Personal Service Contracts Host: Sally Molsberger Contract Administration and Procurement Services

1. Personal Service ContractsHost:Sally MolsbergerContract Administration and Procurement Services

2. Definition and Policy Definition Personal service contract is described in 45A.690as an agreement whereby an individual, firm, partnership, or corporation is to perform certain services requiring professional skill or professional judgment for a specified period of time at a price agreed upon. Policy ----Governed by University of Louisville Policy # 11.00 It is the policy of the University of Louisville to establish personal service contracts for professional services in accordance with the provisions of KRS 45A.690 – 45A.695. Examples of services that must be provided through a personal service contract include but are not limited to consultants, doctors, employee search firms, nurses, lawyers, engineers and architects. Commodities, equipment and non professional services are not to be procured via a personal service contract.

3. Employee or Independent Contractor - Determination • When considering hiring an individual, the determination must be made whether to execute a personal service contract or to place the individual on Payroll in a temporary status. • Departments seeking to establish a PSC with an individual must complete the document entitled “Employee or Independent Contractor” found at: • http://louisville.edu/purchasing/policies/emplindepcontr.pdf • Determination of nature of relationship as required by IRS • Whether temporary employee or independent contractor • Relationship of worker and business must be examined • If employer/employee relationship is indicated – department must contact Payroll and add as a temporary employee. • If independent contractor relationship is indicated – the department must execute a personal service contract form and forward to the Department of Purchasing. • “Employee or Independent Contractor” document must be submitted to Department of Purchasing with the personal service contract.

4. Sub-Award or PSC – Determination (Sponsored Project ) When considering the establishment of a personal service contract on a sponsored project, the first determination to be made is whether or not the procurement mechanism should be a sub-award or a personal service contract. The following should assist in distinguishing between the two processes: Sub-award: An agreement written under the authority of and consistent with the terms of the Prime Award (grant, contract or cooperative agreement) that transfers a portion of the research or substantive effort to another organization when such expertise is not available within the primary awardee’s institution. A sub-award should be identified at the time of proposal to the sponsoring agency and is considered fully executed once it has been signed by both parties. A Sub-award is an appropriate procurement mechanism when: The collaboration is substantive programmatic work which is beyond mere analytical work-for-hire normally conducted by a routine service provider. The collaboration is substantial enough that the collaborating individual or organization will participate in preparation of results, publication, presentation or other collaborative participation beyond routine analytical work. The collaborator will maintain control of the work to be performed under the sub-award. Responsible Administrative Unit: The Office of Grants Management or Industry Contracts is responsible for the preparation, signing and non-fiscal management of all sub-awards issued by the University. Additional information can be obtained by contacting Judy Bristow, Director of the Office of Grants Management at 852-3788 or Dave King, Director of Office of Industry Contracts at 852-6543.

5. Sub-Award or PSC – Determination (Sponsored Project) (continued) Personal Service Contract: A written agreement whereby an individual, firm, partnership or corporation is to perform certain services requiring professional skill or professional judgment for an agreed upon price for a specific period of time. The agreement is for a specialized service not available through a routine service provider. The contractor requires a specialized knowledge in a particular field and often requires originality, creativity and decision-making abilities. The agreement is intellectual and professional in nature and is signed by both parties. A personal service contract is an appropriate procurement mechanism when: The collaboration is not substantive programmatic work, however, is beyond mere analytical work-for-hire normally conducted by a routine service provider. The collaboration is not substantial enough for the collaborating individual or organization to participate in scientific design, methodology, preparation of results, publication, presentation or other collaborative participation beyond the specialized service. The individual or organization acts as an independent contractor. The collaborator meets a special agency (University) need and is usually professional in nature and is normally on a short term basis. Responsible Administrative Unit: The Department of Purchasing is responsible for the processing of all Personal Service Contracts. Additional information may be obtained by Contacting Sally Molsberger at 852-8223.

6. Procedures for Establishment of a Personal Service Contract • The following procedures must be utilized in order to establish a personal service contract for the following funding sources: • University of Louisville Research Foundation, Inc. • U of L State Appropriated Funds • University of Louisville Athletic Association, Inc. • University of Louisville Foundation, Inc.

7. Request for Proposal • RFP form found at: • http://louisville.edu/purchasing/forms/pscrfpinstructions.doc • Per KRS 45A.695 (3), departmental head or other authority “authorized designee” shall issue an RFP. • Components of an RFP: scope of services, info background, cost, method of award, and contract period. • Anyone acting in role of evaluator on submitted proposals or advisor to the team must sign confidentiality/conflict of interest statement:http://louisville.edu/purchasing/policies/pscconfidentiality.pdf • Department is required to submit copy of the Request for Proposal to Department of Purchasing for review and approval, and for posting on the Department of Purchasing website. • Appropriate department evaluator to the RFP may conduct discussions with any offeror • having met the qualifications listed in the RFP.

8. Request for Proposal (continued) • Award will be made to the offeror determined to have the highest score based on the evaluation factors set forth in the RFP. All scorings shall be made in writing. A sample score sheet is on the Department of Purchasing website at: http://louisville.edu/purchasing/forms • Once an award is made, originating department must submit to Department of Purchasing: • Completed original personal service contract form (including the signatures of department “Recommended by” party and the “Second Party” • Scoring summary • Copy of RFP issued by originating department • Copy of response from selected vendor • Copy of completed “independent contractor vs employee” form, if applicable • All documentation must be kept on file by originating department for three years. • All contract forms must be typewritten and any changes made after signatures are • affixed must be initialed by all parties. • Departments must contact University of Louisville Privacy Officer, at 852-3803, • for assistance in compliance with applicable statutes if health-protected information • is included within the contract.

9. Types of Personal Services Contract Forms Forms University of Louisville State Appropriated Funds University of Louisville Research Foundation Funds University of Louisville Athletic Association Funds University of Louisville Foundation, Inc. Funds

10. Sole Source Personal Service Contract KRS 45A.095 provides for establishment of personal service contracts by noncompetitive negotiation only for sole source purchases or when competition is not feasible as determined by the Department of Purchasing in writing prior to award or when emergency conditions exist. Emergency conditions are defined per KRS 45A.095 (3): An emergency condition is a situation which creates a threat or impending threat to public health, welfare, or safety such as may arise by reason of fires, floods, tornadoes, other natural or man-caused disasters, epidemics, riots, enemy attack, sabotage, explosion, power failure, energy shortages, transportation emergencies, equipment failures, state or federal legislative mandates, or similar events. The existence of the emergency condition creates an immediate and serious need for services, construction, or items of tangible personal property that cannot be met through normal procurement methods and the lack of which would seriously threaten the functioning of government, the preservation or protection of property, or health or safety of any person. Sole source is a situation in which there is only one (1) known capable supplier of a service, occasioned by the unique nature ofthe requirement, the supplier, or market conditions. • Procedure for processing of Sole Source personal service contract • Department must submit written justification signed by Chair/Department Head to Department of Purchasing for approval prior to establishing contract.

11. Shall be used when parties to an established contract agree to increase or decrease funds, revise the scope of work, extend time for performance within the current biennium, or any other change. The signature process is handled in the same manner as original contract. Amendment/Extension form can be found at: http://louisville.edu/purchasing/forms No personal service contract amendment/extension shall be in order any sooner than ninety (90) days from the start date of an approved personal service contract. Amendment/Extension to a Personal Service Contract

12. Review and Approval Process for Personal Service Contracts • Personal service contracts on U of L Research Foundation, Inc. and State Appropriated funds require the following signatures: • Second Party • Department Chair • Department of Purchasing • University Counsel • Vice President for Business Affairs • PI on project and Director of Office of Grants Management or Office of • Industry Contracts – if funding is fund from Sponsored projects • Contracts on U of L Athletic Association, Inc. require the following signatures: • Second Party • U of L Athletic Director • Department of Purchasing • University Counsel • Contracts on U of L Foundation, Inc. require the following signatures: • Second Party • Vice President for Finance • University Counsel • Department Chair

13. Review and Approval Process for Personal Service Contracts (continued) • All University of Louisville state appropriated funded personal service contracts must abide by KRS 45A.695(1) which states that no work shall begin until the contract is filed with the Government Contract Review Committee. Each personal service contract shall have a cancellation clause not to exceed thirty (30) days notice to the contractee. • Committee meets once per month to review contracts • Contract must be submitted prior to the close of business of the last working day of the month • Department must complete a Proof of Necessity form • Adequate time must be allowed for committee review • Department of Purchasing will forward copy of executed copy to the originating document • Originating department must enter requisition using the assigned personal service contract number and vendor.

14. U of L Research Foundation, Inc., U of L Athletic Association, Inc., and U of L Foundation, Inc. will not be required to be submitted to Government Contract Review Committee. Please Note: No work can be done until all required signatures are affixed, and the contract has been received by the LRC or entered into the PeopleSoft system. Department must enter a requisition using the assigned PSC # and vendor # Review and Approval Process for Personal Service Contracts (continued)

15. Departmental Responsibilities regarding Personal Service Contracts • Keep current copies of completed contracts on file for 3 years • Extend and/or amend prior to ending date • Execute contract with accurate start and stop dates • The fund source can not be changed during the period of the contract • Ensure that invoices are correct, and that no invoices are approved for payment for services prior to a contract being fully executed or after termination of contract • Requisitions must be entered in PeopleSoft prior to the contract end date • Established contracts cannot extend past the end of the current biennium • Note….contracts that have passed their expiration date cannot be amended/extended for any reason.

16. Sally Molsberger Associate Director of Contract Administration and Procurement Services Email: sally.molsberger@louisville.edu Phone: 852-8223 Donna Barrett Administrative Assistant Department of Purchasing Email: donna.barrett@louisville.edu Phone: 852-8225 Department of Purchasing Website: http://louisville.edu/purchasing/ Revised 10/18/2011 Contact Information