Contracts

Personal and Purchased Service Contracting

The procedures here are issued to help clarify and document the proper way to establish a personal service, purchased service, or other contractual obligation other than the purchase of goods. Changes in current State Law and increasing liability issues make it essential that these procedures are adopted in every department, by all university personnel.

Definitions

Personal Service

A personal service is an expert service provided by an individual or company that results in evaluations or recommendations, policies, procedures, training, or similar planning document or tool. For the purposes of this procedure, Personal Services are subject to policies and law established for OFM's management of State contracts for personal services.

Client Service

A personal service provided directly to agency clients. RCW 39.29.006(2) defines client services as: ... services provided directly to agency clients including, but not limited to, medical and dental services, employment and training programs, residential care, and subsidized housing. Students may be considered clients where the contractor provides direct services to students such as counseling, guest lectures, student workshops or entertainment services. The contractor must be providing direct service to the client for the service to be designated a client service. Direct service means the contractor is in direct, face-to-face contact with the individual clients as part of providing the client service.

Purchased Service

A purchased service is the purchase of a service that usually is associated with specialized or crafts labor and is either ordinary maintenance or in amounts less than those defined above as "Public Works". For the purposes of this procedure, Purchased Services are subject to policies and law established for the State General Administration's purchase of goods and services.

Employee

Washington State Employment Security Department has revised the definition of an employer/employee relationship. Except for honorariums (see definition), if an individual is performing a personal service and they do not have a business license, the relationship is considered an employer/employee relationship. Employee hires are performed through Personnel Action forms available from the Personnel Office or the Provost Office for academic hires.

Architectural and Engineering Services

These professional services provide planning for Public Works projects. Only the University Facilities Planning Department may enter into these types of contractual services. For the purposes of this procedure, these contracts are subject to State laws specific to these contracts and the procedures detailed in this document do not apply.

Evidence of Competition

For the purposes of this procedure, "evidence of competition" refers to the documentation to support your investigation into alternative sources of the personal service. A written solicitation document should be used to obtain information from these sources and we are required to post the solicitation document on the State’s bid notification system (Washington's Electronic Business Solution). See the requirements below and obtain a sample of a solicitation document.

Formal Competition

For the purposes of this procedure, formal competition refers to the process conducted by the University Purchasing Department of issuing a written Bid or Request for Proposal; establishing evaluation criteria; advertising and mailing bids; and scoring returned bids or proposals.

Sole Source Justification

For the purposes of this procedure, sole source justification, as defined by the Office of Financial Management (OFM), must include the following:

A. Specific Problem or Need

Identify and fully describe the specific problem, requirement or need which the contract is intended to address, and which makes the services necessary. Also include an explanation as to how the agency determined the services are critical or essential to agency responsibilities or operations and/or whether the services are mandated or authorized by the Legislature.

B. Other Public Resources

Explain what effort has been taken to conclude: (a) that sufficient staffing or expertise is not available within the agency to perform the service, and (b) that other qualified public resources are not available to perform the service more efficiently or more cost effectively.

C. Competition Not Appropriate

Explain how the agency concluded that competitive procurement was not appropriate in this instance.

D. Sole Source Criteria

Include a detailed explanation of the items below which are relevant to the sole source decision

(i) Unique nature of the service and/or the unique qualifications, abilities or expertise of the contractor to meet the agency needs. Unique service would be those which are highly specialized or one-of-a-kind. However, other factors which may be considered include past performance, cost-effectiveness (learning curve) and/or follow-up nature of the required services.

(ii) Any other special circumstances which may be relevant such as confidential investigations, copyright restrictions, or time constraints. If time constraints are applicable, identify when the agency was on notice of the need for the services, the entity that imposed the constraints, explain the authority (if not obvious) of that entity to impose them, and provide the timelines within which work must be accomplished.

(iii) Sole availability in the location required. If the proposed contractor is the only source available in the geographical area, state the basis for this conclusion and the rationale for limiting the size of the geographical area selected.

E. Reasonableness of Costs

Since competition was not used as the means for procurement, explain how the agency concluded that the costs, fees or rates negotiated are fair and reasonable. Either make a comparison with comparable contracts, use the results of a market survey or employ some other appropriate means calculated to make such a determination.

If the contract is being filed based on a cumulative sole source total of contracts awarded to the contractor in a fiscal year, include the total amount of the other sole source contracts and amendments awarded during the fiscal year to this contractor.

F. Sole Source Advertisement

Sole source contracts of $20,000 or more are required to be advertised in either a statewide or regional newspaper and on the State’s bid notification system (Washington's Electronic Business Solution). Advertisements may also be published in other media as appropriate. The advertising requirement is based on the estimated contract amount, and is not a cumulative total of sole source contracts with a contractor in a fiscal year.

Include the name(s) of the newspaper(s) in which the advertisement was published, the date(s) of the advertisement(s) and the name(s) of those responding. If no responses were received, please so indicate in the sole source justification. If one or more responses are received, explain how the agency concluded the contract is appropriate for sole source award. List any other potential contractors that were contacted through other means and explain why these firms could not perform the services.

If the sole source contract is exempt from advertising, clearly identify the basis for the exemption and include a copy of the documentation which provides the authority for the exemption, as applicable.

Dollar Amounts

For the purposes of this procedure, specific dollar amounts refer to the value of the contract, cumulatively, for any single 12 month period.

Public Works

These purchased services result in construction or capital improvements to buildings or properties, other than ordinary maintenance. There is no minimum dollar contract amount for public works or prevailing wages. Only the University Facilities Management Department may enter into these types of contractual services. For the purposes of this procedure, these contracts are subject to State laws specific to these contracts and the procedures detailed in this document do not apply.

Personal Service Contracting Procedures

Civil Penalty for Violation of Policies

A $300 civil penalty may be assessed to any individual who knowingly violates the policies stated. The University will be unable to pay for these penalties if incurred.

Authorization

Personal Services may only be contracted by submitting a requisition to the Purchasing Department prior to commencement of any work.

Once a requisition is received, competition is obtained and documented, contracts are filed with OFM and a Purchase Order is created prior to work being performed.

Prior to procuring Personal Services valued at $5,000 or more, OFM requires CWU to document the following:

• The service is critical to agency responsibilities or operations, or is mandated or authorized by the Legislature;
• Sufficient staffing or expertise is not available within the agency to perform the service; and
• Other qualified public resources are not available to perform the service either more efficiently or cost effectively.

Requirements for a signed two-way contract

Any personal service contract in excess of $500 should have a contract signed by both the authorized University agent and the contractor. A Standard Agreement form is available, which can be used for simple contractual relationships.
Please note:

• Contracts must be approved by the Business Services and Contracts office before they are executed.
• Only certain individuals have been delegated signature authority to contract for the University.

For more complex contracts, the CWU Contracts Department can assist in contract preparation.

Requirements for Competition

Sole Source

• If contracts are with sole source providers, a written Sole Source Justification must be prepared (see definition).

Dollar threshhold equaling between $1-$4,999

• Seeking competition is always recommended, though not required.
• Telephone calls can be made to firms or individuals describing the service desired and requesting price, schedule and qualifications to perform.
• Contract is entered into upon selection of contractor.

Dollar threshhold equaling between $5,000-$19,999

• Informal competition (Evidence of Competition)
• Prepare written document/letter including at a minimum: description of services required, project schedule, request for consultant’s qualifications, request for costs or fees and due date for responses.
• Send to a minimum of three firms/individuals and post to Washington's Electronic Business Solution (WEBS). May be faxed to them and responses may be faxed to agency to expedite processing.
• Evaluate responses and make award decision.
• Negotiate contract.
• Document for file: names of firms solicited; information on firm’s responses; basis for award decision; copy of contract.

Dollar threshhold equaling $20,000 or more

• Formal competition
• Prepare formal solicitation document, e.g., Request for Proposals (RFP) or Request for Qualifications/Quotations (RFQQ). Include all requirements in order for proposer to understand what the agency needs and how the agency will evaluate responses.
• Post to WEBS. Develop bidder’s list from firms responding to notice, internal agency listing, etc. Send to a minimum of six bidders.
• Issue RFP or RFQQ.
• Conduct preproposal conference, if scheduled in RFP or RFQQ, and issue minutes.
• Date and time stamp proposals received by due date.
• Evaluate proposals strictly against what is set forth in the RFP or RFQQ and score. Schedule oral interviews, if required. Determine apparent successful contractor.
• Notify successful and unsuccessful firms.
• Negotiate contract with apparent successful contractor.
• Conduct debriefing conferences, if requested.
• File contract with OFM (institutions of higher education may not be required to file due to fund source).
• Begin contract work.

Requirements for Filing Contract with OFM for Review and Approval

Sole Source

• Threshold: $5,000-$19,999
  • Non-state funds
  • OFM Filing not required
  • 10-working day adv. filing
• Threshold: $20,000
  • Non-state funds
  • OFM Filing not required
  • 10-working day adv. filing

Competitive

• Contracts and amendments for: Management consulting, Org. Dev, Marketing, Communications, Employee Training and Recruitment
• $20,000 or more
• Non-state funds
• OFM filing not required
• 10-working day adv. filing

Competitive

(contracts and amendments not included in previous list)

• Threshold: $20,000 or more
• Non-state funds
• OFM filing not required
• Work may start on or after day filed with OFM

Amendments

Competitive or sole source contract that result in contract amount greater than 50% of original value or which constitute a substantial change in scope of work.

• Threshold: $5,000 or more (contract, when amended, equals $5,000 or more)
• Non-state funds
• OFM filing not required
• 10-working day adv. filing

Emergency

• Threshold: $5,000
• Non-state funds
• OFM Filing not required
• 3-working days from date of execution or start of work, whichever is sooner

Contracts Exempted from Competition and Filing with OFM:

• Personal Service Contracts less than $5,000.
• Contracts for services performed for prices established by published tariff.
• Interagency Agreements.
• Contracts necessary to provide collaborative research when the contractor is approved by the granting agency.
• Contracts for Client Services such as performances or instruction for students.
• Engineering & Architectural Services.

Documentation Required

• Requisition to authorize payment. This must reference the provider's Federal Tax I.D. or their social security number if not a company.
• Signed contracts if in excess of $500
• OFM Filing Sheet if required to be filed with OFM
• W-9 form if not already on file.
• Vendor invoice or State A-19 Invoice Voucher, referencing the Purchase Order number must be submitted to Accounts Payable to initiate any payment.

Honorariums

Honorariums are personal service contracts and being the most prevalent, deserve special attention in this procedure manual.

Definition: Honorariums are personal service contracts with individuals who are performing a one time service of limited duration (less than one week). Honoraria individuals have an expertise but do not have a business license.

Individuals who have been CWU employees within the current calendar year cannot be paid honoraria. These individuals should be paid through Payroll instead. For the purposes of this procedure, honorariums are considered personal services under $500. Honoraria dollar amounts normally include ALL EXPENSES of the individuals being paid by this means.

Documentation

• A Purchase Requisition must be submitted prior to any work performed.
• A Purchase Order will be issued by the Purchasing Department.
• To receive payment, a W-9 form must be submitted (or previously on file with the University) with an Invoice Voucher (A-19) which references the Purchase Order number.

Purchased Services Contracting Procedures

(Not Personal Service Contracting)

Authorization

Purchased Services (except for Public Works) may only be contracted by submitting a requisition to the Purchasing Department prior to commencement of any work.

Requirements for Competition

• Any purchased service in excess of $5,000 but less than $50,000 must have at least three quotes obtained by the University Purchasing Department. These quotes may be obtained by phone or fax.
• Any purchased service in excess of $50,000 must have formal competition (see definition ).

Requirements for Liability Insurance

A vendor or contractor is required to show proof of property, professional, or general liability coverage, sufficient to the University Business Services & Contracts Department, prior to commencement of any work performed on University property. This is required regardless of contractual amount.

Requirements for Payment of Prevailing Wage

• Any Public Works contract.
• Any installation requiring the services of skilled trades personnel.

Exceptions to Payment of Prevailing Wage

• Work performed by the sole owners or their spouses.
• Work performed by any partner that owns at least 30% of a partnership.
• Work performed by any president, vice president, or treasurer of a corporation that owns at least 30% of the corporation.
• Continuing and necessary ordinary maintenance (except for janitorial services) such as maintenance agreements on equipment.

Requirements for a signed two-way contract

Any purchased service in excess of $500 should have a contract signed by both the authorized University agent and the contractor. This may be waived in cases where a Purchase order alone, by virtue of its acceptance by the contractor, sufficiently establishes the terms of payment and the deliverable consideration from the contractor. This decision may only be made by the Director of Business Services and Contracts.

Other Contracts

Other types of contracts might include grants, leases, maintenance, in-kind, interagency, revenue generating, or similar contracts that do not fall under the category of purchased goods, purchased service, or personal service.

Authorization

Authorization for signature authorities for these types of contracts may be found in the University Policy manual, however, at minimum, these contracts must be reviewed by the Director of Business Services and Contracts.

Documentation

Documentation required will depend if the contract is revenue generating or requires payments by the University.

If there are any associated payments to be made by the University, a Purchase Requisition will be required as well as signed contracts. If it is a revenue generating contract, signed contracts will be required.

Internal and External Documents Required

Documentation is substantially the same for either Purchased Services or Personal Services and will be differentiated where necessary in this section.

Purchase Requisition

A Purchase Requisition must be submitted to the Purchasing Department which authorizes the expenditure. This must be submitted prior to the commencement of any work. This is an originating department responsibility.

Bid or RFP Document

A Bid or RFP will be issued if necessary by the Purchasing Department (see competitive requirements ). See the subsequent section of this procedure which addresses the development of contracts or bid documents. This is a joint originating department and Purchasing department responsibility.

Signed Contract

Two original, signed contracts must be obtained if the work is in excess of $500. This may be developed on the University's Standard Agreement form or an otherwise approved contract form. The contract must be reviewed and approved by the Business Services Department and signed by the authorized University Agent appropriate for the service or department requesting the service. See the University Policy manual for signature authorities. See the subsequent section of this procedure which addresses the development of contracts or bid documents. The Business Service Department will assist in preparing these documents. This is a joint originating department and Purchasing department responsibility.

OFM Personal Service Filing Face Sheet

This document must be completed if the personal service contract is required to be filed and approved by OFM at least 10 days prior to the commencement of any work (see list of contracts requiring filing). It is available from the Business Services department. This is a joint originating department and Purchasing department responsibility.

Certificate of Insurance

Any purchased service performed on campus cannot commence until adequate proof of insurance is obtained and approved by the Purchasing or Business Services department. This is a Purchasing Department Responsibility.

Purchase Order

The University Purchasing Department will issue a Purchase Order after receiving the necessary documents above and a determination is made as to who will perform the work.

Affidavits of Intent to Pay Prevailing Wage and Affidavits of Payment of Prevailing Wage

These documents are obtained from the Department of Labor and Industry for Purchased Service contracts subject to prevailing wage (see for requirements for prevailing wage).This is a Originating Department Responsibility.

Payment Documents

The following documents are required to see that a provider is paid. These documents are the joint responsibility of the originating department and the provider.

W-9 Form

This form must be submitted once (usually with first payment) for any personal service provided.

A-19 Invoice Voucher or Vendor Invoice

Payment cannot be made without some type of invoicing. For Honorariums or other personal services provided by individuals not customary with submitting invoices, an A-19 State of Washington Invoice Voucher is used. This form is available from the accounting department section of the CWU forms webpage. Originating Departments should assist individuals who are not accustomed to invoicing for services to complete this form. Departments that need assistance completing this form should contact Accounts Payable.

Bid, RFP, or Contract Content Guide

The following is a general outline for establishing a personal service or purchased service contract for consulting or other professional services. Establishing an RFP or a Contract should be the joint responsibility of the Business Services Department and the Originating Department.

Uncomplicated Contracts

For less complex contracts that have an easily defined task, completion time, and payment schedule, the University has a Standard Agreement form. This form has standard terms and conditions and spaces provided to complete the necessary parts of a contract.

Complex Contracts

More complex contracts that require more than one line descriptions of the task, completion time, or payment schedule should follow the guidelines below for establishing a contract. The same steps apply to either preparing an RFP or preparing a contract.

Questions in section I should be addressed regardless of contract amount. Steps II through VI refer to the competitive process.

1. Consider the structure you expect for the finished service contract.
   • What work is expected to be accomplished.
   • What type of final reports will be expected.
   • If possible, what measure will there be to determine completeness of the work.
   • What time-frame will the contractor have for completing the work. Are there critical beginning or ending dates involved.
   • What format do you expect the compensation to take, ie, firm price for work performed; time and materials with a not to exceed limitation; Published rate structures; other (?)
   • What are the qualifications you require of the consultant, ie, years of past experience?; 1, 2, 3, or more references for work of similar scope and nature?; Special licenses required?; background experience of any employees who will be directly involved in the contract?
   • What type of insurance must the consultant have while performing this work. The University Business Services and Contracts Office should be consulted for proper types and amounts of coverage.
   • Establish evaluation criteria to be used in reviewing proposal responses from qualified consultants and who will be evaluating these proposals.
2. Prepare responses to Section 1, A-H, and send (e-mail) to the Purchasing Office with a Purchase Requisition. This will initiate the competitive process.
3. Solicitation of proposals from qualified consultants. This will be done by the Purchasing office. This process, from the date the Purchasing Dept. receives information in section 1, is approximately 3 weeks.
   • Preparation of a Request for Proposal based on information provided by the department. Additional (standard terms), if necessary, will be added to the information provided by the department.
   • Advertise our needs in the Seattle Daily Journal of Commerce and any suggested trade journal will be done by the Purchasing Department.
   • Mail Requests to any known, qualified consultants.
4. Evaluation of proposals submitted.
   • Grade or compare to evaluation criteria established.
   • Select consultant
5. Prepare a contract and acquire signatures and approvals
   • Consultant or Contractor Signature Approvals.
   • Departmental Signature Approvals
   • University Contracts Signature Approval
6. If over $5,000 for the fiscal year, the contract may have to be sent to OFM for approval at least 10 days prior to when work will commence if the contract is with a sole source provider.