GENERAL POLICIES FOR ACQUIRING PERSONAL SERVICES FROM OUTSIDE CONSULTANTS
| SUBSECTION 4.3.1.1 GENERAL POLICIES FOR ACQUIRING PERSONAL SERVICES FROM OUTSIDE CONSULTANTS |
| 4.3.1.1.1 | Purpose | Effective Date: | June 11, 1998 |
| This subsection sets forth the general policies, procedures, and guidelines for state agencies to follow in acquiring personal services from outside consultants. Subsection 4.3.1.2 establishes the requirements for competitive procurements. Subsection 4.3.1.3 identifies the filing, record keeping, and reporting requirements for personal service contracts entered into by state agencies. |
| 4.3.1.1.2 | Authority | Effective Date: | June 11, 1998 |
| Personal services are to be procured and awarded by state agencies in accordance with the requirements of Chapter 39.29 RCW, Chapter 101, Laws of 1998 and Chapter 245, Laws of 1998. |
| 4.3.1.1.3 | Definitions | Effective Date: | June 11, 1998 |
| 4.3.1.1.3.a | Agency - Any state office or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, and commissions, and educational, correctional, and other types of institutions. |
| 4.3.1.1.3.b | Approval - OFM's authority to analyze the filed contract or amendment and to approve or disapprove based on compliance with the competitive procurement, filing and other requirements of Chapter 39.29 RCW. |
| 4.3.1.1.3.c | Client Services - Services provided directly to agency clients including, but not limited to, medical and dental services, employment and training programs, residential care, and subsidized housing. Client service contracts are entered into for professional or technical services to be provided by an organization or person external to state government which will result in the delivery of direct services to clients. |
| 4.3.1.1.3.d | Competitive Solicitation - A documented formal process providing an equal and open opportunity to qualified parties and culminating in a selection based on criteria which may include such factors as the consultant's fees or costs, ability, capacity, experience, reputation, responsiveness to time limitations, responsiveness to solicitation requirements, quality of previous performance, and compliance with statutes and rules relating to contracts or services. |
| 4.3.1.1.3.e | Consultant - An independent individual or entity contracting with an agency to perform a service or render an opinion or recommendation according to the consultant's methods and without being subject to the control of the agency except as to the result of the work. The agency monitors progress under the contract and authorizes payment. |
| 4.3.1.1.3.f | Emergency - A set of unforeseen circumstances beyond the control of the agency that either: (1) presents a real, immediate threat to the proper performance of essential functions or (2) may result in material loss or damage to property, bodily injury, or loss of life if immediate action is not taken. |
| 4.3.1.1.3.g | Evidence of Competition - Documentation demonstrating that the agency has solicited responses from multiple firms in selecting a consultant. |
| 4.3.1.1.3.h | Personal Service - Professional or technical expertise provided by a consultant to accomplish a specific study, project, task, or other work statement. This term does not include purchased services as defined below. |
| 4.3.1.1.3.i | Personal Service Contract - An agreement, or any amendment thereto, with a consultant for the rendering of personal services to the state which is consistent with RCW 41.06.380. RCW 41.06.380 prohibits contracts which would have the effect of terminating classified employees or classified employee positions existing at the time of execution or renewal of the contract. |
| 4.3.1.1.3.j | Purchased Services - Services provided by a vendor to accomplish routine, continuing, and necessary functions. Generally, these services meet more routine needs of an agency for general support activities. This term includes, but is not limited to, services acquired under RCW 43.l9.190, the authority of the Department of General Administration, Office of State Procurement, or RCW 43.105.041, the authority of the Department of Information Services, for equipment maintenance and repair; operation of a physical plant; security; computer hardware and software maintenance; data entry; keypunch services; and computer time-sharing, contract programming, and analysis. |
| 4.3.1.1.3.k | Review - OFM's authority to analyze the filed contract or amendment based on compliance with the competitive procurement, filing and other requirements of Chapter 39.29 RCW. Does not authorize OFM to approve or disapprove the contract filing. |
| 4.3.1.1.3.l | Sole Source - A consultant providing professional or technical expertise of such a unique nature that the consultant is clearly and justifiably the only practical source to provide the service. The justification is to be based on either the uniqueness of the service or sole availability at the location required. |
| 4.3.1.1.3.m | State Funded - Funded with dollars which are: (1) appropriated by the Washington State Legislature and/or (2) allotted by the agency. |
| 4.3.1.1.4 | Contracts Exempt From the Requirements of Chapter 39.29 RCW | Effective Date: | June 11, 1998 |
| If the primary purpose or nature of a contract is in one of the categories described below, that contract is exempt from the requirements of Chapter 39.29 RCW. | |
| 4.3.1.1.4.a | Contracts with a total value of less than $5,000. An exception occurs when multiple sole source contracts are awarded by an agency to a contractor in a fiscal year. When the cumulative total of sole source personal service contracts and amendments awarded to a contractor in a fiscal year reaches $5,000 or greater, the contract or amendment which brings the total to, or over, the $5,000 threshold is subject to filing, regardless of its amount, as are any subsequent sole source contracts and amendments awarded to that contractor in the fiscal year. |
| 4.3.1.1.4.b | Contracts awarded to companies that furnish a service where the tariff is established by the Washington Utilities and Transportation Commission or other public entity. This exemption is limited to contracts wherein the fee is pre-established by tariff and does not apply to all contracts with such companies. |
| 4.3.1.1.4.c | Contracts between Washington State agencies or between a Washington State agency, political subdivision, unit of local government, another state, the federal government or any Indian tribe recognized as such by the federal government. These are called intergovernmental or interagency agreements, and they are addressed in the Interlocal Cooperation Act, Chapter 39.34 RCW. |
| 4.3.1.1.4.d | Contracts awarded for services to be performed for a standard fee, when the standard fee is established by the contracting agency or any other governmental entity, and a like contract for equivalent services is available to qualified applicants as services are required. Standard fees may include hourly or daily rates or similar fee-for-service rates. |
| 4.3.1.1.4.e | Contracts for services that are necessary to the conduct of collaborative research where prior approval is granted by the funding source. Upon approval from the funding source and receipt of funds, the resultant contract with the named firm or individual is not required to be filed with the Office of Financial Management (OFM), nor does it require approval by OFM. For example, this exemption may be used when an agency is applying for grant or research funds and names a firm or individual in the written application to perform specific services. |
| 4.3.1.1.4.f | Contracts for client services. Client services are defined in RCW 39.29.006(2) as services provided directly to agency clients including, but not limited to, medical and dental services, employment and training programs, residential care, and subsidized housing. |
| 4.3.1.1.4.g | Contracts for architectural and engineering services as defined in RCW 39.80.020, which are entered into pursuant to Chapter 39.80 RCW. However, contracts entered into by any state agency for architectural and engineering services, and modifications (amendments) thereto, shall be reported to OFM on a quarterly basis in such format as OFM prescribes. |
| 4.3.1.1.4.h | Contracts securing the services of an expert witness for the purpose of litigation. Expert witness contracts may include case consultation, research, legal services, or other related activities but the purpose of the contract ultimately must include the possibility of expert testimony if the case goes to trial. |
| 4.3.1.1.4.i | Contracts for bank supervision authorized under RCW 30.38.040. These are contracts entered into by the Department of Financial Institutions to conduct examinations of branches of out-of-state banks that are operating in Washington state. |
| 4.3.1.1.5 | Agency Responsibilities | Effective Date: | June 11, 1998 |
| State agencies subject to Chapter 39.29 RCW are authorized to expend funds for personal service contracts only when the agencies have complied with the competitive procurement and other requirements of the chapter. | |
| The agency director or authorized designee has full responsibility for securing outside contractual help as required by that agency in the most effective and economical manner possible. The state officer or employee executing personal service contracts is responsible for ensuring that personal services are procured in accordance with the policies set forth in Subsections 4.3.1.1, 4.3.1.2, and 4.3.1.3. |
| 4.3.1.1.6 | Limitations on Personal Service Contracts | Effective Date: | June 11, 1998 |
| 4.3.1.1.6.a | Agencies are to procure personal services only to resolve particular agency problems or issues, or to expedite specific projects that are temporary in nature. Prior to procuring personal services valued at $5,000 or more, the agency must document that: |
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| Contracts and amendments filed with OFM are to include this information in the justification submitted with the filing. |
| 4.3.1.1.6.b | A state agency may not enter into a personal service contract under which the contractor could charge additional costs to the agency, the Joint Legislative Audit and Review Committee or the Office of the State Auditor for access to data generated under the contract. For purposes of this requirement, "data" includes all information that supports the findings, conclusions and recommendations of the contractor's reports, including computer models and the methodology for those models. |
| 4.3.1.1.7 | Failure to Comply | Effective Date: | June 11, 1998 |
| The state officer or employee executing personal service contracts shall be responsible for compliance with the requirements of Chapter 39.29 RCW. Failure to comply with the requirements set forth in the chapter shall subject the state officer or employee to a civil penalty in the amount of $300. A consultant who knowingly violates this chapter in seeking or performing work under a personal services contract shall be subject to a civil penalty of $300, or 25 percent of the amount of the contract, whichever is greater. | |
| The State Auditor's Office is responsible for auditing violations, and the Attorney General's Office is responsible for prosecuting violations of Chapter 39.29 RCW. |
| 4.3.1.1.8 | Public Resources | Effective Date: | June 11, 1998 |
| Agencies are to consider the feasibility of using qualified public resources before using a private consultant. The following are public resources which may be available to assist state agencies: | |
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| 4.3.1.1.9 | Liability Insurance | Effective Date: | June 11, 1998 |
| 4.3.1.1.9.a | Before conducting a personal service procurement, the agency should analyze the type of services required and evaluate the State's exposure to legal liability that may result from that contract. To protect the State's interests, appropriate liability insurance requirements should be included in the solicitation document as a condition of responsiveness. |
| Injury or damage to a third party may result in legal liability if it occurs as a result of a contractor's negligence. Liability insurance covers legal liability of an insured. If a contractor buys liability insurance and names the State as an additional insured on the policy, the State will have insurance protection for many types of tort claims that arise out of the contractor's activities. |
| 4.3.1.1.9.b | The Department of General Administration, Division of Risk Management (DRM), recommends that agencies include insurance requirements in their contracts. At a minimum, DRM suggests that contractors be required to buy general liability and employer's liability insurance and comply with workers compensation laws. For more information on DRM's suggested insurance specifications, refer to Contracts: Transferring and Financing Risk. This manual is available in hard copy through DRM or on the GA Home Page at: http://www.ga.wa.gov/risk/risk.htm. If you have further questions, you may contact the Division of Risk Management at (360) 902-7306. |
| 4.3.1.1.10 | Industrial Insurance | Effective Date: | June 11, 1998 |
| 4.3.1.1.10.a | With few exceptions, Washington State's industrial insurance law, Title 51 RCW, requires that all persons performing work under contract be covered by industrial insurance, and RCW 51.12.050 holds the contracting agency ultimately responsible for making sure that such coverage is provided. Agencies should incorporate into their personal service contracts a provision stating that the contractor agrees to comply with the industrial insurance requirements of Title 51 RCW. |
| 4.3.1.1.10.b | Contractors are required to provide industrial insurance coverage either through the Department of Labor and Industries (L&I) or as self-insured employers certified by L&I. Industrial insurance coverage is optional for sole proprietors, partners, and corporate officers. Agencies can verify a contractor's compliance by contacting L&I in Olympia at 1-800-547-8367. |
| 4.3.1.1.10.c | In the event the contractor is found to be out of compliance, the agency may still enter into the contract, but should notify the contractor that no payments for services provided under the contract will be made until the contractor furnishes evidence of full compliance. RCW 51.12.050 and RCW 51.12.070 each give the contracting agency the authority to "collect from the contractor the full amount payable in premiums." | ||
| 4.3.1.1.11 | Formal Contract Required | Effective Date: | June 11, 1998 |
| 4.3.1.1.11.a | A written document specifying the agreement between the agency and the contractor is to be prepared for all contracted personal services. Required elements in a personal service contract are identification of the parties, scope of services, maximum compensation, period of performance, payment mechanism, and signatures of responsible parties. Numerous other elements are often included in contract documents to provide additional legal protection to the state. Refer to the OFM booklet, "A Guide to Personal Services Contracting", for an explanation of these and other elements which may be included in the contract. (See Paragraph 4.3.1.1.16 of this policy.) |
| 4.3.1.1.11.b | Agencies may choose a contract format appropriate to the services being acquired, provided that the required elements identified in the previous paragraph "a" are included. For example, an agency may wish to use a short-form contract or letter of agreement where the contract is not complex or where the contract consideration is less than $5,000. |
| 4.3.1.1.11.c | The contract document is to be reviewed "as to form" by the Attorney General's Office prior to execution. Provided that the contract format has been approved "as to form" by the Attorney General's Office, it is not necessary that each contract executed by the agency be approved "as to form" by the Attorney General's Office, as long as the approved format is followed. |
| 4.3.1.1.12 | Structuring of Contracts | Effective Date: | June 11, 1998 |
| Agencies shall not structure contracts to avoid the competitive procurement or other requirements of this policy. |
| 4.3.1.1.13 | Account Codes | Effective Date: | June 11, 1998 |
| Sub-objects to be used for reporting expenditures against personal services are as follows: | ||
| CA CB CC CD CE CF CG CH CJ CK CZ | Management and Organizational Services Legal and Expert Witness Services Financial Services Computer and Information Services Social Research Services Technical Research Services Marketing Services Communications Services Employee Training Services Recruiting Services Other Personal Services | |
| Definitions for these sub-objects are included in this manual in Subsection 7.2.6.2. | ||
| 4.3.1.1.14 | OMWBE Requirements | Effective Date: | June 11, 1998 |
| Agencies are to comply with the requirements of the Office of Minority and Women's Business Enterprises (OMWBE) set forth in Chapter 39.19 RCW as they relate to procurement and award of personal service contracts. A listing of certified minority-owned and women-owned businesses is maintained by OMWBE. For more information, contact OMWBE at (360) 753-9693. |
| 4.3.1.1.15 | Additional Information on Using Outside Consultants | Effective Date: | June 11, 1998 |
| Supplemental information on contracting with outside consultants is included in "A Guide to Personal Service Contracting" published by OFM, Accounting and Administrative Services Division. To receive a copy of the publication, call (360) 902-0404, or you may access it on the OFM Home Page at http://www.ofm.wa.gov/. |