Section 36: Ethical Conduct and Penalties

36.0 Ethical Conduct and Penalties

The purpose of this section is to set forth standards of conduct for employees of Utah State University where there are actual or potential conflicts. Utah State University endorses Legislative intent to strengthen and promote faith and confidence of the people of Utah in the integrity of Utah State University as outlined in Utah State Code:

Regents Policy R571, Delegation of Purchasing Authority,
Chapter 63G-6A-Section 24, Unlawful Conduct and Penalties,
Chapter 67-16, Utah Public Officers and Employees Ethic Act, and
Chapter 76-8, Receiving or soliciting bribe or bribery by public servant.

In addition, University employees are subject to conflict of interest policies noted in Code of Federal Regulations (2 CFR 200), which includes that no employee, officer, or agent must participate in the selection, award, or administration of a contract if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract.

All University employees, regardless of involvement in procurement decisions are subject to the Utah Public Officers’ and Employees’ Ethics Act. Employees who accept inappropriate gifts may be at risk of criminal penalties and/or may be subject to University disciplinary action.

As stated in Utah Public Officers’ and Employees’ Ethics Act Section 67-16-5(2), “It is an offense for a public officer or public employee to knowingly receive, accept, take, seek, or solicit, directly or indirectly for himself or another a gift of substantial value or a substantial economic benefit tantamount to a gift:

That would tend to improperly influence a reasonable person in the person’s position to depart from the faithful and impartial discharge of the person’s public duties;
That the public officer or public employee knows or that a reasonable person in that position should know under the circumstances is primarily for the purpose of rewarding the public officer or public employee for official action taken…”

Utah Procurement code specifically identifies and criminalizes activities related to the acceptance of gifts by University employees engaged in either of two roles:

Procurement Professional:
1. Employees by title and primary responsibility who are preparing, administering, conducting, or making decisions regarding a procurement process, or
2. Employees serving on an RFP, bid, or quote evaluation committee.
3. Procurement Professional Excludes:
  1. Any individual who, by title or primary responsibility, does not have procurement decision making authority, or employees not serving on an RFP, bid, or quote evaluation committee.
  2. A university or college president, vice president, business administrator, or dean.
Contract Administration Professional: an individual who is directly under contract with Utah State University and has responsibility in developing a solicitation or grant, or conducting the procurement process; or supervising or overseeing the administration or management of a contract or grant. Specifically excludes: an employee of Utah State University.

If you are currently engaged in either of the roles noted, then the prohibition on gifts and gratuities applies to you and your family members. This means it is unlawful for an interested vendor to give you a gift and for you to accept the gift. “Gift” includes travel, meal, lodging, money, loan, entertainment tickets, etc.—regardless of the value.

A gift, gratuity, or kickback does not include:

An item, including a meal in association with a training seminar, that is:
1. Included in a contract or grant; or
2. Provided in the proper performance of a requirement of a contract or grant;
An item requested to evaluate properly the award of a contract or grant;
A rebate, coupon, discount, airline travel award, dividend, or other offering included in the price of a procurement item;
A meal provided by an organization or association, including a professional or educational association, an association of vendors, or an association composed of public agencies or public entities, that does not, as an organization or association, respond to solicitations;
A product sample submitted to assist in the evaluation of a solicitation;
A political campaign contribution;
An item generally available to the public; or
Anything of value that one public agency provides to another public agency.

There are some exceptions for Procurement Professionals or Contract Administration Professional. First, there is a very narrow exception for “hospitality items” valued at less than $10. Hospitality items include a pen, stationary, toy, pin, trinket, snack, nonalcoholic beverage, or appetizer. It does NOT include a meal, money, ticket, admittance to an event, entertainment, travel or lodging. Hospitality items may be accepted from a vendor as long as the value of hospitality items from one vendor does not exceed $50 in one year.

There is also an exception for “contributions” to public entities as long as the contribution is not made with the intent to influence a procurement process or administration of a procurement contract. This exception includes the following activity:

It is lawful for a vendor to provide a voluntary donation to the University for the University’s use. This includes donation of money, services or other items of value.
It is also permissible for a vendor to provide to the University admission to a seminar, supplier fair, charitable event, fundraising event or similar event that relates to the function of the University.
It is also lawful for a vendor to sponsor a University event or for a vendor to purchase a booth at an event sponsored by the University.

If you are not a Procurement Professional or Contract Administration Professional, your conduct is still governed by the “Utah Public Officers and Employees Ethic Act.”

In general, we recommend that the best practice for ALL Employees is to separate those engaged in procurement activities and administration of procurement contracts from those engaged in development and other activities involved with donations/contributions. By clearly differentiating these roles and having separate employees fulfill these duties, it will alleviate the potential for the appearance of a violation of criminal provisions.

We recognize that the criminal nature of these activities enhances the concern of employees and Departments. If there is any question about the propriety of any conduct, please don’t hesitate to contact the Purchasing and Contract Services.

36.1 Penalties - Gratuities, Kickbacks, Small Purchase or Unlawful Use of Position or Inluence

For purposes of this procedure, points, miles, and so forth established by standard industry practice and related to individual P-Card usage are not gratuities or kickbacks.

A person who violates this section is guilty of:
1. A felony of the second degree if the total value of the gratuity or kickback is $1,000 or more;
2. A felony of the third degree if the total value of the gratuity or kickback is $250 or more, but less then $1,000;
3. A class A misdemeanor if the total value of the gratuity or kickback is $100 or more, but less than $250; or
4. A class B misdemeanor if the total value of the gratuity or kickback is less than $100.

36.2 Penalties for Artificially Dividing a Purchase

A person who violates small purchases is guilty of:
1. A felony of the second degree if the total value of the divided procurements is $1,000,000 or more;
2. A felony of the third degree if the total value of the divided procurements is $250,000 or more, but less than $1,000,000;
3. A class A misdemeanor if the total value of the divided procurements is $100,000 or more, but less than $250,000; or
4. A class B misdemeanor if the total value of the divided procurements is less than $100,000.