The first step to engage a service provider, consultant, contractor, or freelancer (hereafter, “service provider”) is to determine whether the service provider may be classified as an independent contractor. This determination must be made before engaging the service provider to comply with tax withholding and reporting obligations. To begin, the requesting manager or principal investigator must determine whether the service provider is an individual or an entity.
- Entity. If the service provider is an entity, the next step will depend on whether the service provider’s services are research-related or non-research-related. See STEP 2 below for more information.
- Individual. If the service provider is an individual, the service provider must complete the online Worker Classification Pre-Qualifying Questionnaire.
Accounts Payable will review the Questionnaire and accompanying documentation to determine the proper classification for the service provider. Once Accounts Payable has determined the proper classification of the service provider, Accounts Payable will notify the service provider via email.
If Accounts Payable determines that the service provider must be classified as an employee, Accounts Payable will notify the hiring manager. The manager/principal investigator should follow the normal hiring process and contact the Payroll Coordinator for guidance and assistance.
For entities and individuals whom Accounts Payable determines may be classified as independent contractors, the next step depends on whether the services to be provided are non-research-related or research-related. In either event, the University and service provider must enter into a contract. The manager/principal investigator will be responsible for ensuring that an appropriate contract is executed and that the service provider complies with the University’s Conflict of Interest Policy (http://www.bu.edu/ethics/conflict.pdf) and, for research-related services, with the University’s Policy on Investigators’ Conflicts of Interest (http://www.bu.edu/handbook/ethics/policy-on-investigators-conflicts-of-interest/).
I. Non-Research-Related Services
When the service provider receives an email that they have been classified as an independent contractor, they will be prompted to complete the online vendor registration. If the service provider is an entity, the manager should contact Sourcing directly at email@example.com. Sourcing will assist the entity with registering and the manager with selecting an appropriate form of agreement using, in the case of individuals, information from the Worker Classification Questionnaire, or in the case of entities, their proposed scope of work.
Once the service provider is fully registered as a supplier, a limit shopping cart should be placed in SAP. All attendant documentation should be attached to the shopping cart, which may include the executed agreement, detailed Statement of Work, and explanatory notes. For additional information on how to complete the form SOW, please click here. Work may only begin after the shopping cart has been processed and the purchase order generated.
A service provider (approved through the worker classification process if an individual, and all entities) who performs a one-time service for the University that lasts less than thirty (30) days and for fees of less than $10,000 can complete an External Service Provider Form and Contract (ESP Form) and send the signed ESP Form, a W-9 (or valid tax form), and invoice to Accounts Payable for payment. In certain circumstances, the ESP Form will also be sent to the Export Control Director for review. Under the ESP Form, payment terms are Net 30.
II. Research-Related Services
When the service provider receives an email that they have been classified as an independent contractor, they will be prompted to complete the online vendor registration. If the service provider is an entity, the principal investigator (PI) should contact Sourcing directly at firstname.lastname@example.org. Sourcing will assist the entity with registering. The PI should download the most current version of the Research-Related Consulting Agreement, which will describe the project on which the service provider will work, the term of service, the scope of work anticipated, the rate of pay, and other terms governing the arrangement.
The PI must complete Sections 1-5 of the Research-Related Consulting Agreement (RRCA) and attach a detailed Statement of Work and the Financial Conflict of Interest Disclosure form (FCOI) completed by the PI and service provider. The PI and either the Center Director, Department Head, or Dean (as appropriate) should sign the Agreement and return it to the Office for Sponsored Programs (OSP) representative responsible for the relevant sponsored program. OSP will send the FCOI to the Office for Research Compliance for review. OSP will also verify that the proposed funding source may be used for the Consultant’s fee and expenses and, if it may, will send the agreement to Sourcing & Procurement. The PI is responsible for ensuring compliance with the University’s Policy on Investigators’ Conflicts of Interest (http://www.bu.edu/orc/coi/forms/). In some circumstances, Sourcing will also send the agreement to the Export Control Director for review. Next, Sourcing will contact the service provider to finalize the agreement before execution. Sourcing will also determine whether it is necessary to require the service provider to obtain (or confirm that it has) insurance. Once the agreement is finalized, Sourcing will coordinate execution of the agreement by an authorized signatory for the University and the service provider.
The PI (or PI’s designee) will then process a shopping cart to encumber the funds for the services. Sourcing will issue a purchase order to the service provider permitting work to begin.