Procurement Services Conflict of Interest (COI) Guidance

Procurement Services COI refers to potential conflicts of interest related to the selection process of contracts or subawards. This is different and separate from conflict of interest in research reviews by the Conflict of Interest Oversight Committee, which focuses on protecting the objectivity of the research when there are researchers with related outside financial interests involved in the study.

Procurement Services COI Review Process

Eliminate unnecessary work and save time

If your potential subrecipient or contractor has a relationship or financial interest that is a potential Procurement conflict of interest issue, complete your Procurement COI review prior to starting the subrecipient or contractor application process. Make sure the entity is eligible before doing all the paperwork.

The Procurement Services COI Review Process begins with the selection process of any potential contractor or subrecipient (ideally before starting on the contractor/subrecipient application to avoid unnecessary work for an ineligible entity). A Procurement Services COI review is required per UC policy if the proposed agreement with the entity includes one or more of the following:

A current or former University employee;
A current employee's near relative (the spouse, child, parent, brother, sister, 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.); or
An entity in which a UC employee or their near relative has a financial interest.

When one or more of the above apply, the Entity and Requesting Department complete and submit the Employee Vendor Relationship Disclosure Form (Procurement COI Form) to procurement@uci.edu with the subject line "Procurement COI Form" to determine if the proposed entity can be a contractor or subrecipient on this project. To avoid unnecessary work and significant delays, we strongly recommend completing this review before working on the contractor/subrecipient application.

Subrecipient vs. Contractor

Subrecipient vs. Contractor Determination Form

Subrecipient

Contractor

For proposed subrecipients with a potential Procurement COI, if the Procurement COI form is not reviewed and approved by Procurement prior to proposal submission, the proposed subrecipient may be later determined to be ineligible per UC policies and an alternate subrecipient may need to be identified at award stage. A copy of the approved Procurement COI form will be required by the Subaward Team for any subrecipient with a Procurement COI issue.

At proposal development stage- see Subaward Proposal Package Checklist

If an outgoing subrecipient is proposed in the project, check with the PI to determine if there are any Procurement COI concerns. If there are, complete and submit the Procurement COI form to procurement@uci.edu with the subject line "Procurement COI Form" for review and approval before starting the subrecipient package.
Once approved by Procurement, the Initiator will respond to the Procurement COI Question in KR PD:
- Will the subrecipient relationship result in an agreement between the University and (1) a current or former University employee or (2) a current employee’s near relative or (3) an entity in which a UC employee or their near relative has a financial interest? Note: "Near relative" includes the spouse, child, parent, brother, sister, 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.
  - Yes, please complete and submit the Employee-Vendor Relationship disclosure form to procurement@uci.edu. Once approved, upload a copy of the Procurement COI form in KR PD Attachments. (Note: If the disclosure form is not reviewed and approved prior to proposal submission, the proposed subrecipient may be ineligible and an alternate subrecipient may need to be identified post-proposal submission.)
  - No, no Procurement COI review is required.

For last minute/late proposal submissions, all "yes" responses to the above question in KR PD will generate an email notification to the PI, Initiator, and Procurement to complete the Procurement COI review process.

New subrecipient identified after awarded- see Post Award Subaward Proposal Package Checklist

If there is a new proposed outgoing subrecipient not originally included in the proposal application, check with the PI to determine if there are any Procurement COI concerns. If there are, complete and submit the Procurement COI form to procurement@uci.edu with the subject line "Procurement COI Form" for review and approval before initiating the new subrecipient process.
Once approved, include a copy of the Employee-Vendor Relationship Disclosure form approved by Procurement Services to your subrecipient package to the Subaward team.

COI is identified when the Vendor goes through the onboarding application in Payment Works. The following situations trigger Procurement COI review in Payment Works:
- The Vendor is a current UC employee and proposes to rent or sell goods/services to the University and controls more than 10% interest in the vendor. As a note, the tax ID for the UC campuses are different for each campus but there is still a need for additional information about the Vendor’s services. If the services being provided are similar to the work they do or did, the Vendor should be paid with a recharge and intercampus transfer. If the services they are providing are different from what their job duties entail, then that would be acceptable
- The Vendor is an ex-UC employee who separated in the last two years
- The Vendor has a near-relative who is a UC employee
- The Vendor is a near-relative of a UC employee and the employee controls more than 10% interest in the vendor
The Vendor Coordinator reporting to Accounts Payable will send an email to the department (Requestor) notifying that the Vendor approval is on hold for Vendor due to COI and share instructions for the Requestor to fill out and submit the Procurement COI form for Procurement Services’ approval (CC Accounts Payable).
The Vendor will be instructed to fill out the top section of the Procurement COI form. Once completed, the Vendor Coordinator will forward the document to the Requestor to fill out the second section and route for additional signatures if needed.
Once completed, the Requestor forwards the COI form to procurement@uci.edu.
The completed COI form is reviewed and approved by the Chief Procurement Officer or designee
If there are questions or clarifications needed, Procurement Services will reach out to Requestor for additional information
Once approved, the Requestor and Vendor Coordinator will receive the final approved COI form via DocuSign for their record
The final step is the Vendor Coordinator will complete the onboarding of the Vendor in KFS

Procurement COI Form Tips

Employee Vendor Relationship Disclosure Form (Procurement COI Form)

Please describe in detail who and how the Vendor/Subrecipient was selected in the Procurement COI form. If there is insufficient space on the Procurement COI form, then attach a page with a detailed explanation
Inquiries related to the “Department Certification” section with the “Department Chair/Supervisor Signature” on the Procurement COI form:
1. If the Vendor (Contractor/Subrecipient) works for UCI, the UCI department or supervisor needs to sign the Procurement COI form
2. If the Vendor (Contractor/Subrecipient) is an employee of another UC, the bottom certification needs to be signed and certified by the head or supervisor of the UC department for which the Vendor works for to confirm that none of their University hours were used for the specific service
Depending on the complexity of the project, the department will need to attach supporting documentation to the Procurement COI form including:
- Documentation that the Principal Investigator (PI) who is a near-relative to the Vendor is not involved in the decision-making process or oversight of any financial transactions of the project
- Student Workers – did not submit billable hours during the time of work and they need to be reimbursed later, requesting payment after separation
Situations when Procurement COI form is NOT required:
- UCI faculty recruitment search involving travel reimbursement for a UC employee
- If a former UC employee has been separated for more than two years

Procurement COI Criteria for Approval

Per UC Business and Finance Bulletin 43, there are restrictions covering the acquisition of goods or services by the University when the transaction involves an employee-supplier relationship.

Employee-supplier relationships are when one of the following propose to lease or sell goods or to provide services to the University:

A University employee, acting alone; or
A business where a University employee who owns or controls more than 10% interest of the business; or
A former University employee acting alone; or
The near relative of an University employee, acting alone, when the University employee has, in any connections with his or her University employment, any responsibility for or will be involved in any manner, in the department’s decision to accomplish or approve the transactions; or
A business that a near relative of a University employee owns or controls more than a 10% interest, when the University employee has, in any connection with his or her University employment, any responsibility for or will be involved in any manner in the department’s decision to accomplish or approve the transactions.

Restrictions on...

Employee

Former Employee

Near Relative

Employee

No purchase or lease of goods or contract for services may be made with a University employee who has an employee-supplier relationship.

Exception: the University may enter into a contract for goods or services when a University employee who has teaching or research responsibilities demonstrates that the goods or services are not available either from commercial sources or from within the University with Procurement COI's approval.
Example: Principal Investigator wants to issue a subaward to their startup company with which they have financial interests (25% equity interest of the company)

Former Employee

University may not purchase or lease goods from or contract for services with any former employee who has an employee-supplier relationship when:

less than 2 years' time has passed since the individual separated from the University and the individual was engaged in any of the negotiations, transactions, planning, arrangement, or any part of the decision-making process relevant to the contract during their University employment
less than 1 year's time has passed since the individual separated from the University and the individual was employed by a department in the policy-making position in the same general subject area as the proposed contract

Near Relative

"Near relative" includes the spouse, child, parent, brother, sister, 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.

The University may with Procurement COI approval purchase or lease goods from, or purchase services with the near relative of any employee, provided that:

the goods or services are not available from the University’s own facilities, and
the University employee:
- does not have, or has not had any responsibility for, or will be involved in any manner, in the department’s decision to accomplish or approve the transaction(s); and,
- does not have a personal financial interest in the transaction, or does not own or control more than a 10% interest in the business