Policy Number: VIII-6.00(A)
University of Maryland, College Park Policy and Procedures Concerning the Sale of Goods and Services
(APPROVED BY THE PRESIDENT )
The mission of UMCP is to serve the public as a comprehensive institution of higher education through instruction, research, service, and related educational functions and activities. In carrying out this mission, the University provides its constituents with a variety of goods and services that are both necessary and integral to the fulfillment of this mission. The provision of these goods and services requires that the University engage in certain business activities. These activities will in some instances offer the same goods and services that may otherwise be available to the campus community through private entrepreneurs. When the University engages in business activities, it is understood that the University must address its inherent concern for availability of necessary goods and services, for convenience, and for the interdependence of each business activity with the major elements of its mission. In addition, the University must give careful consideration to the impact its business activities may have on the local community, and especially on those private businesses that are strategically located near the campus and whose economic fortunes may depend heavily on constituents of the campus. Some business activities may be identified as unrelated business income activities and require the University's compliance with applicable laws and regulations pertaining to such activities. The purpose of this policy is to assist in the decisions about future business activities in which the University may engage.
II. Educational Business Activities
Educational business activities are those that are necessary either to enhance, promote, or support the University's instructional, research, public service, and other educational functions, or to meet the instructional, research, public service, and other educational needs of the students, faculty, staff, and members of the public participating in institutional events.
An educational business activity may be established and carried on by the University when consistent with the following conditions outlined in the University of Maryland System Policy:
- The activity is deemed to be an integral part in the fulfillment of the institution's educational, research, and public service mission as well as institutional support functions and other educational and support activities, without regard to profit.
- The activity is needed to provide an integral good or service at a reasonable price, on reasonable terms, and at a convenient location and time.
- The activity is carried out for the primary benefit of the institution community but with sensitivity to the total community.
Sales of the following types of goods or services are examples of educational business activities:
- Goods or services which are the products of the University's laboratories, research facilities, academic programs or workshops.
- Fee-based programs or services offering a substantial instruction or other educational experience or applied research, development or testing services.
- Programs or services including recreational, cultural, and athletic events; student housing and dining services; community enhancing activities; health services and medical treatment; public service radio and television broadcasting; events or functions which have as their principal purposes the improvement of relations between the University and the general public; or the sales of contributed services if related to fund raising activities.
- Academic programs teaching and promoting entrepreneurship, and student-run cooperatives, provided that the programs or cooperatives are self-supporting or otherwise do not receive unfair subsidies from the University.
- Dispositions of the University's surplus property.
III. Other Business Activities
The University will normally engage in business activities that are necessary and directly and substantively related to fulfilling its primary mission as described above; however, there are certain exceptions to this presumption. In those instances there will need to be a reasoned balancing of factors to determine whether the University should or should not undertake such activities. Among the factors to be considered should be:
Contribution to teaching, research, and public service mission of the University.
- Student demand.
- Accommodation of the needs of students, faculty, and staff for daily life on campus/convenience.
- Enhancement of the quality of life on the campus.
- Tax consequences, including both local property tax and need to report as Unrelated Business Income.
- Necessary revenue generating potential.
- Degree of adverse or beneficial impact on the private sector.
- Whether it involves the sale of goods or services that are either not commonly available in or not of general use to the community.
- Prices are reflective of the regional private sector market.
To this end, the University will participate in an appropriate forum for dialogue with the local business community to discuss issues of mutual concern and to promote cooperative communication between the local community and the institution.
IV. Contract and Franchised Services
The foregoing policies and procedures do not apply to sales by independent contractors which contract with the University to provide goods and services on campus, provided that:
- the contract is with a person or vendor who is not affiliated with the University,
- the contract was let through the University's normal procurement regulations with a full opportunity given to the local community to participate,
- the contract provides for rents and other terms that would be applicable in the private marketplace,
- the University does not participate in the daily management of the activity except to act as landlord, and
- due regard weight is given in project design and bid solicitation to knowledge of and the concerns of the local community.
The sale of goods and services by outside contractors must, in all cases be approved by the Director of Procurement and Supply or his or her designee.