Docstoc

Principles and Standards of Purchasing Practice with Accompanying

Document Sample
Principles and Standards of Purchasing Practice with Accompanying Powered By Docstoc
					  Principles and Standards of Purchasing Practice with
                      Accompanying Guidelines

These principles are derived the ISM standards of global supply
management      conduct,   (purchasing).      IRPT   contracts    services   for
administration – which includes purchasing goods and services. Hence,
throughout this Statement of Principals, “contractor” refers to the
administrative services contract; “purchasing agent” also refers to the
administrative services contract in another context.


   1. Avoid the intent and appearance of unethical or compromising
      practice in relationships, actions, and communications.
   2. Demonstrate loyalty to the employer by diligently following the
      lawful instructions of the employer, using reasonable care and
      granted authority.
   3. Avoid any personal business or professional activity that would
      create a conflict between personal interests and the interests of the
      employer.
   4. Avoid soliciting or accepting money, loans, credits, or preferential
      discounts, and the acceptance of gifts, entertainment, favors, or
      services from present or potential suppliers that might influence, or
      appear to influence, supply management decisions.
   5. Handle confidential or proprietary information with due care and
      proper   consideration   of   ethical   and    legal   ramifications   and
      governmental regulations.
   6. Promote positive supplier relationships through courtesy and
      impartiality.
   7. Avoid improper reciprocal agreements.
   8. Know and obey the letter and spirit of laws applicable to supply
      management.
   9. Encourage support for small, disadvantaged, and minority-owned
       businesses.
   10.       Acquire and maintain professional competence.
   11.       Conduct purchasing activities in accordance with national
       laws and the organization’s policies, and these ethical principles and
       standards of conduct.


GUIDELINES

1. PERCEIVED IMPROPRIETY


Avoid the intent and appearance of unethical or compromising
conduct in relationships, actions, and communications.


It is essential that any activity or involvement which in any way
diminishes, or even appears to diminish, open and fair treatment of
suppliers   is   strictly    avoided.    Those     who      do    not   understand    the
circumstances will judge based on appearances.


The following are recommended guidelines in dealing with perception:


   •   Situations     may       occur      in     which,     through      unanticipated
       circumstances, a business relationship transpires with a personal
       friend. The perception (as well as the potential) of a conflict of
       interest should be discussed with management, and a reassignment
       of procurement responsibility should be considered.
   •   Business      meeting        locations     should     be     carefully   chosen.
       Environments         other   than    the    office    may    be    perceived   as
       inappropriate by the business community or by co-workers.
   •   Displays of personal preference may give an impression of
       impropriety and should be avoided. Conversation that delves
       excessively into personal affairs should be avoided.
2. RESPONSIBILITIES TO THE EMPLOYER


Demonstrate loyalty to the employer by diligently following the
lawful instructions of the employer, using reasonable care and
granted authority.


It is the duty to ensure that actions taken as an agent for the IRPT will
serve the interests of the IRPT to the exclusion of personal gain. This
requires application of sound judgment and consideration of both the
legal and ethical implications of our actions.


The following are recommended guidelines for satisfying responsibilities to
IRPT:


   •    Understand the authority granted, and apply the legal and ethical
        requirements embodied in the relationship with IRPT.
   •    Obtain the maximum value for monies expended as agents for
        IRPT.
   •    Avoid activities which would compromise, or create the perception
        of compromising, the best interests of IRPT.


3. CONFLICT OF INTEREST


Avoid any personal business or professional activity that would
create a conflict between personal interests and the interests of
IRPT.


IRPT contractors must not use their positions in any way to induce
another person to provide any benefit to themselves, or persons with
whom they have family, business, personal, or financial relationships.
Even though a conflict may not technically exist, IRPT must avoid the
appearance of such a conflict.


Conduct to be Avoided


   •   Engaging in improper personal business with, or employment by,
       an organization which competes with, or is a supplier to, the
       employer. Examples include but are not limited to:
   •   Owning or leasing any property with knowledge that IRPT has an
       active or potential interest therein.
   •   Lending money to, or borrowing money from, any customer or
       supplier.
   •   Using the organization’s name (unless authorized) to lend weight or
       prestige endorsing the product or service of another organization.


Personal Investment


Ownership of stock in a supplier of goods or services, competitor, or
customer should be reported to the employer for review and guidance to
avoid the potential for impropriety. Interests by members of the
professional’s immediate family are considered to be of the same
significance as direct ownership.


Conflict of Interest Statements


IRPT contractors are encouraged to disclose any potential conflict of
interest, and to advocate that IRPT obtain conflict of interest statements
from all contractors upon retention, and annually thereafter.


4. ISSUES OF INFLUENCE


Avoid soliciting or accepting money, loans, credits, or preferential
discounts, and the acceptance of gifts, entertainment, favors, or
services from present or potential suppliers that might influence,
or appear to influence, purchasing decisions.


Those in a position to influence the procurement process must be
dedicated to the best interests of IRPT. It is essential, for all in a position
to influence a purchasing decision, to avoid any activity which may
diminish, or even appear to diminish, the objectivity of the decision


Gifts, Gratuities, and Entertainment


Gifts, gratuities, and entertainment include material goods, services, or
activities offered with the intent of, or providing the potential for,
influencing a buying decision. As such, these may be offered to IRPT
contractors or to other persons involved in the purchasing process (or
members of their immediate families). They may be offered in various
forms.


   •   Extreme caution must be used in evaluating the acceptance of gifts,
       gratuities, or entertainment, even if of nominal value, and the
       frequency of such actions (the collective impact) to ensure that one
       is abiding by the letter and the spirit of these guidelines.
   •   Soliciting gifts, gratuities, or entertainment in any form for yourself
       or your employer is unacceptable.
   •   Avoid accepting monies, credits, and prejudicial discounts.
   •   Establish nominal value in organization policy. (2008-2009 $35.)
   •   Refuse gifts exceeding nominal value, and return them with a polite
       explanation, or if perishable, either return the gifts or donate them
       to a local charity in the name of the supplier.


Product Samples


Product test samples may be offered by suppliers. If test samples exceed
nominal value, purchasing should consider issuing a document to cover
the transaction. This document should clarify the responsibility for the
cost of the samples and should address any obligation for sharing test
results with the supplier.


Business Meals


Occasionally, during the course of business, it may be appropriate to
conduct business during meals.


   •   Such meals shall be for a specific business purpose.
   •   Frequent meals with the same supplier should be avoided.
   •   IRPT should be in a position to pay for meals as frequently as the
       supplier.


Personal Relationships


Personal relationships are an inherent aspect of supply management. The
development of personal relationships from such interactions is both
expected    and    desirable   as   it   leads   to   relationships   based   on
understanding and trust. It must also be recognized that the purchasing
decision must not be influenced by anything other than what is in the best
interest of the organization, and that personal relationships that develop
beyond what is necessary to ensure understanding and trust may be
inappropriate.


Political Considerations


All organizations are subject to internal and external forces and
pressures. Internal forces and pressures result from an organization’s
culture. External forces and pressures consist of economic conditions,
laws, regulations, public opinion, special interest groups, and political
entities. The negative influence of internal and external forces and
pressures       on    purchasing       decisions   can   be   minimized     when     the
organization adopts practices based on ethical principles and standards.




Specifications and Standards


In       developing   Requests     for    Proposal,   the RFP       must   ensure   that
specifications and standards are objectively written in a manner that
encourages          competition    when      appropriate,     excludes     unnecessary
restrictive requirements, and appropriately defines quality.


5. CONFIDENTIAL AND PROPRIETARY INFORMATION


Handle confidential or proprietary information with due care and
proper       consideration        of     ethical   and   legal   ramifications      and
governmental regulations.


Proprietary         and   confidential    information    requires    protection.    Such
information may or may not be upheld by patent, copyright, or non-
disclosure agreement. Proprietary and confidential information should be
released to other parties (internal and external) only on a need-to-know
basis. It is the responsibility of the individual sharing confidential or
proprietary information to ensure that the recipient understands his or
her obligation to protect such information.


     •    Proprietary and confidential information must be identified as such
          when communicated, whether disclosed electronically, in writing, or
          orally.
     •    Use of written non-disclosure confidentiality agreements that clarify
          the parameters for use of information and responsibilities inherent
          in its use is recommended.
6. SUPPLIER RELATIONSHIPS


Promote positive supplier relationships through courtesy and
impartiality.


Contractors entrusted with purchasing decisions should promote mutually
acceptable business relationships with suppliers and customers. By
affording all business contacts the same courtesy and impartiality in all
phases of business transactions will enhance the reputation and good
standing of IRPT and themselves.


Fairness and impartiality should be extended to all legitimate business
concerns. While it may be desirable to build long-term relationships with
selected suppliers, such relationships should not deter the potential of
establishing similar working relationships with other suppliers.


The following are recommended guidelines for maintaining positive
supplier relationships:


   •   Establish parameters for bidding, rebidding, and/or negotiations
       prior to the issuance of a request for quotation or similar document
       to ensure a fair, consistent, and unbiased process.
   •   Maintain confidentiality regarding proprietary information as well as
       suppliers’   prices   and   terms,   unless   otherwise   required   by
       government regulation.
   •   Achieve a prompt and fair resolution of problems.
   •   Avoid unreasonable demands.
   •   Ensure prompt and open communications.
   •   Exercise professional,    cooperative,   and objective behavior    in
       business relationships and avoid partiality, or the appearance of
       partiality, in business dealings.




7. RECIPROCITY


Avoid improper reciprocal agreements.


Agreements involving a specific commitment to buy in exchange for a
specific commitment to sell also constitute reciprocity. These purchasing
actions are illegal if they tend to restrict competition or trade or if they
are coerced, since such acts may be construed as "restraint of trade" in
violation of Sections 1 and 2 of the Sherman Act.


Purchasing agents and their organizations must be able to recognize
reciprocity and its ethical and legal implications.


Reciprocity is both a legal and an ethical issue that may result in legal
sanctions against the organization, its management, and/or its supply
management personnel.


8. APPLICABLE LAWS


Know and obey the letter and spirit of laws applicable to supply
management.


Purchasing agents should obtain and maintain an understanding of the
legal concepts that govern their activities as agents of their employers,
and of the various laws that govern the purchase and sale of goods and
services. These include laws and regulations at the international, national,
state, and local levels, especially:
   •   Government     procurement    regulations,     including     the   Federal
       Acquisition   Regulations   (FARs)    and    the   Defense     Acquisition
       Regulations (DARs)
   •   Environmental laws, including Environmental Protection Agency
       (EPA) laws
   •   Employment     laws,   including     Equal   Employment      Opportunity
       Commission (EEOC) laws


   .   Antitrust laws, including the Sherman Act and Clayton Act


9. SMALL, DISADVANTAGED, AND MINORITY-OWNED BUSINESSES


Encourage support for small, disadvantaged, and minority-owned
businesses.


All business concerns, large or small, majority- or minority-owned, should
be afforded an equal opportunity to compete. Most government entities
and many businesses have developed specific guidelines and procedures
to enforce policies designed to support and stimulate the growth of small
businesses and those owned by minorities or other disadvantaged groups.


Derived from: The National Association of Purchasing Management
Ethical Standards Committee (now Institute for Supply Chain Management)

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:15
posted:11/1/2011
language:English
pages:10