The subgroup addressing purchasing and vendoring engaged in conversations with UCLA and UCSC, both of whom take a very different approach to risk management and insurance requirements. The recommendations of the subgroup were also aided significantly by conversations with the Streamlining Research Pilot work team spearheaded by the Goldman School of Public Policy, the vice chancellor for research, the campus risk manager and the chief ethics, risk and compliance officer.
Challenges
- Comments and interviews reflect an extreme degree of perceived and adopted risk aversion with regards to purchasing and vendoring on our campus that is different from some of our sister campuses (e.g., UCLA, UCSC).
- Compliance with the systemwide BFB-BUS-63 Policy requires a certificate of insurance from all suppliers and vendors that work with UC. Currently at Berkeley, the interpretation of this policy does not allow for any flexibility or standard exceptions. This creates an administrative bottleneck for hundreds of staff members involved in the day-to-day purchasing at Berkeley, with about $2 million in staff time spent just tracking insurance certificates. Interpretation and enforcement of BUS-63 lie within the Risk Office at Berkeley.
- Hiring abroad is extremely challenging and convoluted (e.g., enumerators and translators). Individuals in remote regions who may or may not speak English cannot navigate our systems. This hinders the research mission of our university.
- Reimbursing international visitors/service providers is exceptionally complicated and time-consuming. The bureaucratic burden in these transactions is significant and falls on a small, resource-limited staff.
Recommended paths forward
- Insurance certificate collection: At this time, insurance certificates are collected for each transaction. Instead, shift insurance certificate collection to vendoring where it is collected once (instead of each time the same person/company is hired);
- Insurance certificate database: Currently, insurance certificates are frequently collected in hardcopy and must be processed. Instead, create an uploadable database so vendors can upload certificates without a further touchpoint by Berkeley staff. Make the database searchable by anyone on campus;
- Waive insurance certificate requirement for low risk transaction: Establish a list of types of transactions that are low risk for which we will no longer require certificates of insurance. Berkeley Risk Services has proposed a preliminary list including some very limited titles as a starting point;
- UCLA does this via a general $10,000 exemption threshold for lower value/lower risk services; UCSC has established a $100,000 threshold for goods purchases.
- Categorically exempt large private and public organizations (e.g. Fortune 500, state and federal agencies) who carry insurance already.
- Update list monthly based on exception requests to risk services and make the list public and searchable. BRS agrees to review exception requests with no more than a 7-day turnaround.
- Insurance certificate duration: Work with insurance vendors to provide monthly, quarterly and annual options for insurance. Make purchasing more straightforward to address communication challenges with less-technical vendors who might struggle with “insurance speak.” Our complex forms negatively affect smaller and minority-owned businesses disproportionately. Possibly design an auto-upload of insurance certificate mechanism through insurance vendor; and
- Establish a team to study international and community-engaged vendoring/procurement. Proactively work on a technological solution to replace petty cash (which is no longer permitted).