Guiding Principles of Procurement

Procurement is the business function concerned with Sourcing and Acquiring (Purchasing) the goods and services from an external source to support the operational activities that are vital to an organization in accordance with the quality, quantity and timeframe at the best price with applied risk management control.

Procurement Objectives are generally represented in 10 R’s as shown below :

Procurement is involved in supplier selection, evaluation, negotiation, contracts sign off and awarding business to suppliers and usually have control over large sums of money that an organization spends.

When interacting with suppliers, procurement should treat them in fair and unbiased manner. Therefore, Ethics play a major role in procurement and are considered more important in conducting business that helps in establishing a long-term relationship and goodwill with suppliers and sustainable image in the public. It’s not only for Organization as a whole, but also reflects individual Procurement Professionals who earns a reputation within an industry, as Brand Stamping.

Failing to abide to ethical practices can lead to immoral and illegal practices such as bribery, favoritism, illegal sourcing etc. and any such unethical behavior will have a negative impact on the brand image of the organization and individuals.

Procurements are Conducted based on certain Guiding Principles which establish the Fundamental Norms, Rules, or Ethics that represent what is desirable (values) and affirmative of the profession and help to determine the rightfulness or wrongfulness of the actions.

These Guiding Principles are based on certain Values and in fact are more explicit than values, and are meant to govern action.

The principles are intended to guide the professional practice of procurement. Of course, no statement of principles can anticipate all situations that arise in the practice of procurement. However, principles are not just guidelines for action when something goes wrong or when a dilemma is found. Rather, principles should proactively guide the behaviours of professionals in everyday practice.

The principles are broadly intended to cover all levels and variations of procurement.

Procurement Operations shall be carried out in accordance with the basic principles. These principles are intended to set the standard of practice for procurement professionals. Some of Standard Practicing Principle are stated below: