No. 5-25h

Rev. 10-14-97

Date 2-23-83

 

I. PURPOSE

 

 

To outline University policy and procedures relating to procurement of supplies, services and construction from a business firm in which a University officer or employee has an interest.

II. REFERENCES

• Utah Public Officers' and Employees' Ethics Act, 1953 Utah Code Annotated, SS67-16-1 et. seq.
• Utah Procurement Code, 1953 Utah Code Annotated, SS63-56-1 et. seq.
• PPM 3-36, Conflicts of Interest
• PPM 5-25a, University Procurement

III. DEFINITIONS

A. Business Entity

A sole proprietorship, partnership, association, joint venture, corporation, firm, trust, foundation or other organization or entity used in carrying on commercial business activities for profit-making purposes.

B. Compensation

Anything of economic value however designated which is paid, loaned, granted, given, donated or transferred to any person or business entity for or in consideration of personal services, materials, property or any other thing whatsoever.

C. Substantial Interest

1. The ownership, either legally or equitably, by an individual, his/her spouse or his/her minor children, of at least ten percent of the outstanding capital stock of a corporation or ten percent interest in any other business entity; or

2. The holding of a position in a business entity as an officer, director or employee.

D. Transaction

A formal or informal contract or agreement, express or implied, to which the University is a party that involves any transfer of consideration or payment of compensation.

E. University Officer or Employee

A person permanently employed by the University on full- or part-time basis; this does not include members of the Board of Trustees or of any other advisory commission, board or committee serving on a part-time basis.

IV. POLICY

A. It is the policy of the University to comply fully with all applicable provisions of the Utah Public Officers' and Employees' Ethics Act. (See PPM 3-36) The statements of detailed policies and procedures set forth herein are intended to provide notice to the University community of the requirements of that Act as applied to the procurement of supplies, services and construction pursuant to the Utah Procurement Code, as amended, and related University regulations. (See PPM 5-25a to 5-25i inclusive)

B. Scope

1. The policies and procedures set forth herein apply to all transactions (including small purchases and emergency procurement transactions -- see PPM 5-25c) to which the University, or any department or operating unit of the University, is or may be a party without regard for the amount of consideration to be paid thereunder or the source of funding.

2. For the purpose of applying the policies and procedures herein set forth, any reference to "director of Purchasing" shall be construed to mean University director of Purchasing or, when appropriate, the responsible officer of any University department or operating unit that is authorized to engage in contracting or procurement activities without going through the Purchasing Department. (See PPM 5-25a, IV, B)

C. Prohibitions

1. A University officer or employee is forbidden to participate in his/her official capacity with respect to any transaction between the University and a business entity in which the officer or employee has a substantial interest.

2. A University officer or employee is forbidden to receive compensation (in addition to regularly budgeted salary or wages for services to the University) as a result of, or in connection with, any transaction between the University and a business entity in which the officer or employee has a substantial interest.

V. PROCEDURES

A. Duty of Disclosure

It is the duty of every University officer or employee to disclose to his/her immediate supervisor and to the University director of Purchasing the existence of a substantial interest which he/she has in any business entity which the officer or employee knows or has reason to believe may submit a bid or sealed proposal for, or otherwise seek to enter into, a transaction with the University.

B. Procurement Procedure

1. The Purchasing Department shall process requisitions in accordance with established University procurement procedures and shall attempt to secure bids or proposals from, and to negotiate with, qualified vendors including vendors in which the existence of a substantial interest on the part of a University officer or employee has been disclosed or otherwise called to the attention of the purchasing agent.

2. All bids and proposals and the proposed terms and conditions of all negotiated agreements shall be subjected to technical and price evaluation in accordance with established University procurement criteria and procedures, provided, however, that the director of Purchasing and all other personnel involved in the evaluation and award process must take appropriate steps to assure that there is no participation therein, direct or indirect, by any University officer or employee who is known to have a substantial interest in any business entity whose bid or proposal is under consideration.

3. If the director of Purchasing determines that in the best interest of the University and in accordance with established criteria the proposed procurement contract should be awarded or entered into with a business entity in which a University officer or employee is known to have a substantial interest, the following steps must be taken before the contract is executed:

a. If the proposed contract price will be paid in whole or in part with funds derived from a federal contract or grant, the proposed contract must be submitted to the office of Grants & Contracts together with a statement of the circumstances and a request that any required waivers be obtained from the cognizant federal officers or agencies permitting the contract to be entered into as proposed. In such cases the contract may not be executed on behalf of the University until the director of Purchasing has received a written memorandum indicating that the requested waivers have been granted.

 

b. In all cases, the director of Purchasing must request and receive from the University officer or employee who has a substantial interest in the business entity designated as a party of the proposed contract a duly executed affidavit in substantially the following form:

I, (name) , hereby declare that in my official capacity, I have not participated in, and that I have not and will not receive compensation (other than my regularly budgeted salary or wages from the University) as a result of, or in connection with, proposed contract (or purchase order) number .

(date) (signature)

C. Remedies

If any transaction is entered into in violation of the policies and procedures set forth herein:

1. The officer or employee who violated the prohibitions specified in section IV, C or who knowingly executed and submitted a false affidavit when requested under section V, B, 3, b shall be subject to appropriate disciplinary action including possible dismissal from University employment as provided in the Utah Public Officers' and Employees' Ethics Act.

2. The University shall have the right to rescind or nullify any contract or subcontract entered into in respect to such transaction or subcontract entered into in respect to such transaction without returning any part of the consideration that may have been received by the University pursuant thereto.