Professional Services Contracts

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Transcript Professional Services Contracts

Professional Service
Contracts (PSCs)
An overview and general
SERV January 30, 2014
PSC - Definition
• The PSC is a means by which contracted
services can be obtained, employee vs.
independent contractor status can be
determined, and the interests of the University
protected. The document can be found at:
The PSC is only to be used for customized
• with independent contractors that are for
professional, or
• technical services that are predominantly
intellectual in nature and require specialized
• In most cases the services are of a specific
project nature and not ongoing.
PSC Use Continued
• An independent contractor provides service for
the university
• but is free from immediate control or direction in the
performance of his or her work under a contract of
• A worker is an employee if the person for whom
he works has the right to direct and control him
concerning when and where to do the work
PSC and MSU Employees
• Individuals currently employed by the university
may not be paid as an independent contractor.
• Individuals who were previously employed by
the university may not be paid as an
independent contractor in the same calendar
year that they were an employee performing the
same duties
Conflict of Interest Disclosure Form
• PSCs with Individuals who have relatives
employed with MSU must include the PSC
Conflict of Interest Form
• This form is located at:
PSC General Information
• The PSC is intended for use with contracted
services only, not for the procurement of printed
materials, other products or any service
involving labor.
• The PSC form is completed (for contracts of
$600 or more) and sent to the proper Institute
Fiscal Officer (FO), ANR Events, or other unit as
PSC General Information - continued
• For services under $600.00
• Disbursement Voucher (DV) may be processed as a means for
payment for services without completing the PSC
• For contracted professional services ≥ $600.00
• MSUE departments need to complete the PSC (and submit it to
the Institute FO, ANR Events or other unit), or
• Hire an individual on a project pay basis through Human
Resources as a temporary employee.
• University limits when project pay may be used
• Project pay must be carefully considered with respect to possible
affordable care act costs
PSC General Information - continued
• Payments for honoraria, speakers and performers
do not require a PSC or requisition by MSU.
• MSUE requires a PSC is completed and sent to
the Institute FO or ANR Events, for any honoraria,
speaker or performer payments ≥ $600
• This will protect MSUE’s interests and ensure that
the service being provided meet the criteria on page
three of the PSC document.
PSC Payments < $600
• In the cases of Honoraria/Speaker/Performer payments
less than $600
• Can be processed using a DV along with the completed
Honoraria/Speaker/Performer Checklist, available in Section 71
of the MBP:
• Please pay special attention to the: “Documentation
(check one or more)” section on the checklist
• Attach and submit the required documentation with the
checklist along with your payment request to the MSUE
Business Office or ANR Events via email. In the body of the
email please confirm that the following statements are true:
Person requesting payment for honoraria/speaker/performer < $600 should make sure
the following criteria are accurate for (U.S. citizens and permanent residents only):
The above-referenced service provider presented a lecture or address, conducted a
training session as a one-time or occasional speaker, or presented a performance.
The service provider is not a current employee or student at Michigan State
The service provider does not receive extensive instructions on how to perform
his/her job.
The service provider does provide or could be available to perform this job at other
The service provider does not receive benefits from Michigan State University.
The university and the service provider agree, either in writing or orally, that the
relationship is strictly that of an independent contractor.
Checklist - continued
• Include in the email the account/subaccount that
the Honoraria/Speaker/Performer payment is to
be issued from.
• Include a business purpose for the payment in
the body of the email as well.
• Attach a W-9 completed by the contractor.
PSC Completion PRIOR to
Service Being Provided
• The PSC document is not intended for use as an
“after-the-fact” means of paying suppliers for
• All PSC documentation is to be completed in
advance of bringing a contractor on board to
perform a specific set of activities if payment
is $600 or more
PSC Over $15,000 No Competitive
• A sole or single source justification is required
for a PSC over $15,000 when competitive bids
are not sought
PSC and External Agency Maximum
Limits – Check First!
• Some agencies have maximum consultant rates
• Dept. of Justice: $450/day
• National Science Foundation: $521/day (Executive
Schedule Level IV Federal employee)
• Other agencies have various maximums.
PSCs and RC Accounts
• PSC’s on RC accounts must include the
following information.
• Dates that are within the project period.
• Rate Justification.
• Distinction between services and expenses.
• Reminders for PSC payments on RC accounts
• Copies of receipts must be submitted for all expenses
• Invoice must include dates of service and signature
• The department/PI should verify that consultant
expenses comply with agency and university
PSCs and CGA
• CGA approval is not required for PSC payments
• However CGA may spot-audit the payment
and/or request further information!
PSC Types of Services
• Examples of services for PSC:
• Interpreters
• Researchers
• Freelance writing
• Educational advisory services
• Speakers
• Lecturing/training for longer period of time
Holly A. Lacina, MPA
MSU Extension Business Office
Children and Youth Institute
Justin S. Morrill Hall of Agriculture
446 West Circle Drive, Room 160
East Lansing, MI 48824-3754
Email: [email protected]
Phone: 517-432-6567
Fax: 517-432-7644