PURCHASING
70.50
Revised 6-06
Purchasing Services
335-3541
PDF link
OVERVIEW
Personal services are professional or technical services provided by a contract consultant to accomplish a specific study, project, task, or other work statement. Contractors who provide personal services serve the University as objective advisers by rendering professional opinions, judgments, or recommendations.
Personal services:
- Are generally infrequent functions of a professional or technical nature;
- Often assist the University with setting policy and/or making decisions;
- May range from fairly simple projects, such as graphic design, to complex consulting engagements resulting in development of complex computer systems.
Contractor's Services
A contract consultant's services may include:
- Offering advice based on specialized knowledge, skills and experience;
- Conducting studies;
- Analyzing and evaluating technical issues; and/or
- Providing advice and training to improve managerial and administrative operations.
Independent contractors performing services for the University have occupations providing services such as accounting, marketing, finance, engineering, architecture, legal services, auditing, organizational development, management services, medical and health services, strategic planning, research, and environmental technology.
Statutes/Regulations
WSU employees involved in obtaining personal services from independent contractors are to comply with the applicable laws. (RCW 39.29)
WSU employees who violate applicable regulations and statutes may be subject to civil penalties of $300. Contractors who knowingly violate regulations and applicable statutes may also be subject to civil penalties. (RCW 39.29)
University Procedures
Departments are to follow the procedures in this section (70.50) to establish contracts for personal services.
Contact Purchasing Services for assistance.
Applicability
The regulations in this section (70.50) apply to all personal services contracts and amendments regardless of funding source. The only exceptions are contracts supported by accounts in program 17C (agency accounts).
Employee or Contractor?
Refer to 60.01 for guidelines for determining whether the personal service should be provided by a University employee or an independent contractor.
Employees
WSU does not issue personal services contracts to WSU employees. When these services are provided by a WSU employee, WSU considers the duties a part of the employee's assignment or additional duties which may result in extra compensation. See 60.01 for more information.
Retired WSU Employees
Normally, WSU does not enter into personal services contracts with retired WSU employees.
- Payments for services may affect WSU retirement supplement amounts depending upon the criteria specified by the WSU retirement system rules.
- WSU may not use a personal service contract to employ a retired person to perform the same or similar duties the employee once performed for WSU as an employee. The retired contractor's assignment must have the same characteristics as others in similar services contracts.
Types of Contractors
Consultants
A contract consultant may provide an independent, unbiased perspective on a problem. University administrators may find value in the service of a firm or individual who is not influenced by internal factors and who may contribute a fresh viewpoint.
The University does not have direct supervisory or managerial control over the day-to-day activities of a consultant providing a service. The consultant's contract includes a specified deadline. The consultant does not have the authority to decide, command, or control University affairs.
Speakers and Conference Participants
Speakers and conference participants are also independent contractors. If a speaker's or participant's fee is less than $3000, complete a Travel Authority and invoice voucher to obtain (approval to pay) services. See 95.25. If the speaker fee is $3000 or more, complete a Departmental Requisition as indicated in this section and forward to Purchasing Services.
NOTE: If an individual teaches a class for which the University provides the facility, supplies, and directs the results of the training, the person is considered to be an instructor (employee), and not a speaker (independent contractor). See 60.01.
PROCEDURES
Evaluation
Departmental Personnel
Prior to any contact with a prospective contractor, departmental personnel need to carefully consider the project. Considerations might include the nature of the problem, the source and availability of funds, the scope of the services desired, and the type and extent of the preliminary information to be shared with prospective contractors.
Grants and Contracts
If sponsored funds are used, departmental personnel are to review the grant or contract to be sure the service is allowed.
Purchasing Services
Purchasing Services reviews requests for independent contractors to determine if the duties are appropriate for an independent contract or WSU employment.
Purchasing Services contacts the prospective independent contractors, completes negotiations, and reviews and approves contract and files with OFM when applicable.
Competition
Purchasing Services coordinates solicitation to guarantee competition. State laws emphasize solicitation from a number of qualified contractors for any contract $5,000 and over.
Competitive Bids
Purchasing Services identifies the kinds of services for which competitive bidding is required. The bidding procedures provide an equal opportunity to qualified parties, culminating in the selection of a contractor. Selection criteria may include the consultant's fee, ability, capacity, experience, reputation, responsiveness to time limitations, responsiveness to solicitation requirements, quality of previous performance, and compliance with statutes and rules relating to contracts or services.
Evaluating Contractors
Purchasing Services requests a departmental recommendation after a competitive process.
Purchase Order
For contracts less than $5,000, Purchasing Services may issue a Purchase Order. In some circumstances, Purchasing Services may ask the department to prepare a contract, depending on the complexity of the project.
Requirements
Competitive Bidding
Purchasing Services seeks competitive bids for all personal services contracts except:
- Sole source contracts and amendments,
- Emergency contracts and amendments,
- Expert witness contracts and amendments, and
- Contracts for less than $5,000 (unless the contracts with a single contractor cumulatively equal or exceed $5,000 in a fiscal year).
Filing with OFM
The Office of Financial Management (OFM) reviews and approves personal services contracts for all state agencies. Purchasing Services completes the Personal Services Contract filing with OFM and includes copies of the contract and documentation. For further information, refer to the OFM Personal Services Contracts Database website at:
Select Contracts-->Personal Service Contracting.
Department Notification
Purchasing Services notifies the department when OFM approval is received.
Exemptions
Personal services contracts of less than $5,000 are exempt from these filing requirements. For these contracts, Purchasing Services has authority to authorize the contract without filing it with OFM. OFM may still audit these contracts for compliance with the law.
Sole Source
The nature of the required service may restrict the selection to one person or company. Sole source requests require substantial justification. See below under "Departmental Requisition."
Prior Approval
Sole source personal services contracts for $5,000 or more must be filed with OFM at least ten working days prior to the anticipated start of the contract. (In order to meet this deadline, the documentation must be received by Purchasing Services at least 20 days prior to the contract starting date.)
All state-funded, sole source, and competitive personal services contracts of $20,000 or more must have positive, prior OFM approval. This means not only approval prior to the contract start date, but approval prior to any commitment to the contractor.
Emergency/Expert Witness
Emergency personal service contracts and contracts for expert witnesses for purposes of litigation must be filed within three days after the date of execution or the commencement of work (whichever is sooner) if the personal services contract is for $5,000 or more.
Late Filing
When contract submittals are filed after the work under contract or amendment is completed, attach the following documents:
- Jusification including late filing explanation, and
- Copy of the contract or amendment.
OFM will acknowledge receipt of the filing and process it. However, OFM will not consider the late filing formally reviewed or approved by OFM. (SAAM 15.30.80)
PROCESSING A CONTRACT
To initiate a personal services contract, the department prepares a Departmental Requisition which includes a brief description of the required services. See the example in the PDF version of 70.50.6. See 70.10 for a complete description of the Departmental Requisition form.
Sole Source
The department may identify a sole source vendor to provide the service. This requires documentation by use of the template available on Purchasing Services website at:
http://www.purchasing.wsu.edu/
Select Personal Services Contract
Provide the name, income tax address (1099 address), title, social security number (or federal employer ID number), and other information about the firm/person which would assist in evaluating the sole source contractor.
Sole Source Deadline
In order to meet sole source filing requirements, the department must ensure that Purchasing Services receives the contract filing package no later than 20 days prior to the anticipated effective date of the contract.
Preparing the Contract
A contract is required if the contract is for $5,000 or more and may be necessary for less than $5,000. The department prepares the personal services contract. Template for personal services contract can be located on Purchasing Services website at:
http://www.ba.wsu.edu/purchase/
Select Personal Services Contract.
Documentation Checklist
A department completes and sends the following to Purchasing Services to initiate a Personal Services Contract:
Routing and Approval
The appropriate dean, director, or other principal administrative officer indicates approval of the personal services contract on the Departmental Requisition.
If Purchasing Services has directed the department to complete a contract and/or sole source documentation, route these documents to Purchasing Services with the Departmental Requisition after the principal administrative officer has indicated approval.
Wait for Approval
The department must wait for notification from Purchasing Services before making a commitment to the contractor.
PAYMENT
The contractor submits an invoice to the WSU Controller. The statement may be on a State of Washington Invoice Voucher (see 30.45) or the contractor's own invoice document. The invoice must include a reference to the WSU Purchase Order number or the WSU contract number.
Payroll Taxes
WSU does not collect social security taxes, withholding taxes, or any other payroll taxes from payments to independent contractors.
Fringe Benefits
WSU does not provide fringe benefits to individuals providing services via a personal service contract.
Federal Income Tax
If the total amount paid to an individual or a partnership on a personal services contract exceeds $600 within one calendar year, WSU reports the total amount to IRS on form 1099. A copy of the 1099 is sent to the independent contractor.