Section 1

CONTRACTING WITH UNIVERSITY EMPLOYEES (FACULTY / STAFF) 

A. Definition
A contract is any agreement between the University and another party, which is enforceable at law, whether or not it is, titled "Contract". A contract includes any agreement made on behalf of the University in which legally enforceable commitments are made by or to the University. Other terms that are sometimes used include agreement, letter of agreement, letter of understanding, memo of understanding, consortium, operating agreement, etc.
 
B. Guidelines
The University may enter into contracts with University faculty/staff and businesses in which they have a financial interest so long as there is compliance with the reporting requirements and limitations outlined in Section C below. The University Purchasing Department, along with other departments who have been granted authorization, are delegated the responsibility of monitoring and approving all bidding and purchasing of equipment, goods and supplies, leases and rentals, and contracts for professional services from University faculty/staff or businesses in which University faculty/staff have a financial interest.
  1. The reporting requirements and limitations set forth apply to all contracts except those which create or supplement employment relationship agreements between the University and the faculty/staff. This regulation covers, but is not limited to, the purchase of equipment, goods and supplies, contracts for construction, renovation and repair, leases and rentals, and contracts for professional services.

  2. University offices may adopt more restrictive regulations (with the permission of the appropriate vice president) than those outlined in this Policy in order to serve the special needs of their area.

  3. The University does expect account directors to use reasonable care to follow the established criteria, particularly in the use of University credit cards and to see that the University makes quality purchases for the lowest prices and to avoid patterns of preferential purchasing from businesses owned or operated by University faculty/staff or businesses in which University faculty/staff have a financial interest.
 
C. Reporting Requirements when Contracting with Faculty/Staff or Their Family/household's Business
  1. It must be demonstrated that the business is an ongoing pre-existing one, based on the following criteria:

    1. The business must have been in existence for at least one year prior to doing business with the University.

    2. The business cannot generate 50 percent or more of its gross annual sales from sales to the University.

  2. The faculty/staff must complete a Financial Disclosure Statement (see Attachment A) and submit it to the Purchasing Department before the business is eligible to contract with the University. A disclosure statement must be resubmitted annually to remain eligible.

  3. The faculty/staff or their Family/Household may not sell or lease products or services to the faculty/staff's own department/unit or to departments he/she supervises.

  4. If the purchase exceeds $1,000, competitive pricing is required.

  5. No contracts will be made with a University faculty/staff's, or their Family/Household's business if that faculty/staff has been involved with developing the design or specifications for that contract, or is involved in negotiating that contract on behalf of the University.
 
D. Exceptions
The President or designee may approve exceptions to this Policy, which involve University faculty/staff. Faculty/staff must process their request for an exception through their appropriate vice president. Exceptions involving the President must be approved by the Finance Committee of the Board of Trustees. Approval of all exceptions must be in writing and include a disclosure of the parties to the transaction, the subject matter of the transaction, and reasons for the exception. If approved, the signed exception must be forwarded to the Purchasing Department.

CENTRAL MICHIGAN UNIVERSITY

1200 S. Franklin St • Mount Pleasant, Mich. 48859
Phone: 989-774-4000

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