When considering the establishment of a personal service contract with an individual, the first determination to be made is whether or not the individual should be added to payroll as a temporary employee or if the nature of the services required dictates that the worker is an independent contractor. In order to determine whether an individual shall be an employee or an independent contractor, the relationship of the worker and the business must be examined - all information that provides evidence of the degree of control and the degree of independence must be considered. Facts relating to evidence of control and independence fall into three categories: behavioral control, financial control and the type of relationship of the parties. All departments seeking to establish a personal service contract with an individual must complete the document entitled Employee or Independent Contractor. This document must be submitted to Procurement Services at the time the contract is submitted. Please note this determination does not apply when contracting with a firm, partnership or corporation.
2. Sub-award or Personal Service Contract
When considering the establishment of a personal service on a sponsored project, the first determination to be made is whether or not the procurement mechanism should be a sub-award or a personal service contract. The following should help to distinguish between the two processes:
A sub-award should be identified at the time of proposal to the sponsoring agency and is considered fully executed once it has been signed by both parties. More details can be found on the Sponsored Programs Grants Administration website.
A sub-award is an appropriate procurement mechanism when:
The collaboration is substantive programmatic work which is beyond mere analytical work-for-hire normally conducted by a routine service provider.
The collaboration is substantial enough that the collaborating individual or organization will participate in preparation of results, publication, presentation or other collaborative participation beyond routine analytical work.
The collaborator will maintain control of the work to be performed under the sub-award.
A personal service contract is an appropriate procurement mechanism when:
The collaboration is not substantive programmatic work, however, is beyond mere analytical work-for-hire normally conducted by a routine service provider.
The collaboration is not substantial enough for the collaborating individual or organization to participate in scientific design, methodology, preparation of results, publication, presentation or other collaborative participation beyond the specialized service. The individual or organization acts as an independent contractor.
The collaborator meets a special agency (University) need and is usually professional in nature and is normally on a short term basis.
3. Request for Proposal (RFP):
KRS 45A.695 (3): Adequate notice of the need for a personal service contract shall be given by the authorized designee of the contracting body through a Request for Proposal (RFP) as specified in KRS 45A.695(3). To access the RFP form and instructions, go to Personal Service Contract RFP Form and Instructions. The Request for Proposal (RFP) shall describe the services required, list the type of information and data required of each offeror, and state the relative importance of particular qualifications. Anyone acting in the role of evaluator/advisor must sign a Confidentiality/Conflict of Interest Statement. Signed Confidentiality/Conflict of Interest forms must be kept in the official RFP file. The originating department is required to submit a copy of all RFP's to Procurement Services for review and approval. Upon completion of the Procurement Services review and approval, the RFP will be posted on the Procurement Services website by emailing it to Procurement Services, to satisfy the public advertising requirement. The originating department may also choose to place an ad in a newspaper of general circulation.
KRS 45A.695 (4): The head of the contracting body or the authorized designee may conduct discussions with any offeror who has submitted a proposal to determine the offeror’s qualifications for further consideration. Discussions shall not disclose any information derived from proposals submitted by other offerors.
As per requirements set forth in KRS 45A.695 (5) an award shall be made to the offeror determined by the head of the contracting body, or the authorized designee, to be the best qualified of all offerors based on the evaluation factors set forth in the Request for Proposals and the negotiation of fair and reasonable compensation. If compensation cannot be agreed upon with the best qualified offeror and if proposals were submitted by one (1) or more other offerors determined to be qualified, negotiations may be conducted with the other offeror or offerors in the order of their respective qualification ranking. In this case, the contract may be awarded to the next best ranked offeror for a fair and reasonable compensation. All determinations of the qualification rankings of offerors by the head of the contracting body or a designee of the offeror based on evaluation factors set forth in the Request for Proposals shall be made in writing.
Prior to contract award, Procurement Services shall complete a review of the contractor(s) against appropriate governmental exclusion/debarment/suspension lists. Any contractors who are identified as potential matches will be reported to the University Integrity and Compliance Office for verification procedures prior to contract award. Procurement Services will not proceed with contract award to any contractor verified as a positive match, without consultation with the University Integrity and Compliance Office and appropriate University Administration.
It may be helpful for the department completing the contract documents to complete the PSC Department Checklist verifying what tasks have been completed and forward to Procurement Services with the documents.
The originating department must submit to Procurement Services a fully completed original personal service contract, evaluation/summary, copy of Request for Proposal issued by the originating department, and a copy of response from selected vendor. As a part of the contract documentation a Conflict of Interest Certification form must be signed by the (Recommended by) Chair/Department Head and attached to the forms for submission to Procurement Services. This form will print as a part of the contract documents. Written documentation shall be maintained by the originating department concerning the final results of negotiation with each vendor and reasoning as to why each vendor was chosen. Upon completion of negotiations and award of contract, the current version of the appropriate Personal Service Contract Form is completed by the department and forwarded to Procurement Services. All forms must be typewritten and any changes made after signatures are affixed must be initialed by all parties. In the event that health-protected information is to be dealt with, the originating department is responsible for contacting the University of Louisville Privacy Officer for assistance in compliance with applicable statutes.
University of Louisville State Appropriated Funds
University of Louisville Research Foundation Funds
University of Louisville Athletic Association Funds
**Departments are required to obtain the appropriate form from the web since the documents are monitored and updated periodically.
SOLE SOURCE PERSONAL SERVICE CONTRACT
KRS 45A.095: Provides for establishment of personal service contracts by noncompetitive negotiation only for sole source purchases or when competition is not feasible as determined by Procurement Services in writing prior to award or when emergency conditions exist. Emergency conditions are defined per KRS 45A.095(3): An emergency condition is a situation which creates a threat or impending threat to public health, welfare, or safety such as may arise by reason of fires, floods, tornadoes, other natural or man-caused disasters, epidemics, riots, enemy attack, sabotage, explosion, power failures, energy shortages, transportation emergencies, equipment failures, state or federal legislative mandates, or similar events. The existence of the emergency condition creates an immediate and serious need for services, construction, or items of tangible personal property that cannot be met through normal procurement methods and the lack of which would seriously threaten the functioning of government, the preservation or protection of property, or health or safety of any person. Sole source is a situation in which there is only one (1) known capable supplier of a service, occasioned by the unique nature of the requirement, the supplier, or market conditions.
Sole Source Personal Service Contract written justification must be signed by the Chair/Department Head. Written justification must be submitted to Procurement Services for approval prior to establishing a Personal Service Contract.
Personal service contract forms must be typewritten and any changes made after signatures are affixed must be initialed by all parties. In the event that health-protected information is to be dealt with, it is the responsibility of the originating party to contact the University of Louisville Privacy Officer for assistance in compliance with all applicable statutes.
AMENDMENT/EXTENSION TO A PERSONAL SERVICE CONTRACT
An Amendment and/or an Extension to a Personal Service Contract shall be processed in the same manner as the original contract. An Amendment/Extension form shall be used if the parties to an established Personal Service Contract agree to increase or decrease funds, revise the scope of work, extend the time for performance within the current biennium, or any other change. It shall be a policy that no personal service contract amendment/extension shall be in order any sooner than ninety (90) days from the start date of an approved personal service contract.
REVIEW AND APPROVAL PROCESS FOR PSC'S
a. All UofL State appropriated funded Personal Service Contracts and University of Louisville Research Foundation funds contracts will require signatures from the Second Party, Department Chair, and University Procurement Services , University Counsel, and First Party (CFO). All UofL Athletic Association funds contracts will require signatures from Second Party, University of Louisville Athletic Director, University Procurement Services and University Counsel.
b. All University of Louisville State appropriated funded Personal Service Contracts must abide by KRS 45A.695(1) which states; "Except as provided in subsection (8) of this section, no one shall begin work on a personal service contract entered into by any contracting body, until notification of the personal service contract is filed with the Government Contract Review Committee. Each personal service contract shall have a cancellation clause not to exceed thirty (30) days notice to the contractee."
c. University of Louisville Research Foundation and University of Louisville Athletic Association will not be required to be submitted to the Government Contract Review Committee, however, no work on contracts shall begin until all required signatures are affixed. Upon completion of all signatures, a completed copy of the approved personal service contract will be sent to the originating department and the awarded vendor. It is the responsibility of the department to establish and obtain vendor number.
d. The Government Contract Review Committee meets once per month to review State appropriated funded Personal Service Contracts. The completed Personal Service Contract must be submitted to the Government Contract Review Committee prior to the close of business of the last working day of the month. The department must complete the Proof of Necessity form on any personal service contract that is charged to general funds. It is the responsibility of the originating department to allow for adequate time to go through the entire University process to prepare for a completed personal service contract to be sent to the Government Contract Review Committee. The originating department will receive an email from Procurement Services as notification that the contract has been filed with the Government Contract Review Committee.
e. When the Personal Service Contract is approved by the Government Contract Review Committee, the originating department will receive an email from Procurement Services and a copy of the approved personal service contract. It is the responsibility of the originating department to enter requisitions using the assigned personal service contract number and the vendor number of the firm that the contract is awarded to.
f. It is the responsibility of the individual departments to keep current copies of completed PSC's on file and to Extend and/or Amend any contracts prior to the end date of the contract. It is the responsibility of each department to maintain accurate and current start and expiration dates for each contract.
g. Contracts that have passed their established expiration date may not be amended/extended for any reason.