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Virginia Conflict of Interest

There are two primary regulations at the state level that govern how we handle conflicts of interest at the university, the Virginia State and Local Government Conflict of Interest Act and Virginia Public Procurement Act.
 

State and Local Government Conflict of Interest Act Applicable Exceptions

The Virginia State and Local Government Conflict of Interests Act, §2.2-3100, et seq. of the Code of Virginia, generally prohibits contracts between employees and their agencies; i.e., between Virginia Tech employees and the university, where the employee has a personal interest in a contract.  A “personal interest” of an employee, including his or her immediate family members, includes having more than a three percent equity interest in a business or the reasonable anticipation of more than $5,000 annual income or other compensation and benefits from a business. In addition, any conduct indicating undue influence by an employee in the performance of duties is prohibited regardless of the percentage of interest or amount of income.

The Commonwealth has recognized that the scholarly pursuits of university employees can be critical to promoting economic development and meeting society's needs. Accordingly, there are several exceptions to prohibited conflicts.

The prohibition does not apply to certain enumerated types of contracts. §§ 2.2-3106.C. and 2.2-3110. Among these are some specifically applicable to institutions of higher education.

Research and Development

A Virginia Tech employee with a personal interest in an entity may conduct research and development with Virginia Tech if the below conditions are met.

  1. the business is research and development or commercialization of intellectual property;
  2. the Virginia Tech employee has disclosed to Virginia Tech via the COISystem his/her interest in the entity prior to the execution of the contract;
  3. the employee files a Statement of Economic Interest § 2.2-3117 and thereafter files such statement annually on or before January 15; and
  4. a management plan is completed and approved.

Dual Hire of Spouses/Immediate Family Members

State Law provides an exception for hiring immediate family members in certain circumstances.

  1. the employee and family member are engaged in teaching, research, or administrative support positions;
  2. the Board of Visitors finds that dual employment is in the best interests of the university; and
  3. after such finding, the Board ensures that the employee or family member does not have sole authority to supervise, evaluate, or make personnel decisions regarding the other. §2.2-3106.C.2.

There are additional considerations when spouses or immediate family members are involved in the same sponsored project where one family member is the lead investigator or co-investigator. By nature of the lead investigator role, this creates a conflict of interest due to the supervisory relationship between family members. Please see the requirements for management of this conflict in the “Managing Conflicts of Interest” on the menu to the left, example 5.
 

Virginia Public Procurement Act
 

A conflict of interest may be actual or potential. It most often occurs when an employee has a financial interest in a private entity which is doing business or is attempting to do business with the university. A conflict of interest can also result in a situation where the employee's spouse or immediate family member has the financial interest.

The most common situation where a conflict of interest occurs is with related-party suppliers.  This is a situation where a Virginia Tech employee has a spouse or immediate family member who has a financial interest in a private business and sells to the university.  It is not a conflict if the business sells to other state agencies.  The violation occurs if they sell to their immediate family members employing agency.

Example: Mary works in the Facilities Department at Virginia Tech.  Her husband John owns a carpentry business.  Under the provisions of the Conflict of Interest Act, John cannot sell his services to Virginia Tech.  John can sell his services to Radford University or other state entities, just not to where Mary works.  If John sells to Virginia Tech, the university will be unable to pay the invoice and Mary will be in violation of the Conflict of Interest Act. 

Currently, a Virginia Tech employee that has a personal interest in an entity that plans to do business with Virginia Tech is limited to contracts that do not exceed $500. Additionally, Virginia Tech employees with a personal interest should recuse themselves from participation in the procurement process which includes negotiating or approving the contract.

If you have a potential conflict, you should contact the Procurement Department at www.procurement.vt.edu.

Statement of Economic Interest Annual Disclosure
 

The Commonwealth's State and Local Governments Conflict of Interests Act §2.2-3100 requires certain officers and employees of the Commonwealth to file written disclosure statements of their financial interests annually on or before January 15. This disclosure is referred to as the Statement of Economic Interest (SOEI).

Employees who are required to submit a SOEI will receive an email from the State informing them of their responsibility to file. Generally, these officers or employees occupy such offices or positions of trust or employment in state government, including members of the governing bodies of authorities, as may be designated by the Governor. 

Employees that are required to submit a SOEI are required by the COI Act to complete State COI training. The training can be found at www.training.vt.edu. Please note that this requirement is in addition to the Virginia Tech specific COI training required of investigators on sponsored projects.

Personal Interest in Research and Development

Additionally, Virginia Tech employees that have a personal interest in an entity that plans to conduct research and development or commercialization of intellectual property must submit a Statement of Economic Interest with the state.