Personal Service Contract Process

1. When is it necessary to process a Personal Service Contract?

   1. Whenever a non-EKU employee provides a service to the University
      
   2. Whenever the cost of providing that service is in excess of $1,000 per fiscal year
2. When is it necessary to process a Proof of Necessity?

   1. For all contracts and amendments
3. When is it necessary to process a Notice of Extension of Personal Service Contract?

   1. Whenever the ending date of the contract needs to be extended
      
   2. Whenever a contract cuts across two fiscal years
      
   3. Note: there is no change in the total cost of the contract
4. When is it necessary to process a Notice of Amendment of Personal Service Contract?

   1. Whenever there is a significant change in the scope of the contract which affects the service to be rendered
      
   2. Whenever there is an increase or decrease in the cost of the contract
5. How do you complete the forms?

   1. Personal Service Contract (PSC)
      1. Indicate Start/End dates in upper right corner (leave PSC # blank)
         (1) All contracts must end with the current fiscal year
         (2) Extensions should be processed for those contracts that must extend beyond the current fiscal year (see below)
         
      2. Indicate project name on ‘Department' line
         
      3. The ‘entered into this ________ day' should reflect the date the form is filled out, not the start date of the contract
         
      4. List the name, social security number (or federal ID number), and address of the contractor
         
      5. Under ‘Service', please be as detailed as possible, even though space is limited
         (1) Please do not use acronyms
         (2) Again, please do not use acronyms
         
      6. The total amount of the contract (fee, travel, miscellaneous expenses) should be listed under ‘Payment'
         
      7. On the ‘Service' line, provide detail as to payment schedule (i.e., $30 per hour/8 hours per day/10 days = $2,400)
         
      8. On the ‘Travel' line, please list specific limits if travel reimbursement will be made (i.e., in keeping with state guidelines, not to exceed $1,500)
         
      9. Please list any miscellaneous expenses (telephone, duplication, etc.) on the ‘Other Expenses' line
         
      10. The budget unit head should sign under ‘Submitted by:'
          
      11. The contractor (second party) should sign in the spaces provided on Page 1 and Page 2
          
      12. The PSC is now ready for processing (see below)
   2. Proof of Necessity (PON)
      1. Indicate project name on ‘Department' line
         
      2. Leave PSC Number blank
         
      3. Indicate the type of contract (most always a ‘New')
         
      4. Indicate name and address of Contractor (Item 1.)
         
      5. Indicate effective period of contract (Item 2.)
         
      6. Give an explanation of the work to be performed. This should involve somewhat more detail than the service listed on the Personal Service Contract. (Item 3.)
         
      7. Respond to the question asked in Item 4.
         
      8. For Item 5, please indicate the total cost of the contract in Item 5A, as well as the source of funding
         
      9. Respond to the questions asked in Items 5B - 5D
         
      10. Item 5E is asking for specifics in arriving at the total cost. Please refer to the Service, Travel, and Other Expenses items on the Personal Service Contract
          
      11. Items 5F - 5G need to be completed based on particular arrangements with contractor
          
      12. Indicate contractor's social security number, or federal ID number on Page 2, Item I
          
      13. The answer to Item J should be ‘no'
          
      14. Complete Items 6 - 8 based on the particular circumstances as they apply to your project
          
      15. Indicate the person responsible for monitoring this contract at Item 9
          
      16. The person who prepared the form should sign/date on the first signature line
          
      17. The budget unit head should sign/date on the second line
          
      18. The Proof of Necessity is now ready for processing (see below)
   3. Notice of Extension of Personal Service Contract
      1. Leave all lines blank in the box in upper right corner
         
      2. Indicate name and address of contractor
         
      3. Indicate the contract number of the personal service contract to be extended
         
      4. Indicate the effective date of the contract to be extended
         
      5. List the revised start and end dates
         
      6. Contractor should sign/date as Second Party
         
      7. The Extension is now ready for processing (see below)
   4. Notice of Amendment of Personal Service Contract
      1. Leave all lines blank in the box in upper right corner
         
      2. Indicate name and address of contractor
         
      3. Indicate the contract number of the personal service contract to be amended
         
      4. Give specific details as to the change in scope of service and additional costs incurred (or decrease)
         
      5. List the effective dates of the contract
         
      6. Once again, list contract number
         
      7. Contractor should sign/date as Second Party
         
      8. The Amendment is now ready for processing (see below)
6. How do I process these forms?

   1. Personal Service Contract
      1. After the form is completed and signatures of the budget unit head and contractor have been secured, forward the original document to Purchases & Stores, CPO 8A. Once received, it will be reviewed for accuracy and completeness, assign a contract number, and continue the approval process.
         
      2. A copy of the fully executed contract will be returned to the department for record keeping purposes.
   2. Proof of Necessity
      1. After the form is completed and signatures of the preparer and budget unit head have been secured, forward the original document to Purchases & Stores, CPO 8A. Once received, it will be reviewed for accuracy and completeness, assign a contract number, and continue the approval process.
         
      2. Generally, the Proof of Necessity is processed at the same time as the Personal Service Contract for all contracts.
   3. Notice of Extension of Personal Service Contract
      1. After the form is completed and the signature of the contractor has been secured, forward the original document to Purchases & Stores, CPO 8A. Once received, it will be reviewed for accuracy and completeness, assign a contract number (if necessary), and continue the approval process.
         
      2. A copy of the fully executed contract will be returned to the department for record keeping purposes.
   4. Notice of Amendment of Personal Service Contract
      1. After the form is completed and the signature of the contractor has been secured, forward the original document to Purchases & Stores, CPO 8A. Once received, it will be reviewed for accuracy and completeness, assign a contract number (if necessary), and continue the approval process.
         
      2. A copy of the fully executed contract will be returned to the department for record keeping purposes.
7. What are the submission guidelines for Personal Service Contracts?

   1. If the total cost of the contract is less than $10,000
      1. The Government Contract Review Committee (a.k.a. LRC) must receive a fully executed copy of the contract (from the Purchasing Office) for their review within 30 days of the start date of the contract. For example, if the start date is August 15, 2004, LRC should have their copy by September 15, 2004. Even if the start date has passed, we are within the submission guidelines as long as LRC has a copy within 30 days. Earlier submissions are welcomed and encouraged!
         
      2. With the 30-day submission guideline in mind, it is necessary for the contract to be received in the Purchasing Office with enough lead time to allow for the reviewing of the contract, review by the University Counsel Office, securing signatures of the Vice President for Financial, making necessary copies, and forwarding to the LRC in Frankfort.
   2. If the total cost of the contract exceeds $10,000
      1. The Government Contract Review Committee (a.k.a. LRC) must review and approve the contract at their monthly meeting (at this time, the second Tuesday of the month).
         
      2. In order for the contract to be placed on the meeting agenda, the fully executed contract, accompanied by a completed Proof of Necessity form, must be received in the LRC Office (Frankfort) from the Purchasing Office prior to the close of business on the last day of the month prior. For example, if the contract is to be considered at the August meeting, it must be received prior to 4:30 p.m., on Friday, July 30. Earlier submissions are welcomed and encouraged!
         
      3. With this in mind, it is necessary for the contract, and accompanying Proof of Necessity, to be received in the Purchasing Office with enough lead time to allow for the reviewing the documents, review by the University Counsel Office, securing signatures of the Vice President for Financial Affairs, making necessary copies, and forwarding to the LRC in Frankfort.
8. How does the contractor get paid?

   1. If the total cost of the contract is less than $10,000
      1. A Banner purchase requisition, listing the contractor as the vendor, is to be completed by the requesting department, making sure the account(s) to be charged are reflected correctly. For example, if the Personal Service Contract allows for travel reimbursement, that amount must be charged to a travel line item on the Banner requisition.
         
      2. In the ‘Description' column, it is not necessary to list the specific terms of the contract. ‘Personal Service Contract' is descriptive enough.
         
      3. The Banner Requisition can be processed at the same time as the Personal Service Contract. Once all signatures have been secured, the Purchasing Office will automatically process the request.
         
      4. If the total cost of the contract is greater than $10,000
         1. A Banner Requisition, listing the contractor as the vendor, is to be completed by the requesting department, making sure the account(s) to be are reflected correctly. For example, if the Personal Service Contract allows for travel reimbursement, that amount must be charged to a travel line item on the Banner requisition.
            
         2. In the ‘Description' column, it is not necessary to list the specific terms of the contract. ‘Personal Service Contract' is descriptive enough.
            
         3. The Banner Requisition should be processed once notification is received from the Purchasing Office that the contract has been approved for payment by the LRC.