If you are not using AggieBuy or an existing university purchasing agreement, you must consider the points on this page when selecting a supplier.

• Conflict of Interest
• Ethical Considerations
• Location Related Costs
• Independent Contractors
• Independent Contractors - IRS Classification Checklist

Conflict of Interest

Per university policy, it is important to avoid any and all conflicts of interest. Employees must disqualify themselves from participating in university decisions in which they have a personal financial interest. This includes purchasing from:

• spouses/relatives/near-relatives
• companies for which the purchaser/decision-maker has stock ownership
• current/former UC Davis employees. See policy.  If you are not sure if the person selected as a supplier is a UC Davis employee, check the Person lookup in KFS. The Person lookup includes all active UC Davis employees.

A Report of Proposed Transaction Involving Potential Conflict of Interest (PDF) should be completed and electronically attached to the Requisition document in KFS if there is any concern of a possible conflict of interest.

California Public Contract Code (section 10515 through 10524) restricts the way UC does business with consultants, employees, former employees and independent contractors. The code primarily impacts the following three business practices:

Successor Contracts

• A person or business entity awarded a consulting services agreement by UC shall not bid on or be awarded a successor contract to provide goods or services required, suggested, or otherwise deemed appropriate in the end product of the original consulting services agreement. In other words, consultants who have performed work for the university cannot participate in subsequent projects relating to the consultant's findings. 
• If a multi-phase project is contemplated, such as a pilot or prototype to be followed by full implementation, any agreement should cover all potential phases of the project with appropriate language reserving final cost figures and the university's discretion to proceed or not with full implementation.

Employee Suppliers

• The  California Public Code statute prohibits university employees from contracting as individuals (independent contractors) with any university department to provide goods or services as an independent contractor. This statute applies to contracts with ANY UC employees, including, but not limited to, UC Davis employees.
• In addition, the statute prohibits employees from engaging in any employment, activity or enterprise from which the employee receives compensation, or in which he or she has a financial interest that is sponsored or funded, in whole or in part, through a contract with the university.  UC employees with teaching or research responsibilities are exempted from this provision of the statute but are still subject to university guidelines for employee-suppliers. See UC Davis Policy & Procedure Manual, Section 350-90.

Contractors who are Former UC Employees

The statute contains two restrictions on contracting with former employees:

• A former university employee cannot enter into a contract for two years from the date of separation to perform work related to contracts that were planned, negotiated, or executed by that employee.
• A former university employee cannot enter into a contract for one year from the date of separation to perform work on a contract if he or she was employed by that department in a policymaking position in the same general subject area as that contract.

UC Davis Health Considerations

In addition to the conflict of interest situations described above, employees who work for UC Davis Health and health professional schools (e.g., medicine, dentistry, nursing, pharmacy, optometry, veterinary medicine) should be aware of the Health Care Vendor Relations Policy. This policy has additional restrictions on supplier compensation and gifts to departments, and also discusses suppliers entering and/or working in patient care areas.

Ethical Considerations

Choose suppliers for the quality and prices of the goods and services they provide. Avoid gifts or gratuities from suppliers.

Location Related Costs

If considering an international supplier, consider the added costs for customs and import fees. Buying locally is generally more economical and more sustainable.

Independent Contractors

An Independent Contractor transaction is one in which the University is contracting with an individual, or a company owned and operated by an individual. If processing a purchasing transaction with an Independent Contractor, the required information/documentation for your KFS document (Purchase Agreement or Requisition) includes:

1. Pre-Hire Form: MUST be completed in its entirety and signed by authorized signatory, and electronically attached to your KFS document (see Forms page).
2. Conflict of Interest Form: Required if contracting with a current or former UC employee or near relative (see Forms page).
3. Detailed Scope of work (Who, Where, When, What, Why) provided by supplier
4. Specific details on the Deliverables (Results) of the service
5. Exact description of the service being provided
6. Specific rate assigned to the service being provided
7. Period of the agreement (Specific Start and End Dates)

Independent Contractors-IRS Classification Forms Checklist

• Instruction:
  • Employees are subject to instruction, and independent contractors generally are not.
• Training:
  • Employees generally receive training from their employer and independent contractors determine their own work methods.

• Significant investment:
  • Employees use university equipment and facilities to perform their work and contractors have business capital investment.
• Payment of expenses:
  • Employers pay all expenses for an employee, whereas independent contractors typically absorb these costs in their fee and are not reimbursed separately.
• Services available:
  • Employees who work full time for the university are not likely to have other customers.
• Incremental payment:
  • Typically, employees are paid a salary and contractors are paid by the job.
• Risk of profit or loss:
  • Employees are paid a salary regardless of the profitability of the company, and contractors may make a profit or suffer a loss depending on their project pricing.

• Regular University business activity:
  • In most cases, regular business activities are performed by an employee, and a contractor performs specialized services not generally performed by an employee.
• Agreement document:
  • A contractor will have a written agreement describing the individual as an independent contractor.
• Status of individual:
  • Employees receive benefits and are supervised. Contractors do not receive university benefits, and determine their own work methods.
• Control of individual:
  • An employee can terminate their relationship with the university without liability, submits oral or written job reports, receives supervision of work methods and may supervise other employees and follows set work hours. Independent contractors may incur contractual liability by terminating a contract before completion, and they determine their own work methods and time to produce the desired results.