This page covers the processes and best practices for selecting a supplier or independent contractor. Schools and units that have already selected a supplier or independent contractor should refer to Topic Overview: Setting Up a New Supplier, Independent Contractor, or Visitor for guidance on setting up, updating, and using their records.
Stanford engages with a wide range of external suppliers (also referred to as vendors) and independent contractors to provide the goods and services necessary to support its mission.
Schools and units are generally free to choose suppliers or independent contractors who meet their business needs, provided they comply with university policy and standards for financial stewardship, ethics, and risk management.
The overarching policies governing how suppliers and independent contractors 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 or independent contractor setup, schools and units should review the many existing methods to purchase goods and/or services. The table below includes examples of needs that do not require setting up a new supplier or independent contractor. Refer to Topic Overview: Categories of Purchases for more guidance on specific types of purchases.
| Need | Recommendation |
|---|---|
| Purchase common goods or services | Catalog options offered by pre-onboarded suppliers:
|
| Purchase goods or services through existing suppliers or independent contractors | Check Stanford’s non-SU payee database, which has approximately 20,000 active records for suppliers, independent contractors, and visitors. Schools and units can use the Supplier Query and Request tool to search for existing records for use in SmartMart Contracts or Non-Catalog requests. |
| Purchase goods or services from suppliers that already have a University-Wide Agreement | The Procurement Services team manages hundreds of University-Wide Agreements (MSAs) with existing suppliers, which can be viewed in the SmartMart Contracts system. 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 automatically manages associated visitor records. |
| Hire a temporary worker | Cardinal Temps is managed by University Human Resources (UHR) and is the centralized program for temporary workers. |
| 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. |
| Small dollar purchases eligible for PCard or TCard |
|
Supplier lifecycle management is a comprehensive process to ensure that the university’s suppliers and independent contractors deliver valuable, high quality products and services at reasonable costs and acceptable levels of risk. Management of a supplier or independent contractor includes two aspects:
- Maintaining valid and current information within the supplier or independent contractor record; and
- Maintaining and monitoring the supplier or independent contractor relationship, which is driven by components of the contract and purchase order process, as noted below in the following five stages:
- Plan the Engagement: Schools and units should identify the key business needs that are driving a potential supplier or independent contractor 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 or independent contractor. When the purchase will require a contract or purchase order, those planning considerations are part of this stage as well.
- Select the Supplier or Independent Contractor: During this stage, the school or unit selects a supplier or independent contractor in compliance with the university’s competitive supplier selection process and purchasing policies and processes. If the selected supplier or independent contractor is not currently active within Stanford’s system, the school or unit must submit a request to add or reactivate the supplier or independent contractor in the university’s centralized non-SU payee database before creating a purchase requisition or requesting a contract.
- Onboard the Supplier or Independent Contractor: During this stage, Vendor Services will verify the record to ensure it is set up appropriately and that the supplier or independent contractor is eligible to do business with Stanford in compliance with university procurement policies and guidelines.
- Manage the Relationship and Record: After the supplier or independent contractor 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 or independent contractor's record remains valid and current and that their interactions with that supplier or independent contractor are meeting the university’s standards and the terms of the contract or purchase order.
- Exit or Terminate the Relationship: The school or unit should work within the contract or purchase order process to end their purchase order or contract with a supplier or independent contractor. More broadly, the university’s centralized non-SU payee database automatically deactivates a supplier or independent contractor if there have been no further purchase requisitions, payments, invoices or changes to the supplier or independent contractor 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 or independent contractor.
This page reviews the planning and selecting stages of supplier lifecycle management. Refer to Topic Overview: Setting Up a New Supplier, Independent Contractor, or Visitor for onboarding information and Topic Overview: Managing the Supplier or Independent Contractor Relationship and Record for more guidance.
Onboarding is the university’s process for creating the records needed to process a contract or make payment to a supplier or independent contractor. This includes collecting essential information and carefully vetting the individual or entity to protect the university from risk and ensure their compliance with university, local, state, federal, and (where applicable) international policies and regulations. Once the supplier or independent contractor is onboarded, they are available to the entire university.
- To prepare for the onboarding process, schools or units should consider how long it will take to set up a new supplier or independent contractor and ensure lead time from when the engagement needs to start. Generally, new record request processing times vary based on the following factors:
- Supplier's or independent contractor's responsiveness to inquiries and requests
- Accuracy and completeness of submitted information and documentation
- Complicating factors, such as
- International supplier or independent contractor setups, which may require more or different information to comply with regulations and university obligations
- Policy and compliance considerations (e.g., conflict of interest, tax, policy compliance)
- Current request volume, which varies throughout the year and tends to increase before new academic quarters, around Commencement, and at the end of fiscal and calendar years
Refer to Topic Overview: Setting Up a New Supplier, Independent Contractor, or Visitor to learn about the non-SU payee setup process, depending on the type of non-SU payee.
Please note: Before a school or unit can initiate and submit a purchase requisition/order or contract request, the supplier or independent contractor must have an active record in the university’s non-SU payee database.
University policy requires that the purchase of goods or services be by competition to the extent possible based upon the total value, which includes considerations such as quality, price, and performance. Competitive purchasing practices include researching and comparing multiple providers of the goods or services, 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.
A robust, competitive, and diverse supply base is essential to power the university and offers greater agility, innovation, and value. Departments can contact the Stanford Supplier Diversity Program to learn more about how to include diverse suppliers or independent contractors in their selection process.
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 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:
- In addition to the quote from the selected supplier or independent contractor, attach at least one or more competitive quotes, proposals, or bids from other suppliers or independent contractors. If the lowest cost bid is not selected, the form below is used to explain the total value and demonstrate price reasonableness of the selected bid.
Or
- When multiple quotes were not solicited, attach a completed single or sole source justification form.
- A single source is a supplier or independent contractor specifically selected amongst others due to superior value, such as compatibility, quality, service, support, continuity, etc.
- A sole source is a supplier or independent contractor for which there are no alternatives for their given product or service, or there are other factors.
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 or independent contractors), 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 purchase amounts and process for the verification of competition for purchases below $50,000 and 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 or independent contractors 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 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 the supplier representative or independent contractor regarding development of a specific statement of work or assistance in developing project specifications and how the project needs would be delivered.
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 and independent contractors, 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 independent contractors 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 or independent contractor 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 officer 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 or independent contractor. This includes considering the following questions:
- Does the proposed engagement include any of the following?
- Access to Stanford’s high-risk data, which may require a Data Risk Assessment
- Data, materials, or activities subject to export controls and overseen by the Office of Export Controls
- Activities governed by laws or regulations, such as HIPAA
- Hazardous materials or equipment subject to Environmental Health & Safety procedures
- Does the engagement create a critical dependency on the supplier’s or independent contractor's goods or services?
Through the onboarding process, Vendor Services will also conduct a risk assessment to screen for and address potential issues.
Vendor Services
The Vendor Services team can assist schools and units with assessing supplier or independent contractor setup requirements, risk, and other engagement considerations. This team also assesses supplier and independent contractor-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 and independent contractor 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 or independent contractor per the above process is complete, and the supplier or independent contractor is not already set up in the university’s non-SU payee database, the school or unit should follow these steps to onboard a new supplier:
- Proceed to Topic Overview: Setting Up a New Supplier, Independent Contractor, or Visitor for guidance on submitting a request to create a non-SU payee active record in the university’s database.
- Refer to Topic Overview: Managing the Supplier or Independent Contractor Relationship and Record for more details on managing the supplier or independent contractor relationship and non-SU payee record after they have been set up and are active in the Supplier Query and Request System.
- Determine whether a contract will be required. Refer to Topic Overview: Contracts for guidance on the procurement contracting process at Stanford.
- Refer to Topic Overview: Purchase Orders to initiate the purchase requisition and purchase order process.
