Consultant Policy

A consultant agreement is a contract through which the University hires a person or firm to obtain professional knowledge, skills or expertise. It is the policy of the University to contract for consultant services when factors such as timing, costs, qualifications or the nature of the service to be rendered make it more beneficial for such services to be acquired outside of the University rather than to be performed by employees of the University.

As in the case of all purchasing transactions, University Purchasing Guidelines mandate that consultant contracts be awarded through a competitive or negotiated selection process that ensures price reasonableness, and clearly establishes the qualifications of the consultant to perform the required tasks. Please see the Consultant Hiring Procedure Supporting Document Checklist for a complete listing of the documentation required.

Consultant:
A firm or individual with whom a Consultant Services Contract is executed for a specialized type of service. Honoraria and human subjects are exempt from this policy.

Consultant Services Contract:
A contract under which a person or firm is hired for the primary purpose of obtaining the benefit of professional knowledge, skills or expertise.

A formal contract is required for a consultant to protect the University's title to all materials produced by the consultant, and protects the University on issues concerning insurance, indemnification, and confidentiality. In addition, the University must comply fully with federal tax code and IRS guidelines regarding the hiring of individuals a independent contractors (consultants) or employees.

Employee:
An individual performing work where the University has the right to control not only the services performed, but also the means and methods of accomplishing the work. Typically, an employee's work is performed in service of the mission of the organization. In the case of the University this includes, but is not limited to research, teaching and administration.

Notice to Proceed:
Written direction to commence delivery, installation, services or work provided for in the contract. This notice authorizes the contractor to begin the work.

Scope of Work:
A complete description of the goods or service being procured by the user and the needs of the user. This can be done either through performance specifications setting forth the minimum acceptable performance standards for the end product, or through a description of the tasks to be performed.

Sole Proprietor:
A self-employed service provider, without a partner or employees.

Consultants who are non-resident aliens must be processed through the Payroll Department for appropriate taxation and reporting. The Non-Resident Alien Policy and Procedures are available from the Controller's Office.

The following list will assist you in determining whether or not an individual may be considered a consultant under IRS regulations for some of the tasks commonly performed at the University. Space prohibits a complete listing of available consultant services available, so please contact the Purchasing Office if you have questions in this regard.

Consultant Status (Assumes no existing employment relationship with the University)

Employee Status

There are instances under the IRS regulations where two individuals performing the same services for the University may be classified differently, one as an employee, the other as a consultant. For example, an architect working for the University and nowhere else, who is assigned office space at the University, has use of the University's facilities, follows the University's holiday schedule and is supervised by another University employee, would be considered an employee. An architect working in an office in midtown Manhattan, with many clients using computers and materials purchased by that architect, and who sets her or his own schedules for work hours, would be considered a consultant. When it is not clear into which category an individual falls, assistance will be provided by the Purchasing Department in consultation with the Controller's Office, Human Resources and the Office of the General Counsel.

Several categories of service providers are exempt from the University's formal consultant contract requirements, as described below. The following service providers can be paid without a purchase order upon submission to Accounts Payable of an invoice, signed by the appropriate authorized department signatory, along with the consultant's W-9 form:

Photographers, Musicians, Caterers, Actors, Piano Tuners, Typesetters, Masseurs, Competition Judges, professionals hired under the music department's Robert Emmett Dolan prizes, and Video/Audio editors who do not perform their services on campus, or use Columbia tools and supplies.

The following service providers can be paid on a limited basis up to a maximum of three (3) times during any twelve (12) month period, upon submission to Accounts Payable of an invoice signed by the appropriate department signatory, along with a list of clients¹ evidencing that the consultant offers services to the general public, and the consultant's W-9 form:

• Writers; Translators²; Literary Editors and Indexers; and Interviewers³.
• Professionals in these categories who are hired by one or more University schools or departments more than three times during any twelve month period must be hired either as a casual employee, or under a formal consultant agreement, with the associated supporting documentation.

Notes:
¹ If a professional does not have a client list because Columbia is their first assignment, then Accounts Payable requires a note from the department stating this fact.
² In order to comply with I.R.S. regulations, a translator must provide a list of clients to be paid as a consultant rather than as an employee.
³ Interviewers whose task is limited to asking interview questions, as opposed to developing, analyzing and administering interviews, may need to be paid as an employee rather than as a consultant. Consult with Accounts Payable prior to entering into a consulting arrangement.

A. Requirements for Non-Construction Related Services

University risk management policy is designed to "right size" the insurance requirements for the most commonly purchased non-construction related consultant services based on an assessment of the level of likely risk to the University, and in consideration of the frequent need to hire faculty from other institutions with highly specialized expertise, or graduate students who combine quality professional services with relevant content related experience. The policy breaks typical services into three broad risk categories and insurance requirements are determined based on 1) the Risk Level; 2) whether or not the consultant is a sole proprietor (such as a faculty member or graduate student); and 3) the value of all awarded and pending contracts with the consultant within the past twelve months (on the assumption that, all else being equal, there is greater risk to the University involved in projects of a high dollar value).

To determine the insurance requirements for you Consultant, please use the Interactive Form Selector. Contact the Purchasing Office or Risk Management in the event that the proposed scope of work is not covered by an existing category.

• Contracts are categorized as low risk where all of the following conditions apply: a) the consultant is a sole proprietor; b) The contract value is not in excess of $10,000 and the cumulative value of all awarded and pending contracts between the University and the consultant within the past twelve months is twenty-five thousand dollars ($25,000) or less, and c) The nature of the work under is of low risk. General and professional liability insurance requirements are waived for low risk contracts.
• Contracts that do not meet the low risk criteria are categorized as medium risk where both of the following conditions apply: 1) the cumulative value of all awarded and pending contracts between the University and the consultant within the past twelve months does not exceed one hundred thousand dollars ($100,000); and 2) the nature of the work under the proposed contract is considered of low or medium risk. General liability insurance is waived for all medium risk contracts where either 1) the consultant is a sole proprietor and the contract value is not in excess of $50,000; or 2) the consultant is not a sole proprietor and the contract value is not in excess of $25,000. For all other medium risk contracts, $1 million of general liability insurance is required. Professional liability insurance requirements are waived for all medium risk contracts. See below for automobile and worker's compensation insurance requirements.
• Contracts that do not meet the low or medium risk criteria based on cumulative award value and/or the nature of the work fall into the high risk category. $2 million of general liability insurance is required for all high risk contracts. $1 million of professional liability insurance is also required except as waived by Risk Management. See below for automobile and worker's compensation insurance requirements.
• Consultants working outside the U.S. may be subject to different insurance requirements and limitations based on the regulations of their host country. Please contact the Risk Management Office and the Purchasing Office to discuss insurance coverage before sending the agreement to the consultant for review.

The minimum commercial insurance requirements under the proposal are a function of the risk category, as summarized in the following table:

*Waived if sole proprietor w/contract of up to $50k in contract value or other ownership up to $25k.

B. Requirements for Construction Related Services

Requirements for construction related consultant services, including architects and engineers performing work in connection with an existing or planned structure, are as follows:

• $5 million in general commercial liability insurance (minimum per occurrence);
• $2 million in automobile liability insurance (minimum per occurrence), where applicable;
• $2 million in professional liability insurance;
• Workers Compensation, as required by statute plus limits to liability for injury.