Personal Service Agreements

The following section reviews the procedures for contracting services on a Personal Service Agreement (PSA).

A. Purpose

A Personal Service Agreement should be used in the following situations:

  1. To contract for services to be performed by an independent contractor. An independent contractor can be an individual, corporation or partnership. According to Board of Trustee purchasing policies: “If the contractor is an individual, the test is that the contractor is expected to complete the job by his/her own methods without being subject to control as to the means of doing the work.”
    • Key considerations are:
      • The absence of a supervisory relationship as indicated, for example, by a performance evaluation system or the establishment of work rules and regulations;
      • The existence of an independently established trade or business; and
      • Compensation which is based on the completion of specified obligations as opposed to hourly or bi-weekly compensation.
  2. To meet temporary employment needs. Temporary means no longer than the equivalent of one semester and normally non-renewable. This includes credit-free instruction services, honoraria and related expenses, and professional services, i.e. medical and dental.
  3. To provide for non-personnel vendor services; and
  4. To provide for specialized facilities not otherwise available.

B. Competitive Process

The contracting of personal services should, whenever possible, be based on competitive bids or quotations. Specialized or unique services that limit or preclude competition should be thoroughly documented by the department representative with review authority.

C. Processing

An approved purchase requisition and the PSA must be received by Finance and Administrative Services no later than 45 working days prior to the start of the contract period. An agreement exceeding $3,000 also requires the approval of the Attorney General and, therefore, must be received at least 60 days prior to the start of the contract period. The issuance of a PSA to a corporation requires a letter of resolution of the corporate authority for the signature and a corporate seal. Refer to exhibit G for instructions on completing the PSA.

D. Contracting State Employees

Special consideration must be given when contracting a state employee. According to Board policy “no state employee may be offered a personal service agreement as an independent contractor, for non-personnel vendor services or to provide specialized facilities unless the contract has been awarded pursuant to an appropriate bidding process.” A record of the bidding process should be maintained. Additionally, the Comptroller’s Office requires the issuance of a Dual Employment Request Form. This form, available in the Personnel Office, is submitted along with the PSA and purchase requisition. Before contracting a state employee, it is important to review the differences between an employment relationship and an independent contractor relationship.