Conflict of Interest Situations with Possible Management Plans
Purchasing Agreement
At many times throughout the history of the University, a certain laboratory, department, center, etc., may produce a certain product or material and make it readily available to the research community, both within and external to the University for a certain pre-determined fee. For a variety of reasons including lack of funding or a high demand for the product/material, it is not uncommon that the University may no longer wish to continue producing this product/material and, through the Office of Technology Transfer, may work with an employee-owned company to take over the production of the product/material through the appropriate vehicle, i.e., license or materials transfer agreement. In situations like this, the Purchasing Department will work with the conflict of interest review committees to ensure that the appropriate management conditions are in place to oversee and monitor the relationship between the University and the employee-owned company. Items to consider include:
- Employee-owned companies are required to register with the UM as a conflicted vendor by completing a W-9 form which is available directly from Purchasing.
- Employee-owned companies may purchase products, materials, goods, services, etc., from the UM through the standard core services agreement.
- Sole source justification may be required.
Example 1: Purchasing with minimal risk
A UM Institute wishes to enter into an annual contract to purchase a product from an employee-owned company. This product was formerly manufactured and distributed by a center within the University with federal funding. When the funding was discontinued, the employee-owned company was formed to manufacture and distribute the product. There is no other source for this product, which is used in multiple UM NIH sponsored projects. None of the key investigators on the UM NIH sponsored projects have a financial or management interest in the employee-owned company.
This situation presents minimal risks and falls into what the conflict of interest committees refer to as an "Administrative Shunt" category requiring disclosure as sufficient management.
Example 1a: Purchasing with significant risk
The product (described above) continues to be available from the UM center. Professor T is the PI on one of the UM's NIH sponsored projects using the product and is an owner of the company. The NIH sponsored project includes the involvement of Human Subject participants. Professor T wishes to purchase the product from the company rather than obtain it through the UM center.
This situation presents significant risks. The example solutions provided below are intended to be a guide for demonstrating how particular conflict situations may be managed [note: the details of some situations may make conflict of interest (COI) management unworkable and the project will not commence]. The examples are not intended to be all-inclusive as each individual situation may require a greater or lesser degree of management based upon the elements of risk presented.
- Appoint a different faculty member, who has no connection to the company, as PI. The new PI oversees all aspects of the NIH sponsored project. This minimizes the conflict of interest for Professor T, who may decide to be involved in the project as a representative of the company.
- Appoint a different faculty member, who has no connection to the company, as PI and allow the original faculty member (Professor T) to serve as co-investigator. The new PI oversees all aspects of the sponsored project including research reporting, financial oversight and all aspects of the Human Subjects research. This becomes a managed conflict of interest for Professor T (see notes below).
- Although the least desirable, if the technical work requires that Professor T remain as PI, another individual with no connection to the company is appointed to oversee the performance of the sponsored project and all aspects of the Human Subjects research (although this individual may not participate in the research activity) (see notes below).
- For examples B & C the following additional management conditions may apply:
- Both examples require disclosure to and approval by the Regents under the State of Michigan Conflict of Interest Statute.
or
or
Notes:
Professor T does not participate in any decision-making as a representative of the company and would disclose his/her company connection to lab staff, students, oversight committees (IRB, UCUCA), Purchasing, as well as in any publications about the research. Annual evaluations of staff or key personnel involved in the project would not be the sole responsibility of Professor T; additional oversight would be provided by a higher-level academic administrator.