UCR

UCR Policies and Procedures

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Campus Policy Number: 750-27

Independent Consultant Agreements
Policy Owner: Campus Purchasing
Effective Date: 02/04/2010

 

A.       DEFINITIONS

        1.       Employee - An individual currently employed by the University of California (any location).
 
2.       Employer-Employee Relationship* - An employer-employee relationship exists when the University has the right (whether or not it exercises the right) to direct and control the method and means of an individual’s work as well as the result to be accomplished.
 
3.       Independent Contractor Relationship* - An independent contractor relationship exists when the University has the right to control only the result of the service and not the manner of performance.
 
4.       Independent Consultant - An independent consultant is an individual or organization outside the University of proven professional or technical competence who provides primarily professional or technical advice to the University and the University does not control either the manner of performance or the result of the service.
 
5.       Employee-Vendor Relationship - a relationship in which: 1. An employee, acting alone, proposes to provide services to the University, or an employee owns or controls more than 10% interest in any business which proposes to provide services to the University; or 2. A near relative (spouse, child, parent, brother, sister, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, sister-in-law, and step-relatives in the same relationship) of an employee, acting alone, proposes to provide services to the University, or a near relative of an employee owns or controls more than 10% interest in any business which proposes to provide services to the University, and the employee has, in any connection with his or her University employment, any responsibility for, or will be involved in any manner in, the departmental decision to accomplish or approve the agreement.
 
6.       Independent Consultant Agreement - A contract for services which are of an advisory nature, provide a recommended course of action or personal expertise, have an end product which is basically a transmittal of information either written or verbal, and which is related to University administration and management. The document used to secure the services of an independent consultant can be seen here.  A purchase order or employment type document may NOT be used.
 
7.       Program Review Official -The Program Review Official for the Riverside campus is the Vice Chancellor or Dean appropriate to the requesting department. All independent consultant agreements must be approved as to purpose and content by the appropriate Program Review Official prior to commitment to the independent consultant.
 
8.       Responsible Administrative Official - The Director of Materiel Management has been delegated the responsibility for overall administration of independent consultant procedures and agreements.
 
* NOTE: The IRS has identified classification factors based on common law standards that can be used to determine whether the University has the right to direct and control the detail and means of a worker’s duties. (see Pre-Hire worksheet)
 
 
B.       SCOPE
 
1.       The requirements and procedures set forth in this policy apply to securing services of independent consultants for campus activities for which administrative responsibility is vested in the Chancellor.
 
2.       The requirements and procedures set forth in this policy do not apply to:
 
·         The appointment of architects and engineers for approved projects; [Standing Orders of The Regents, Section 100.4 (y)]
·         University faculty members who serve internally as consultants, as covered in the Academic Personnel Manual, Section 664.
·         Engagements with The Regents' external audit firm, as covered in Business and Finance Bulletin BUS-76.
·         Independent contractor relationships, as covered in Business and Finance Bulletin BUS-77; or
·         Employer-employee relationships, as covered in the applicable personnel policies.
 
 
C.       GENERAL REQUIREMENTS
 
1.       Arrangements to secure the services of an independent consultant may be entered into only when a determination has been made that the services are so urgent, special, temporary, or highly technical that they cannot be performed economically or satisfactorily by existing University staff during the course of their normal University responsibilities or duties.
 
2.       The use of an independent consultant is expected to be infrequent and is primarily used to solve clearly delineated problems.
 
3.       An independent consultant shall not be used to carry out a major portion of a program. If it is desired to use an independent consultant to direct a program or to participate extensively in such a program, the person shall be employed through the regular employment process.
 
4.       If the Director of Materiel Management determines that a proposed agreement may result in an employer-employee relationship, the case shall be referred to the Director of Human Resources for further review. Only upon determination by the Director of Human Resources that no employer-employee relationship would be established may the proposed agreement be executed.
 
5.       If it is determined that an employer-employee relationship would be established, the proposed agreement shall be converted to regular employment by Human Resources.
 
6.       University policy regarding employee vendor relationships shall be observed when contracting for the services of an independent consultant. If an employee-vendor relationship exists, the requirements indicated in Business and Finance Bulletin BUS¬43, Part 7, shall be followed.
 
7.       The services of an independent consultant shall not entitle the person to credit other than as "consultant" in any published report or other document.
 
8.       An independent consultant shall not hire any employee of the University to perform any service covered by the agreement. If the work is to be performed in connection with a Federal contract or grant, an independent consultant shall also not hire any employee of the U.S. Government to perform any service covered by the agreement. The consultant shall not be in a reporting relationship to a University employee who is a near relative nor shall the near relative be in a decision-making position with respect to the consultant.
 
9.       The consultant shall affirm that, to the best of his/her knowledge, there exists no actual or potential conflict of interest between consultant's family, business, or financial interests and the services provided. Any question regarding possible conflicts of interest shall be raised with the Director of Materiel Management.
 
10.    The laws and regulations affecting the University of California Retirement System (UCRS) and the Public Employees Retirement System (PERS) do not prohibit a retired member of UCRS or PERS from providing services to the University as an independent consultant. Note: a person who retired under the Voluntary Early Retirement Incentive Program (VERIP) is subject to specific limitations.
 
 
D.       REQUESTS AND APPROVAL 
 
1.       A requesting department shall make a written presentation of its requirement for the services of an independent consultant and submit it to the appropriate Program Review Official who shall, upon approval, forward to the Director of Materiel Management. The request for consultant service shall be in a form which will clarify and define the problem for the benefit of the Program Review Official and Director of Materiel Management, and which will enable prospective independent consultants to prepare proposals.
 
2.       The request for consultant service shall include, but not necessarily be limited to, the following:
 
a.        A description of the problem;
 
b.       The objectives of the study or a general statement of what is expected to be accomplished;
 
c.        An explanation of why the service cannot be performed by university employees;
 
d.       Scope of work, including any desired approach to the problem, specific limitations, questions requiring answers, format for the completed report, and the extent to which assistance, resources and cooperation from the University will be available to the consultant;
 
e.       If the services are to be performed in connection with a contract or grant, pertinent extracts of such contract or grant shall be attached and the conditions set forth therein shall be considered a part of the request for consultant services.
 
f.         Firm or estimated time schedule including dates for commencement of performance, submission of progress reports, and for completion of the service;
 
g.        To what extent progress payments will be allowed;
 
h.       FAU (account number) to be charged;
 
i.         A justification for not securing formal competitive proposals, if applicable; and
 
j.         A written statement regarding the requesting department's determination that the prices or rates to be paid by the University under the proposed agreement are reasonable.
 
k.        A completed Independent Contractor Pre-Hire worksheet
 
3.       Proposals from independent consultants shall be in writing and include, but not necessarily be limited to, the following:
 
a.        A description of the consultant's qualifications, with a brief list of similar types of consulting contracts successfully concluded, a sample of such work when appropriate, and a description of the lead personnel and anticipated supporting personnel to be employed on the study;
 
b.       An overall description of the techniques by which the consultant intends to approach the problem, amount of resources, time and manpower to be expended, the anticipated beginning and ending dates for the services, equipment and facilities to be utilized and, if subcontractors are contemplated, a description of these persons or firms and the portions and monetary percentages of the work to be done by them;
 
c.        A description of the type of information, if any, to be collected about an individual, the method of collection, the physical type of the resulting record, i.e., typed or written notes, tape recordings, photographs, and the proposed ownership of such records. The department proposing to engage a consultant shall be guided by University Business & Finance Bulletin RMP-8 (Legal Requirements of Privacy of and Access to Information). Tape recorders shall not be used during discussions with University staff, or their agents, pertaining to employment matters except as specified by the Memorandum, Vice President Kleingartner to Chancellors, Laboratory Directors, Vice President Kendrick, Executive Assistant Wilson, Recording of Discussions with Employees, March 20, 1981; such use shall be specified in Article I. H. of the Independent Consultant Agreement form and the consultant’s attention shall be directed especially to Articles XII and XIII of the Independent Consultant Agreement.
 
d.       The total cost of the study and a breakdown of how this cost was computed, including any travel expenses, and desired method of payment;
 
e.       The total dollar amount of consultant work with the University of California in the last 12 months;
 
f.         The name and University of California position of any officer, faculty member, or other employee of the University who holds a position of director, officer, partner, trustee, manager, or employee in the consultant organization, as well as the names of any near relatives who are employed by the University; and
 
g.        If the consultant is not a citizen of the United States, an explanation of the person's alien status in the United States.
 
4.       If the total amount of the contract with an independent consultant is $50,000 or more, the Director of Materiel Management shall assure that, if possible, proposals are solicited from three or more qualified independent consultants. When competitive proposals are not to be solicited, the reason for not seeking competition shall be documented by the requesting department.   Further, the requesting department shall submit a statement regarding their efforts to determine the reasonableness of the proposed price. The Director of Materiel Management shall determine that the payment is reasonable for the services to be performed.
 
5.       If the total amount is less than $50,000, the Director of Materiel Management shall determine that the payment is reasonable for the services to be performed. The requesting department shall submit a statement regarding their efforts and determination of price reasonableness to assist in this regard. The scope of the agreement shall not be artificially divided so as to avoid the solicitation of competitive proposals.
 
6.       Selection of the independent consultant shall be made on the basis of qualifications, resources, experience, needs of the University, and cost to the University. In the selection process, any University officer or employee participating in the decision must keep in mind the disqualification requirements for financial conflict of interest of the State of California Political Reform Act of 1974.
 
 
E.        AGREEMENT COVERING SERVICES
 
1.       The agreement between the University and an independent consultant shall be executed on the standard agreement form. Any modification of the standard agreement form or material modification of the approved scope of services shall be reviewed and approved by the Director of Materiel Management, who shall consult with the General Counsel or Senior Vice President ¬ Business and Finance as appropriate.
 
2.       The insurance requirements to be provided under Article XI.2 of the agreement shall be those set forth in Business and Finance Bulletin BUS¬63, Section IV.B.2., IV.C., and V.A.2. Any exception to the insurance limit requirements must be reviewed and approved by the Campus Risk Manager.
 
3.       The agreement between the University and an independent consultant shall be signed by the consultant, by the Director of Materiel Management, and by the appropriate Program Review Official prior to the beginning of any service.
 
4.       A report of all new agreements and amendments executed each fiscal year is to be sent to the Senior Vice President ¬Business and Finance by the Director of Materiel Management .
 
5.       There shall be no extension of the termination date or expansion of the scope of the original agreement or payment thereof without prior written approval by the Director of Materiel Management and appropriate Program Review Official. Any such changes must be executed through an Amendment to Independent Consultant Agreement (located here) and signed by the appropriate parties. Amendments may not be issued for work unrelated to the scope of the original agreement.
 
6.       A purchase order shall not be used in lieu of the standard agreement form to secure the services of an independent consultant.
 
 
F.        PAYMENT FOR SERVICES OF INDEPENDENT CONSULTANT
 
1.       A consultant shall submit an invoice setting forth the appropriate charges and indicating the agreement number and taxpayer reporting number. An invoice need not be submitted if exempted by terms of the agreement.
 
2.       Authorization for consultant payments shall be a copy of the properly executed standard agreement form.
 
3.       Payment shall not be made for services rendered prior to the execution of a written agreement, except as expressly approved by the Director of Materiel Management and the appropriate Program Review Official, nor shall payment be made for services rendered after expiration of the agreement.
 
4.       Payment shall be made in accordance with the schedule set forth in Section III of the agreement. In case of termination prior to completion of the work to be performed under the agreement, a determination shall be made of an equitable compensation to be paid for the work completed based on its value to the University, provided that such compensation shall in no event exceed the total agreement price.
 
5.       Final payment will be withheld until evidence is received by the Director of Materiel Management that terms of the agreement have been completed. This evidence may take the form of a final report or a memo attesting to completion signed by both the consultant and the departmental official to whom the consultant has reported.
 
6.       If a consultant is not a citizen of the United States, University procedures regarding payments to aliens shall be followed.
 
 
G.       FEEDBACK
 
For questions regarding this policy or procedure, please contact the Director of Materiel Management
 
 
H.       REFERENCES:
·         Business and Finance Bulletin BUS¬34, Securing the Services of Independent Consultants
·         Business and Finance Bulletin BUS¬43, Part 7, Employee-Vendor Relationships
·         Business and Finance Bulletin BUS¬63, Certificates of Insurance
 
 
I.         FORMS:
·         Independent Consultant Agreement (Required Form)
·         Amendment to Independent Consultant Agreement (Sample Form)
·         Independent Contractor Pre-Hire worksheet and IRS Classification Factors
 
 
J.         FREQUENTLY ASKED QUESTIONS (FAQs) – to be added in a future update