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Professional and Consultant Services (C-45)

Original Implementation: October 26, 1999
Last Revision: July 15, 2008

Before entering into a Professional or Consultant Services contract, the department must determine whether the individual should be hired as an independent contractor through the procedures outlined herein or as an employee through the PAR process. To make this determination, refer to the IRS 20-Question test.

DEFINITIONS

"Professional Services" means those services within the scope of the practice, as defined by state law, of:

  1. accounting
  2. architecture
  3. landscape architecture
  4. land surveying
  5. medicine
  6. optometry
  7. professional engineering
  8. real estate appraising
  9. professional nursing

or those services provided in connection with the professional employment or practice of a person who is licensed or registered as

  1. a certified public accountant
  2. an architect
  3. a landscape architect
  4. a land surveyor
  5. a physician, including a surgeon
  6. an optometrist
  7. a professional engineer
  8. a state certified or state licensed real estate appraiser
  9. a registered nurse

Based on State Comptroller Expenditure Codes and associated reporting requirements, the following types of services are also categorized as professional services and will be processed under the same rules and guidelines defined herein:

  1. guest lecturers, speakers, artists, entertainers, performers, musicians, etc.
  2. educational/training services for state employees
  3. veterinary services
  4. other professional services

"Consulting Services" means the service of studying or advising a state agency under a contract that does not involve the traditional relationship of employer and employee.

A consultant may be used only if there is a substantial need for the consulting services and only if the agency cannot adequately perform the services with its own personnel or obtain the consulting services through a contract with a state governmental entity.

"Major Consulting Services Contract" means a consulting services contract for which it is reasonably foreseeable that the value of the contract will exceed $25,000.

NOTE that the $25,000 threshold is not a one-time cost, but rather a cumulative amount for on-going consulting services.

"Consultant" means a person that provides or proposes to provide a consulting service. The term includes a political subdivision but does not include the federal government, a state agency, or a state governmental entity.

SELECTION OF A PROVIDER

A "Professional Service" provider is not to be selected on the basis of competitive bid but rather 1) on the basis of demonstrated competence and qualifications to perform the services; and 2) a fair and reasonable price, as long as professional fees are consistent with and not higher than the recommended practices and fees published by the various applicable professional associations and do not exceed the maximum provided by law. Architectural, engineering, or land surveying services must be procured in the following manner in accordance with Government Code 2254.

  1. Select the most highly qualified provider based on demonstrated competence and qualifications;
  2. Attempt to negotiate a contract with the selected provider at a fair and reasonable price;
  3. If a satisfactory contract cannot be negotiated with the most highly qualified provider, formally end negotiations with that provider; select the next most highly qualified provider; and attempt to negotiate a contract at a fair and reasonable price. The selection process for architectural, engineering, or land surveying services shall continue in this manner until a contract is accepted by all parties.

A "Consulting Service" provider is to be selected based on demonstrated competence, knowledge, and qualifications and on the reasonableness of the proposed fee for the services. If other considerations are equal, preference shall be given to a consultant whose principal place of business is in the state or who will manage the consulting contract wholly from an office in the state.

If a solicitation will enhance the selection process for either professional or consulting services, contact the purchasing director to discuss options for making informal price comparisons or preparing a formal Request for Proposal.

Major Consultant Contracts greater than $25,000 must be submitted to the Legislative Budget Board and the Governor's Budget and Planning Office, and must be submitted to the secretary of state for publication in the Texas Register for a minimum of 30 days. The published invitation must include a finding and explanation by the president that the consulting services are necessary. Contact the purchasing director or general counsel’s office for assistance in completing the Major Consulting Contract Request Form.

Professional or Consulting Service solicitations greater than $25,000 will be posted on the Electronic State Business Daily unless purchasing determines that no value is added by the posting.

Professional or Consulting Services $100,000 or greater must be approved by the Board of Regents. Reference Policy D20.5, Items Requiring Board of Regents Approval.

CONFLICTS OF INTEREST REGARDING CONSULTANTS

Upon submittal of an offer by a private consultant to provide consulting services to SFA, any officer or employee shall report to the president within 10 days of receipt of the offer: 1) any financial interest that the officer or employee has in the private consultant, or 2) any financial interest in the private consultant of anyone related to the officer or employee within the second degree by consanguinity or affinity as determined under Texas Government Code, Chapter 573. Reference Government Code 2254.032 and Policy E-56, Ethics.

RESTRICTIONS ON HIRING FORMER OR RETIRED EMPLOYEES

  1. HIRING A FORMER EMPLOYEE AS A PROFESSIONAL OR CONSULTANT
    2. State Funds - strictly prohibited within 12 months of the employee's separation date
    Local Funds - allowed within 12 months of the employee's separation date ONLY with presidential approval and ONLY with local funds.
  2. HIRING A RETIREE AS A PROFESSIONAL OR CONSULTANT
    3. State Funds - strictly prohibited within 12 months of the employee's separation date
    Local Funds - allowed within 12 months of the employee's separation date ONLY with presidential approval and ONLY with local funds.
  3. HIRING A FORMER EMPLOYEE/RETIREE AS A CONSULTANT
    4. Funds - If a past employee or retiree is hired within 2 years of leaving SFA or any other state agency, the consultant must disclose in his/her offer the following information: a) nature of employment at the agency; b) the date employment was terminated; c) the annual rate of compensation at termination. This requirement does not apply to professional services.
  4. HIRING A COMPANY EMPLOYING A FORMER OR RETIRED EMPLOYEE
    5. Any Funds - allowed under a professional services contract only if the former or retired employee does not work on a project that was similar to his/her duties while employed by SFA, within the first 12 months of leaving SFA.
  5. HIRING AN EXECUTIVE DIRECTOR OF ANY STATE AGENCY FOR ANY CONTRACT
    6.  Any Funds - Restrictions apply to contracts with a) the executive director of the state agency; b) a person who at any time during the four years before the date of the contract was the executive director of the state agency; c) a person who employs a current or former executive director of a state agency. Reference Government Code 669.003 for details.

PROCEDURES FOR SECURING PROFESSIONAL OR CONSULTANT SERVICES

  1. Determine if the need is that of a professional or a consultant service. Contact the purchasing director or Office of the General Counsel if assistance is needed in making this determination.
  2. Determine if the selection of a professional or consulting service provider would be enhanced by informal price or qualifications comparisons or a formal Request for Proposal or Request for Qualifications process. Contact the purchasing director to discuss options.
  3. ENTER THE REQUISITION. Amounts may be estimated. If the vendor will perform essentially the same service on multiple dates, only one requisition is to be entered with separate lines for each date.
  4. If the contract is a "Major Consultant Contract", the department must complete a Major Consulting Contract Request form at least 60 days prior to the need for service. The form is to be forwarded to the Office of the General Counsel to facilitate the finding and posting requirements stated above under ‘Selection of a Provider’.
  5. Negotiate a contract, either directly or through Purchasing. All applicable rules associated with the amounts specified in 'Selection of a Provider' must be followed.
  6. Professional or consultant agreements require a formal contract be reviewed by the Office of the General Counsel and signed by the president. See ‘When Is A Contract Is Needed’ on the purchasing web-site.
  7. The department may draw up a contract using samples provided by the general counsel, or purchasing can assist in completing the contract. The contract may be complex or very simple depending on the nature of the services to be provided and must clearly define:
    1. The responsibilities of each party, in clear detail;
    2. The period of time the contract is to be in effect;
    3. The amount of payment;
    4. The terms of payment;
    5. The contractor's federal identification or social security number for payment processing; to secure this information, the department should have the contractor complete a W9 form. The form can be obtained from the controller's office.
  8. The contract must be reviewed by SFA general counsel and signed by the president or other administrator with written delegated contracting authority.
  9. The completed contract with signatures of all parties must be forwarded to purchasing for completion of the purchase order.
  10. The receiving entry must be made in the FRS system. Payment will be made through normal accounts payable procedures. To insure inclusion in a particular week's check run, the department should have payment information to accounts payable by the previous Friday.
  11. The consultant's report, if applicable, must be on file in accounts payable before payment will be made.

Cross Reference: Texas Government Code Title 10, Section 2254; Texas Government Code Title 10, Subchapter Z, Section 2252.901; Texas Government Code Title 6, Section 669.003; Ethics Policy E-56; Purchasing Ethics and Confidentiality Policy C-33; Items Requiring Board of Regents Approval Policy D-20.5

Responsible for Implementation: Vice President for Finance and Administration

Contact for Revision: Director of Purchasing and Inventory/HUB Coordinator

Forms: Professional/Consulting Services Agreement (General Counsel’s web-site)