1. Brown Bag Information Session on Contracts for Professional Services Presented by Jennifer Schulz, PS Division of Health Policy and Management, School of Public Health Sponsored by Financial Systems User Network (FSUN)

2. Agenda Professional Service vs a Standard Service Employee vs. Vendor CPS Threshold (Types of Professional Services) – VCPS, QCPS, CPS & PCPS Required Forms -Independent Contractor Form, PSIS and SOW Bid Process for CPS’s Amending or Change Order?

3. What is a service? There are 2 kinds of Services: Standard and Professional A standard service is defined as something that is routinely provided to a large number if customers. Examples of a Standard Service: A photographerCourier services Carpet cleaningData ComputersOffice Supplies A professional service, including consulting services, is defined as a service based on specialized expertise, often original in character. Examples of a Professional Service: Web or artistic designEditorial services HonorariumSoftware Creation or Development Examples of a Consulting Services: Management ConsultantsComputer Consultant Investment Consultants

4. Reasons to purchase a professional service –Limited or one time use of specialized or creative skills. –Unique areas of expertise. –Provides access to the latest technology through the expertise of a contractor. –Access to unique problem solving alternatives. Are they an employee or vendor? Determining if a vendor should be paid as an employee or outside employee can be difficult however, by using the independent contractor form it makes it easier. If you answer “YES” to the following questions you should speak to your HR person or Payroll Services to determine if they should be put on payroll. – Has the vendor been a University employee during the current calendar year? –Does the University have the right to control how the work results are achieved? –Does the University provide the vendor with any training? –Will the University pay the vendor hourly/weekly/monthly rather than a lump sum? –Will the University provide the vendor with insurance, pension benefits, vacation, or sick pay? –Is the person teaching a class for credit or providing class instruction for credit? **Please note that these are just a select few examples from the PSIS and Independant Contractor Form**

5. CPS Threshold Voucher Contract for Professional Services (VCPS) A VCPS is intended for low-risk, small-dollar professional services (under $3,000). The requisition is typically entered and processed after the work is done and the vendor invoice has been received. Quick Contract for Professional Services (QCPS) A QCPS is used when the professional service contract dollar value is between $3,000 and $49,999.99. A QCPS is a type of legally binding agreement, but has fewer requirements than a regular CPS. The QCPS does not require the vendor to sign the contract, but does require the contract requisition to be approved online by the University and the PO contract dispatched to the vendor before the work begins. By starting work the vendor is, in essence, agreeing to the terms and conditions in the contract. Contract for Professional Services (CPS) A CPS is used when the professional services contract dollar value is $50,000 and over. This requisition type will generate the University’s Standard Contract for Professional Service. Bidding is required when the contract dollar value is $50,000 and over. This contract type must be signed by the vendor and the University before work begins. The procurement specialist is responsible for gathering the required physical signatures, including the University Delegated Signature Authority for the individual department. Performance Contract for Professional Services (PCPS) A PCPS is used to contract with entertainers, speakers, and performers when the contract value is $3,000 or more. A PCPS includes specialized terms and conditions for performers. This contract must be signed by the vendor and the University before work begins.

7. CPS’s/PO’s over $50,000 Bid Process Purchasing services determines if it is appropriate to invite competitive proposal in lieu of bids. A request for bid (RFP) is an invitation to vendors to submit a written offer to supply services. This is a very lengthy process so it is imperative to plan accordingly. With contracts valued at $1 million or greater, purchasing will obtain approval from the Board of Regents. You can find additional information on this policy at the Uwide policy library http://policy.umn.edu/prod/groups/president/@pub/@forms/@procurement/documents/form/excepttor egentspurchpol.pdf http://policy.umn.edu/prod/groups/president/@pub/@forms/@procurement/documents/form/excepttor egentspurchpol.pdf Department Request for Exception to Board of Regents Policy – aka bid bypass (Uwide form UM1721) This form is used to request bypassing the bidding process. Approval from purchasing must be obtained BEFORE placing an order or starting any work. You can find more detailed information at http://purchasing.umn.edu/bidthreshold/newbidthreshold.html http://purchasing.umn.edu/bidthreshold/newbidthreshold.html

8. Amendments vs. Change orders Change order - A change order is a change to an existing CPS/PO where the total of the PO does not exceed $49,999.00. The change order is processed by the department’s Procurement Specialist. Change Order entered into EFS by procurement specialist. All original approvers except Disbursement Services and Payroll must approve the changes offline. Approvals are documented in an email from each approver. The Procurement Specialist should upload the change request and approvals to the PO header. Amendment – An amendment is a change to an existing CPS/PO where the total amount exceeds $50,000. The Amendments are processed by Purchasing Services. Changes do not go through the online approval process. All original approvers except Disbursement Services and Payroll must approve the changes offline. Approvals are documented in an email from each approver. Purchasing Services (Contract Administrator) will collect University Authority Signatures and enter the amendment in EFS. If changing a contract that was originally approved by Board of Regents, discuss the change with Purchasing to identify whether the amendment needs Board of Regents approval. * Please note that if there is a significant change in the scope of work a new contract may need to be processed.

9. Change order/Amendment form examples Information Purchasing needs to complete an amendment (50k or higher): Attach approval emails from PI and accounting staff. Remember individual units or departments may have other processes so check with them first. For a list of Contract Administrators, go to the purchasing website and under staff directory with contact information or call the help line (4-1617). For amendment job aid from Central go to http://www1.umn.edu/ohr/prod/groups/ohr/@pub/@ohr/@trainingservices/documents/asset/cps-co-amend-ja.pdf http://www1.umn.edu/ohr/prod/groups/ohr/@pub/@ohr/@trainingservices/documents/asset/cps-co-amend-ja.pdf Information your Procurement Specialist needs to complete a change order:

11. For Further information on processes and policy please go to the Uwide Policy at http://www.policy.umn.edu/, then go to “Purchasing a Professional Service” in the finance portion.http://www.policy.umn.edu/ The University’s Administrative policy is found at http://www.policy.umn.edu/Policies/Finance/Procurement/PROFESSIONALSERVICE.html http://www.policy.umn.edu/Policies/Finance/Procurement/PROFESSIONALSERVICE.html The University’s Administrative Procedure can be found at http://www.policy.umn.edu/Policies/Finance/Procurement/PROFESSIONALSERVICE_PROC01.html http://www.policy.umn.edu/Policies/Finance/Procurement/PROFESSIONALSERVICE_PROC01.html You can find processing information in the Create Requisitions Manual located at the training services site. http://www1.umn.edu/ohr/prod/groups/ohr/@pub/@ohr/@trainingservices/documents/asset/ohr_89971.pdf http://www1.umn.edu/ohr/prod/groups/ohr/@pub/@ohr/@trainingservices/documents/asset/ohr_89971.pdf

12. Links to forms Statement of Work http://policy.umn.edu/Forms/formresults.cfm?ctg=FIhttp://policy.umn.edu/Forms/formresults.cfm?ctg=FI form number UM1697 Professional Services Information Sheet http://policy.umn.edu/Forms/formresults.cfm?ctg=FIhttp://policy.umn.edu/Forms/formresults.cfm?ctg=FI form number UM 1669, PSIS Performance Agreement http://www.ogc1.umn.edu/stellent/groups/public/documents/webasset/contractresults.hcst?SortField=dDocTitle&SortOrder=Asc&Sub Category=Purchase Form Number OGC – SC514 http://www.ogc1.umn.edu/stellent/groups/public/documents/webasset/contractresults.hcst?SortField=dDocTitle&SortOrder=Asc&Sub Category=Purchase Purchasing Terms and Conditions for CPS’s http://purchasing.umn.edu/finsyspurch.html Exception to Regents Purchasing Policy – Bid Bypass http://policy.umn.edu/prod/groups/president/@pub/@forms/@procurement/documents/form/excepttoregentspurchpol.pdf Independent Contractor Form – for Sole Proprietors/Individuals http://policy.umn.edu/prod/groups/president/@pub/@forms/documents/form/um1650.pdf