Supplier Selection SOP Template

1.Purpose

To select new suppliers through a consistent, documented process that compares options fairly on price, quality, capacity and risk before committing to a contract.

2.Scope

Applies to sourcing and selecting a new supplier for a good or service category not already covered by an approved supplier. Ongoing supplier performance evaluation is covered by a separate SOP.

Definitions

RFQ

Request for Quote, a solicitation asking suppliers to submit pricing for defined items or services.

RFP

Request for Proposal, a broader solicitation asking suppliers to propose a solution, often for complex services.

Scoring matrix

A structured tool used to score and compare supplier bids against weighted criteria such as price, quality and delivery.

Supplier onboarding

The process of setting up an awarded supplier in company systems, including tax, banking and compliance documentation.

3.Responsibilities

Category Buyer

Defines requirements, runs the solicitation, and scores supplier bids.

Procurement Manager

Approves the solicitation approach, reviews scoring, and approves the final supplier award.

Stakeholder Requester

Provides technical or business requirements and participates in bid evaluation for their category.

Compliance Officer

Reviews the awarded supplier's compliance documentation, insurance and risk profile before onboarding.

RACI matrix

R = Responsible, A = Accountable, C = Consulted, I = Informed

4.Materials and PPE

Materials, tools and systems

• →RFQ or RFP template
• →Scoring matrix with weighted criteria
• →Supplier compliance and insurance checklist
• →Supplier onboarding form
• →Bid comparison spreadsheet
• →Contract or master services agreement template

5.Procedure

1. 5.1

   Define the requirement

   Category Buyer

   Work with the stakeholder requester to define the specific item, service level, quantity, timeline and any technical specification needed before sourcing suppliers.

2. 5.2

   Set the evaluation criteria

   Category Buyer

   Define the scoring matrix criteria such as price, quality, lead time, capacity and risk, and assign a weight to each based on what matters most for this category.

   Checkpoint: Evaluation criteria and weights are finalized before any bid is received, not adjusted afterward.

3. 5.3

   Identify candidate suppliers

   Category Buyer

   Identify a shortlist of candidate suppliers through market research, referrals or an existing supplier database, aiming for enough candidates to create real competition.

4. 5.4

   Issue the RFQ or RFP

   Category Buyer

   Send the RFQ or RFP to shortlisted suppliers with a clear deadline, required format for responses, and the specifications defined earlier.

5. 5.5

   Answer supplier questions consistently

   Category Buyer

   Answer clarifying questions from suppliers during the bidding period, and share any material clarification with all participating suppliers to keep the process fair.

   Warning: Never share one supplier's pricing or proposal details with a competing supplier during an active solicitation.

6. 5.6

   Collect and log bids

   Category Buyer

   Collect all bids by the deadline and log them in the bid comparison spreadsheet, noting any bid received late or incomplete.

7. 5.7

   Score the bids

   Category Buyer

   Score each bid against the weighted criteria in the scoring matrix, involving the stakeholder requester for technical or quality-related scoring.

8. 5.8

   Shortlist top bids for negotiation

   Category Buyer

   Identify the top-scoring bids and negotiate on price, terms or scope where there is room to improve the offer before a final decision.

9. 5.9

   Review compliance and risk

   Compliance Officer

   Review the leading candidate's compliance documentation, insurance coverage and any available risk or financial stability information before recommending an award.

   Checkpoint: Compliance and insurance documentation is reviewed and cleared before a supplier is awarded the contract.

10. 5.10

    Approve the supplier award

    Procurement Manager

    Review the final scoring, negotiation outcome and compliance review, and approve the supplier award and contract terms.

11. 5.11

    Notify suppliers of the outcome

    Category Buyer

    Notify the winning supplier to begin contracting, and notify unsuccessful bidders that the opportunity has been awarded, without disclosing competitors' pricing.

12. 5.12

    Onboard the new supplier

    Category Buyer

    Complete supplier onboarding, including tax and banking setup, adding them to the approved supplier catalog, and scheduling the first performance review checkpoint.

6.Quality checks

• →Evaluation criteria and weights are set before bids are received.
• →All participating suppliers receive the same clarifications during the solicitation.
• →Compliance and insurance documentation is cleared before a supplier is awarded.
• →The awarded supplier is added to the approved catalog only after onboarding is complete.

7.Records

• →RFQ or RFP documents
• →Bid comparison and scoring matrix
• →Compliance and insurance review results
• →Supplier award and onboarding records

8.KPIs

• →Average time from requirement defined to supplier awarded
• →Number of qualified bids received per solicitation
• →Percentage of awards going to the top-scored bid
• →New supplier onboarding completion time

9.Common mistakes

• →Changing evaluation criteria after bids have already been received.
• →Sharing one supplier's proposal details with a competing bidder.
• →Awarding a contract before compliance and insurance review is complete.
• →Skipping formal scoring in favor of an informal, undocumented decision.

10.Revision history