Service Centers at the University have been established to execute fee for service arrangements. If you are affiliated with a Service Center please visit the Service Center webpage.
What is Fee for Service?
Outside entities or individuals sometimes ask BU researchers or departments to perform paid services, under the auspices of Boston University, that are not traditional research or teaching activities. These services, which are sometimes referred to as “fee for service” or “institutional consulting”, are typically predefined or repetitive, or may involve producing a product or report that meets predefined specifications. Fee for service work is not generally expected to add to the body of fundamental knowledge in a given field, although the process of creating the work product may benefit the University by adding to the efficacy of methods or processes used by researchers or departments to evaluate data. At times, fee for service work may be similar to work done under sponsored research projects, but generally the work is specified by the outside entity or individual.
In the typical “fee for service” agreement, the external entity requests ownership of the work product, results and reports, and may seek to impose obligations of confidentiality on BU, possibly including requiring prior approval for any publications. “Fee for service” arrangements create potential liability for the University if the terms of the agreement are not met.
Research conducted at BU should be beneficial to the general public and/or advance BU’s educational and research mission, and not solely or primarily for the commercial benefit of an external party. As a result, there should only be a limited amount of fee for Service work (outside of Service Centers) at BU. While there may be research or scholarly benefits to a FFS agreement, those benefits are likely not be the primary purpose of the activity and pose risks that need to be appropriately managed.
Funds received for work that is unrelated to BU’s tax-exempt purposes, may be subject to payment of Unrelated Business Income Tax (UBIT). Although it is not inappropriate to have some UBIT, BU must monitor the income and usage that generates the UBIT, and departments must be aware that they will be responsible for paying any UBIT.
Determining if you have a fee for service agreement
If the below statements are true then you may have a FFS agreement:
- Your department/office doesn’t anticipate publication from this work
- You do not expect to own results created from this work (other than improvements to methods or processes of analysis).
- You would not expect to be considered an investigator or co-investigator on this project.
Contact the relevant office
Whether you are sure you have a FFS agreement or need further guidance, contact the appropriate office as soon as possible so that they can walk you through the process.
- For Service Centers: Service Center Administration (firstname.lastname@example.org)
- For Industry Partners: Industry Engagement
- For All Others (non Industry): Sponsored Programs
*Note that there is a distinction between FFS agreements and personal consulting agreements. Personal consulting agreements are between an outside entity and an individual faculty member. BU is not a party to personal consulting agreements and is not involved in negotiating those agreements. The Office of General Counsel cannot counsel faculty members on personal consulting agreements, but provides some guidance [here].
These teams will assist with the following:
- Determine if “fee for service” is the appropriate mechanism for the work
- Review the signed and submitted FFS Summary Form (link)
- Provide guidance on budgeting and setting rates
- Discuss contract considerations and execute agreements
- Explain the invoicing and payment process
Setting up a Fee for Service Account
Fee for Service Accounts will be set up via the Budget Office (909xxxxxxx). The following process outlines steps to be taken in order to ensure timely and accurate set up once Agreement or Purchase Order is executed by Industry Engagement or Sponsored Programs.
909xxxxxxx Account Process Set Up and Management
- Departmentand Dean’s Office Financial Administrator is carbon copied on E-mail to Sponsor with Executed Agreement
- Department contacts their Dean’s Office Financial Administrator to request a new Designated Account, including a copy of Executed Agreement and the Fee For Service Summary Form
- The Dean’s Office then requests the new account through the normal process, including the Fee for Service Summary Form with their account request
- The Budget Office creates a new 909xxxxxxx account, which will have the Internal Order Category of Fee for Service, and disseminates the account information to the requestor
- Departments are responsible for ensuring expenses are appropriate following the Four Cost Principles
- Departments are responsible for billing through Miscellaneous Receivable; training and additional resources on billing can be found here
- Based on Sponsor rules, any residual direct balance will be transferred accordingly
- 909xxxxxxx accounts are not allowed to be in deficit