Policies and Procedures

Procurement from Vendor In which College Employee has an Interest


Chapter: 2

Section: 10.07

Computer Index Code: C2S10.07

Origination Date: 5/22/84

Inst. Council Approval Date: 10/10/84

Subject: Chapter 2 BUSINESS--VP FOR BUSINESS
Section 10.07 PROCUREMENT FROM VENDOR IN WHICH COLLEGE EMPLOYEE HAS AN INTEREST

  1. PURPOSE

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

  2. PURPOSE

    Utah Public Officers' and Employees' Ethics Act, 1953 Utah Code Annotated, 67-16-1 et.seq.

    Utah Procurement Code, 1953, Utah Code Annotated, 63-56-1 et. seq.

    Policy and Procedure 9.0 College Procurement - General

    Policy and Procedure Chapter III Section 3.5 Conflict of Interest

    Policy and Procedure Chapter III Section 2.1 Employee Definitions and Categories

  3. DEFINITIONS

    1. "Business entity" means 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.
    2. "Compensation" means 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.
    3. "Substantial interest" means (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 a 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.
    4. "Transaction" means a formal or informal contract or agreement, express or implied, to which the college is a party that involves any transfer of consideration or payment of compensation.
    5. "College officer or employee" means a person permanently employed by the college on full or part-time basis, but does not include members of the Institutional Council or of any other advisory commission, board, or committee serving on a part time basis, See Pol. and Proc. Chapter III Section 2.1 Employee Definitions and Categories.
  4. POLICY

    1. It is the policy of the college to comply fully with all applicable provisions of the Utah Public Officers' and employees' Ethics Act. The statements of detailed policies and procedures set forth herein are intended to provide notice to the college community of the requirements of the Act as applied to the procurement of supplies, services, and construction pursuant to the Utah Procurement Code, as amended, and related college regulations. See Policy and Procedure 9.0 - 9.5 inclusive.
    2. Scope

      1. The policies and procedures set forth herein apply to all transactions (including small purchases and expedited procurement transactions, see Policy and Procedure 9.2) to which the college, or any department or operating unit of the college, 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 of "Purchasing Agent" shall be construed to mean college Purchasing Agent or, when appropriate, the responsible officer of any college department or operating unit that is authorized to engage in contracting or procurement activities without going through the Purchasing Department.
    3. Prohibitions

      1. A college officer or employee is forbidden to participate in his/her official capacity with respect to any transaction between the college and a business entity in which the officer or employee has a substantial interest.
      2. A college officer or employee is forbidden to receive compensation (in addition to regular budgeted salary or wages for services to the college) as a result of, or in connection with, any transaction between the college and a business entity in which the officer or employee has a substantial interest.
      3. Employees of the college cannot use their position in the college (including use of the college mailing address) to obtain goods or materials for instruction and then resell those goods and materials for personal gain.
  5. PROCEDURES

    1. Duty of Disclosure

      1. It is the duty of every college officer or employee to disclose to his/her immediate superior and to the college Purchasing Agent 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 college.
    2. Procurement Procedure

      1. The Purchasing Department shall process requisitions in accordance with established college 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 college 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 college procurement criteria and procedures, provided, however, that the Purchasing Agent 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 college 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 Purchasing Agent determines that in the best interest of the college and in accordance with established criteria the proposed procurement contract should be awarded or entered into with a business entity in which a college officer or employee is known to have a substantial interest, the following steps must be taken before the contract is executed:

        1. 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 Vice President for Administration 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 college until the Purchasing Agent has received a written memorandum indicating that the requested waivers have been granted.
        2. In all such cases the Purchasing Agent must request and receive from the college officer or employee who has a substantial interest in the business entity designated as a party to 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 college) nor will college facilities or materials or contracted time be used in connection with proposed contract (or Purchase Order No.______). (date)(Signature)

    3. Remedies

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

      1. The officer or employee who violated the prohibitions specified above, or who knowingly executed and submitted a false affidavit when requested shall be subject to appropriate disciplinary action including possible dismissal from college employment as provided in the Utah Public Officers' and Employees' Ethics Act.
      2. The college shall have the right to rescind or nullify any contract or subcontract entered into in respect to such transaction without returning any part of the consideration that may have been received by the college pursuant thereto.

For more information, contact Office of Equal Employment Opportunity and Risk Administration at 801-957-4041