Professional Service Contracts (PSCs) An overview and general information 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: rev3.pdf rev3.pdf

PSC Use The PSC is only to be used for customized services: with independent contractors that are for professional, or technical services that are predominantly intellectual in nature and require specialized knowledge 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 service 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: interest.pdf interest.pdf

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 indicated.

PSC General Information - continued For services under $ Disbursement Voucher (DV) may be processed as a means for payment for services without completing the PSC For contracted professional services ≥ $ 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 . In the body of the please confirm that the following statements are true:

Honoraria/Speaker/Performer Checklist 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 University. 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 businesses/schools. 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.

Honoraria/Speaker/Performer Checklist - continued Include in the 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 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 services 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 Bid 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 restrictions

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

Questions 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 Phone: Fax: MSUE BUSINESS OFFICE WEB SITE: