Skip to main content

System Status: 

Conflict of Interest: Employee - Vendor Relationships

Learn about UC's Conflict of Interest Policies and Employee - Vendor Relationship Disclosures (EVRD)

The UC Community is committed to the highest ethical standards in furtherance of our mission of teaching, research, and public service. In an effort to uphold the trust of the people of the State of California; our policies, procedures, and standards provide guidance for maintaining our core values of Integrity, Excellence, and Accountability, and Respect. 

Separation of Interests

To ensure compliance of all applicable laws and policies, safeguard UC and its employee from charges, or appearance thereof and favoritism in the acquisition of goods and services, it is the University's policy to keep employee's University and private interests separate.

Conflict of Interest - California Political Reform Act (PRA)

The Act prohibits an employee from making or participating in the making of a governmental decision if a financial conflict of interest exists. Here are examples of how an employee can impact a decision:
  • You make a decision by authorizing a purchase, voting as part of a committee action, or by making an appointment.
  • You participate in making a decision by giving advice or making recommendations to the decision-maker.
  • You influence a decision by communicating with the decision-maker.

California Public Contract Code (PCC)

Public Contract Code §10516 prohibits active UC employees from contracting with the University to provide goods and/or services as an Independent Contractor. Public Contract Code §10517 prohibits certain former UC employees from contracting with the University to provide goods and/or services as an Independent Contractor for specified periods depending on the specific scenario following separation.

EVRD Definitions

Determination - No employee or near relative shall purchase or lease goods or contract for services, unless there has been a specific determination by the materiel manager, or designee.

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

Employee-Vendor Relationship - A relationship in which an employee, or near relative, acts as an independent contractor for the purpose of renting, selling goods or providing services to the University.

Former Employee - An individual who was retired, separated, dismissed or otherwise formerly employed by the University.

Financial Conflict of Interest - A financial or other interest in, or a tangible personal benefit from an organization considered for a contract. Financial benefits (whether real or perceived) can be derived from relationships in which an individual has the potential to receive a salary, gift, royalty, intellectual property rights, consulting fee, honoraria, or other financial benefit. A set of circumstances that reasonable observers would believe creates an undue risk that an individual’s judgment or actions regarding a primary interest of the University will be inappropriately influenced by a secondary financial interest.

Near Relative - The spouse/domestic partner, child, parent, sibling, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of a University employee. UC step-relatives and relatives of the domestic partner in the same relationship are also applicable.

Public Official - University employees, officers, members, certain consultants who work on the University’s behalf, and Certain non-University employees who are members of decision-making bodies as defined by the Political Reform Act.

Teaching or Research Responsibilities - An academic appointee who is engaged in teaching and/or research activities, and certain staff employees (e.g., staff research associates) who may participate in teaching or research activities.

EVRD Review Process

An Employee-Vendor Relationship, also referred to as employee-supplier relationship, exists when:

  • An employee, acting alone, is proposing to rent, sell, or otherwise provide goods and/or services to the University
  • An employee, owning or controlling a financial interest in the vendor business, is proposing to rent, sell, or otherwise provide goods and/or services to the University
  • A former employee proposing to rent, sell, or otherwise provide goods and/or services to the University
  • A near relative of a UC employee is proposing to rent, sell, or otherwise provide goods and/or services to the University; and/or
  • A near relative of a UC employee, owning or controlling a financial interest in the vendor business, is proposing to rent, sell, or otherwise provide goods and/or services to the University

Such relationships must be disclosed at the supplier setup process through Payment Compass or within a Oracle requisition.

In the event a vendor's status changed and an Employee-Vendor Relationship becomes applicable, it is the responsibility of the department to notify Procurement and Contracts of such change and for the supplier to update their Payment Compass information. 

Before Procurement and Contracts can provide a full internal review, the following packet must be submitted via a completed Payment Compass invitation or Oracle Requisition:

  • Independent Contractor Packet (PDF) 
  • SSPRJF (PDF) Source Selection and Price Rationale Justification Form**
    • Complete all fields and have the form signed by the requesting department's authority such as a Department Head
    • To submit with an active employee request please ensure Sole Source is selected from Federal or Non-Federal Funds

 ** The Source Selection and Price Rationale Justification Form is required for any transactions involving active UC employee to justify how the goods and/or services are not available either from commercial sources or from within the University. 

Submission of the forms do not constitute approval and departments may not request an individual/vendor to provide goods and/or services to the University without Procurement and Contract's prior authorization in the form of a Purchase Order(PO) or Agreement.

After a careful analysis of the request, Procurement and Contracts shall provide an impartial internal review and if deemed appropriate within policy and law an approval shall be provided. All forms and a statement of work, proposal, quote are required for an internal review. Missing documentation, incomplete forms, inaccurate information, missing employee, former employee, and/or Department Head signatures, will increase the review time. 

Please note disclosing an Employee Vendor Relationship does not automatically disqualify use of the proposed vendor. Procurement and Contracts actively works to faciliate the purchase within the constrains of the law.

UCOP BUS-43: Purchases of Goods and Services

BUS-43 sets the procurement policies and procedures for the University by incorporating State law, bylaws and policies of the University, as well as procurement best practices. The aforementioned restrictions imposed by the California Political Reform Act and Public Contract Code are incorporated into BUS-43 to denote the University's responsibility in adhering to State Law. 

Furthermore, as extension of University policy, pursuant to Section III, Part 5(b); the University may purchase or lease goods or services from a near relative of any employee, provided that the UC employee did not make, participate in making, or influence the decision for acquisition and the goods and/or services are not available from the University's own facilities. No UC employee shall be in a decision-making position, or reporting relationship, with a near relative contracted by the University. 

A near relative is the spouse, child, parent, sibling, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of a University employee, and step-relatives in the same relationship. Near relative also includes the domestic partner of a University employee and a relative of the domestic partner in one of the foregoing relationships.

For more information regarding BUS-43, visit UCOP Purchases of Goods and Services Policy Manual.

California Public Contract Code (PCC)

With respect to Conflict of Interests, the legislative intent of the CA Public Contract Code is to eliminate favoritism, fraud, and corruption in the awarding of public contracts. With the approval of Senate Bill 1467, the Public Code Contract was amended to incorporate conflict-of-interest provisions specifically to the Regents of the University of California and its course of business contracting.

Current UC Employees as Independent Contractors

Public Contract Code §10516 prohibits active UC employees from contracting with the University to provide goods and/or services as an Independent Contractor. However, the University may contract for goods and/or services from an active employee provided that the UC employee has teaching or research responsibilities and the goods and/or services are not available either from commercial sources or from within the University. 

This restriction is not applicable to student employees for payment for additional campus activities or engagements outside of the scope of their primary University employment. 

An employee with teaching or research responsibilities is an academic appointee who is engaged in teaching and/or research activities, and certain staff employees (e.g. Staff Research Associates) who may participate in teaching or research activities. 

University departments that require the services of an active UC employee who does not fit the criteria to do business as an Independent Contractor must work with Human Resources to compensate the employee through the payroll system, if appropriate, in accordance with existing law and University policy.  

Former UC Employees as Independent Contractors 

Public Contract Code §10517 prohibits former UC employees from contracting with the University to provide goods and/or services as an Independent Contractor for a period of:

  • Two (2) years beginning on the date the person separated from the University, if the individual was engaged, using their official UC capacity, in any of the negotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to the proposed contract; or

  • One (1) year beginning on the date the person separated from the University, if the individual was employed by the same department as that of the requesting department's proposed contract in a policy-making position.

Otherwise, if none of the above situations are applicable, the University may purchase or lease goods from or contract for services any former employee.

This prohibition shall not apply to any proposed contract requiring the person's services as an expert witness in a civil case or to a contract for continuation of an attorney's services on a matter such individual was involved with prior to leaving the University. 

Penalties for failure to comply with the Public Contract Code §10516 et seq include charges of felony and/or misdemeanor, contract nullification, and doubled damages to the University. 

For more information regarding the California Public Contract Code, visit the California Legislative Information site.

 

California Political Reform Act (PRA)

Adopted in 1974 as a response to the lack of transparency and trust in the government, the California Political Reform Act is the most foundational conflict of interest law in California governing campaign finance, financial conflicts of interest by public officials, lobbyist registration and reporting, post-governmental employment, political mass mailing at public expense, and gifts and honoraria given to public officials and candidates.

As a public institution, all members of the University must adhere to the law as public officials. With regards to Conflicts of Interests, the Act requires University employees to refrain from making, participating, or influencing a decision in which they have a financial interest.

An individual makes a decision by authorizing a purchase, voting as part of a committee action, or making an appointment.
An individual participates in making a decision by providing advice or making recommendations to the decision-maker.
An individual influences a decision by communicating with the decision-maker. 

A violation of the Act can be pursued in three ways: (i) administrative proceedings by the FPPC Enforcement Division; (ii) criminal prosecution by a local district attorney or the state attorney general; and/or (iii) civil action by the public, certain government agencies, or the FPPC Enforcement Division. 

For more information regarding the California Political Reform Act, visit the Fair Political Practices Commission site.

 

Privacy Notice

The state of California information practices act of 1977 requires the University to provide the following information to individuals who are asked to provide information about themselves:

  • The principal purpose for requesting the information on this form is to determine any possible conflict of interest that might be involved in a proposed University purchasing transaction. University policy authorizes maintenance of this information.
  • Furnishing all information required on this form is mandatory - failure to provide such information will delay or may even prevent completion of the action for which the form is being filled out.
  • Information furnished on this form maybe used by various University departments as required in the regular course of business and will be transmitted to the state and federal governments if required by law.
Find answers, request services, or get help from our team at the UC San Diego Services & Support portal.
This section is a summary of Conflict of Interest laws, regulations, and policies. In case of conflict of interpretation, the actual laws, regulations, and policies prevail. For more information, please reach out to Campus Counsel or General Counsel for guidance.