Why do quotations matter?
Quotations are the simplest proof that you paid a fair price. Without them, nobody can tell whether a purchase was good value or a favour. Donors expect competition, and auditors ask to see it.
Too many quotations also cost money. If every pen purchase needs three written offers, staff waste days and suppliers stop answering. The skill is to match the effort to the size and risk of the purchase.
What is the usual structure?
Most NGOs use a short table of bands. The amounts below are examples only. Set yours from your own budget size and your donors’ rules.
| Total purchase value | Typical method |
|---|---|
| Small, routine | Direct purchase; a price check or one quotation |
| Medium | Three written quotations |
| Large | Formal invitation to tender with written criteria |
| Very large | Formal tender plus a committee to evaluate and award |
Notice the word “total”. Use the full cost: tax, transport, installation and any training. Compare the same total across offers, not only the unit price.
Our article on approval limits for NGO procurement shows how to line up quotation bands with approval bands, so one set of numbers covers both.
How to decide the thresholds
- Collect the donor rules. Write down what each active donor requires and for which value. Do not rely on memory; read the agreement or the donor’s procurement guidance.
- Take the stricter rule. If a donor needs more competition than your policy, use the donor’s rule for purchases charged to that grant.
- Check last year’s purchases. See how many fall into each band. If almost all purchases land in the “three quotations” band, the band may be set too low.
- Put edges in one place. Use the same value for the quotation edge and the approval edge where you can. People remember fewer numbers.
- Publish and date the table. Put it in the policy with a version and an effective date.
Laws and donor rules differ by country and by agreement. Check the rules that apply to you instead of copying a number from another organization.
How to run a fair quotation round
A round is fair when every supplier answers the same question.
- Write the specification. Describe quantity, quality, delivery place, date and payment terms. Avoid brand names unless you add “or equal”.
- Invite suppliers. Send the same request, at the same time, to at least the number your rule needs.
- Set a closing date and time. Accept nothing after it.
- Open the offers together. Two people look at them at once, so nobody can change them.
- Compare like with like. Put offers in one table: price, delivery time, validity, warranty, payment terms.
- Choose and explain. Lowest price is common, but write the rule you used. If you did not pick the lowest, say why.
- File the lot. Keep every offer, including the ones you rejected.
What if you cannot get enough quotations?
It happens. Remote areas may have one shop. Specialist goods may have one dealer. Emergencies leave no time.
Do not fill the gap with invented quotes. Write a short exception note:
- what you needed and by when,
- which suppliers you contacted,
- why fewer replied than the rule needs,
- who approved the exception, and when.
A suspicious pattern is the opposite: three quotations that look alike, share formatting or arrive at the same minute. Treat that as a reason to look closer, as it can signal that the suppliers are linked or that someone prepared the offers.
What other points do comparisons miss?
- Supplier checks. The cheapest offer is not good value from a supplier that cannot deliver. See our article on checking suppliers before you buy.
- Whole-life cost. A cheaper generator may cost more in fuel.
- Splitting. Dividing one need into several smaller orders to avoid a band is a breach of the rule.
- Repeat buys. If you buy the same item every month, a framework agreement may be better than repeated quotation rounds.
Where EMPOBase fits
EMPOBase Procurement links each request to a project and budget line, sends it through approval levels L1 to L5 that your organization sets, and records who approved, when and any note. Vendors are kept in a register, and Vendor Scorecard keeps supplier performance on the record, which helps when you choose between offers. EMPOBase does not run quotation rounds or decide the number of quotations for you, so your policy sets that rule. Read how the chain works on the procure-to-pay workflow page.