100: Purchasing and Contract Ethics

Procurement and Contract Services Policy & Procedures Manual
Section 100: Purchasing and Contract Ethics
Effective: 01/04/2010
Revised:  11/20/2012

 

Purpose:

To direct OSU faculty, administrators and staff in ethical and responsible procurement practices ensuring compliance with applicable laws, regulations, policies and procedures.

Background:

OSU employees are expected to uphold the highest ethical standards in their relationships with one another, with students, with the wider community and in all of their professional pursuits.  Inherent in this responsibility is the obligation to follow the laws, regulations, policies and procedures that govern ethical and responsible procurement practices while exhibiting integrity expected of all employees.  Specifically, the regulations guiding employees are those contained in the Oregon Government Ethics Law, ORS 244 and the Code of Ethics, OAR 580-061-0000.  This policy will address ethical and responsible procurement and public contracting practices.

101: Employee Ethical Conduct

Procurement and Contract Services Policy & Procedures Manual
Section 100: Purchasing and Contract Ethics
Effective: 01/04/2010
Revised:  12/24/2013

 

101-001: Financial Gain or Avoidance of Financial Loss

Employees are prohibited from using or attempting to use their positions to gain financial benefit or to avoid a financial cost for themselves, a relative, a member of their household or their business if the opportunity is available only because of the position held by the employee.

Employees with purchasing authority should not engage directly or indirectly in a personal financial transaction that primarily relies upon information obtained through University employment and is not otherwise common knowledge. 

Except when purchasing from or contracting with OSU employees as described in 101-002, it is inappropriate for employees to profit from OSU related business such as obtaining credit card bonuses obtained by purchasing items for OSU business on a person’s personal credit card and requesting reimbursement, thus keeping the bonus for personal financial benefit.

 

101-002: Purchasing from or Contracting with OSU Employees, Relatives of OSU Employees or Members of the OSU Employee’s Household

Any purchase or contract for the provision of goods or services, regardless of the dollar value, is subject to the provisions of this policy.  OSU may only purchase from or contract with OSU employees, relatives of OSU employees (relative as defined in ORS 244) or members of the OSU employee’s household if all of the following requirements are met:

a)    The purchase or contract is NOT for the Department, College or Administrative Unit that the OSU employee is currently working for or has worked for as an employee in the previous 6 months;

b)    The goods or services sought for purchase or contract are substantially different from the work the employee performs in their employment with OSU;

c)    OSU employee must complete the “PaCS Disclosure of Real or Potential Conflict of Interest” form and submit to PaCS for review.

d)    The OSU employee, relative of an OSU employee or member of the OSU employee’s household must be determined to be an Independent Contractor for the services being proposed;

e)    The OSU employee, relative of an OSU employee or member of the OSU employee’s household must have a federal tax identification number separate from their social security number; and

f)    PaCS must conduct a competitive solicitation in accordance with OAR 580-062-0020 (2) or conduct a sole source process in accordance with OAR 580-062-0020 (8). 

Procedure:

1.    Departments or Business Centers must submit a Purchase Requisition or Personal Services Contract to the Procurement and Contract Services Office indicating that they wish to purchase or contract for goods or services from an OSU employee, relative of an OSU employee or member of the OSU employee’s household. 

2.    Procurement and Contract Services will conduct the competitive solicitation or a sole source process as appropriate and in accordance with OAR.

3.    Purchases or contracts that violate this policy will be considered an unauthorized purchase or contract and must follow the process for  Unauthorized Purchases or Contracts contained in PaCS 203.  Violations involving federally funded projects are subject to Conflict of Interest Violations Pertaining to Use of Federal Funds in PaCS 104-003.

 

101-003: OSU Employee Honorariums Guideline

OSU employees may not solicit or accept honorarium in excess of $50 for which the honorarium are solicited or received in connection with the official duties of the OSU employee.  OSU employees may solicit or receive honorariums in excess of $50 for which the honorarium is received in connection with a private activity of the OSU employee.  This does not authorize OSU to provide honorariums to OSU Employees.

 

101-004: Other State Employees Honorarium Guideline

OSU may not Contract with or pay an honorarium in excess of $50 to other State of Oregon employees for which the honorarium is being paid in connection with the State of Oregon employees official duties.  State of Oregon employees may solicit or receive honorariums in excess of $50 for which the honorarium is received in connection with a private activity of the State of Oregon employee.

 

101-005: Personal Purchases using OSU Funds

Employees may not make personal purchases using OSU funds.

 

101-006: Personal Purchases using OSU Contracts

OSU does not include discounts in OSU Contracts for purchases made by employees for their individual personal use.  Vendors, who are also OSU Contractors, may extend offers, special discounts or other incentives to employees.  Employees may only make personal purchases provided the following circumstances exist: 

a)    the product or service is available to other employee groups (in both private and public sector) on the same terms and conditions, and not exclusively to employees of the public agency; and

b)    the price of the goods or services are not better than the public agency has contracted.  Any more favorable arrangement than the public agency’s Contract may be a conflict of interest.

102: Interaction With Vendors

Procurement and Contract Services Policy & Procedures Manual
Section 100: Purchasing and Contract Ethics
Effective: 01/04/2010
Revised: 08/05/2011

 

102-001: Vendor Gifts or Entertainment

An employee, relative or member of the household may not solicit or receive gifts with an aggregate value in excess of $50 during a calendar year, or receive payment for expenses for entertainment from a single source that has an interest in the agency in which the public official works.  Additionally, employees may not accept a favor, gratuity or special consideration from Vendors and Contractors doing or seeking to do business with the University in order to influence a purchase or secure a Contract.

 

102-002: Vendor Employment Promises

Employees may not solicit or accept the offer, pledge or promise of future employment based on an understanding that the employee will influence a purchase or Contract award for their future employer while still employed by OSU.  Employees involved in the preparation, solicitation, evaluation, award or approval of a solicitation or execution of a Contract may not be employed by the Contractor for a period of one (1) year.

 

102-003: Impartiality

Employees will conduct themselves and represent OSU in a manner which exhibits fair and impartial treatment to all Vendors.

 

102-004: Endorsement

OSU does not endorse goods or services offered by Vendors without entering into an endorsement agreement executed by a Contracts Officer detailing the terms and conditions under which such endorsement will be allowed.  Employees shall refrain from representing or implying that OSU will endorse a Vendor’s goods or services outside of an endorsement agreement.

103: Ethics in Purchasing and Contracting

Procurement and Contract Services Policy & Procedures Manual
Section 100: Purchasing and Contract Ethics
Effective: 01/04/2010
Revised: 01/11/2013

 

Employment at Oregon State University is a public trust.  The ethical standards that OSU employees must maintain encompasses the highest standards of honesty, integrity, impartiality and professionalism in conducting business on behalf of the University.  As employees responsible for maintaining the integrity of the solicitation, procurement and contracting processes and as stewards of the University and taxpayers dollars it is especially important that OSU employees avoid even the perception of a conflict of interest.

103-001: Ethics Statement for Employees in the Procurement Process

Under Division 61 of the Oregon University System (OUS) Procurement and Contracting Code, OAR 580-061-0000 persons employed by Oregon State University (OSU) who purchase goods and services, or are involved in OSU’s procurement process must, on an annual basis, submit a statement that the employee has reviewed and will comply with the OUS Code of Ethics.  OSU employees not involved in the procurement process as part of their routine duties, but who will be involved in a particular project must submit a statement that the employee has reviewed and will comply with the OUS Code of Ethics at the commencement of their involvement in such project.  Employees may utilize the OUS online tool to review the OUS Code of Ethics and submit a statement that the employee has reviewed and will comply.

Procedure:

1.    Access the OUS online tool at: http://www.ous.edu/qapp/ethics/

2.    Enter your first name, last name, email address, institution and faculty/staff ID.

3.    After logging in, thoroughly read the OUS Code of Ethics.

4.    If you agree to the OUS Code of Ethics, scroll to the bottom of the screen and click on “I agree” to complete the process.

5.    Once submitted, the system sends an automated email receipt of completion to the employee with a copy to the OSU Chief Procurement Officer.

 

103-002: Authority to Purchase or Enter into Contracts

Employees may not procure goods or services or enter into Contracts outside of the employee’s budget authority, purchase authority, Institutional authority or Contract signature authority.

 

103-003: Purchase/Payment Fragmentation

Employees shall not fragment purchases or payments in order to avoid following a regulation, policy or procedure.  Anticipated and estimated purchases shall be aggregated whenever possible to accurately reflect purchase totals and gain economies of scale as available with quantity purchases.

 

103-004: Process Circumvention

Employees may not circumvent regulations, policies or procedures by using personal funds for the purchase and then seeking reimbursement or by using an alternate funding source or contracting method which will be indirectly reimbursed or paid for by OSU.

 

103-005: Bid Shopping

Employees involved in the procurement process will not disclose a Vendor’s price to competitors in order to have a competitor beat the Vendor’s price.  Price results may only be given to Vendors once the final selection is made.

 

103-006: Collusion

Collusive behavior will not be tolerated from employees or Vendors.  Collusive behavior includes but is not limited to, making agreements or understandings between two or more persons to commit a fraudulent, deceitful, unlawful or wrongful act in order to provide an unfair advantage.

 

103-007: Document Fabrication

Altering, fabricating, destroying, misrepresenting, or forging Contracts or documents for personal gain or an unfair advantage is prohibited.

104: Conflict of Interest

Procurement and Contract Services Policy & Procedures Manual
Section 100: Purchasing and Contract Ethics
Effective: 01/04/2010
Revised: 08/05/2011

 

104-001: Declaration of Conflict or Potential Conflict of Interest

The procurement of goods and services at OSU must be free of the undue influence of outside interests. There may be situations in which financial or other personal considerations may compromise, or have the appearance of compromising, an employee's professional judgment in the execution of any part of the procurement  or contracting process.  Any conflicts or potential conflicts of interest regarding the procurement or contracting process must be reported to PaCS before making the procurement or executing the contract.  Conflicts of Interests regarding the research integrity of a research project or proposal are managed through the Research Office process.  Their decision on the conflict of interest relating to research integrity does not mitigate conflicts of interest in the procurement or contracting area.

Procedure:

1.    Actual or potential conflict of interests may be resolved by full disclosure as well as making appropriate arrangements that clearly mitigate the conflict of interest.

2.    Employees should promptly disclose any real or potential conflicts of interest by filling out the “PaCS Disclosure of Real or Potential Conflict of Interest” form and submitting to PaCS for review and advice on mitigating the conflict of interest.

3.    PaCS will review the disclosure and determine if there is a conflict of interest and if the conflict of interest can be mitigated in order to eliminate the conflict.

4.    In some instances, actual or potential conflicts of interest may need to be referred to OSU Office of General Counsel.

 

104-002: Conflict of Interest for Selection Committee Members

Employees engaged as a Selection Committee Member must first execute the OUS Conflict of Interest Statement before participating in the evaluation or selection of a Contractor or Vendor under a Formal Procurement process.

 

104-003: Conflict of Interest Violations Pertaining to Use of Federal Funds

In compliance with all applicable Code of Federal Regulations code of conduct requirements, OSU standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the federal fund recipient. 

Procedure:

In cases where it is determined that there has been a violation of PaCS Policies and Procedures pertaining to Conflicts of Interest PaCS will collaborate with the OSU Office of General Counsel, Office of Research Integrity and Office of Post Award Administration, and in some cases, the Human Resources Department in order to work with the Dean or Department head responsible for overseeing the college or department employee.  In consultation with these departments the Dean or Department head will determine an appropriate disciplinary action for the employee responsible for the violation.  Pursuant to Oregon Administrative Rules applicable to violations of university policy, (and/or a collective bargaining agreement in the case of represented employees) personnel may be disciplined for cause, including warning, reprimand, or a more severe sanction for cause, up to and including termination.

 

104-004: Segregation of Procurement and Accounting Functions

Administrators should structure the entire function and cycle of procurement so that purchasing, purchasing approvals and payment are adequately segregated to ensure ethical practices.  These duties should be divided among departmental personnel so that there is a distinct separation of those duties.  Separating the functions within the cycle of procurement should provide a series of checks and balances of all facets of purchasing.  It is important that administrators are aware of the purchasing function within their department and provide oversight and review of this function, ensuring the continued separation of purchasing duties.

 

Additional Information:

Oregon Revised Statute 244

Oregon Administrative Rule 580-061-0000

OUS Financial Irregularity Policy

Code of Federal Regulations Title 40 Part 30.42