X-42 Authorizing Contracts Between the University and a Member of the Faculty, Research Staff, or Coaching Staff or a Company in Which the Employee has an Interest Under Specified Circumstances

NORTHWESTERN STATE UNIVERSITY

Authorizing Contract Between the University and a Member of the Faculty, Research Staff, or Coaching Staff or a Company in Which the Employee has an Interest Under Specified Circumstances

I. Purpose and Scope: This procedure outline the method for authorizing contracts between the University and its faculty, research staff, and coaching staff or contract with a company in which the faculty, research staff, or coaching staff has an interest under specified circumstances.

II. Reference: Louisiana R.S. 42:1101 to R.S. 42:1148 (especially R.S. 42:111, 42:1112, and 42:1123)
Rules of the Board of Supervisors

III. Responsible Area: President and Vice Presidents
Business Affairs - Purchasing Section
Business Affairs - Human Resource Section

Policy

Background

A sizeable body of Louisiana law (Title 42) addresses the permissible conduct, qualifications, duties, performance, compensation and benefits, and penalties for Public Officers and Employees. Prior to the passage of Act 229 of the 1987 Regular Session of the Louisiana Legislature, Louisiana law prohibited an employee of a university and any company in which he/she owned an interest from bidding on or entering into a contract with the university or involving the university. Act 229, which became R.S. 42:1123 (10), amended the Ethics Code to authorize contracts between a university and members of its faculty or a company in which faculty members have an interest under specified circumstances. Act 1107 of the 1997 Legislative Session broadened R.S. 42:1123 (10) to include members of the university's research staff or athletic coaching staff regarding research activities or athletic coaching activities.

This policy recognized the benefits of certain types of contracts between Northwestern and its employees or legal entities in which these employees have an interest. Nothing in the policy is intended to preempt or invalidate any other provision of Northwestern policy that is considered to be lawful and valid under State of Louisiana law and policies of the Louisiana University System.

The following definitions shall apply throughout the remainder of this policy:

"Employee" shall mean any member of Northwestern's faculty, research staff or coaching staff.

"Private entity" shall mean any outside foundation, cooperation, company or partnership in which the employee, or a member of his or her immediate family, has an economic interest.

"Economic interest" means a five percent (5%) or larger shareholder position.

Contracts Permitted

For a proposed contract between Northwestern and a Northwestern employee or Northwestern and the private entity to be permitted under this policy, the contract must relate to either:

1) The disposition of a patent, copyright, licensing right, or royalty which is attached to a discovery, technique, or technology resulting from research done, in whole or in part, by a Northwestern employee in the course of his or her employment at Northwestern, or

2) A business activity relating to or resulting from research conducted, in whole or in part, by a Northwestern employee in the course of his or her employment at Northwestern, or

3) A business activity relating to or resulting form a coaching activity of a Northwestern employee conducted in the course of his or her employment at Northwestern.

Exceptions

Other Northwestern employees may not have an interest in the contract or the private entity if:

4) They participated on behalf of Northwestern in the negotiation of the contract; or

5) Members of their immediate family participated in the negotiation of the contract on behalf of Northwestern.

IV. Procedure:

If an employee or the private entity desires to enter into a contract that conforms to stipulations 1, 2, or 3 above and is not precluded by stipulation 4 or 5 above, then the following procedures must be followed.

1) All contracts and correspondence must be in writing and Attachment #1 (Request for Authorization of Contract Between Northwestern State University and a Member of the Faculty, Research Staff, or Coaching Staff or a Company in which the Employee has an Interest) must be completed and submitted to employees' respective Department head, Dean and/or Vice President

2) The ownership interest in the private entity must be disclosed in full and in writing. The owner's name(s), address, and interest, as well as the names of every officer, director, manager, board member, and five percent (5%) or larger shareholder, must be stated

3) All negotiation between an employee, or the private entity, and Northwestern must be at arms' length. Neither the employee nor his or her immediate family, when they are also employed by the University, may participate in negotiations or decision making on behalf of the University. Northwestern may, however, elect to consult the employee regarding technical or scientific aspects of the proposed contract.

4) Another Northwestern employee, appointed by the President, who is not under the direct supervision of or a member of the department of the employee submitting the contract request, must negotiate the contract on behalf of Northwestern

5) A University Committee, appointed by the University President, must review all such proposed contracts after they have been negotiated and the employee and/or private entity have agreed to their terms. Membership of this committee may include representatives from both the public and private sectors. The President or designee shall chair the committee. This committee will e empowered by the University of Louisiana System Board of Supervisors to certify to the Board of Regents, per Louisiana R.S. 42:1123 (10)(a), semiannually, that entering into the contract will contribute to the economic development of the state, and among readily available alternatives, entering into the contract serves the public interest

6) The appropriate Northwestern Vice President or designee shall certify to the committee that entering into the contract will not interfere or conflict with the performance of the employee or the employee's fulfillment of his/her obligation to Northwestern

7) An employee with a joint appointment must receive the approval of the other institution, provided, however, that where agreement or approval cannot be reached or is unobtainable, the University President shall make the final decision without such approval

With respect to payments made pursuant to any contract perfected under this policy, the following standards must be followed:

8) Compensation to Northwestern for the use of services, supplies, facilities, equipment, or technology must be paid at the same rate that such services, supplies, facilities, equipment, or technology would be made available to the general public or to others under arms' length negotiated contracts

9) Compensation from Northwestern to the employee, or to the private entity, for service rendered cannot be more than normally would be paid for similar services

10) Where Northwestern and an employee, as a contractor or subcontractor, or Northwestern and the private entity provide services to a third party, a fair apportionment of the remuneration should be made and specified based on the value of their respective contributions in service, investment, technologies, equipment, or facilities utilized

Contracts and Agreements Involving the University Foundation

Separate public not-for profit corporations are frequently established to perform certain duties in support of the University. Among these are the tasks of accepting, buying, selling, leasing, licensing, or otherwise alienating intellectual property assigned to it by the University. When a contract, or agreement, is proposed as stipulated above except that it is between the employee and the foundation or the private entity and the foundation, then for purposes of this policy it shall be deemed to be between the employee or the private entity and University for approval and review purposes. In such cases, all the above policy essentials apply except the negotiation and the final contract execution (signing). Approved University policy and procedures must be followed with the University prior to final approval and execution. In such a case, the tasks of negotiation and final execution of the contract reside with the Foundation. Nothing in this policy is intended to preempt, influence, eliminate, or diminish the due diligence responsibilities of the Foundation.

Relationship to Policy on Employment Outside the University Setting

Northwestern's Employment Outside the University Setting (University Policy and Procedure X-7-1), must be independently satisfied before any action under this Contract Policy will be effective. Northwestern's Employment Outside the University the University Setting is not preempted, influenced, eliminated, nor diminished by an action under Employment Outside the University Setting prior to making application under this Contract Policy.

Employee or Private Entity

1. Completes Request for Authorization of Contract Between Northwestern State University and a Member of the Faculty, Research Staff, or Coaching Staff or a Company in which the Employee has an Interest (Attachment #1). Submit to respective Department Head, Dean and/or Vice President.

Department Head, Dean and/or Vice President

2. Reviews contract for completeness and forwards to President.

President

3. Sends contract to University employee who he has appointed to negotiate the contract on behalf of the University. (This employee cannot be under the direct supervision of or a member of the department of the employee submitting the request).

President's Appointee

4. Receives contract request from President. Negotiates the contract on behalf of Northwestern. Submits the negotiated contract to the University Committee appointed by the President for review.

University Committee

5. Receives negotiated contract from Negotiator. Review contract and have certification from appropriate Vice President/designee that entering into the contract will not interfere or conflict with the performance of the employee or the employee's fulfillment of their obligation to the University. (This Committee must certify to the System Board of Supervisors, semiannually, that entering into the contract will contribute to the economic development of the state, and among readily available alternatives, entering into the contract serves the public interest.) Decision of the Committee is sent to the President.

President

6. Receives decision from University Committee. Notifies respective employee of Committee decision.

 

 

Attachment #1 

REQUEST FOR AUTHORIZATION OF CONTRACT BETWEEN NORTHWESTERN STATE UNIVERSITY AND A MEMBER OF THE FACULTY, RESEARCH STAFF, OR COACHING STAFF OR A COMPANY IN WHICH THE EMPLOYEE HAS AN INTEREST

Date: _____________________


Employee Name: _________________________________

Employee Department: ________________________________

Employee Status:
_____ Faculty
_____ Research Faculty
_____ Coaching Staff

Type of Contract Request: _______ Between NSU and employee
_______ Between NSU and legal entity


If contract is between Northwestern State University and a legal entity (company) in which NSU employee has an ownership interest, provide the following information:

Name of legal entity (company):
Type of business:
Name and address of owner and % of ownership interest:


If applicable, provide the names of officers, directors, managers, board members, and other shareholders who have a 5% or larger share of ownership:

 

 


Description of services to be provided/received if contract is approved:

 

 

 

In what way will this contract/agreement contribute to the economic development of the state and serve the public interest?

 

 

Contract Terms and Conditions:

 


Signature:

Employee/legal entity representative: ___________________________ Date _______________

Northwestern State University Approvals:

NSU Negotiator: _________________________________ Date _______________

NSU Committee: _________________________________ Date _______________

NSU President: _________________________________ Date _______________