1. Authority granted within the University to individuals to place
orders, specify products, write specifications and sign contracts
brings with it a duty to conduct oneself in a fair and ethical
manner within a government procurement environment.
A. The following are excerpts from the Chancellor's letter of August
30, 1993 regarding ethical conduct in our environment: ..."large
state-funded institutions like UWM must pass the test of intense
public scrutiny...the decisions we make as employees of UWM are
often based upon interpretations which reflect personal
ethics....In all these cases, our personal ethics must pass the
test of public scrutiny".
B. The procurement environment in which UWM exists is a state
government procurement environment characterized by utilization
of an open, fair competitive procurement process. All
procurement records, subject to limited exceptions, are open to
inspection by the public. State government procurement practices
define a different standard of ethical or fair conduct than may
exist in a private institution or business.
C. The procurement environment in which UWM exists is a commercial
procurement environment which is defined by standard practices in
commercial transactions outlined by the Wisconsin Statutes
incorporating the Uniform Commercial Code which applies to
commerce "between merchants" (as business-to-business
transactions are called). This type of environment defines
different standards of ethical or fair conduct than exists in
transactions between a retail merchant and a consumer buying for
personal use. Individuals engaged in commercial transactions are
assumed to be sophisticated in those transactions. Determination
of such issues as warranties, unsuitable goods and services and
consequences of unsatisfactory vendor performance are not weighed
as heavily in favor of the commercial buyer as they are for an
individual consumer.
D. Vendors deserve and have a right to fair and ethical treatment.
They are typically federal and state taxpayers. They often
attend or support dependent students who attend the University.
In addition, the vendor supports a payroll of taxpayers who may
attend the University. In all of these roles, the vendor is
supporting the University financially.
2. The following published guidelines apply to ethical conduct in the
University:
A. Wisconsin Statutes, section 19.41: Code of Ethics for Public
Officials and Employes. High moral and ethical standards are
essential to the conduct of free government.
B. Wisconsin Administrative Code, Chapter ER-Pers 24 Code of Ethics
24.04: No employee may solicit or accept from any person or
organization, directly or indirectly, money or anything of value
if it could reasonably be expected to influence such employee's
official actions or judgment, or could reasonably be considered
as a reward for any official action or inaction on the part of
such employee.
C. State Procurement Manual Section PRO-D-8: No state employee or
public official may use his or her public position or office to
obtain financial gain or anything of substantial value for the
private benefit of himself or herself or his or her immediate
family, or for an organization with which he or she is
associated.
D. UWS 8.03 Standards of Conduct (1) (b): No member of the
unclassified staff may solicit or accept from any person or
organization anything of value pursuant to an express or implied
understanding that his or her conduct of university business
would be influenced thereby.
E. UW System Financial Policy and Procedure Paper 30: If the
institution judges that an employee should attend a
vendor-sponsored education session, the institution (not the
vendor) should pay all the necessary costs associated with
attendance.
3. It is not possible in this procedure to cover all the situations
which pose ethics or fairness issues in commercial dealings. A few
of the following are more common situations or practices:
A. Bid Trading: This is the practice of revealing a vendor's bid
price to another vendor to induce the second vendor to reduce its
price even lower than the first vendor's price. Prices in public
procurement are established by bids which are not revealed to
other vendors until the competitive process is complete. Awards
are made to the lowest responsive, responsible bidder.
B. Restrictive Specifications: This is a practice of writing overly
restrictive specifications which are not necessary to obtain the
required performance level of goods or services with the intent
of unfairly barring competitors from supplying goods or services
which meet requirements.
C. Unfair delays in payment: This practice typically occurs when
the University department which ordered the goods is not prepared
for acceptance or test of the goods. If a vendor supplies goods
as ordered, we are obligated to receive, test and pay for the
goods or dispute the payment for unacceptable goods in a timely
manner.
D. Acceptance of Gratuities: This is the practice of acceptance of
gifts from vendors which benefit the individual recipient. This
practice or even the appearance of this practice shall be
avoided.
E. Serial Procurement: This is the practice of breaking larger
procurements into smaller transactions with the intention of
avoiding the competitive procurement process or withholding
information regarding future procurement activity related to a
current transaction. This results in lack of fair competition
based on lack of information.
4. Formal state procurement processes are not required for certain
categories of purchases. That lack of process does not eliminate
the necessity for complying with ethical and fair conduct standards
in the consummation of those purchases.
5. The Purchasing Office investigates vendor complaints of unfair
treatment in University transactions. Internal Audit is charged
with investigating alleged incidents of unethical conduct which
violate University, System or State rules and guidelines.
6. The Wisconsin "whistle blower" law protects state employees from
retaliation for reporting to a supervisor, an employee's attorney,
collective bargaining agent or legislator, information which the
employee reasonably believes violates any state or federal law, rule
or regulation, or demonstrates mismanagement or abuse of authority,
substantial waste of public funds, or a danger to public health and
safety. Wisconsin Statute, Section 230.80 et seq
7. Individuals who violate ethical considerations may be subject to an
internal complaint process and discipline or, in very serious cases,
civil liability or criminal prosecution for misconduct in public
office. The University may also be adversely affected by exposure
to potential liability, waste of public funds, and loss of
credibility with the public and funding authorities.
Questions regarding Fair and Ethical Conduct in Procurement Transactions
should be addressed to Purchasing (x4304).
You can also send Email for more information.
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