Understanding Conflict of Interest regulations is critical for ensuring the appropriateness and legality of a contract.

Standard California state agency conflict of interest and penalty provisions for procurement apply to the University of California, including Article 4 of Chapter 2.5 of Part 2, Sections 10515 through 10524, of the California Public Contract Code.

Statute Primarily Impacts the Following Practices of Business & Revenue Contracts

• Hiring current university employees to provide services or goods to UC under agreements as contractors.
• Hiring former UC employees as contractors to perform work related to contracts that were planned, negotiated, executed or involving policy created by the employee before the employee's separation from UC.

The statute prohibits most current university employees* from contracting as individuals with any university department to provide goods or services as a contractor. In addition, the statute prohibits employees from engaging in any employment, activity or enterprise from which the employee receives compensation, or in which the employee has a financial interest, and which is sponsored or funded, in whole or in part, through a contract with the university.

*UC employees with teaching or research responsibilities, or those who are students, are exempted from this provision of the statute but are still subject to university guidelines for employee-vendors. Please refer to UC Davis Policy & Procedure Manual, Section 350-90.  

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 policy-making position in the same general subject area as that contract.

What Documentation is Required With a (Possible) Conflict of Interest?

In  general, it is recommended to select another supplier whenever possible in order to avoid a conflict of interest or a perceived conflict of interest. If this is not possible, the Conflict of Interest - Report of Proposed Transaction form (available on the Supply Chain Management Forms page) is required to document the reason for a proposed transaction involving a conflict of interest or a perceived conflict of interest.