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).
  

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