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St. Cloud State University

St. Cloud State University

Hiring Contractors

Independent Contractor Agreements

Some grants and contract agreements will necessitate the hiring of consultants or contractors to perform duties.   A consultant or contractor is someone who is not a State Employee hired to do a specific task within a discrete time period.  To utilize a consultant or contractor, follow these steps.

Independent Contract Agreements are the most complicated transactions a Principal Investigator is likely to become involved in.  SCSU is bound by numerous state and federal regulations.  Accept the fact that this is going to take some time.  Trying to take shortcuts will certainly cause problems and result in significant delays.

You may also wish to consult the Purchasing Manual for additional information

Important Points

Independent Contract Agreements are regulated by State Law as well as MnSCU policy and procedures. For some details, SCSU has no flexibility.  Watch out for these: 

Do not allow individuals to begin work before this procedure is finished and all signatures are in place .  Per MN Statutes 16A.15, Subd. 3 all contracts must be fully executed before work begins. Under exceptional circumstances, a Form 16A Reason for Delay   may be used to ask the Business Office to approve the contract.  The Business Office is under no obligation to do so.  Violation of Statute 16A can incur serious personal liability.

Do not modify the Standard Contract.  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. 

Alterations to the Standard Contract can take 30 days.   Any alteration of the contract will require approval from the Attorney General's Office.

Advance payments are not allowed in any situation.

Payment under $1750 :  If the individual is to be paid $1750 or less, there is an easier procedure.  Execute an Individual Service Agreement

This Process will take a minimum of 15 working days.  25 working days is a realistic estimate.  Failure to complete any step properly or in order can create a situation where the entire process must be restarted.

Step Process Responsible Office Timeline (from submission of complete forms)
1.  Determine if the individual is properly classified as a contractor.  
  1. Complete the Employee/Contract Status Form (click to download in pdf format) .
  2. Submit forms to Human Resources
  3. If HR classifies individual as contractor, proceed to Step 2.
Human Resources 5 working days
2.  Draft a Contract
  1. Complete the Standard SCSU Contract Form (SCSU 0003) (click to download in word  format) ; please see Carol John and get assistance with this unless you are well-experienced.
  2. Take care in arranging payments (Section B1).  In some circumstances this can become the PI's responsibility.  (See Step 7 below)
  3. Have Carol John (x3136) in the Business Office review the contract.  Talk to Carol about how to pay for contractors' travel.
Principal Investigator

Final contract approval is with the Business Office.

3 working days (recommended that this be done simultaneously with Step 1, if Step 1 approval is likely)
3.  Initiate a Purchase Order 
  1. Obtain a vendor ID for the individual through the Vendor Request System (if the individual does not already have a vendor number).
  2. Enter and release the purchase order via PCS to the Business Office.
  3. Have Carol John verify encumbrance (signature block #2)
Principal Investigator or Individual authorized to execute Purchase Orders against relevant Grant account (often a departmental secretary).  Use the Purchase Control System Security Authorization Form to provide such permission. 3 working days
4. Get Vice-President's Signature
  1. Bring 2 copies of the Contract to OSP.  OSP will obtain this signature
OSP 3 working days
5.  Obtain individual contractor's signature
  1. Obtain individual contractor signature on 1 copiy of signed contract.
  2. Instruct contractor to keep 1 signed copy.
Principal Investigator 5-7 working days
6.  Submit contract for full execution (A fully executed contract means that all four signature blocks have been signed and signatures are in place prior to the contract effective date).
  1. Submit 1 original and 1 copy  to Carol John.  Submit 2 copies to OSP
Principal Investigator 3 working days
7.  Payment Processes
  1. Payment depends upon what was noted in section B1 of the contract.
  2. Option 1:  Contractor submits invoices per invoice schedule.  Invoices must include the P/O number.  It is the PIs responsibility to provide this to the contractor.
  3. Option 2:  The Professional Technical Authorization form will be printed and sent to the PI by the Business Office after the contract is fully executed. PI holds this form until the contractor has completed all duties (do not lose this form; it cannot be reprinted) .  When satisfied, the account responsible person signs it and sends to Business Office for payment.
Principal Investigator and/or Contractor Payment will be made within 30 days of receipt by Business Office of invoice or Professional Technical Authorization Form.

Common Problems

Need to Amend Contract (change dates, duties, amount) :  If  you need to revise a contract, use the  Contract Amendment Form (pdf format).