SUBJECT:

Purchasing System Review Audit - ONR

Recently, the campus has been the subject of a federal procurement review
conducted by representatives of the Office of Naval Research.
While the outcome of the audit was favorable to UCSD's purchasing system,
the audit team found that the campus community needed to be notified about
the provisions of the Anti-Kickback Act of 1986.

In compliance with the review team finding, we are providing the following
information, relative to the Anti-Kickback Act of 1986, to campus
departments involved in any aspect of the procurement process.

Anti-Kickback Act of 1986

Federal Acquisition Regulations (FAR 52.203-7) require that the University
have in place and follow reasonable procedures designed to prevent and
detect violations of the Anti-Kickback Act of 1986 in its operations and
direct business relationships. "Kickback" as defined by the FAR means any
money, fee, commission, credit, gift, gratuity, thing of value, or
compensation of any kind which is provided, directly or indirectly, to any
prime Contractor, prime Contractor employee, subcontractor, or subcontractor
employee for the purpose of improperly obtaining or rewarding favorable
treatment in connection with the prime contract or in connection with a
subcontract relating to a prime contract.

The University's procedures for enforcing these guidelines are:

(a) compliance with NAEB (National Association of Educational
Buyers) standards of conduct for purchasing professionals, as
outlined in the Purchasing Policy and Procedure Manual, Section
523.

(b) the Presidential Policy on Acceptance of Gifts and
Gratuities under California's Political Reform Act, dated March,
1995, which is consistent with the State of California Political
Reform Act of 1978 and is responsive to OMB Circular A110
administrative requirements;

(c) internal and external reviews from ONR and A110 provide
checks and balances, and;

(d) UCSD's established levels of authority for approving
transactions the purpose of which is to detect any discrepancies
or failure to follow required polices and procedures.

(e) If an employee becomes aware of any activity of the type
described herein, they should immediately report such activity to
the Purchasing Manager. If this person or the person appointed
to receive such reports is the person alleged to have received
the kickback, then the activity should be reported to the
Assistant Vice Chancellor Business and Financial Services. These
reports will be examined and, if warranted, investigated.

This policy and the referenced 'NAEB standards of conduct'
are available for review from Purchasing's web site at
http://www-bfs.ucsd.edu/pur/services/pursvcs/ethicsgs.htm.
This site can be accessed via InfoPath through Administration, link to
Business Affairs --> to Business and Financial Services --> to Purchasing.

Should you have any questions, or would like to discuss the details of
these requirements or this policy further, please contact Linda Collins,
Purchasing Manager, extension 43082 or email lcollins@ucsd.edu.

Don Larson Assistant Vice Chancellor