Procedure 5.14.2 Consultant, Professional or Technical Services

System Procedures
Chapter 5 - Administration

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for Board Policy 5.14


Part 1. Authority. Board Policy 5.14, Procurement and Contracts, delegates to the chancellor authority to develop procedures on behalf of the board for entering into consultant, professional or technical services contracts.

Part 2. Contracting Authority. State colleges and universities have authority to enter into individual contracts with a value of up to and including $100,000 without vice chancellor-chief financial officer approval.

Contracts over $100,000 require system office approval from the vice chancellor-chief financial officer. Institutions must submit a memorandum explaining the need for the contract, the proposed process to be used in selecting a contractor, estimated cost, and verify that funds are available for paying the contractor. The vice chancellor-chief financial officer will review the memorandum and respond in writing to the institution.

Contracts requiring vice chancellor-chief financial officer approval include consecutive single year contracts with the same entity and contracts with amendments which when added together exceed $100,000.

Contracts of any value with a term in excess of five years require approval by the vice chancellor-chief financial officer.

Each college and university shall develop procedures for entering into contracts in consultation with the system office. Employees and their exclusive bargaining representatives shall also be consulted on the proposed procedures and must address topics such as employee protection, information availability and reporting, conflict of interest, and renewal restrictions.

Part 3. Contract Preparation. Contracts must be prepared on forms approved by the system office to assure that they include all state required contract language. Any modification of forms approved by the system office or the use of a non- system office form requires the review by the system legal counsel and approval of the vice chancellor-chief financial officer. System legal counsel includes either the Minnesota State Colleges and Universities General Counsel or the Minnesota Attorney General's Office.

Part 4. Encumbrance. Funds must be encumbered prior to making an obligation. An authorized employee must certify that the accounting system shows sufficient allotment or encumbrance balance in the fund, allotment, or appropriation to meet it. College, university, and system office administration must assure proper authorization is on file for employees charged with encumbering funds. An expenditure or obligation authorized or incurred prior to encumbering funds is in violation of state law and ineligible for payment until made valid and is in violation of Minnesota Statutes Ch. 16A15, Subd. 3. An employee authorizing or making the payment, or taking part in it, may be liable to the state for the amount paid. A knowing violation of Minnesota Statutes Ch. 16A.15, Subd. 3, is just cause for the employee's removal. The State cannot agree to indemnify third parties or hold them harmless (Minnesota Statutes Ch. 16A.138; Minn. Const. Art. XI, Sec. 1).

Part 5. Prepayment. Minnesota Statutes Ch. 16A.41, Subd. 1, prohibits the system office and the colleges and universities from paying in advance. The system office and colleges and universities can only make prepayments for software or software maintenance contracts for system-owned or leased computer equipment, sole source maintenance agreements, exhibit space, subscription fees for newspapers and magazines, registration fees where advance payment is required or advance payment discount is provided, and the Library of Congress services.

Part 6. Consultant, Professional, or Technical Services Contract Definition. A consultant, professional or technical contract means any agreement entered into for consultant, professional, or technical services usually on a short-term basis for a finite period of time and for a specific purpose(s).

Subpart A. Consultant, professional, or technical services contracts are predominately intellectual in character which could include consultation analysis, evaluation, prediction, planning or recommendation; that do not involve the provisions of supplies or materials; and that result in the production of a report or the completion of a task.
Subpart B. Contracts shall generally not exceed five years. Contracts must show any renewal information including the amount previously paid. Any contract or amendments to original contracts that a campus or the system office proposes to continue beyond five years shall be reviewed and approved by the vice chancellor-chief financial officer.
Subpart C. A two week public notice of Request for Proposals (RFP) shall be given for contracts over $50,000 in an official newspaper. The official newspaper may be the State Register. In addition to the public notice, requests for proposals may be solicited by directly notifying prospective bidders not less than seven (7) days before the final date of submitting bids.

Part 7. Contracts in Excess of $100,000. Contracts over $100,000 require system office approval from the vice chancellor-chief financial officer. Institutions must submit a memorandum explaining the need for the contractor, the proposed process to be used in selecting a contractor, estimated cost, and verify that funds are available for paying the contractor. The vice chancellor-chief financial officer will review the memorandum and respond in writing to the institution.

Contracts requiring vice chancellor-chief financial officer approval include consecutive single year contracts with the same entity and contracts with amendments which when added together exceed $100,000.

Contracts with a term in excess of five years require approval by the vice chancellor-chief financial officer.

Section 1. Businesses with More than 40 Minnesota Employees. Consistent with Minnesota Statute Ch. 363A.36, vendors who intend to bid on any purchases or contracts exceeding $100,000 and have had on any single working day in the previous twelve (12) months more than forty (40) full-time employees within Minnesota, must apply for a Certificate of Compliance from the Minnesota Department of Human Rights. Bids or proposals on purchases or contracts exceeding $100,000 from vendors who have not applied for this certificate cannot be accepted. An award exceeding $100,000 cannot be made to vendors who have not obtained this certificate.

Section 2. Businesses with More than 40 Employees Outside Minnesota. Consistent with Minnesota Statute Ch. 363A.36, vendors who do not have more than forty (40) full-time employees in Minnesota, but who have had on any single working day in the previous twelve (12) months more than forty (40) full-time employees in the state in which their principal place of business is located, must have a Minnesota Certificate of Compliance or must certify that the business is in compliance with federal affirmative action requirements in order to receive a contract award exceeding $100,000.

Part 8. Contracting with Targeted Group Businesses. Targeted group businesses are those meeting the definition in Minnesota Statutes Ch. 16C.16, Subd.5. Purchasing practices will include provisions whenever practicable, for procurement from small targeted group businesses as defined in Minnesota Statutes Ch. 471.345, Subd. 8. Targeted businesses are certified as such and a list is available from the Department of Administration.

Part 9. Customized Training, Income and other Contracts. College and university presidents may enter into contracts to provide customized training instruction or otherwise generate income without additional authorization from the Board. Contracts in this category with a total value in excess of $1,000,000 require approval by the vice chancellor-chief financial officer. Contracts with a total value in excess of $3,000,000 require approval by the Board. Contracts in this category with a term in excess of five years require approval by the vice chancellor-chief financial officer.

Part 10. Intra-Agency and Inter-Agency Agreements, Joint Powers Agreements, and Master Contracts. College and university president may enter into intra-agency, inter-agency, joint powers agreements that do not create a joint powers board, Minnesota Department of Administration master contracts, Office of Enterprise Technology master contracts or Minnesota State Colleges and Universities master contracts without additional authorization from the Board. Contracts with a total value in excess of $1,000,000 require approval by the vice chancellor-chief financial officer. Contracts with a term in excess of five years require approval by the vice chancellor-chief financial officer.

Part 11. Restrictions.

Subpart A. Contracts with Law Firms or Lawyers. Only system legal counsel has the authority to represent the state. Colleges, universities, and the system office may enter into contracts with a law firm or a lawyer for non-legal services subject to the review by system legal counsel and the approval of the vice chancellor - chief financial officer and system legal counsel. The following language must be included in any contract entered into with a law firm or a lawyer for non-legal services: "Contractor's duties do not include providing legal services to the state within the meaning of Minnesota Statutes Ch. 8.06."
Subpart B. Contracts for Banking Services and Banking Related Services. Minnesota Statutes Ch. 16A.27 gives to the commissioner of Minnesota Management and Budget the authority to "control the amount and manner of deposit of state funds." The system office, colleges, and universities must work with Minnesota Management and Budget when seeking any services related to the handling of state funds, banking, or banking services. The vice chancellor-chief financial officer should be consulted prior to execution of any banking services contracts. The system office and the colleges and universities should re-bid bank services at least every five years.
Subpart C. Contracts for Audits with a Public Accountant. Minnesota Statutes Ch. 3.972, Subd. 3 places a restriction on contracting with public accountants for audits. It requires that "a contract shall not be negotiated unless the contract has been reviewed by the legislative auditor." Board policy 1A.2 requires Board approval of audit firm contracts under certain circumstances. Colleges and universities shall consult with the vice chancellor-chief financial officer prior to the execution of any contract with any audit firm.
Subpart D. Employer-Employee Relationship. A contract must not establish an employer-employee relationship as defined in Internal Revenue Service rules.

Part 12. Code of Ethics. All system employees engaged in contracting and purchasing are subject to Minnesota law applicable to state employees, including Minnesota Statutes Ch. 15.43, 43A.38, 43A.39 and System Procedure 1C.01.

Part 13. Accountability. The chancellor for the system office and the president of each college and university shall designate an employee who shall have overall responsibility for complying with state and federal laws, board policy, bargaining agreements and system-wide procedures for all consultant, professional, and technical contracts.


Related Documents:

To view any of the following related statutes, go to the Revisor's Web site (http://www.revisor.leg.state.mn.us/). You can conduct a search from this site by typing in the statute number.

  • Minnesota Statute 136F.581, Purchases and Contracts
  • Minnesota Statute 136F.582, Customized Training; Local Contract Authority
  • Minnesota Statute 136F.59, Technical Equipment; Computer Sales and Support, Cooperation with Office of Technology
  • Minnesota Statute 168.012, Vehicles Exempt from License Fees
  • Minnesota Statute 471.345, Uniform Municipal Contract Law
  • Minnesota Statute 471.346, Publicly Owned and Leased Vehicles Identified

Procedure History:

Date of Adoption: 7/28/96,
Date of Implementation: 7/28/96,

Date & Subject of Revisions:

1/25/12 - The Chancellor amends all current system procedures effective February 15, 2012, to change the term "Office of the Chancellor" to "system office" or similar term reflecting the grammatical context of the sentence.

Click here for additional 5.14.2 HISTORY.

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