Purchasing a Professional Service

Professional services are those that require specialized intellectual, educational, or creative expertise. Examples include: design services, editorial services, technology related services, research services, and consultants.

Construction Professional Services are those that require architecture/engineering (A & E) services, construction consulting, construction and material testing, or construction expertise. Examples include: architectural design, interior design, engineering, cost control consulting, and construction management.

Units may purchase these professional services on an intermittent or temporary basis. The following are examples of why professional services may be needed:

• limited or one-time use of specialized or creative skills;
• the provider has expertise that is not available within the unit or University; or
• the supplier has in depth knowledge of the marketplace to provide solutions or guidance.

Professional services for auditing, architectural design, legal services and construction project management require a contract at any dollar amount.

Professional services and their expenses that total less than $3,000 may be procured without a contract for professional services. Units may process a non-PO voucher to pay for the services after the work is completed. The department may create a contract if it chooses.

Professional services engagements totaling $3,000 or greater require a contract for professional services. Units must ensure that all contracts for professional services:

• comply with IRS requirements for defining employees and independent contractors.
• comply with special requirements of projects supported by sponsored funds.
• include a complete statement of work (DOCX) including any deliverables.
• include either the University's standard Contract for Professional Services (CPS) terms and conditions, OR use terms and conditions that have been reviewed and approved by the Office of the General Counsel.
• do not conflict with other University policies.
• are fully approved and the contract is issued to the contractor before any work begins.

Professional service engagements totaling $50,000 or greater, OR construction professional services totaling $100,000 or greater require a formal competitive bid process that must be performed by Purchasing Services to select a supplier, OR the unit may complete and submit a Department Request for Exception to Board of Regents Policy (DOCX) to Purchasing Services to determine whether the purchase may be exempt from the competitive bid process.

Construction professional services require a contract through Capital Planning and Project Management (CPPM) regardless of dollar value. Contract values that total less than $100,000 may be procured informally through CPPM. On a case-by-case basis, CPPM may approve a unit to conduct its own procurement.

Additionally:

• All professional services and expenses may NOT be purchased using the University’s procurement card (PCard).
• Per IRS regulations, University employees may NOT pay for any professional services and expenses out-of-pocket using their own funds. These expenses are always unallowable and non-reimbursable.
• For purchases totaling less than the formal bid threshold, a competitive proposal process is not required. However, the department may request that Purchasing Services conduct a competitive bid process.

Conflict of Interest

Per Minnesota Statutes section 15.43, "no employee of the State or the University of Minnesota in direct contact with suppliers and potential suppliers to the State or the University, or who may directly or indirectly influence a purchasing decision or contract ... may:

• have any financial interest or have any personal beneficial interest directly or indirectly in contracts or purchase orders for goods or services
• accept directly or indirectly from a person, firm, or corporation to which a contract or purchase order has been or may be awarded a rebate, gift, money, or anything of value other than items of nominal value. No such employee may further accept any promise, obligation, or contract for future reward."

A violation of this statute is classified as a misdemeanor, and may also violate federal regulations regarding sponsored funds.

Separation of Duties

Units must give careful consideration to the assignment of duties to employees in regards to procurement transactions so that the same employee is not allowed to select the supplier, place an order, receive the goods/services, approve the transactions, and process the associated voucher and payments.

Exclusions

This policy does not apply to purchases of standard services. Standard services are services routinely provided to a large number of customers usually at published rates without significant customizing (e.g., administrative services, dry cleaning, extermination services, equipment maintenance, laboratory testing services, lawn care, and courier services.).

Purchases of professional services between the University of Minnesota and University of Minnesota Physicians will not require review and approval from Purchasing Services or from the Board of Regents, but will instead be consistent with the Master Agreement for the Purchase of Goods and Services between the University of Minnesota and University of Minnesota Physicians (PDF). The Master Agreement does not apply to lease of real property from one party to the other, or to sponsored research activities and related subcontractor relationships.

Special Situations

The Office of the General Counsel is the only unit that may purchase legal services from an external supplier.

Construction professional services that exceed $200,000 and utilize state funds may require procurement through the State Designer Selection Board (SDSB).

The Controller's Office must approve all purchases of any services from accounting/auditing firms regardless of the amount. Contracts totaling $100,000 or greater require prior approval from the Board of Regents. A professional services contract is always required for these services.

Purchases of professional services from Fairview University Hospital will be handled in a manner consistent with Administrative and Board of Regents Policies: Purchasing, but purchases from Fairview University Hospital that are related to research projects will not require bidding for any dollar amount.

Twin Cities and Duluth Campuses: The Department of Public Safety (DPS) on the Twin Cities and the Duluth Police Department DPD) campus, under the direction of their Chiefs of Police, have sole responsibility for all aspects of the public safety workforce.  No unit on the Twin Cities or Duluth campuses may hire individuals or contract with firms to provide physical security, unless an exception has been granted in writing by the Vice President for University Services (Twin Cities) or the Chancellor (Duluth).  This includes licensed peace officers, contracted security personnel, and other individuals hired to perform work related to public safety, and is applicable regardless of qualifications, working title, or duration of contract.  Only these departmentsmay enter into contracts for temporary or ongoing private security services.  These contracts will be issued by and responsible to these departments regardless of funding source.  DPS and DPD will work in partnership with units planning major events or operating large venues to evaluate security needs on a per-event basis.  Security services needed will be provided by DPS and DPD, and the cost will be the responsibility of the unit hosting the event or operating the venue.  In rare circumstances, it may be operationally desirable for a contract or reporting relationship to be based outside of DPS or DPD.  The Vice President for University Services (Twin Cities) or the Chancellor (Duluth)  hold the responsibility for determining if such an exception is warranted and for what duration.