OSP has created a resource document to help distinguish the differences between a subcontractor and a consultant (vendor) here.
Consultants are hired to provide essential services unavailable from existing project personnel. Contrasting characteristics of consultants:
Consultants provide goods or services commercially as part of its normal business operations
Consultants provide similar goods or services to many different purchasers
Consultants operate in a competitive environment
Consultants provide goods or services that are ancillary to the project
There should be a line item in the award budget (or project brief budget) for all proposed consultants. If there is not a line item either in the award budget or project brief, the PI/PD should contact their OSP assigned staff member to ensure a consultant agreement can be issued. Guidelines for processing consultant agreements are attached to the consultant agreement template (see Attachment III-F of the PI Handbook). To access the Consultant Agreement template on the OSP website, click here. The PI/PD or his/her designee will complete the fillable portions of the template by inserting information such as the period of performance, the contract amount, consultant's name and contact info., etc. The PI/PD or academic unit is not responsible for determining contract terms and conditions as they are already incorporated in the template. The PI/PD or his/her designee will attach a scope of work (SOW) to the agreement and forward the agreement to the consultant for their review/signature. The SOW is a determined summary of work that the consultant will perform.
Those who currently have authority to execute Professional Services Agreements (PSAs) have authority to sign the PSA consultant agreement on behalf of AU. The exception is consultant agreements valued at $10,000 and above. The Procurement and Contracts Department (PCD) is required to sign consultant agreements valued at $10,000 and above.
For additional guidance, please contact your assigned OSP staff member.
Rate of Pay
To determine the reasonable cost of an external consultant, the principal investigator/project director may wish to consult: (1) the range of fees of the other qualified individuals considered in the selection process; (2) the cost of consultants on other projects; and (3) University compensation levels for similar individuals. Some federal agencies limit the maximum rate per day for consultants. The University honors any limit imposed by Federal agencies on consultant rate of pay. OSP can provide guidance on determining limits set by the sponsor. All payments for consulting services are made directly to the consultant. Consultants generally submit an invoice for their services to Accounts Payable (AP) unless special arrangements were made between AP and the PI/PD (or their designee) to allow the consultants to directly submit their invoices to the PI/PD. Upon the PI’s/PD’s (or their designee) approval of the consultant’s invoice, the PI/PD (or their designee) will work with Accounts Payable to request payment to the consultant.
Subcontracts are drafted at the request of the principal investigator/project director (or their designee), based upon information he or she provides to the assigned OSP staff member per the subcontract request form here.
The assigned OSP staff member prepares all subcontracts/subagreements/subawards and submits these to the subcontractor. After the subcontractor’s signature is obtained, the agreement is forwarded to the Director of Procurement and Contracts for signature on behalf of the University.
When the subcontract has been fully executed, a copy is provided to the principal investigator/project director, Director of Procurement and Contracts and GCA for their records. The original is kept in the project file in OSP.
Subcontractor invoices are generally submitted to AP unless special arrangements were made between AP and the PI/PD to allow the subcontractor to directly submit their invoice to the PI/PD. Once the PI/PD has verified that the necessary work has been completed by their subcontractor, and that the charges are accurate, they will authorize AP to execute payment.
Principal Investigators/Project Director may not subcontract to any corporation or company in which the Principal Investigator/Project Director or members of the Principal Investigator’s/Project Director’s family have an ownership interest or to any company that any other member of the University has an ownership interest.
Consulting By University Employees
Faculty or staff members who serve as consultants on the sponsored projects of other faculty members receive no compensation above full-time base salary. When consultation is across teaching unit lines and the faculty or staff consultant performs the work in addition to the regular work load, compensation above base salary must be specifically provided for in the agreement with the sponsor. Individual arrangements must be approved in writing by the teaching unit head, the college dean, the Dean of Academic Affairs (for faculty), or the Director of Human Resources (for staff), and the sponsor.
Since federal regulations governing supplementary compensation are very restrictive, the principal investigator should consult the assigned OSP staff member before entering into any commitments on inter-unit consulting.
A faculty member with a full-time appointment as a principal investigator/project director cannot function as an inter-unit consultant.