Material & Disbursement Services (MSD)
POLICY 27
Effective Date: 07/01/2003
Last Modified Date: 11/17/2003
Types of Services
For application of purchasing rules, services are divided into three categories: general services, personal services, and consultant services.
General Services
Most services, such as janitorial services, maintenance agreements for equipment or software (see MSD Policy 44), etc., are considered general services contracting. General services contracts are subject to obtaining competitive quotations or bids as outlined in MSD Policy 6, Solicitation of Bids and Quotations. These services are purchased by submitting a purchase requisition to Purchasing Services.
Personal Services
Personal services are independent contractor services provided on a temporary or occasional basis by a professional individual using his/her professional skills to perform a professional task. Examples include services provided by a doctor, dentist, attorney, architect, professional engineer, scientist, performer of the fine arts or similar professions, referee for athletic events, workshop or conference speaker, and programmer. Please note that, if payment for such service is made to a company and not an individual, or if the service provided is a consultant service (see definition below), the service cannot be purchased as a personal service and must be purchased under the rules for general service or consultant service, as appropriate. A personal service must be purchased under consultant services purchasing rules if the service provides counsel, review, analysis, or advice in formulating or implementing improvements in programs or services. Personal services over $5,000 must be competitively bid through Purchasing whenever possible. Competition is not required for educational, training, developmental, or research services or when the service can be obtained from only one source. Personal services are paid via Form AP-1A (see APY Procedure 6, Request for Payment of Independent Contractor) and must be reported quarterly to the Office of State Management and Budget and to the Office of State Personnel. Disbursement Services has developed a Web-based reporting tool and sends reminders to departments when the quarterly deadlines approach.
Consultant Services
Consultant services are defined as work or tasks performed either by individuals (who are considered independent contractors) or by companies possessing specialized knowledge, experience, expertise, and professional qualifications to investigate assigned problems or projects and to provide counsel, review, analysis, or advice in formulating or implementing improvements in programs or services. This includes but is not limited to the organizing, planning, directing, controlling, evaluating, and operating of a program, agency, or department. (Note that using the "consultant" object code for a service does not make it a consultant service for purchasing purposes.) Consultant services are procured through Purchasing, are normally acquired under competitive purchasing procedures, and must be approved by the Governor before a Request for Proposals is issued or approval for a sole-source contract is sought.
Such approval requires a written justification signed by the Vice Chancellor for Finance and Administration. This justification must include an explanation of the services desired, a description of the funding source (including budget subhead and line item), why the work cannot be done by employees, how the work relates to University functions, the benefits anticipated from the services, estimated cost (including value/benefit analysis), potential sources, existing sources within State government, and reason(s) these sources are not available. After all requisite Purchasing-related actions have been completed and approved through Purchasing, payment to an individual is transacted with Form AP-1a, while payment to a company requires a Purchase Requisition.
Exceptions
Exceptions to the purchasing definitions and rules cited above are as follows:
- Consultant services for instructional services, curriculum development, or academically oriented research are exempt from the normal rules for purchasing consultant services. Pay individuals with Form AP-1a, companies with a purchase requisition. See also: CON Policy 3(d), Contractual Services; CON Appendix 33, N.C. Department of Administration Consultant Services Guidelines; APY Procedure 6, Request for Payment of Independent Contractor
- Architectural and engineering services, or other similar services related to building construction, maintenance, and repair, are arranged through Facilities Services (Planning and Design).
- Services such as installation that are merely incidental to the purchase of supplies, materials, or equipment are acquired under the same Purchase Requisition used for the equipment or supplies.
- Services provided directly by an agency of the State, Federal, or local government, or their employees when performing service as part of their normal governmental function, are purchased through Purchasing; however, competition is not required for such services.
- Printing services are purchased in accordance with MSD Policy 28, Printing Services.
Extending Service Contracts
Requests to extend the term of a service contract beyond the ending date specified in the original agreement (and any renewal options included in it) must be approved in writing by the agency head, before submitting the request to the appropriate State office,* if
- The total contract amount is equal to or more than $500,000, AND
- The requested extension period is one year or more.
*Either the Division of Purchase and Contract, or the Statewide Information Technology Purchasing Office.
Additional Information
APY Procedure 6, Contractual Services
APY Appendix 4, Request for Payment of Independent Contractor, Form AP-1a
MSD Policy 6, Solicitation of Bids and Quotations
MSD Policy 17, Avoiding Conflict of Interest
MSD Policy 28, Printing Services
CON Policy 33, N.C. Department of Administration Consultant Services Guidelines
MSD Policy 38, Purchasing Computer Systems Support Services
MSD Policy 44, Maintenance Service Contracts
MSD Appendix 5, Employee vs. Independent Contractor
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