Regulations, Policies, and Best Practices for Conducting Business with UC San Diego

The University of California, San Diego has experienced an increase in the number of reported fraudulent emails being sent to our suppliers by individuals posing as UC San Diego employees, specifically Chief Procurement Officer Ted Johnson.

The perpetrators of this scheme are requesting quotes in a manner that does not align with UC San Diego processes. Indications of fraudulent emails include incorrect domain names in the email address, poorly written emails with grammatical errors, and a request to open a line of credit on behalf of the university. 

Ensure that you are doing business with an authorized University of California, San Diego employee

Do not ship goods or provide services to the university without first receiving a valid purchase order 

• UC San Diego emails will end with mail.ucsd.edu
• deliveries to personal residences are generally not allowed
• most purchases go through the campus eProcurement site, Oracle, and will generate a Purchase Order
• when accepting a payment method other than cash, proper identification should be obtained prior to completion of a sale
• UC San Diego cannot be responsible for fraudulent orders 
• if orders were accidentally shipped as a result a fraudulent scheme, report it to your local police department

*Note: If there are any doubts regarding the legitimacy of a purchase or quote request, contact Strategic Procurement at 858-534-9494 or pohelp@ucsd.edu.

Additional information regarding purchase order fraud can be found on the FBI website (search FBI.gov).

Purchases above $100,000 require a competitive bid

University policy* and the state of California's Public Contract Code (PCC)** require that competitive bids be obtained for purchases above $100,000.

*Detailed information regarding this policy can be found in the University of California Business and Finance Bulletins under BUS 43 Part 3
**Detailed information on code PCC is available on the California Legislative Information website.

Exceptions to the competitive bid requirement include:

• Sole source: If Strategic Procurement determines that goods or services are only available from a sole source, a competitive bid may not be required. A sole source might include:
  • Patented software products
  • Drugs
  • Manufactured items are only available from 1 supplier or manufacturer.
  • The need to match existing furniture
  • Part replacement on a custom piece of equipment
• Strategically sourced contracts: Competitive bids are not needed for contracts previously established through the strategic sourcing process since the competitive bid requirement has already been satisfied. UCSD encourages its community to take advantage of strategic sourcing contracts. Departments may make purchases under these contracts even if the value of the purchase exceeds $100,000.
• Professional or personal services: Certain exemptions apply to contracts for these types of services. Please contact Strategic Procurement for information specific to your situation.
• Oracle suppliers: Most of the products and services available through Oracle are sourced from a formal competitive bid process, thereby satisfying the university's policy.
• Emergency or public safety: Under some emergency situations where the loss of life or major loss of property may occur, university policy permits Strategic Procurement to forgo competitive bids.
• UCSD Strategic Procurement is solely responsible for managing all competitive bid solicitations in accordance with university policy.

Detailed information and links to the most current versions of the University of California Terms & Conditions and other legal forms that may be required in negotiated agreements with UC San Diego are housed on the University of California Forms and Policies page on the University of California Office of the President (UCOP) website. 

For more information regarding federal flow-down terms and conditions, please see the University of California Research Policy Analysis and Coordination page (includes information and links to Federal Agency home pages, Federal Regulations, OMB Circulars, and other contract and grant terms and conditions) 

The University of California’s policy requires that all suppliers doing business with the University carry insurance

Certificates of Insurance: A Certificate of Insurance provides proof that a vendor, contractor, consultant, or facility user has purchased an insurance policy and that The Regents have certain rights under that policy.

The university requires insurance certificates to ensure the protection of its assets from exposure to losses created by the liability of those with whom it does business. The certificate verifies that the supplier meets the indemnification and insurance requirements in a contract or agreement.

Insurance certificates issued to the University should name "The Regents of the University of California" as an additional insured and include the required insurance limits as indicated in the contract or agreement. Send certificates to uc@instracking.com.

Required levels of insurance vary with the type of goods or services supplied.

Standard minimum insurance requirements are:

Detailed information regarding UC insurance requirements can be found in the University of California Business and Finance Bulletins under BUS 63.

 When issuing a certificate pay careful attention to the policy expiration date. The buyer should ensure that:

• The insurance does not expire before the end of the contract term. If it does the buyer will request a new certificate before the expiration date.
• If the contract is extended, the buyer will ask that the certificate is current. In some cases, coverage must continue for three years beyond the termination of the contract.

Learn about possible tax implications when conducting business with UC San Diego

• UC San Diego is subject to California sales tax, when applicable. Suppliers registered to do business in California should charge sales tax when it is due. 
• UC San Diego may be required to withhold federal or state income tax when services are provided. California nonresident withholding is required on all services totaling over $1,500 in a calendar year when the services are physically performed in California. 
• Sales Tax: California is a seller-liability state when it comes to sales tax. A California retailer who does not collect the sales tax from the purchaser is simply electing not to reimburse itself for the sales tax. The obligation remains with the retailer and cannot be transferred to the purchaser in the event the sales tax remains unpaid to the state.

More information about sales and use tax and nonresident withholding can be found on the Franchise Tax Board website: https://www.ftb.ca.gov/

Only the issuance of a resale certificate by the purchaser to the retailer will transfer the liability of the sales tax to the purchaser. The purchaser then becomes responsible for collecting the sales tax at the time of resale. If the purchaser subsequently decides to self-consume the item originally purchased for resale, the purchaser would be liable for use tax on the item.

• Use Tax: If you are an out-of-state vendor who is not licensed to collect sales or use tax, the University will accrue the tax and directly pay the state. Note: Any supplier doing business within the state, as defined by the California State Board of Equalization, is subject to audit by the Board on any of its transactions with California entities.

When sales or use tax applies

• Funds being used are not specifically exempt from sales tax
• Goods or services are taxable according to California State Board of Equalization (SBOE) regulations

When sales or use tax doesn't apply

• Funds being used are within non-taxable guidelines of a contract or award
• Goods or services are tax-exempt
• Items purchased are for resale

Synopsis

• Purchases of tangible personal property, such as photocopier machines or toner cartridges, are taxable.
• Services, such as maintenance or repair, are generally not taxable. However, any consumables supplied in the course of making the service call are taxable.
• In most cases, our purchases are not for exempt use or resale. You will need to make your tax determination based upon each purchase transaction.

Who is authorized?

UC San Diego Strategic Procurement has the delegated authority for signing all contracts or agreements that commit UC San Diego to purchase, rent, lease, license, subscribe to, or use goods or services. This delegation comes from the president of the University through the UC San Diego chancellor.

Generally, individual faculty members and employees are not authorized to sign on behalf of the University or to bind the university in any manner. 

Why is authorization necessary?

Contracts and agreements often contain terms and conditions that are in conflict with the business rules and policies of the university. Professional buyers understand these possible areas of disagreement and can negotiate with you to come to a mutual agreement.

Obtain an authorized signature

To be sure an authorized person is the one signing your form of agreement, send it to the professional buyer responsible for the purchase, or to:

UCSD Strategic Procurement
9500 Gilman Drive Mail Code 0914
La Jolla, CA 92093-0914

Employee-Vendor Relationships

It is University policy to keep separate an employee's university and private interests and to safeguard the university and its employees from charges of favoritism in the acquisition of goods and services.

What is an employee-vendor relationship?

An employee-vendor relationship is a relationship between a UCSD employee and a proposed vendor that might create a conflict of interest. An employee-vendor relationship exists when:

• An employee proposes to rent, sell, or provide goods or services to the University.
• An employee owns or controls more than 10% interest in the vendor who proposes to rent, sell, or provide goods or services to the University.
• A former employee proposes to rent, sell, or provide goods or services to the University.
• A near relative or spouse of an employee currently provides or is being proposed to provide, goods or services to the University.
• A near relative or spouse of an employee owns or controls more than 10% interest in the vendor who currently provides, or is being proposed to supply goods or services to the University.

Disclosure

If an employee-vendor relationship exists, the department must disclose it in advance to the Chief Procurement Officer. Contact a professional buyer for assistance*. A careful analysis of the relationship is required. The Chief Procurement Officer has sole authority to determine if the relationship is approved, and that approval must be granted before the university may execute a contract or purchase order.

Need an expert? *Contact Jasmine Montilla, (858) 246-3179.

In preparation for completing your application to do business with UC San Diego, please have the checklist of items completed as outlined in SBA's Register for Government Contracting resource. Suppliers are welcome to contact the Small Business Development Office to learn how to do business with us.