DARTMOUTH COLLEGE CONFLICT OF INTEREST POLICY
FOR PURCHASING AND PROCUREMENT OF GOODS AND SERVICES
I. Policy
Dartmouth College recognizes the importance of avoiding actual and perceived conflicts of interest in purchasing and procurement. A conflict of interest occurs when an individual’s personal or private interests might lead an independent observer to reasonably question whether the individual’s professional actions or decisions are influenced by considerations of personal interest, financial or otherwise. To avoid such conflicts, Dartmouth College adheres to the following principles regarding purchasing and procurement:
1. All purchasing and procurement decisions made on behalf of Dartmouth College must be based solely on a desire to promote the best interests of the institution. In order to avoid conflicts of interest in purchasing and procurement, whenever practical, purchasing decisions shall be made based on competitive bidding, using fairly developed specifications which increase the opportunity for multiple sources to submit a bid.
2. Purchasing and procurement decisions should not provide personal gain to an employee. Employees of the College who have direct or indirect influence on those decisions have an obligation to identify situations which would lead to personal gain, and each department should provide an opportunity for an employee to identify potential personal gain and to recuse himself or herself from the decision.
3. Employees may not participate in the selection, award, or administration of a contract if the employee, or any member of his or her immediate family, his or her domestic partner, his or her close friend, or business associate, has a financial or other interest in a firm that is eligible to be considered for an award.
4. Gifts and Gratuities: No gifts, beyond those of an advertising nature and insignificant value, generally distributed to all potential customers, may be accepted by any Dartmouth employee or related party from an actual or potential supplier of goods and services. Gifts offered or received which are unacceptable according to this policy shall be rejected or returned to the donors and the offer of the gift shall be reported to the appropriate supervisor, Dean or Department Chairperson, and to the Director of Procurement & Auxiliary Services. Participation as a guest of a vender in an event sponsored by the College is not considered a gift or a gratuity. However, departments are encouraged to recognize that allowing one individual within a department to participate in events at the exclusion of others can lead to morale problems and perceptions of unfairness. Furthermore, repeated participation as the guest of one vender can lead to concerns about favoritism towards that vender.
5. Meals: For a variety of reasons, it may be convenient for an employee and a representative of a supplier to meet over a meal. There is nothing unethical about meeting with a supplier or potential supplier over a modest meal paid for by a supplier, either to give the salesperson a better opportunity to present his or her case, or to cultivate a business relationship, provided the employee accepts invitations for such a meal from other suppliers or potential suppliers. However, an employee should reject an offer of a meal if he or she believes that accepting the offer might be viewed as creating an obligation on the part of the College. Furthermore, extravagant and/or frequent meals with an individual supplier are more likely to benefit the individual employee than the College and must be avoided.
6. Attendance at Events. From time to time, employees are invited to attend events sponsored in whole or in part by vendors or potential vendors of the College. As with gifts and gratuities, employees should not accept purely social entertainment offered or sponsored by suppliers. Entertainment is not construed to mean an occasional business meal as described above or a function where Dartmouth stands to benefit from the supplier association. In some cases, employees may attend events that are sponsored by a vendor if the employee reasonably believes that attendance may be beneficial to the College. For example, an employee may attend an educational or networking event sponsored by a vendor as a way to obtain information that may be beneficial to the College.
II. Noncompliance
The College reserves the right to void contracts which in the College’s judgment promote the interests of an employee over the interests of the institution. In addition, an employee’s failure to follow the guidelines set forth above may result in discipline, up to and including discharge. In the event an employee fails to comply with this policy, the Director of Procurement and Auxiliary Services should be notified in order to evaluate whether or not any action should be taken related to the transactions that the College entered into. Concerns about conflicts of interest should be brought to the attention of the Director of Procurement and Auxiliary Services. As an alternative, the concern can be raised by contacting the College’s Business Ethics Helpline (http://www.dartmouth.edu/~businessethics/helplines/index.html).
III. Examples
The following examples illustrate the situations described above and the expected employee response. These examples are illustrative only and are not meant to be exhaustive.
1. Disclosure and Recusal:
a. Department A needs to purchase a piece of equipment for a laboratory. The Department’s business manager, Mary, would normally research the venders for a purchase like that and, working with the principal investigator(s), make the purchase. Mary’s husband Bob is a commission salesman for an equipment company that sells the equipment the Department needs. If Department A purchases the equipment from Bob’s company, he will receive a commission. In order to avoid a conflict of interest, Mary should advise her supervisor, the Department Chair or the relevant Dean in writing of the conflict and remove herself from the decision making process. In addition, Mary should not participate in the purchasing decision. Instead, the decision should be made by her supervisor or another more senior person within the Department. Procurement can provide support for purchasing decisions in these cases.
b. Department B purchases a commodity that is available from several different vendors. Company X is one of the vendors that supplies the commodity in the Upper Valley. Bob, the manager of Department B, is responsible for the purchasing decisions. Company X is owned by an individual who has been Bob’s friend for many years and their friendship predates Bob’s position at Dartmouth. If Bob decided to buy the material from Company X, it might appear to others that his friendship was a factor in that decision. In addition, eliminating Company X from the opportunity to supply the College would disadvantage Company X and might result in higher cost for the College. Alternatives include allowing Procurement and Auxiliary Services to solicit bids for the products and recommend an award
2. Gifts and Gratuities:
a. Outdoor Programs Golf Tournament. Each year, the Outdoor Programs Office hosts a fundraising golf tournament. Several venders of the College, including venders who have no connection to the Outdoor Programs Office, pay for foursomes to play in the outing. Some of those venders invite College employees to participate in the tournament. Those invitations may arise out of friendship with a particular employee or a business relationship with that employee. In either case, participating in the tournament as a guest of a vender would not be a violation of this policy because the event is sponsored by the College. Departments should be aware that a concern may develop within a department if some people are denied the opportunity to participate in such an event while others are allowed to participate. Managers should be prepared to deal with the morale issues that can be caused by including some employees while excluding others.
b. Entertainment. Company A sells a commodity that is used by a particular department at the College. The commodity is available from several different suppliers. Bill is the manager in that department and he can decide what supplier to purchase from. The owner of Company A, who has no relationship with Bill outside of work, invites Bill to join him for a trip to Fenway Park to see the Red Sox. Bill should not accept the ticket to the game because it violates this policy. Accepting the gift is a problem because it could put Bill in the position of feeling ‘in debt’ to Company A and needing to spend College money to “clear” that debt, it could lead the owner of Company A to believe that Bill will steer more business his way, and it could lead other people in Bill’s department to think that Bill was not making purchasing decisions in the best interest of the College.
c. Red Sox Game. Assume the same fact pattern as Example B above, with the following addition: The Owner of the Company A and Bill are friends and their friendship precedes the relationship at Dartmouth. Bill has disclosed his relationship to the owner of Company A under this policy. The Owner invites Bill to attend the game as a friend, not as a business contact. Bill will not feel “in debt” to the Company by accepting these tickets. Accepting the tickets under these circumstances would not be a violation of the policy.
d. Networking event. A vendor is a sponsor of a networking event at an educational program of interest to a manager. Managers from peer institutions are likely to attend the educational program and the networking event. Contact with peers is likely to be helpful to the manager in the performance of his or her duties, and thus helpful to the College. The manager may attend the event.
