Examples in Procurement

A "conflict of interest" in a university setting generally refers to situations in which the external interests of a university employee have the potential to influence their decisions in their university role. The influence is generally in ways that could lead to personal gain (financial or non-financial) for the individual or immediate family members.

Conflicts of interest can occur any time the university buys, rents, leases or accepts donated items that have monetary value from any entity in which a Regent's university employee has a significant interest.

These examples are intended to give an idea of the range of situations that might occur. They are not inclusive of all possible situations that could be or could be perceived to be conflicts of interest.

Situation: The spouse of an ISU employee has a graphic design business and is hired by the University of Iowa to design a brochure for an upcoming conference.

Why could this be perceived to be a conflict of interest? Iowa code prohibits the use of one's state position to influence state business in a way that could result in personal or family gain. For conflict of interest purposes, all Iowa Regent's institutions are considered a single state entity, and, therefore, there is the perception that the ISU employee could have influenced the decision by the University of Iowa to hire their spouse's graphic design business to design the brochure.

What should the employee do? The spouse should contact the ISU Director of Purchasing to apply for approval as a Conflict of Interest Vendor.

Situation: A university instructor requires students or workshop participants to purchase a book, pamphlet or training manual from which the instructor will receive royalties.

Why could this be perceived to be a conflict of interest? Requiring people to purchase an item for which one will gain financially raises questions about whether the item is being required because of its appropriateness for the class or workshop or because of the financial benefit to the instructor. This policy is found in the Faculty Handbook, 10.9.1.5

What should the employee do? The employee should determine if there is another viable product (book, pamphlet, etc.) available. If not, they should disclose the royalty issue to their department chair or college curriculum committee to determine whether they agree that the product still should be required. If they do, the employee should work with their department or college to establish a management plan to assure that earned royalties are managed in an account that does not benefit them as an individual. One possibility is to donate the earned royalties to a not-for-profit charity.

Situation: An ISU employee's company has invented a novel piece of equipment that ISU investigators would like to use in their research. The ISU investigators can not afford to purchase the equipment, and so the company decides to loan it to ISU for free in return for an agreement that the investigators evaluate the equipment and report their evaluation back to the company.

Why could this be perceived to be a conflict of interest? Donations of equipment to the university, although seemingly free, can result in various costs and legal issues (including liability for damages) and are therefore governed by rules similar to those pertaining to purchases. If, for example, the only source of parts, supplies and reagents to keep the equipment running is the company, the university would be forced to make repeated purchases from the company. The university also may be held financially liable for damages to the instrument while it is on loan.

What should the employee do? The employee should contact the Director of Purchasing to make the necessary arrangements. The management strategy will depend on the specifics of the particular situation.