Service Provider Training Module

1. Service Provider Training Module

2. Training Agenda • Update the Schools and Departments with the new Agreements in place and where they can be found on our Website • Purchasing Role • What is a Service Provider • Services Agreement Process • Review the Existing/New Forms • What is an Independent Contractor • Highlight the Insurance Requirements for All Consultants • Review Commodity Codes • Guide Users through New and Improved Website Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

3. Purchasing Role in the Process • Purchasing is the central point of contact for all Agreements where there are services being provided to the University • Purchasing is responsible for coordinating the necessary University resources (Office of the General Council, Risk Management, Medical Compliance, etc.) in order to bring agreement’s to conclusion • Departments having contract questions from suppliers should contact Purchasing for review and commentary • Purchasing coordinate’s between the University and the supplier during contract negotiations • Only those designated by the University Trustees are permitted to Sign Agreements on behalf of Columbia We Have a Shared Responsibility in the Process Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

4. Why do we have Purchasing Policies, Practices and Processes? Employ Best Business Practices Create Opportunity Spend Dollars Wisely Change in the Way we do Business Reduce Liability Reduce Reputational Risk Meet Audit Requirements Meet IRS Regulations Comply with Various Government Organizations (e.g. FAR, OMB, etc) Value for Money Statutory Requirements FAR – Federal Acquisition Regulation: Basic Rulebook for Government Contracts OMB – The Office of Management and Budget

5. What is a Service Provider at Columbia? “Professional Services to accomplish the objectives of the University when such Services are specialized, highly technical, and cannot be economically or satisfactorily performed by University employees as part of their normal duties.” Current Service Provider Statistics: • ~1,000 Agreements reviewed each year for services ranging from Web Designer to Business Consultant to Architect • Value of Service Agreements ranges from couple hundred dollars to the millions of dollars A Temporary or Casual Employee is NOT a Service Provider • Hired for a special project or as a short-term replacement • Paid for the exact hours worked and processed through the timesheet submission • Rates of pay and job duties are established by each department – there are no fringe benefits • Usually limited to four consecutive months Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

6. What is a Service Provider? “Service Provider” Web Designers Engineers Strategic Consultants Business Consultants Graphic Designers Architects Auditors PR & Marketing Engineers Accountants Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

7. Service Agreements Process Option Review Defining Your Needs Sourcing Your Needs Finalizing an Agreement Purchase Order Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

8. Purchasing Bid and Justification Policies • Requires one of the following: • Written Bid(s) • Proposal(s) • Quote(s) $1 - $24,999 (non-UwPA) • Three Written Bids, Quotes or Proposals • Single/Sole Source form must be approved by Senior Level Officer in the department prior to submission to Purchasing at this dollar threshold. • Make sure your justification clearly defines WHY you chose to Sole/Single source and provide a clear cost reasonableness. $25,000 or Higher (non-UwPA) $0 and higher UwPA(University wide Purchase Agreement) • Requires: • Written quote or proposal and • Executed Scope of Work Note: UwPA: University Wide Purchase Agreement

9. Why are Agreements Important to Columbia University? Indemnification Limitation of Liability Use of Columbia Confidential Information To secure against loss or damage and provide compensation Protects CU and Supplier Reduces Responsibility to determine accountability of the Services performed Protects CU and Supplier Protects all information for University and Supplier Terms/Conditions Acceptance of Deliverables/Work Product Ownership of Work Product Use of Columbia University Name Ensures we get what we are paying for and sets expectations Defines exclusive right to results and the by products of an engagement Protects the Reputation of Columbia University Protects the University Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

10. A Purchase Order or Agreement for my Service? Go to the Purchasing Website to review Service Provider Grid • Binding Contract between the University and the Supplier • Requires SOW • Required upon request Certificate of Insurance Purchase Order Only • Binding Contract between the University and the Supplier • Requires SOW • Agreement requires submission Certificate of Insurance Agreement Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

11. Why a PO versus PO + Service Agreement? • Risks varies from a Service Agreement because of the type of services being rendered (SA) • Service Agreements have flexibility to negotiate terms/conditions (SA) • Insurance Requirements (PO, SA) • Validate authorization, charges the appropriate accounts and gives the approval for the purchase (PO, SA) • It is the ONLY mechanism to encumber the funds (PO) • It helps keep track of these type of agreement relationships (PO) • It is the best way to administer centrally on a systemic basis (PO) Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

12. The Process to Submit an Order for a Service Provider Requisition Checklist • All orders (Purchase Requisitions) are processed through the Financial Front End (FFE) system and require a DAF to Provide Approval for the Order • Once you submit your transaction, a Central Purchase Order Requisition will be provided to you electronically. • Refer to the Requisition Checklist for ALL the Supporting Documentation Needed for a NEW Requisition • Pink: Existing Suppliers in Purchasing System even though worked with supplier previously. • + Blue: Depending on the $ Threshold • + Green: Access Patient Health Information • Once a PO is generated, you will be able to pay the Service Provider Accuracy is Key, so Make Sure ALL Documents are Submitted to Purchasing for Timely Turn Around for a PO Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

13. Forms/ Supporting Documents Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

14. Forms: What is an Independent Contractor (aka Consultant Worksheet) – Based on IRS Standards? “A business firm or an individual that contracts with the University to provide services for which the University controls or directs at most the result of the service, not the means and methods of accomplishing the result.” • Independent Contractor Certification • According the IRS, should the Service Provider be treated as an employee or an Independent Contractor? (Payroll Tax Withholding) • New York State withholds Workers Compensation and Unemployment Tax Withholding • Before the performance of services commence, departments contracting for services must assess the relationship with the individual providing services to ensure that individuals hired or contracted to perform services are properly classified as an employee or an independent contractor. • The three main categories for determining whether a relationship should be categorized as an employee or independent contractor are: • Behavior Control • Financial Control • The Individual’s Relationship with the University Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

15. IRS Litmus Test for Independent Contractor vs. Employee Behavioral Control FinancialControl Type of Relationship Financial controls are evidenced by facts that determine whether the employer has a right to direct or control the financial/business aspects of the individual's business activities, including (1) the extent to which the individual is reimbursed for business expenses, (2) the extent of the individual's investment in the business and whether a profit or loss is realized, (3) the extent to which the individual offers similar services to the relevant market, and (4) how the employer pays the individual, such as hourly, salary, or a flat fee. The relationship between the individual performing services and the employer is evidenced by examining how the employer and the individual perceive their relationship, including (1) whether a written contract exists explaining the employer's and individual's intent, (2) the provision of, or lack of employee benefits, (3) the permanency of the relationship, (4) the right to terminate the relationship, and (5) the extent to which services are performed that are a part of the employer's regular business activities.. Behavioral controls are evidenced by facts that determine whether the employer has a right to direct and control how the individual performs the tasks for which the individual is hired, including the type of instructions the employer gives the individual and how the individual obtains training for providing such services. - An employee must comply with instructions about when, where, and how to work. Even if no instructions are given, the CONTROL factor is present if the employer has the right to give instructions. - An employee can quit his/her job at any time without incurring liability. An Independent Contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it. Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

16. Insurance Requirements: Commercial vs. Professional Commercial General Liability Professional Liability • Provides coverage for your business if an individual or another business claims your company or your employee was negligent and responsible for bodily injuries, property damage, financial loss, personal injury or advertising inquiry • Contractual Liability • Breach (Confidentiality, SOW) • Pays for Defense Costs • Designed to pay for economic damages caused by negligent acts, errors or omissions for which you’re legally liable. • Protects you if, in your professional capacity, you do or fail to do something that causes financial loss to a third party. • Covers professionals as Doctors, Lawyers, Executive Search, Accountants, Data Analysis, PR/Marketing, Web Designers Examples: A visitor could slip, a competitor could sue for false advertising, a client could sue for damage to their property value while in your care, a former client could sue for libel or slander Examples: Failure to perform services as requested or design, misrepresentation, failure to make recommendations, breach of client confidentiality, unintentional dissemination of false or misleading info. Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

17. Insurance Requirements: Umbrella Policy “Umbrella Insurance” Commercial General Liability • Is an option that can be utilized by Service Providers in the event their primary Commercial General Liability and Automobile are not sufficient to meet University requirements. • An example – if the Service Provider has $500K in CGL and AL and the CU requires $1MM, Service Provider can purchase an additional $500K Umbrella Policy that would cover both. Automobile The Purpose of Insurance is to Mitigate and Manage Risk to the University which Will Not be Waived. Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

18. Sample ACORD Certificate of Insurance (COI) • A Certificate of Insurance is an articulation of a firms coverage. • Purchasing will need an updated COI for each Requisition even though the supplier is performing multiple projects for the University • The COI is renewed on an annual basis • Per Service Provider Agreement, Section Titled “Insurance, 1(a), “Products and completed operations insurance shall be maintained for 3 years following termination of this Agreement.” • The last two sections must read… PO Suppliers will not be Required to Provide a COI however, this will not Release them of the Obligation to carry the Appropriate Coverage Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

19. Process Flow – Purchase Order and Standard PO Standard A clearly defined Statement (Scope) of Work is needed for both. Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

20. Process Flow – Custom Custom A clearly defined Statement (Scope) of Work is needed for both. Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

21. What is a Change Order? Four Types of Change Orders Change Orders Change Order 1 Change Order 2 • Agreements will not be extended beyond 3 years regardless if services remain the same. • Make Sure you provide detailed supporting documentation • Ensure Certificate of Insurance is up-to-date Increase in Dollar Value, same Scope Extension to the Period of Performance Change Order 4 Change Order 3 Change in Language of the Executed Agreement Extension to Period and Increase Example: • Valid CO: Executive Search Firm Change Order where the Salary is Higher than Expected or the Search takes longer. • Invalid CO: If it is a New search, a New Requisition will need to be processed with New Support Documentation. NOT Change Order Changes in SOW beyond Original Scope

22. Process Flow: Change Order and Financial CO Financial Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

23. University-wide Purchasing Agreements (UwPA)/Master Agreements • What are UwPAs? • Negotiated or bid contracts with select vendors • Best value • No need for additional bids • For a complete listing of all UwPAs, visit: http://www.columbia.edu/purchasing/purch/pv_list.html • What are Master Agreements? • These are agreements where the contract terms & conditions have been negotiated and on file with Purchasing • This does not preclude the competitive bidding process and is required for these agreements, but if awarded only a standard University Scope of Work document is required as supporting documentation to the request. Always BEST to Refer to the UwPAs when Possible for Savings! Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

24. Changes For 2009 Service Providers Transaction Process Greater Collaboration Improved Communications Refined Processes • Purchasing will work with Schools and Departments to ensure the proper documentations are completed to ensure a timely PO issued for purchases • Require Requisitions to be submitted PRIOR to work starting • PO specific Service Providers • Continue to Evaluate Alternative Processes • Purchasing will be offering training to individuals to ensure support documents are precise and to expectation to avoid any bottlenecks in the process Go to the Service Provider Website which Provides Necessary Documents and Insight Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

25. Purchasing Will Support You With A Range Of Project Management Activities From the Purchasing Office Service Agreement Team, you can expect: Weekly Requisition Status Management Plan of Overall Process for Sourcing a Need Check-Ins with the Transactions Support for Onboarding and Training Update WebPur with Notes Ad-Hoc Transaction Support Update on Open Questions We’re All In This Together! Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

26. How do I Submit Documentation to Purchasing? Through one of 3 methods: • BEST: Email documents to Purchasing using the Fax Server • Email to purchsrv@columbia.edu • Indicate ONLY the Purchase Requisition Number (RAXXXX) in the Subject Line of the email (Add sample email) • Attach all supporting documents • GOOD: Fax documents to Purchasing Using the Fax Server. • Fax number: 212-854-2699 • Fax coversheet: http://www.columbia.edu/purchasing/forms/pdf/faxcoverletter.pdf • LEAST: Inter-campus Mail or Dropping it off at the Purchasing Office Please Make Sure to Include Requisition Number on Fax Sheet and Make Copies Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

27. Update Your Contact Lists for Service Agreements! NameEmailPhone Number Carlos Arias caa2130@columbia.edu 212.851.7346 Fatima Suarez fs2257@columbia.edu 212.854.7551 Joe O’Brien j.obrien@columbia.edu 212.854.3664 Service Provider Team Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html

28. Need Information? Available Resources to Assist You • Purchasing Website: http://www.columbia.edu/purchasing • Complete Listing of UwPAs • News Updates • Library of Standard University Forms • Link to Accounts Payable Procedures • Link to WebPur • Link to Risk Management Website • Purchasing Policies and Guidelines Note: http://procurement.columbia.edu/purchasing/hire_consultant_a.html