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Tip Sheet Volume 3:3
Purchasing I: Conflict-of-Interest
Vendors
Most campus activities involve making
purchases. These purchases are made for educational, research,
or outreach activities. The State of Iowa has laws that govern
acquisitions of products and services from employees. The following
information provides assistance in recognizing a potential conflict-of-interest
situation, as it relates to ISU employees, and the appropriate
procedure to use in making a purchase when a conflict of interest
exists.
What Is a Conflict-of-Interest
Vendor?
Conflict-of-interest vendors are ISU employees, spouses of employees
or their minor child(ren), graduate assistants, student employees
and other non-student hourly employees, who are paid by ISU outside
of the payroll process, for products sold or services rendered.
This includes purchases from partnerships and/or sole proprietorships
involving any of the above-mentioned parties, as well as corporations
where the above parties hold at least 5% ownership interest.
When acquiring products or services from these parties, it is
referred to as a "conflict of interest-purchase of goods
and services from employees," and certain steps must be
taken before purchases can be made.
Approval of Conflict-of-Interest
Vendors
A conflict-of-interest vendor that does more than $1,000 in business
in any one transaction or $2,000 cumulatively in a fiscal year
must first be approved by the Board of Regents, State of Iowa,
to do business with ISU. Once approval is granted, any transaction
greater than $2,000 or any transaction that causes the total
cumulative, noncompetitive purchases in any one fiscal year to
exceed $5,000, must be competitively bid by the Purchasing Department.
Total fiscal-year purchases from conflict-of-interest vendors
are reported annually to the Board of Regents, State of Iowa.
Making Purchases from
Conflict-of-Interest Vendors
Departments making purchases that involve a conflict-of-interest
vendor are required to submit a purchase requisition to the Purchasing
Department. This requisition is to be submitted prior to signing
agreements, placing orders, or making any financial commitments.
In addition, when a conflict-of-interest vendor is involved,
it is not appropriate to use professional services agreements,
purchasing cards, payment authorization vouchers, direct entry
purchase orders, honoraria, or small dollar reimbursements by
voucher.
Contact Information
For questions and additional information on gaining approval
for a conflict-of-interest vendor, contact Nancy S. Brooks, Associate
Director of Purchasing, nsbrook@iastate.edu
(ph: 294-8757) or Arlo W. Meyer, Director of Business Affairs,
awmeyer@iastate.edu
(ph: 294-4701).
Related Information
For more information on other types of conflict-of-interest,
please refer to the following:
If you have any questions
about this tip sheet or working with industry, please contact:
Lisa Lorenzen, 1210 Molecular Biology Building, Phone: (515)
294-0926, Email: llorenze@iastate.edu
Acknowledgement: Thanks to
Arlo Meyer for providing the information for this tip sheet.
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