Professional Services Contractual Agreements (PSCAs)
To comply with legislative changes and subsequent Board of Regents, State of Iowa (Regents) policy revisions, the Procurement Services Department will have an increasing role in contracting for professional services. Professional services are defined as unique, technical, and/or infrequent functions performed by an independent contractor qualified by education, experience, and/or technical ability to provide services. In most cases, these services are of a specific project nature and are not a continuing, on-going responsibility of the institution. The services rendered are predominately intellectual in character, even though the contractor may not be required to be licensed. Professional services engagements may involve partnerships, corporations, or individuals. Examples of professional services typically acquired by the University include consulting, marketing analysis, banking services, medical services, physicians, software development/design, and auditing services.
Services which would not be considered professional services include repair services, small equipment rental, laboratory testing services, construction services, computer programming, etc. These services are often referred to as routine services. Transactions involving routine services will be handled consistently with the University's procurement policy for the purchase of supplies. In the past, University departments had delegated procurement authority to enter into professional services contractual agreements up to $50,000. Processing payments under this process involved creating a payment voucher or honorarium voucher for payment, attaching a copy of the professional services contractual agreement to the contractor's (vendor's) invoice, and sending it to the accounting office for processing.
The University's policy on professional services is revised as follows:
- A new agreement format for professional services acquisitions has been developed. It is called the Professional Services Contractual Agreement (PSCA). Departments should immediately discontinue using older PSCA versions and begin utilizing the new agreement format. The Professional Services Contractual Agreement has been integrated into the new Contract Request Form. The new form is completed online and routed to Procurement Services directly for your convenience. Please click here to be redirected to the Contract Request Form.
- Professional Services Contractual Agreements (PSCAs) where the total project expense (compensation, travel, lodging, etc.) is anticipated to exceed $50,000 are to be handled through a competitive selection process coordinated by the Procurement Services Department. Selection of the contractor will be based on a variety of criteria including, but not limited to: demonstrated competence, experience, knowledge, ability to meet the University's needs, references, methodology, and unique qualifications. In addition, the contractor must offer a fair and reasonable price consistent with current market conditions.
- Departments will continue to have the latitude to choose contractors and develop PSCAs under $50,000, except where a conflict of interest exists. However, departments will be expected to document the selection process they have followed for all PSCAs in excess of $2,000. The documentation should include the names of other contractors that were considered and the reasons for the department's selection. This documentation is to accompany the PSCA and a requisition, which are to be sent to the Procurement Services Department. Procurement cards are not to be used for the acquisition of professional services.
- All PSCAs in excess of $2,000 will require review and approval by the Procurement Services Department before the contractor begins to perform the specified tasks. Until signed by the Procurement Services Department, the PSCA is not valid and the contractor will not be paid for services performed.
- PSCAs involving a contractor who represents a conflict of interest (referred to as a conflict of interest vendor), regardless of the projected total compensation, are to be handled by the Procurement Services Department. Should the contractor be a paid employee of Iowa State University (ISU), another Regent institution, or state agency, a conflict of interest is created. PSCAs may only be used when working with an independent contractor. They may not be used for situations involving employer/employee relationships or as a mechanism to provide additional compensation beyond an employee's current salary. To help determine whether the service provider is an independent contractor, refer to the following website: Independent Contractor Determination
- Total payments to a contractor for services provided to any one University department under PSCAs may not exceed $50,000 in a fiscal year, or per project, unless subject to competitive bidding or review and approval by the Procurement Services Department.
- PSCAs are not required for speakers, unless the speaker represents a conflict of interest. Training sessions would not fall under PSCA's but a contractual agreement or quote should be used as documentation with the PO. Individuals teaching a non-credit or for credit class by definition represent an employer/employee relationship and compensation should be sought through Payroll.
- PSAs are not required for entertainers unless the entertainer represents a conflict of interest. Entertainers often have their own agreement forms. Departments are reminded not to sign vendor agreements. Procurement Services will assist departments by reviewing and signing all such agreements prior to the event.
- Professional services associated with contracts and grants are no longer being handled by the Office of Sponsored Programs Administration (OSPA) and are now being handled by the Procurement Services department. OSPA will continue to handle all subrecipient awards with federally funded contracts and grants.
- Architectural services, engineering services, construction managers and any specialized consultants related to the planning, design and construction of University facilities are to be coordinated through the ISU's Facilities Planning and Management (FP&M) Architectural and Engineering Services Office. The selection of architects, engineers and consultants for this purpose will be handled consistent with Regents policy on capital construction.