The Chair's 'Small Favor' and the Split Purchase
The department chair asks you to split a $32,000 order for a specialized centrifuge into three separate purchase orders of $10,500 each. The university's procurement policy requires three competitive quotes and dean approval for any single purchase over $10,000. The chair says the vendor can ship the centrifuge in three modules, so 'it's really three purchases,' and that the centrifuge is needed for the final four months of a federal award with a $50,000 balance. You later learn that the chair's spouse is a sales representative for the vendor and that the chair has not filed a conflict-of-interest disclosure. When you raise the policy, the chair says, 'Everyone does this at the end of an award; we can't send money back.' The centrifuge is not in the approved budget, and the award's terms require prior approval for equipment purchases over $5,000.
1. How should you respond to the request to split the purchase?
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I would refuse to split the purchase. The policy threshold is based on the total cost of a single procurement, not on how many shipments or modules the vendor uses. Dividing a $32,000 centrifuge into three $10,500 orders to avoid three quotes and dean approval is a deliberate evasion of procurement controls. On a federal award, it also implicates the Uniform Guidance requirements for competition, cost reasonableness, and written procurement procedures, and it can look like a false or fraudulent purchasing scheme. I would tell the chair in writing that I cannot process the orders, explain the policy basis, and offer the compliant path: a single requisition for $32,000 with three competitive quotes and dean approval, or a documented sole-source justification if the centrifuge is uniquely available. I would also escalate the request to my supervisor or the procurement office. The chair's position of authority does not change the answer; if anything, it increases the need to document the request and the refusal.
2. What conflict-of-interest issues are present, and what steps are required?
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The spouse's employment with the vendor is a financial conflict of interest that must be disclosed under the institution's COI policy. The chair should not participate in vendor selection, price negotiation, or approval of the purchase. Because the chair has not filed a disclosure, the RA should not proceed and should report the matter to the COI office or research integrity office. The COI office may manage the conflict by requiring recusal, appointing an independent reviewer, or directing the department to use a different vendor. If the chair's spouse would earn a commission on the sale, the conflict is direct and material. The RA should also avoid discussing the purchase with the vendor in a way that could be seen as steering the award. Documentation is critical: the disclosure, the management plan, and the chair's recusal should be in the file before any order is placed.
3. What are the risks of the 'use it or lose it' argument, and what compliant alternatives exist?
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'Use it or lose it' is not an allowable cost principle. Unspent funds at the end of an award are not a reason to buy equipment that is not needed or not approved; that is a spend-down mentality that can lead to disallowance and reputational harm. The centrifuge is not in the approved budget and is over the $5,000 prior-approval threshold, so the PI cannot buy it without sponsor approval. Compliant alternatives include: requesting prior approval and buying the centrifuge only if it is essential to the remaining aims; obtaining competitive quotes and a sole-source justification if appropriate; leasing instead of buying; requesting an NCE if more time is genuinely needed; rebudgeting to other allowable costs that support the aims; or returning unused funds. The chair's claim that 'everyone does this' is not a defense. The RA should document the pressure, refuse the split purchase, and route the request through the proper approval channels.