[Purchasing] [Purchasing Manual] Professional/Technical Contracts

Consultant Service contracts are required when a person will be paid to perform a task(s). These contracts are predominately “intellectual” in character and may include consultation analysis, evaluation, prediction, planning or recommendation of policies or courses of action, and they usually result in the production of a report. Object code 15xx “Professional/Technical Services” usually applies.

Instructional Contracts are defined as any activity undertaken related to classes, training or activities in support of classes and training. Use object code 1560 for these contracts.

Use object code 1910 for speakers and performers whose presentations are open to the public. These contracts may be subject to 2% “entertainer’s tax”.

All accounts are required to use contracts for consultants, speakers, or entertainers. This includes student organization, activity accounts, grants, etc...

Things to Keep In Mind

Payments to St. Cloud State University employees teaching a course, or guest lecturing should not be processed through PCS but should be processed on an Unclassified Change Form through Human Resources.

Payments to all other State employees (excluding University of Minnesota employees), should be processed on an Employment Request Form through Human Resources.

Payments to students enrolled in 6 or more credits should be processed through student payroll.

IRS regulation: If you are paying an individual for something other than a one time speaking engagement or performance, please contact Human Resources for a determination whether this person should be paid as a contractor or an employee.

Contracts over $50,000 will require approval from the Minnesota State Colleges and Universities Vice Chancellor of Finance.

All contract requests must be entered into the Purchase Control System and be fully executed (valid) prior to the obligation to comply with M.S. 16A. Four signatures are required before a contract is valid. If work begins under a contract before it is valid, you are in violation of 16A.

Contracts containing erasures, cross-outs or white outs will be returned to the department to be redone unless the changes have been initialed by all parties involved.

Any alteration of the contract will require approval from the Attorney General’s Office.

Foreign Individuals

Contracts with a foreign vendor require much advance notice in order to have time for processing paperwork for Immigration and IRS documents, contracts, possible 30% federal tax withholding, etc… We must first have MnSCU approval before offering a contract to a person of foreign residency. Your office manager and/or faculty member will need to work closely with the professional technical contracts coordinator in AS-122 during this process.