A sponsored research project may include three types of contractors: a consultant, a Sub-Recipient, and a regular vendor contractor. Under the OMB Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, the term “vendor” was replaced with “contractor.” For consistency purposes, when the University of Houston provides funds from a federal award to a non-federal entity, the non-federal entity receiving these funds is classified as a subrecipient or a contractor based on the nature of the agreement and the criteria in 2 CFR §200.330.

The Sponsored Project Contractual Agreement should be used when the contractor is a consultant or when the contractor is not a sub-recipient. Normally, such contractors are specifically identified upfront in the proposal budget under the “contractor” category and explained in the budget justification.

• A consultant is any person or entity hired in a professional capacity to provide specific expertise in the technical area of the project for a specified period under a written agreement.
• Other contractors are persons or entities who provide goods or services specifically tailored for the sponsored project for a specified period under a written agreement.

Contractors Paid on Federal Funds

The Uniform Guidance identifies specific standards in addition to the University’s requirements, which include:

• 200.212  Suspension and debarment - Contractors are subject to the non-procurement Debarment and Suspension regulations
  
  
• 200.305  Payment - The University must make Timely Payments to contractors, but payment amounts can be withheld by the University from contractors to assure satisfactory completion of work
  
  
• 200.318 General procurement standards - Maintain Oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders
  
  
• 200.319  Competition – Procurement must be conducted in a manner providing full and Open Competition consistent with the standards of this section. For consultants, at the Pre-Award stage in the recommendation for award, PIs should explain the selection methods

The University Policy

In addition to the Uniform Guidance, the University of Houston MAPP 04.00.00 - Code of Conduct- Procurement Responsibilities should be adhered to for the procurement of a contractor on a grant. This policy defines the standards of conduct that must be met by all university employees engaged in any activity related to purchasing or contracting for goods or services for the university regardless of the funding source.

The Sponsored Project Contractual Agreement

Use the Sponsored Project Contractual Agreement when paying contractors budgeted on a sponsored project award. Contractors budgeted on awards are normally consultants or contractors providing very specific services to the award. A contractor may be an individual or an entity.

• Individual Contractor – A person (not a company), with specific expertise in the technical area of the project.
  • Conference/workshop Lecturers and Speakers
  • Trainers
  • Evaluators
  • Technicians for repair or constructing apparatus/equipment
  • Software and Information Technology expert

• Entity Contractor – A business that normally provides a particular type of good or service but has designed or adjusted it specifically to suit the needs of the sponsored project.
  • Conference/workshop venues including hotels
  • Private for-profit companies providing the services listed above

Completing the Sponsored Project Contractual Agreement

• Statement of Work to be Performed - A Description of the services. For longer descriptions, add an appendix A to the agreement and state “see Appendix A” in the description section.
  
  
• Term of Agreement – Must begin on or after the start date of the award and end on or before the end date of the award. When “upon execution” is used as the start date, this signifies that the services will start on the date of the last signature on the agreement. Therefore, invoices or backup documents with dates before this time is a red flag.
  
  
• Calculation of Fees – Establish this amount at the proposal stage. Department Business Administrators (DBAs) should use the information from the proposal to guide this process. Methods used to arrive at the agreed amount can be hourly, daily, or a fixed price for the job. Common errors are:
  • Stating that the NSF daily rate for consultants will be used when the hourly rate proposed is higher than that rate.
  • Providing hourly rates but paying a fixed sum representing the total budgeted amount with no reference to # of hours worked in the backup documentation/invoice.
    
    
• Foreign National Addendum Required: Check the box that applies. If a foreign national, complete the required addendum.
  
  
• Signature of the Principal Investigator – The PI signature is required on every contract. The PI certification is an indication that the PI read and understands the agreement, including the need to vet and secure a written activity report or delivery from the contractor to show to an auditor if needed.
  Note: The statement calls for a report to be uploaded to the voucher payment.
  
  
• Other Signatures – All signatures are required on the agreement. All signatures should be dated. Agreements without signatures and dates will not be processed by the Office of Contracts and Grants (OCG).

Standard Vs. Non-Standard Agreement

• Standard Sponsored Project Contractual Agreement
  • When using the standard agreement, complete the required forms and submit via a People Soft RC730 requisition to OCG for processing.
    
    
• Non-Standard Sponsor Project Contractual Agreement:
  • When the contractor prefers to use its own agreement instead of the standard University agreement, the contract must first be reviewed and endorsed by the Office of General Counsel or by OCG Contract Officers. Once the agreement is endorsed, attach the necessary documentation and then begin the submission via a People Soft RC730 requisition to OCG for processing.

Documents Accompanying the Agreement for Processing 

The following documents must accompany the contract and must be completed, signed, and approved before services commence.

• Contract Cover Sheet- Internal administrative routing sheet
  
  
• Foreign National Information Addendum- To be completed by Non-residents only
  
  
• Child Support Certification- For payment on state grants and contracts
  
  
• Recommendation for Award Form– Basis for selection of the contractor. It is recommended to complete this form at the proposal stage.
  
  
• Sole source Justification– For agreements over $10,000.00. The form must be signed and approved by OCG and the Purchasing Department before it is uploaded and routed on the on-line requisition
  
  
• Worker Classification Checklist Information– For determining employee/independent contractor status.

Process for Completing and Routing the Sponsored Project Contractual Agreement

Effective 06/01/2020, sponsored research consultant and service agreements using fund 5 (except for fund 5999) must be routed on RC730 requisition.  Refer to the table for routing instructions. Contracts over $50,000.00 are routed to the Provost Office for Approval. An Authorization and Information Summary Sheet for Purchase Requisitions Exceeding $100,000 must be completed for purchases greater than $100,000.

Below are the steps to submit consulting and service agreements:

1. The Department staff prepares the documents listed above and obtains all necessary signatures, then uploads the signed forms to PS requisition using one of the following account codes that roll up to the budget account B5023 – Contracting of Services:
   
   • 52108 - Other professional services - professional services rendered on a fee basis by a person or firm recognized as possessing a high degree of learning and responsibility in any area not categorized under other subcodes [account code].
   • 53857 - Services under a written contract not classified under any other account

2. When the Office of Contracts and Grants (OCG) receives the requisition via PeopleSoft (PS) workflow, the agreement will be recorded and reviewed for accuracy, appropriateness, availability of funds, and compliance with sponsor requirements.
3. OCG will create a Purchase Order (PO) in PeopleSoft to encumber the funds on the grant. A copy of the PO will be sent to the department. 
4. The originating unit initiates payments on a PO voucher for payment to the contractor via Accounts Payable.
5. Amendments or changes to the agreement should be submitted directly to the OCG RA for review, approval, and, when necessary, adjustments to the PO amount.  If the amendment increases the contract above the thresholds listed above, the required permissions are needed.

Late submission of a contractual agreement must be accompanied by a late justification form signed by the PI and the DBA. Note that the agreement is late if the effective date or start date is before the date on which all parties signed the agreement, and the work by the contractor begun.

Other Non-Standard Contract Agreements: 

Honoraria are unallowable on federal research grants when the primary intent is to confer distinction on or to symbolize respect, esteem, or admiration for, the recipient of the honorarium. The NIH grants policy specifically prohibits this cost.

Speaker Fees are an allowable payment for services rendered, such as a speaker’s fee under a conference grant, the presentation of research results, the reading of papers, or the participation in workshops and seminars when the cost is budgeted on the award or prior approval is received from the sponsor. When the Speaker Agreement is used, a requisition routed via OCG on the RC730 business unit and use of the account codes referenced above (52108 or 53857).