300-18 Independent Consultants

Effective Date: 1/1/92 (revised 2/1/97)
Office of Origin: Budget and Finance--Materiel Management

I. Purpose

This policy defines the rules governing the use of independent consultants and external consulting firms to ensure compliance with Internal Revenue Service regulations.

II. Definitions

Employee: any individual who performs services in which the job and the methodology are subject to the will and control of an employer.
Independent consultant: an individual or organization independent of the campus of proven professional or technical competence that provides advice of a professional or technical nature.
Independent contractor: any person or organization that receives payment for a service for which the end result is specified and controlled by an employer but the means by which the result is accomplished is not specified or controlled.
Program review official: the official who is delegated responsibility by the Chancellor for the overall administration of independent consultant procedures and agreements. For academic consultation, the official is the Vice Chancellor--Academic Affairs. For design, construction, and engineering consultation, the official is the Assistant Vice Chancellor--Facilities Management. For all other consultation, the official is the Materiel Manager.

III. Policy

A. Selection/Eligibility

1. Independent consultants may be used when the service being offered is primarily professional advice. Services from other independent contractors (e.g., equipment repair, janitorial services, computer programming) are typically provided by means of a purchase order or construction contract.

2. Arrangements to secure the services of an independent consultant may be entered into only when a determination has been made that the services are urgent, special, temporary, or highly technical and cannot be performed economically or satisfactorily by existing University staff during the course of their normal University responsibilities.

3. A requesting unit shall complete a University Consultant Agreement outlining its requirement for the services of an independent consultant and submit it to the responsible program review official.

4. A consultant agreement may not be executed if the relationship between the consultant and the University is that of employee and employer. Such individuals must be hired as employees.

5. Independent consultant agreements involving current UC faculty and/or staff members, whether they are paid or unpaid, will not normally be approved.

6. Selection of the independent consultant shall be made on the basis of qualifications, resources, experience, needs of the University, and cost to the University. In the selection process, any University officer or employee who participates in the decision must follow the disqualification requirements for financial conflict of interest of the State of California Political Reform Act of 1974.

7. The furtherance of the University's business affirmative action programs shall be considered in the selection process. The Affirmative Action/Equal Opportunity Office provides assistance in this area.

8. The laws and regulations affecting the University of California Retirement Program (UCRP) and the Public Employees Retirement System (PERS) do not prohibit a retired member of UCRP or PERS from providing consulting services to the University as an independent contractor. However, some time limitations may apply to certain retirees.

B. Payment

1. When independent consultant services are expected to exceed $15,000 over the length of the contract, the department chair or business officer shall ensure that proposals are solicited from three or more qualified independent consultants.

2. Fees charged by consultants must be pre-determined for reasonableness prior to the execution of the agreement.

3. Payment shall not be rendered for services performed prior to the execution or after the expiration of a written agreement unless it is expressly approved by the department chair (or business officer, if delegated) and the program review official.

C. Approvals

1. Proposed consultant agreements must be approved by the consultant and both the department chair (or business officer, if delegated) and the program review official. Work on a consulting project cannot begin until the agreement has been properly approved by all parties.

2. Approvals must be obtained from the department chair or administrative officer and dean, vice chancellor or Medical Center Director prior to submitting the consultant agreement to the appropriate vice chancellor for final approval.

IV. Responsibility

It is the responsibility of the department initiating the agreement to ensure that the relationship is of a consultant nature rather than an employee/employer relationship.

V. Related Policies

Conflict of Interest (Policy 150-10)
Affirmative Action/Nondiscrimination in Employment (Policy 150-12)
Purchasing (Policy 200-18)
Agency Funds (Policy 300-12)
Honoraria (Policy 300-29)

VI. References

UC Business and Finance Bulletins, Office of the President:
Securing the Services of Independent Consultants (BUS-34); Materiel Management (BUS-43); Conflict of Interest Policy and Compendium of Specialized University Policies, Guidelines, and Regulations Related to Conflict of Interest (G-39)