An Expenditure contract is an agreement between the University and a vendor for compensation in exchange for services or commodities. Any dollar value may require an expenditure contract. All contracts should outline the following critical information: Who are the parties to the contract?; What is the purpose of the contract?; When are the conditions expected to be met?; Where will the work take place?; Why is the University engaged with this vendor?; How much does the University expect to pay as a result of the contract and how will it be paid to the Vendor?
All contracts, license forms, and agreements must be submitted to the Office of Purchasing and Contracts. After review by the Contract Officer, the documents are forwarded to the appropriate signatory and returned to the department or contractor, as required. In accordance with SUNY Procurement Policy, Item #7553, contracts and agreements entered into by the University may be signed ONLY by the University President, the Vice President for Finance and Business, or the Associate Vice President for Finance and Business and Controller. Any other University employee who signs a contractor agreement may be held personally responsible for its performance (payment, liability, etc.).
Contracts are initiated after the procurement process has been completed. Under no circumstances should work be authorized under a contract until the contract has been approved and signed by all appropriate parties.
Generally speaking, a Consultant is an individual who, under written agreement, approved and executed by the authorized executive of the University in advance of the commencement of an obligation, performs a service(s) to a particular department or unit. Service(s) provided are typically task oriented, specific in nature and of a limited, short duration. Remuneration for the accomplishment of the service(s) is typically established as a set fee, not an hourly rate and may not exceed levels established by SUNY and/or New York State. All agreements must be supported by proper documentation regarding selection criteria, description of services, payment schedule and reasonableness of price before the University official will execute the agreement.
Remuneration for Non-Resident Aliens, pursuant to regulations issued by the NYS Office of the State Comptroller, for purposes of reporting and withholding taxes from personal service payments must be made via the University's payroll system and may not be paid as a consultant. Please contact the Office of Human Resources for assistance.
Lecturers, guest speakers and performing artists providing services up to $2,500 may be paid through the honoraria process. The Accounting Office processes honoraria.
On a limited basis a department may need to secure the services of an individual who is either a State or Research Foundation employee. In those circumstances, the University cannot enter into a direct contract with that individual. Instead such cases are handled as "Extra Service" and must be processed through the Office of Human Resources or Sponsored Funds Personnel. If approved, the individual's payment will be received in the form of a paycheck for the extra service work performed. Please contact the Office of Human Resources or the Office of Sponsored Funds Personnel for detailed information.
Policies regarding Independent Contractors have been established to ensure that:
- Payments for services performed by individuals are classified correctly according to Internal Revenue Services (IRS) guidelines.
- Services have been obtained in accordance with University procurement rules and guidelines.
- There is no conflict of interest.
This procedure is not intended to be used to circumvent employment practices and/or recruiting requirements. Efforts should be taken, in the first instance, on the part of the account manager, to ensure proper classification of the individual when contemplating securing the service(s). Penalties may be assessed by the Internal Revenue Service (IRS), NYS Department of Labor, or NYS Worker's Compensation Board if the person is misclassified as an Consultant instead of an employee.
Remuneration for service(s) performed must be either to an employee or a Consultant. The University, as an employer, must adhere to applicable State and Federal laws. Under Federal law, it is illegal to knowingly classify an employee as a Consultant in order to avoid Affirmative Action recruitment efforts, immigration restrictions, and/or payment of taxes, fees, insurance premiums, fringe benefit/overhead charges, or to circumvent compliance with any other applicable or statutory employment regulation. It is the policy of the University at Albany to fully comply with all laws, rules and regulations regarding employment and consultant classifications.
The department representative should consult with a Purchasing Agent prior to making a contractual or financial obligation to an individual.
After a discussion with a Purchasing Agent the department will be required to submit the following items:
- Justification Memo
- Detailing the scope of work the individual will perform and why these services will be of a consultant nature and not that of employment.
- Detailing the individual selection process and what practices were used to secure the individual to provide the services.
- Establishing reasonableness of price. Solid tangible evidence is necessary to satisfy this requirement.
- State Funded Purchasing Requisition
- Include account authorized signature
- Provide sufficient funds for the current year
- W-9 Taxpayer Identification Number and Certificate
- Internal Revenue Services Classification Determination
- Consultant for Non-State Employee Contract
- Contracts executed with original signature w/ Exhibits A (021114) and S and (Z when applicable)
- Original signed Notary Certification (1 each per contract)
- Consultant Disclsure
- Form A
- Procurement Lobby Act ($15,000 or greater)
- Report of Contact (from department representative)
- Procurement Lobbying Act Compliance (from consultant)
The entire package should be submitted to the Office of Purchasing and Contracts. Once received, an acknowledgement from the Office will be sent to the end-user and a Purchasing Agent will be assigned the transaction.
The integrity of the University's financial stewardship and internal controls has been rewarded with a limited amount of flexibility in its execution of expenditure related transactions. All New York State Finance Laws, SUNY Policies and Procedures and IRS Laws apply. To the extent allowed under such law, the Office of Purchasing and Contracts will work with the department to meet their need. At the very minimum, transactions over $10,000 require full disclosure through the NYS Department of Economic Development in advance of a contractual obligation. Also, multiple transactions to the same individual within a twelve month period require special approvals and public posting. It is extremely important that you have a discussion with a Purchasing Agent in advance of your commitment.
Occasionally departments contract for specific services with contractors who are also State employees. In these cases, the University cannot enter into a direct contract with that contractor/employee. Such cases are handled as "Extra Service" and must be processed through the University Office of Human Resources. In this circumstance, the State employee (even if he/she is not a University employee) receives payment in the form of a regular paycheck for the extra service work performed.
Memorandum of Understanding
Occasionally departments contract for specific services with State agencies. These services are usually defined and agreed to in a Memorandum of Understanding (MOU). The MOU sets forth many of the same elements as a contract (for example, services to be provided, payments to be rendered, performance timetables, etc.). Memorandums of Understanding can only be entered into between State Agencies. The most notable difference is the exchange of compensation which can be handled by a journal transfer.
* You must include a budget with your MOU document.
Sample Budget MOU Processes
Revenue contracts are created when the University will receive monetary compensation for providing a service to a company or municipality. The contract would be based on a detailed proposal outlying the services requested deliverables, time frames and payment schedule. A justification will be required to substantiate the dollar value of the contract. These contracts require the signature of the Dean in addition to that of the University Controller. Revenue contracts with a value of $25,000 or more over the life of the contract will require prior approval of the Attorney General and State Comptroller of the State of New York. Proposals must be in agreement with State and SUNY contract terms.
* You must include a budget with your Revenue Contract.
Data Use Agreements
Data use agreements describe how data will be used and establishes who is permitted to receive or use the data. Often times a Principal Investigator, Faculty, Staff, or Student may have a need to request permission to access data as part of their educational or research requirements/needs.
A Data Use Agreement must be reviewed by the staff of the Office of Purchasing and Contracts and executed by the authorized University official, whether there is a cost for the data or not, prior to any commitment to the organization holding the data. The agreement must note as to whether it is between the University at Albany, SUNY or the Research Foundation of the State University of New York as different terms and conditions may apply.
If the Institutional Review Board (IRB) due to human subject content or any other requirement regulates the data use, the IRB approval must be acquired before the Data Use Agreement is processed. If there is a charge associated with the data use a Purchase Requisition must accompany the agreement to the Purchasing Office.
Once the terms and conditions of the Agreement have been reviewed and further negotiated by the Office of Purchasing and Contracts, it will be returned to the requester to secure the signatures of each of the required signatory's (data owner, Principle Investigator, campus IT security, faculty advisor, etc.). It should them be returned to the Office of Purchasing and Contracts for final execution by the University official.
Questions regarding IRB procedures should be directed to the Office of Regulatory Research Compliance at 442-9050.
Prior to submitting a contract to the Office of State Funded Purchasing and Contracts for review and approval, contractors should sign the contract document. Depending on the dollar amount of the contract, three to five contracts with original signatures may be required. Please call the Office of State Funded Purchasing and Contracts for additional information.
For most contracts, contractor signatures must be acknowledged by a Notary Public. In addition, all contracts must incorporate New York State standard contract clauses.
New York State standard contract clauses:
If you are unable to view either or both of the above exhibits, please contact the Purchasing and Contracts Office for a hard copy.
Along with the contractor's signed copies of the contract, the following documentation should be submitted to the Office of State Funded Purchasing and Contracts:
- A requisition in the amount of the money to be encumbered for the current fiscal year, noting a valid University account number.
- Justification for the use of a consultant, which specifies why University staff cannot provide the consulting services, why this particular consultant is able to provide the services, and the qualifications of the consultant. In addition a statement justifying the reasonableness of price will be required.
Any waivers which may be required by your department and/or division. In addition, if a contract is a sole source, a written statement to document the choice of vendor must be submitted. This explanation should detail why the vendor is uniquely qualified to provide the goods or service and provide proof that the cost is reasonable. If the value of the contract exceeds $20,000 the sole source statement is forwarded by the Office of State Funded Purchasing and Contracts to the State Comptroller for approval. The contract cannot be awarded until the sole source receives Comptroller approval.