a school or unit can initiate and submit a purchase requisition/order or contract request, the supplier must have an active record in the university’s centralized supplier database.

Adhere to the University’s Competitive Supplier Selection Process
University policy requires that the purchase of products or services be by competition between suppliers to the extent possible based upon the total value, which includes considerations such as quality, price, and performance. Competitive purchasing practices include researching potential suppliers, their prospective solutions, and pricing. To advance Stanford’s ability to live its values, departments should leverage responsible purchasing practices whenever possible, taking into account the environmental and social impact of all purchases. 

Certain pricing agreements, such as those available from Amazon Business and SmartMart Catalog Suppliers, have been previously established through a competitive bid process so Stanford purchasers can buy goods and services without additional proof of competition.

Validation of Competition for Purchases $50,000 or Greater

Please note: The purchase amount that requires Procurement Services to validate competitive supplier selection for purchases of goods and services increased from $25,000 to $50,000 on May 6, 2024. Learn more
When purchasing a product or service with a cost of $50,000 or greater after taxes and fees, the purchase requisition must include documentation verifying that the requirement for competition has been met. This documentation is reviewed by Procurement Services before school or unit financial approval. There are two documentation options available, which can be attached to the purchase requisition in iProcurement: 

  1. In addition to the quote from the selected supplier, attach at least one or more competitive quotes, proposals, or bids from other suppliers. If the lowest cost bid is not selected, the form below is used to explain the total value and price reasonableness of the selected bid.

  2. When multiple quotes were not solicited, attach a completed single or sole source justification form.
    • A single source is a supplier specifically selected amongst others due to superior value, such as compatibility, quality, service, support, continuity, etc.
    • A sole source is a supplier for which there are no alternatives for their given product or service.

      The source justification should include a statement that demonstrates the unique qualifications of the product or service, a description of efforts made to locate other sources (suppliers), and documentation that the anticipated cost is fair and reasonable.

To support continued compliance with the university’s competitive supplier selection policy, schools and units can establish and/or maintain their own thresholds and process for the verification of competition for purchases below $50,000. To facilitate reviews and approvals that support competitive purchasing, schools and units can attach the above documentation options to any purchase requisition, regardless of cost. 

Proposal and Bidding Process

A Request for Proposal (RFP) is a formal process used to gather proposals from suppliers to solve a problem or issue and considers a broad range of criteria, including price, quality, methodology, and service delivery plans (e.g., suppliers submit proposals, including cost estimates, to provide catering services at an event for 50 people).   When requested by a university department,professional buyers in the Purchasing and Contracts department will assist with the RFP process.

An Invitation for Bid (IFB), which can be included in the RFP process, is generally used when the school or unit has a detailed, focused  set of criteria (e.g., detailed design drawings and specifications) and the supplier selection will be based mostly on the lowest bid received that meets such specifications. 

For assistance with the preparation of an RFP, please submit a support request.  Proposal or bid solicitations managed by the school or unit, without assistance from the Purchasing  department, must comply with federal, state, and local regulations, as well as university policies that pertain to hiring contractors and consultants. 

Typically, department requestors consult directly with a supplier representative regarding development of a specific statement of work or assistance in developing project specifications and how the supplier can deliver such project needs. 

A purchase order, contract, agreement, memorandum of understanding, letter of intent, or other document authorizing the project may only be executed by central Procurement with specifically delegated authority.

All university community members, including Stanford’s suppliers, must comply with university policy, including the Code of Conduct and policies on Conflict of Commitment and Interest and Faculty Policy on Conflict of Commitment and Interest

Relationships between Stanford and its suppliers or sponsors must be free of any real or perceived impropriety or favoritism. University community members should not solicit any gift and should not personally accept any material gift, gratuity, or payment, in cash or in kind, from any third party seeking to do business or currently doing business with the university. The School of Medicine has a special policy related to medical industry suppliers.

Some examples of circumstances that may create a conflict of interest:

  • A Stanford employee is also an employee, officer, or adviser of the supplier's organization.
  • A Stanford employee or immediate family member has a financial interest in the supplier.
  • A supplier offered, or a Stanford employee accepted, any gift or favor.

If a staff member is aware of conduct that violates, or anticipates a situation that potentially violates, university policies on Conflict of Commitment and Interest, that staff member must immediately disclose in writing the details of the situation, through their supervisor to the appropriate university officer or reach out to the Ethics & Compliance helpline. Exceptions to conflict policies must be approved in advance by the appropriate office in writing. 

Through the contract or purchase order process, schools and units will partner with Procurement Services to consider risk factors that are involved in selecting a new supplier. This includes considering the following questions:

  • Does the proposed engagement include any of the following?
  • Does the engagement create a critical dependency on the supplier’s products or services?

Through the supplier set up and onboarding process, Vendor Services will also conduct a risk assessment.

Vendor Services
The Vendor Services team can assist schools and units with assessing supplier setup requirements, risk, and other supplier engagement considerations. This team also assesses supplier-related risks to support financial stewardship and compliance to safeguard the Stanford community against fraud.

To receive this type of assistance from the Vendor Services team, submit a support request

Purchasing and Contracts
The Procurement Services Purchasing and Contracts team supports schools and units in the acquisition of high-quality products and services, which includes:

  • Working with university staff to ensure the effective management and delivery of quality procurement services.
  • Designing, implementing, and training university staff on effective procurement processes.
  • Maintaining suitable sources of supply by facilitating supplier outreach for department requirements and ensuring equal opportunity in university business contracting.
  • Establishing competition wherever practicable, including: 
    • Assisting in the development of procurement specifications 
    • Soliciting and processing RFPs
  • Conducting negotiations for legal terms and conditions to align with university policy, and where requested, price, scope, key service levels, and other business terms.
  • Where necessary, conferring with legal counsel.
  • Establishing annual price agreements and contracts in accordance with sound procurement practices, including participation in specialty contracts and consortium agreements.
  • Administering and maintaining purchasing records for federal, state, and internal policy compliance and audits.

To receive support on the acquisition of goods and services from the Purchasing and Contracts team, submit a support request

If the selection of a supplier per the above process is complete, and the supplier is not already setup in the university’s centralized supplier database, the school or unit should follow these steps to onboard a new supplier:

Last Updated: May 21, 2024