Employee-Vendor Relationships and Conflict of Interest

(Policy MM0003)

I.  Purpose/Scope of the Policy

The State of California Political Reform Act prohibits an employee from making or participating in the making of a decision if there exists a financial conflict of interest.  It is the policy of the University to separate an employee’s University and private interests, and to safeguard the University and its employees against charges of favoritism in acquisition of goods and services.  This policy describes restrictions on (A) the purchase of goods and services involving participation in purchasing decisions by employees, and (B) purchases of goods and services from (1) employees, (2) employee-owned businesses, (3) near relatives or (4) businesses owned by near relatives.

II.  Detailed Policy Statement

A.  Participation In Purchasing Decision

No employee of the University shall make, participate in, or attempt to influence any decision if the employee knows or has reason to know that he/she has a financial interest in the outcome of that decision.

B.  Purchases From Employees

Purchases, lease/rent of goods, or contracts for services shall not be made from any employee unless there has been a specific determination by the Director of Materiel Management that the goods or services are not available either from commercial sources or from the University’s own facilities.

C.  Purchases From Employee-Owned Businesses

Purchases, lease/rent of goods, or contracts for services shall not be made from any business which is owned or controlled more than 10% by an employee, unless there has been a specific determination by the Director of Materiel Management that the goods or services are not available either from commercial sources or from the University’s own facilities.

D.  Purchases From Near-Relatives Of An Employee Or From Business Owned By Near Relatives Or Employees

Purchases, lease/rent of goods, or contracts for services shall not be made from any near relative of an employee, or from any business which is owned or controlled more than 10% by a near relative of an employee if the employee has any responsibility for, will be involved in, or is in a position to influence the departmental decision to accomplish or approve the transaction unless there has been a specific determination by the Director of Materiel Management that the goods or services are not available either from commercial sources or from the University’s own facilities.

E.  Procedures

1. Approval:  The Employee Vendor Conflict of Interest Evaluation Form must be completed by any employee who proposes, or whose near relative proposes, to rent or sell goods or provide services to the University.  Before a purchase or rental of goods or services can be made from a university employee or near relative, the Director of Materiel Management must review and approve this form.  Once approved the form may remain in effect for no more than 12 months.

2.        Exceptions:  The Vice Chancellor of Business and Administrative Services may, within constraints imposed by the Political Reform Act, approve exceptions to this policy when unusual or extenuating circumstances exist.

III.  Definitions

Employee:  Any individual who is presently employed by the University.

Near Relative:  Spouse, child, parent, brother, sister, grandparent, grandchild, or in-laws and step-relatives in the same relationship.

Employee-Vendor Relationship:  A relationship in which:

·         An employee proposes to rent or sell goods or to provide services to a University department; or

·         A business owned or controlled more than 10% by an employee proposes to rent or sell goods or to provide services to a University department; or

·         A near relative of an employee proposes to rent or sell goods or to provide services to a University department, and the employee has, in any connection with his or her University employment, any responsibility for, or will be involved in any manner in, the departmental decision to accomplish or approve the transaction; or

·         A business owned or controlled more than 10% by near relative of an employee proposes to rent or sell goods or to provide services to a University department, and the employee has, in any connection with his or her University employment, any responsibility for, or will be involved in any manner in, the departmental decision to accomplish or approve the transaction

IV.  Getting Help

The campus Conflict of Interest Coordinator and Central Purchasing provide training and assistance to campus units (including help with completing forms, carrying out procedures, or interpreting policy).

V.  Applicability and Authority

This policy on Employee-Vendor Relationships and Conflict of Interest applies to all campus purchasing activities.

It is a new policy and thus supersedes any campus practices in existence prior to its effective date.

The campus Conflict of Interest Coordinator is the authority on Conflict of Interest.  The Director of Materiel Management is the campus authority for the Employee-Vendor Relationships and Conflict of Interest policy.  This policy was reviewed and approved by the Chancellor on June 12, 1997.  Next review date is January 1999.

VI.  Related Policies/References for More Information

Related Policies and Procedures

UC Business & Finance Bulletin BUS-43
University of California Conflict of Interest Code G-39

Related Forms

Employee Vendor Conflict of Interest Evaluation Form

References

UCSC Delegation of Authority 
UCOP Policy Regarding Employee-Vendor Relationships, dated August 19, 1982
UCOP Delegation DA 0777:  Policy Regarding Employee-Vendor Relationships
President Saxon to Chancellor et al., dated March 25, 1983

UC Santa Cruz Policy  
Employee-Vendor Relationships and Conflict of Interest: MM0003  
Effective Date:  June 12, 1997  
Central Purchasing:  lrose@cats.ucsc.edu; (408) 459-2084