ADMINISTRATIVE PROCEDURE

Purchasing a Professional Service

To be in compliance with laws and University policy, the following list of professional services must be purchased by specific departments via a contract for professional services requisition/PO:

Legal Services

Only the University of Minnesota Office of the General Counsel (612-624-4100) is authorized to purchase legal services. A contract for professional services is always required to purchase legal services.

Construction Project Management, Architect and Engineer Services, and Design Services

Only Capital Planning and Project Management (CPPM) in University Services (612-626-1613) is authorized to purchase architect and engineer services, construction project management, and design services (defined in the Policy as Construction Professional Services). In some instances, CPPM may authorize individual departments to purchase these services on a case by case basis. A contract is always required to purchase these services.

Services from Audit and Accounting Firms

Proposed contracts must be reviewed by the Controller’s Office for possible impairment of independence concerns relative to University of Minnesota audits. Additionally, contracts totaling $100,000 and over must receive prior approval from the Board of Regents. A contract for professional services is always required to purchase accounting and auditing services.

Processing Professional Services Transactions

Professional Services totaling $0 to $2999.99

There are two possible methods to purchase professional services that total less than 3,000. They are:

  • Non-PO related voucher (preferred): generates a payment to the supplier
  • Contracts: Quick Contract for Professional Services (QCPS) or Performance Contract for Professional Services (PCPS)

Use the below grid to determine whether a voucher or contract may be created:

Questions to Consider If You Answered Yes to the Question
Does your department want a contract? Create a QCPS or PCPS.
Does the supplier want a contract? Create a QCPS or PCPS.
Is this for auditing services, construction project management, architectural design, OR involve an audit or accounting firm? Create a QCPS. It is absolutely required.
What if the services total less than $3,000 but when adding expenses, the total is $3000 or more? (Example: services are $2,500 and expenses are $500) Create a QCPS or PCPS. Any professional services (including their expenses) that total $3,000 or more require a contract for professional services.
Professional services totaling less than $3,000 and not one of the above situations? Use the non-PO voucher process.

Do NOT split payments to professional service providers to keep them under the $3,000 threshold to avoid creating a contract. This is a violation of purchasing policy.

Non-PO related Voucher for professional services/expenses totaling less than $3,000:
  1. Contact the supplier to agree on the fee and services to be provided. If the supplier is not set up in the financial system, complete the Supplier Authorization/Change Form and submit it to controller@umn.edu.
  2. Direct the supplier to perform the work.
  3. When the work is completed as expected, refer to appendix: “Purchasing Professional Services: Supporting Documentation at a Glance Grid” to determine which documentation is required.
  4. Create a non-PO related voucher. The financial system will route the voucher for approvals.
  5. Once the voucher is approved and without error, a payment will be made to the supplier.
Quick Contract for Professional Services (QCPS) or Performance Contract for Professional Services (PCPS) totaling less than $3,000
  1. Contact the supplier to agree on the fee and services to be provided. If the supplier is not set up in the financial system, complete the Supplier Authorization/Change Form and submit it to controller@umn.edu.
  2. Refer to appendix: “Purchasing Professional Services: Supporting Documentation at a Glance Grid” to determine which documentation is required.
  3. Create the requisition in the financial system. The requisition will route for approvals.
  4. Once the requisition is approved and without error, the financial system will create and dispatch the contract (PO) to the supplier.
  5. Work may only begin once the contract’s start date has occurred AND once the fully approved contract is issued to the supplier.
Professional Services totaling $3,000 and greater

The University has established a threshold where professional services totaling $3,000 or greater require a contract. Depending upon the dollar amount and purchase category, one of three possible contracts will be created:

  • Performance Contract for Professional Services (PCPS): for performer categories (singers, entertainers) for any dollar amount
  • Quick Contract for Professional Services (QCPS): totals $0-$49,999.99
  • Contract for Professional Services (CPS): totals $50,000 and over

Regardless of their type, all contracts follow the same overall business processes:

  1. Contact the supplier to agree on the fee and services to be provided. If the supplier is not set up in the financial system, fill out the Supplier Authorization/Change Form and submit it to controller@umn.edu.
  2. Refer to appendix: “Purchasing Professional Services: Supporting Documentation at a Glance Grid” to determine which documentation is required.
  3. Create the requisition in the financial system. The requisition will route for approvals.
  4. Once the requisition is approved and without error, the financial system will create and dispatch the contract (PO) to the supplier.
  5. Work may only begin once the contract’s start date has occurred AND once the fully approved contract is issued to the supplier.

Approvals

The financial system will route transactions for electronic approvals to the following individuals as applicable:

  • Departmental Approver - Level One (Dept ID1 approver) for $100 and over
  • Departmental Approver - Level Two (Dept ID2 approver) for $10,000 and over
  • Certified Approver (CA) - if sponsored funds are used AND either the transaction totals $1,000 and over OR uses a travel-related Chart of Accounts Account code (7206XX) for any dollar amount
  • Tax Analyst - if the supplier is an individual/sole proprietor OR a performer
  • Payroll Services - if the supplier is a foreign national supplier
  • Capital Planning and Project Management - if the services are for construction project management, architect and/or engineering services or design services
  • Controller’s Office - if an accounting or audit firm is used OR if accounting or audit services are being purchased. Transactions also route if the supplier used is coded as an audit supplier.
  • Purchasing Services - if the purchase totals $50,000 and over; OR totals $25,000 and over and is paid for by a federally sponsored contract

Note: Any contract with altered terms and conditions must be reviewed and approved offline by the Office of General Counsel before issuing the contract to the supplier and any work is performed.

All purchases totaling $1 Million and over require Board of Regents approval before awarding a contract. In addition, prior approval from the Board of Regents is required when purchasing accounting or auditing services that total $100,000 or greater. The Board of Regents has its own review and approval process for awarding purchases totaling $1 Million and over.

Authorizing Payment (Receiving)

If a contract (PO) is issued to the supplier and the work is completed as expected, a supplier invoice or Check Request Form (CRF) must be generated to capture the supplier’s request for payment, The requester authorizes payment for the invoice or CRF by entering a receipt transaction in the financial system.

Amending a Contract for Professional Services (all types)

Contractual changes are processed as amendment Purchase Order (PO) change orders. The procurement specialist is responsible for entering PO change orders in the financial system. PO change orders route for approval. PO change orders totaling $50,000 or greater require the PO Change Order form (UM 1790) and will route to Purchasing Services for approval. Refer to the “Entering PO Change Orders $50,000 or Greater” document for specific instructions.

Changes that affect the contract’s business or legal terms must be issued to the supplier. Internal changes like changing a Chart of Accounts value do not need to be issued to the supplier. Contracts totaling less than $50,000 cannot span more than three years. Longer contracts should be discussed with Purchasing Services.

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