Financial conflict of interest (COI) is an often unexpected factor in a procurement which can stop a transaction in its tracks. California state law mandates some restrictions and has some outright prohibitions on purchasing transactions involving individuals or companies with certain defined ties to university personnel. COI is so important that UC and UC Davis policy prohibits even the appearance of it. You will help yourself in the long run to learn a bit about COI and how to avoid it.

Some financial COIs are rather obvious – not hiring your own company, for example – but some of the restrictions are not so obvious. For example, doing business with a company in which your sister-in-law owns a 1% interest, or contracting with someone who left UC employ less than a year ago (2 years in some cases.) Another potential COI situation involves going straight to a single vendor without checking for other vendors or their prices. These do not automatically make a transaction impossible when addressed in advance of the actual purchase but certain steps must be taken and documented through the procurement process.

For these reasons it is best not to make any firm commitments to anyone until you’ve checked with the UC Davis office handling your procurement request. Making a promise we later can’t keep creates hard feelings that can have repercussions for years.

Specifically related to license agreements for Intellectual Property is “What Inventors Need to Know About Conflict Of Interest In Licensing.”