The Value of Preferred Supplier Agreements

17 February 2022

This article has been edited March 11, 2022 to update "two-quote" to "multiple-quote" terminology.

To support the community as we move closer to the April 1, 2022 implementation date of changes to the purchasing process, Procurement and Contract Management (PCM) will continue to distribute regular communications through the Quad on the following five critical process changes: (1) mandatory use of Preferred Supplier Agreements (PSAs), (2) clear understanding and use of university purchasing methods, (3) multiple-quote process for non-PSA vendor purchases between $20,000 - $75,000, (4) discretionary oversight for Request for Proposals (RFPs), and (5) process identification for Contract for Services. For more information, please refer to our previous articles Purchasing Goods and Services at the U of A and A New Direction for Procurement & Contract Management.

In an earlier article, Purchasing Goods and Services at the U of A, we shared information on the four purchasing methods available at the university: purchase order for PSA vendors, purchase order for non-PSA vendors, Corporate Purchasing Card (PCard), and Request for Proposal (RFP). This week we will focus on the value and benefits of using preferred suppliers, identify goods and services available through a Preferred Supplier Agreement (PSA), and share how to place an order. One key change that will be implemented as of April 1, 2022, is the mandatory use of Preferred Suppliers Agreements.

Purchase orders for PSA vendors


Purchasing goods and services

The following four methods are available to facilitate a purchase at the U of A.

  1. Purchase order for PSA vendors (what we are talking about in this article): used when purchasing goods, services, and construction of any value through the Preferred Suppliers in SupplyNet.
  2. Purchase order for non-PSA vendors: used when purchasing goods, services, and construction of any value up to $75,000 through the non-PSA vendors in SupplyNet. Purchases between $20,000 - $75,000 require multiple quotes or single-source justification.
  3. Corporate purchasing card (PCard): used for purchases below $5,000 and when the product is not available through the Preferred Suppliers.
  4. Request for Proposal (RFP): Used for purchases of goods and services equal to or greater than $75,000 and construction equal or greater than $200,000.

Preferred Suppliers are vendors that have been awarded a contract through a competitive bid process for use by all departments, faculties and units at the University of Alberta. This provides a high level of cost-saving opportunities as opposed to buying retail from various suppliers. In most circumstances, Preferred Supplier Agreements (PSA) offer cost-effective and efficient processes for repetitively purchased goods and services by leveraging the university's purchasing power to lower the total cost of goods and services, including the transaction-processing costs for equipment such as office furniture, computer equipment, and office and lab supplies. Our preferred supplier agreement savings vary from vendor to vendor, but in most situations, you can expect an overall savings of 3% to 10%.

On rare occasions, lower pricing may be available through alternative suppliers. This can occur when a competitor vendor is attempting to secure business from the university. They will offer increased discounts to try and get the university to change its supplier base. This pricing is not sustainable and will only be available for a limited time.

In other circumstances, lower pricing can occur when a vendor is completing a "selloff". This happens consistently with airlines. The airline needs to fill the flight and will offer the last few seats at a reduced price. In all instances, please notify Procurement and Contract Management through our email at We will reach out to our preferred supplier and investigate if the vendor will match or adjust their pricing.

Benefits and Savings in Using Preferred Suppliers

Preferred Suppliers should always be the first choice when looking to purchase goods and services. In all purchasing situations, the total cost of ownership needs to be considered. Our preferred suppliers provide free shipping to the university's central receiving area, extended warranties, and hassle-free returns. They are also set up in SupplyNet to process and expedite invoicing seamlessly through the system and without paper invoicing. Additional benefits of using a PSA include:

  • Competitive pricing and discounts
  • No requirement for multiple quotes
  • Streamlined ordering through SupplyNet
  • Negotiated warranties (extended terms and conditions)
  • Designated vendor contact for escalation and questions
  • U of A equipment standardization
  • Compliance with the university's Procurement Policy
  • Defined return process

There are negative financial impacts when a Preferred Supplier Agreement (PSA) is not used. The university faces additional costs in the following two ways: there is an increased cost of goods and services and an increased work effort to complete the full purchasing lifecycle. This leads to an additional lifecycle cost on each transaction. Lifecycle costs include additional administrative costs for processing returns, negotiating warranties, processing credits, and processing invoices. In addition to these processing costs, the individual requiring the goods or service must identify a vendor, purchase the goods, expense the purchase, and arrange for delivery to a campus location. All of these factors add substantial cost to the purchasing lifecycle.

To prepare for the April 1, 2022 implementation of changes to U of A purchasing processes, Procurement and Contract Management (PCM) is currently redesigning the Finance, Procurement and Planning website in order to provide easy access and enhanced visibility to our Preferred Suppliers. The redesigned web pages will include a description of products and services searchable by commodity, the ordering method for each supplier, key benefits, supplier contact information in case of returns, order status and cancellations, delivery information, warranty information, and other order related inquiries. Stay tuned for updates.

Ordering through SupplyNet

SupplyNet is the university's web application (e-procurement platform) for purchasing and paying for goods and services. Currently, the university has 16 Preferred Supplier Punchout Catalogues with preferred university pricing and streamlined ordering and invoicing. A "punchout" allows a user to "shop" the approved online catalogues of our Preferred Suppliers, add items to a shopping cart, submit requisitions electronically for approval, and create purchase orders which are then sent electronically to suppliers.

A variety of goods and services are available and include office supplies, lab equipment, and shredding services. The table below provides a sampling of commodities available through our Preferred Suppliers in SupplyNet. For a comprehensive list of our preferred suppliers and available commodities, visit the Preferred Supplier Agreement Contract List.


Goods and services available through our preferred suppliers

Visit the Preferred Supplier Agreement Contract List for a full list of available commodities.

  • Athletic apparel
  • Audio and visual
  • Campus signage
  • Catering
  • Computer equipment
  • Furniture
  • Lab supplies
  • Moving services
  • Multi-function devices
  • Office supplies
  • Shredding
  • Travel

We recommend at all times beginning your purchase through our Preferred Suppliers and using the alternate purchasing methods available: purchase order for non-PSA vendors, Corporate Purchasing Card (PCard), and Request for Proposal (RFP) when the goods or services are not available through a PSA vendor.

If a preferred supplier for your specific good or service is unavailable, you can complete a Freeform Requisition in SupplyNet with another supplier. Note: If the dollar amount is below $5000 you may find an alternative supplier and complete the purchase on a university-issued corporate purchasing card.

It is recommended that departments authorize the following:

  • SupplyNet Requester Access for employees who anticipate placing 5+ SupplyNet Orders annually from Preferred and/or other Suppliers. 
  • A Corporate Purchasing Card for employees who regularly purchase low dollar goods or services that are not available from Preferred Suppliers and that do not require a SupplyNet PO.

Individuals who procure infrequently and do not require the above access are encouraged to work with their Academic Department Manager, Faculty General Manager (for non-departmentalized faculties), or supervisor to determine the process to purchase goods and services.

Product Availability

Worldwide events including the pandemic, catastrophic weather events, and shipping supply disruptions have affected the supply chain. The impact of these events falls into three primary purchasing commodity categories: vehicles, glassware (used in lab supplies), and chips included in multi-functional devices (this includes computers, laptops, printers and photocopiers).

The current risk to the U of A includes an increase in costs, delays in delivery time, and the inability to source many commodities. To date, these risks have been monitored, mitigated, and managed by PCM.

It is expected these risks will continue in the coming year and beyond into 2023; PCM will continue to monitor the effect of these risks and will work directly with units to expedite the purchasing process.

A Note on Expense Reimbursement

Expense Reimbursement (ER) is not a purchasing method supported at the university. The use of ER is limited to purchases below $500 in the following situations: remote locations, cash economies, and emergency situations. In all circumstances, personal financial resources including cash, personal credit card, and debit cards may only be used when other university purchasing methods have been exhausted (SupplyNet, Corporate Purchasing Card (PCard), and Petty Cash). For example, office supplies can only be purchased with a PCard or through SupplyNet. The use of a personal credit card to complete a purchase of office supplies is ineligible through the expense reimbursement process.

Connect with us

For questions on purchasing methods and processes, please contact Finance, Procurement and Planning (FPP), previously referred to as Supply Management Services (SMS), by email at or visit our website.