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Conflict of Interest Vendors/Employees, Procurement

Effective: Moved to Policy Library from UPM 10.2(9), UPM 10.3(4)
Updated/Revised: July 10, 2007
Contact: Director of Purchasing

Introduction

State laws, Iowa Administrative Code rules and federal regulations apply to purchases from "conflict of interest vendors" or "employees." Iowa State University promotes ethical business practices, professional integrity and objectivity in all procurement transactions conducted by its employees. The university is committed to complying with applicable procurement laws and regulations, including requirements that apply to conflicts of interest, as provided by the following:

  • Iowa Code
  • Iowa Administrative Code
  • Board of Regents, State of Iowa
  • Federal Office of Management and Budget (OMB) Circular A-110

Definitions

"Conflict of interest vendor" or "employee"
  • A paid employee (whether full-time, part-time, hourly, temporary, or student-including a graduate student on assistantship) of a Regent institution or the Board of Regents Office
  • A member of the Board of Regents, State of Iowa
  • The spouse or minor children of a Regent institution (Iowa State University, University of Iowa, University of Northern Iowa, Iowa Braille and Sight Saving School, Iowa School for the Deaf) employee
  • Any firm of which any of the above referred persons is a partner or sole proprietor
  • Any corporation in which any of the above referenced persons holds five percent or more stock either directly or indirectly
  • An employee of another State of Iowa agency (Iowa Department of Transportation, Department of Administrative Services, Department of Human Services, Iowa Department of Personnel, etc.)
Conflict of interest vendor/employee (federal definition)
  • A paid employee (whether full-time, part-time, hourly, temporary, or student-including a graduate student on assistantship) of Iowa State University
  • An officer or agent of the university, any member of his or her immediate family, his or her partner
  • An organization which employs or is about to employ any of the parties indicated herein
  • Anyone who has a financial or other interest in the firm selected for an award

Policy Statement

Under the Board of Regents, State of Iowa, policy and Iowa Administrative Code rules, no university (Regent institution) "employee" (see definitions above), whether full-time, part-time, hourly, temporary, or student (including a graduate student on assistantship), their spouse or minor child, may sell in any one occurrence to any Regent institution, either directly or indirectly, any goods or services in excess of $2,000 unless the Board of Regents, State of Iowa, gives its consent. Consent will be granted only after the request has been properly docketed for presentation at a meeting of the Board of Regents, State of Iowa, and after receiving a narrative from the employee that explains how the position held by the conflict of interest vendor (employee) will not unduly influence decisions made in the acquisition of goods and services.

Competitive Bidding

After the required Board of Regents, State of Iowa, approval is obtained, university employees or conflict of interest vendors may not sell any goods or services to any Regent institution that have a value in excess of $2,000 for any one transaction, unless pursuant to an award or contract let after public notice and competitive bidding. The only exception to the bidding requirement is an emergency condition that endangers life or property. All such emergency conditions shall be documented by the requesting department and approved by the Purchasing Department. The Purchasing Department is required to annually report all purchases from conflict of interest vendors and employees to the Board of Regents, State of Iowa.

Pre-order Identification of Potential Conflicts

Before funds can be committed or before orders are placed with a conflict of interest vendor, the Purchasing Department must issue an authorizing purchase order. When departments become aware of a potential conflict of interest affecting any procurement transactions, the department is expected to share the existence of the conflict of interest vendor with the Purchasing Department before a commitment is made or an order is placed. With the strict bidding requirements associated with conflict of interest vendors, an individual making an unauthorized commitment may be making a personally funded commitment.

Abstention from Participation in Procurement

Conflict of interest vendors, employees, and officers who have, or reasonably anticipate having, an ownership interest, a significant executive position, or another remunerative relationship with a prospective supplier of goods or services to Iowa State University, or who know that a member of their family or other person with whom they have a personal or financial relationship has such an interest, shall not participate in the preparing of specifications, qualifying vendors, selecting successful bidders on products or services in which they have an interest, or approving payment to those interests.

Federal Guidelines: Code of Conduct

In addition to the conflict of interest policy provisions stated above, Office of Management and Budget (OMB) Circular A-110, Procurement Standards §42 Codes of Conduct, imposes additional requirements on federally funded acquisitions concerning conflict of interest situations. It states: "No employee, officer, or agent shall participate in the selection, award, or administration of a contract sponsored by federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subagreements."

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