Procurement under a grant is more than buying at the lowest price. Donors may require competition, conflict-of-interest controls, approval thresholds, documentation and value-for-money checks. Your organization may also have its own procurement policy, and the stricter applicable rule may need to govern the purchase.
Before buying anything
- Confirm the item is in the approved budget or otherwise permitted.
- Check the procurement threshold and required number of quotations.
- Identify any donor prior-approval requirement.
- Document conflicts of interest.
- Define specifications before comparing suppliers.
Price is not the only factor
Value for money can include quality, delivery time, warranty, service support, total operating cost and supplier reliability. Record the selection criteria before the final decision so the file shows a fair process.
Build a complete procurement file
- Purchase request or specification.
- Quotations or tender documents.
- Evaluation record.
- Approval.
- Purchase order or contract.
- Delivery evidence.
- Invoice and payment evidence.
Watch for split purchases
Dividing one purchase into several smaller transactions simply to stay below a competitive threshold undermines the control and may violate policy.
The Award Absorption Capacity Check can help identify whether procurement systems are strong enough for the size and complexity of an award.
Practical rule
A good procurement file should allow someone who was not present to understand what was bought, why the supplier was selected and who approved the decision.
Frequently Asked Questions
Which procurement rules should an NGO follow?
Follow the grant agreement, applicable donor rules and the NGO’s own procurement policy. Where requirements differ, determine which stricter or donor-specific rule applies.
When are competitive quotations required?
The threshold and method should be defined in policy or donor rules. Higher-value or higher-risk purchases generally require stronger competition and documentation.
How should conflicts of interest be handled?
Staff and evaluators should disclose conflicts, recuse themselves where necessary and document the action taken to protect the integrity of the process.
What procurement documents should be retained?
Keep requisitions, approvals, quotations or bids, evaluation records, contracts, delivery evidence, invoices and payment records as applicable.
Can procurement exceptions be used?
Yes, but only where justified and permitted. The reason, approval and any donor requirement should be documented before or as soon as the exception occurs.
Conclusion
Grant procurement rules are designed to show that spending decisions were reasonable, fair and properly authorized. NGOs should make the required method clear before purchasing begins and retain enough evidence to explain how the supplier was selected and paid.
Put this guide into practice
Free resource: The Funding Checklist. Use this free guide to apply the article’s advice to your next funding decision or application.
Optional paid resource: Nonprofit Grant Proposal Templates. Proposal, concept note, budget, logframe, M&E and donor-document starting points. Review the product details and current price before purchasing.
