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Conflict of Interest: Employee-Vendor Relationships

UC policy attempts to avoid preferential treatment in purchasing goods and services by separating employees’ personal interests from the interests of UCLA. Recent state law prohibits most staff from selling goods or services as independent contractors to the University of California and requires waiting periods before many separated UC employees may enter into contracts with UC.

What is an employee-vendor relationship?

An employee-vendor relationship is any relationship between a UCLA employee and a proposed vendor that might create a conflict of interest.

When does an employee-vendor relationship exist?

An employee-vendor relationship exists when a family relationship exists between the person involved in the selection of the vendor and the proposed vendor.

Examples of employee-vendor relationships include:

  • A University employee acts as a vendor to sell goods or services to the University.
  • A University employee buys goods or services for UCLA from a vendor who is a member of the employee's family.
  • A University employee or a member of his or her family owns or controls at least 10% of the business from which the university purchases goods or services.

Rules governing employee-vendor relationships

If a current University employee is the proposed vendor, and that employee does not have teaching or research responsibilities as part of his or her job, that employee cannot sell goods or services to the University. There are no exceptions provided in the law for sole source considerations.

If a former University employee is the proposed vendor:

  • The law provides for a 24-month waiting period before the former employee may enter into a contract in which he or she was a part of the negotiations while a University employee.
  • The law provides for a 12-month waiting period before the former employee may enter into a contract with his or her former department if he or she was a policy-maker in that department.

What if an employee-vendor relationship exists?

UCLA strives to avoid employee-vendor relationships, both to comply with the law and to prevent the appearance of favoritism. If a potential employee-vendor relationship exists, you must disclose it in advance to the Purchasing Director. A careful analysis of the relationship may result in approval.

To report the relationship

  1. Complete the Employee-Vendor Relationship Disclosure form.
  2. Forward the form to the Purchasing Director.
  3. The Purchasing Director will coordinate an impartial review with departmental representatives, Campus Counsel, and/or General Counsel to determine if the purchase from the proposed vendor is allowable and in the best interest of UCLA.
  4. The Purchasing Director will contact you with the decision.