University of Minnesota  Administrative Policy

Purchasing a Professional Service

Policy Statement

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.


  • 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.


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.

Reason for Policy

To implement Board of Regents Policy: Purchasing.  Noncompliance with laws, regulations, sponsor requirements, and University policy may result in unnecessary legal fees, fines, penalties, loss of sponsored funding, and adverse impact to the University’s reputation.




Frequently Asked Questions

  1. Are the procurement requirements in the new uniform guidance in OMB 2.CFR.200.320 applicable to existing and new awards?

    The University of Minnesota has chosen to delay implementation of the new procurement requirements in OMB 2.CFR.200.320 until July 1, 2016. All other regulations in OMB 2.CFR.200 are applicable to new federal awards issued after 12/26/14 and may be applicable to existing federal awards depending on agency implementation plans.


Primary Contact(s)Beth Tapp612-624-5255[email protected]
  • Purchasing Services
  • Policy Clarification
  • Preparing a Request For Proposal (RFP)
  • Evaluating a Proposal
  • Non-Standard Contract
  • Administering a Professional Services Contract
Financial Helpline612-624-1617[email protected]
Sponsored FundsSPA Grants Administrator612-624-5599 (Helpline) 

Payment Procedures

Hiring and Paying EmployeesHuman Resources Consulting Group612-624-UOHR (8647); 800-756-2363[email protected]
Paying ContractorsFinancial Helpline612-624-1617[email protected]

Tax Issues

Federal Withholding Tax
Tax Treaties
Payroll Services612-624-8647[email protected]
State Withholding / 1099Financial Helpline612-624-1617[email protected]

Immigration Issues

Employment and Tax IssuesPayroll Services612-624-8647[email protected]
Visa Issues, StatusInternational Student & Scholar Services612-626-7100[email protected]
Responsible Individuals
Responsible Officer Policy Owner Primary Contact
  • Controller
  • Director of Purchasing Services
  • Beth Tapp
    Director of Purchasing Services



CPS - Contract for Service

PCPS - Performance Contract for Professional Service

PSIS - Professional Services Information Sheet

QCPS - Quick Contract for Professional Service

RFP - Request for Proposal

SOW – Statement of Work

VCPS - Voucher Contract for Professional Service (eliminated in January 2017)

Professional Services Information Sheet (PSIS):

A form that collects information about professional service providers and is required in the majority of professional services transactions.

Reasonable Price:

A price that can be shown as being consistent with current market prices and not considered excessive.

Request for Proposal (RFP):

A document usually sent to multiple suppliers inviting them to make a competitive offer to provide professional services to the University.

Statement of Work:

An outline of what the supplier is expected to accomplish or deliver to the University for the price stated in the contract.

Types of Services:

There are two overall types of services purchased by University colleges and departments: standard and professional services.

  • Standard Services: Services routinely provided to a large number of customers usually at published rates without significant customizing.
    • Examples are dry cleaning, extermination services, equipment maintenance, laboratory testing services, lawn care, or courier services.
  • Professional Services: Professional services are those that require specialized intellectual, educational, or creative expertise.
    • Examples include: design services, editorial services, research services, and consultants.


Capital Planning and Project Management

Reviews and approves architectural, engineering, construction project management, interior design, and building maintenance services being purchased by the University.

Controller’s Office

Reviews proposed professional services contracts with accounting and auditing firms for possible "impairment of independence" issues relative to University of Minnesota audits. For contracts not representing an impairment of independence, approves contracts or recommend Board of Regents approval for contracts requiring Board approval.

Tax Analyst/Accounting Services (was Disbursement Services)

Reviews PSIS (Professional Services Information Sheet) to ensure compliance with IRS rules and University policies and procedures. Properly records and withholds certain federal taxes per IRS guidelines. Accumulates IRS 1099 data.

Office of the General Counsel

Purchases legal services for the University. Reviews and approves all nonstandard contracts, and all revisions or exceptions to the University's standard Contract for Professional Services terms and conditions.

Payroll Services

Reviews requisitions and vouchers issued to foreign national suppliers. Advises departments on how to engage with professional service providers that have established prior employment relationships with the University.

Purchasing Services

Develops and oversees the process for the procurement of professional services. Ensures that the process complies with University policies, applicable laws, and good business practices. Facilitates the RFP process for purchases of professional services $50,000 and over. Reviews and electronically approves professional services requisitions and Purchase Orders $50,000 and over, OR requisitions and Purchase Orders $25,000 and over and paid for by a federal contract.

Requestor/Requesting Departments

Completes electronic requisitions. Documents justification for supplier selection (under $50,000). Prepares RFPs, reviews and evaluates supplier proposals against the RFP evaluation criteria (for professional service purchases of $50,000 and over). Designates contract administrator. Verifies deliverables prior to payment of invoices on contract.

Certified Approver

Reviews and approves professional services transactions for compliance with sponsored funding guidelines.

Related Information



August 2017 - Minor Revision. Added to the Special Situations section of the policy that the Department for Public Safety has sole responsibility for all aspects of public safety workforce. Units wishing to provide security must seek an exception from the Vice President for University Services.


February 2017 - Comprehensive Review, Minor Revisions. The changes primarily eliminate the requirement for a Voucher Contract for Professional Services because this particular document, when completed, not only sets in motion an encumbrance transaction, it also generates a check (in lay person's terms).


November 2014 - Comprehensive Review, Minor Revision. 1. Ink signatures are no longer necessary. 2. Links have been updated and the policy was made consistent with other administrative policies. 3. Conflict of interest information in Minnesota Statutes section 15.43 was moved from related information to the policy statement.


July 2008 - Revised extensively to address rollout of the Enterprise Financial System.


April 2006 - Added Special Situations section.


January 2006 - Reference Policy 3.7.3 - Purchasing Goods and Services in exclusions section and noted that policy 3.7.3 covers standard services.


April 2005 - Facilities Management changed to Capital Planning and Project Management.


February 2005 - The Purchasing a Professional Services Policy using Paper has been retired.


January 2004 - The Policy Statement contains a new requirement that Professional Services $50,000 and over will require that Purchasing Services conduct a formal Request for Proposal process to identify a vendor to receive the contract.

The Routing and Approvals appendix is changed to reflect the fact that since the Contract for Professional Services is now available as a financial transaction on Financial Forms Nirvana (FFN), approval routing will be done electronically. The specific approval routing for each contract is triggered by information entered by the preparer, such as dollar amount, sponsored or non-sponsored funding, type of vendor (individual or corporation) and object code.

The Routing and Approvals appendix reflects that Contracts for Professional Services entered on FFN under $10,000 may be signed by the individual who has been delegated signature authority under the Delegation of Authority. Contracts $10,000 and over will be signed by Purchasing.

The Routing and Approvals appendix reflects that retention of paper FFN contracts under will be the responsibility of the department. Retention of paper FFN contracts $10,000 and over will be the responsibility of Purchasing.

The Procedures section simply links to the appropriate pages on the Financial One Stop.

Procedure Establishing a Basis for Contractor Selection and Reasonable Price has been significantly expanded.

Procedure Administering Contracts for Professional Services has been significantly expanded.


March 2003 - Added Exclusion Section to include Master Agreement with U Physicians.


February 2003 - Added the Guide to filling out the Professional Services worksheet in the Forms Section.


September 2002 - Added MN New Hire Reporting Form.


April 2002 - Changed references from "special payments" to "Non Purchase Order Related Payments".


November 2001 - Added Paying Foreign Nationals to Appendices.


October 2001 - Added Special Payments to Appendices.


September 2001 - Under Definitions, Request For Proposal, deleted "outlining services to be rendered and" and replaced inviting vendors to inviting them; added "and writing vendors to offer competitive proposals to provide goods or services to the University" to the end of the sentence. Under Appendices added 1) Certified Approver Program: Payments for Services and 2) Certified Approver Program: Payments for Individuals. Revised under Responsibilities - SPA - added "and approve" after Review and deleted Approve contracts (see Contract Approvals). Deleted Sole Source Letter info because it is obsolete. Revised under Responsibilities Purchasing Services and General Counsel paragraph.


August 2001 - Changed University Attorney to General Counsel and deleted over $25,000.


March 2000 - Updated Contacts Section.


June 1999 - Added Contract for Professional Services Terms and Conditions.


February 1999 - Policy Statement Change - first bullet changed from "be formally approved" to "be fully and formally approved before work begins".


September 1994