July 1, 2008 — In 2006, the Virginia General Assembly passed legislation amending the State and Local Government Conflict of Interests Act. The act bars employees of the University of Virginia from having a personal financial interest, through ownership or compensation, in a company that contracts with the University, unless an exemption applies.
The 2006 amendment granted higher education institutions new authority to approve exemptions for contracts with firms in which an employee of the University or a member of his immediate family owns in excess of 3 percent of the contracting firm's equity. The 2006 legislation is designed to maintain and promote confidence in public contracting.
Generally, officers or employees with a financial interest in a firm involved in contract negotiations with the University must disclose in writing their interest in the firm and that they will not participate on behalf of the University or the firm in negotiating or approving the contract. The president of the University must certify that the contract is in the best interest of the University. For the specific statutory requirements, refer to Virginia Code section 2.2-3110(A)(5), (found online at leg1.state.va.us/cgi-bin/legp504.exe?000+cod+2.2-3110).
This statute may apply to you, specifically, if you, your spouse or a dependent living in your household has a financial interest in a firm that is or might be involved in negotiations with the University to provide goods or services. This financial interest might be a conflict of interest under Virginia law.
If you currently have such a conflict or anticipate a conflict in the future, you must complete a disclosure notice to document the conflict for review by the president under the exemption. This applies to contracts with the University into which your company would be entering as either the prime vendor or as a subcontractor. The University's Conflict of Interests policy is available online at www.virginia.edu/finance/polproc/pol/xva1.html. A disclosure notice template is available online in section 2.5 of the policy, or you may directly access the notice template at www.virginia.edu/finance/polproc/pol/COIADisclosureLtr062806Dr1.doc.
This is not the only disclosure notice you may receive. The State Conflict of Interests Act includes a separate exemption for conflicts created by an employee's personal financial interest in a research and development contract with the University. This exemption requires disclosure and approval by the University under a process that also complies with federal research regulations. In addition, your school may have separate procedures for disclosure of conflicts particular to its mission. Be sure to make all required disclosures.
If you have questions regarding this memorandum, contact Eric Denby, director of Procurement Services, at 924-4019. Questions about research conflicts should be directed to the Office of the Vice President for Research and Graduate Studies at 924-3606.