Service Provider Training Module

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Service Provider Training Module
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Training Agenda

• Update the Schools and Departments with the new
  Agreements in place and where they can be found
  on our Website
• Purchasing Role
• What is a Service Provider
• Services Agreement Process
• Review the Existing/New Forms
• What is an Independent Contractor
• Highlight the Insurance Requirements for All
  Consultants
• Review Commodity Codes
• Guide Users through New and Improved Website

Note http//procurement.columbia.edu/purchasing/h
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Purchasing Role in the Process

• Purchasing is the central point of contact for
  all Agreements where there are services being
  provided to the University
• Purchasing is responsible for coordinating the
  necessary University resources (Office of the
  General Council, Risk Management, Medical
  Compliance, etc.) in order to bring agreements
  to conclusion
• Departments having contract questions from
  suppliers should contact Purchasing for review
  and commentary
• Purchasing coordinates between the University
  and the supplier during contract negotiations
• Only those designated by the University Trustees
  are permitted to Sign Agreements on behalf of
  Columbia

We Have a Shared Responsibility in the Process
Note http//procurement.columbia.edu/purchasing/h
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Why do we have Purchasing Policies, Practices and
Processes?
Employ Best Business Practices
Create Opportunity Spend Dollars Wisely
Change in the Way we do Business
Reduce Liability Reduce Reputational Risk
Meet Audit Requirements Meet IRS Regulations
Comply with Various Government Organizations
(e.g. FAR, OMB, etc)
Value for Money
Statutory Requirements
FAR Federal Acquisition Regulation Basic
Rulebook for Government Contracts OMB The
Office of Management and Budget
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What is a Service Provider at Columbia?

• Professional Services to accomplish the
  objectives of the University when such Services
  are specialized, highly technical, and cannot be
  economically or satisfactorily performed by
  University employees as part of their normal
  duties.

• Current Service Provider Statistics
• 1,000 Agreements reviewed each year for services
  ranging from Web Designer to Business Consultant
  to Architect
• Value of Service Agreements ranges from couple
  hundred dollars to the millions of dollars

• A Temporary or Casual Employee is NOT a Service
  Provider
• Hired for a special project or as a short-term
  replacement
• Paid for the exact hours worked and processed
  through the timesheet submission
• Rates of pay and job duties are established by
  each department there are no fringe benefits
• Usually limited to four consecutive months

Note http//procurement.columbia.edu/purchasing/h
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What is a Service Provider?
Service Provider
Web Designers
Engineers
Strategic Consultants
Business Consultants
Graphic Designers
Architects
Auditors
PR Marketing
Engineers
Accountants
Note http//procurement.columbia.edu/purchasing/h
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Service Agreements Process
Option Review
Sourcing Your Needs
Finalizing an Agreement
Defining Your Needs
Purchase Order
Developing Statement of Work, Time Lines, Quality Service requirements, etc. Contact the Purchasing Office for Advice and Review University Wide List (UwPA) Identifying Vendors Obtaining Bids Confirming Order Validating Vendor Negotiating Terms and Conditions Getting Necessary Signatures Ensuring Insurance Requirements are Met Resolving Intellectual Property Issues Creating a Requisition Obtaining approvals such as Prior approvals, DAF and Sole/Single Source Approval Reviewing with Purchasing including Compliance and Exceptions
Note http//procurement.columbia.edu/purchasing/h
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Purchasing Bid and Justification Policies

• Requires one of the following
• Written Bid(s)
• Proposal(s)
• Quote(s)

1 - 24,999 (non-UwPA)

• Three Written Bids, Quotes or Proposals
• Single/Sole Source form must be approved by
  Senior Level Officer in the department prior to
  submission to Purchasing at this dollar
  threshold.
• Make sure your justification clearly defines WHY
  you chose to Sole/Single source and provide a
  clear cost reasonableness.

25,000 or Higher (non-UwPA)
0 and higher UwPA (University wide Purchase
Agreement)

• Requires
• Written quote or proposal and
• Executed Scope of Work

Note UwPA University Wide Purchase Agreement
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Why are Agreements Important to Columbia
University?
Indemnification
Limitation of Liability
Use of Columbia Confidential Information
To secure against loss or damage and provide
compensation Protects CU and Supplier
Reduces Responsibility to determine
accountability of the Services performed Protects
CU and Supplier
Protects all information for University and
Supplier
Terms/Conditions
Acceptance of Deliverables/Work Product
Ownership of Work Product
Use of Columbia University Name
Ensures we get what we are paying for and sets
expectations
Defines exclusive right to results and the by
products of an engagement
Protects the Reputation of Columbia University
Protects the University
Note http//procurement.columbia.edu/purchasing/h
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A Purchase Order or Agreement for my Service?
Go to the Purchasing Website to review Service
Provider Grid

• Binding Contract between the University and the
  Supplier
• Requires SOW
• Required upon request Certificate of Insurance

Purchase Order Only

• Binding Contract between the University and the
  Supplier
• Requires SOW
• Agreement requires submission Certificate of
  Insurance

Agreement
Note http//procurement.columbia.edu/purchasing/h
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Why a PO versus PO Service Agreement?

• Risks varies from a Service Agreement because of
  the type of services being rendered (SA)
• Service Agreements have flexibility to negotiate
  terms/conditions (SA)
• Insurance Requirements (PO, SA)
• Validate authorization, charges the appropriate
  accounts and gives the approval for the purchase
  (PO, SA)
• It is the ONLY mechanism to encumber the funds
  (PO)
• It helps keep track of these type of agreement
  relationships (PO)
• It is the best way to administer centrally on a
  systemic basis (PO)

Note http//procurement.columbia.edu/purchasing/h
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The Process to Submit an Order for a Service
Provider

• All orders (Purchase Requisitions) are processed
  through the Financial Front End (FFE) system and
  require a DAF to Provide Approval for the Order
• Once you submit your transaction, a Central
  Purchase Order Requisition will be provided to
  you electronically.
• Refer to the Requisition Checklist for ALL the
  Supporting Documentation Needed for a NEW
  Requisition
• Pink Existing Suppliers in Purchasing System
  even though worked with supplier previously.
• Blue Depending on the Threshold
• Green Access Patient Health Information
• Once a PO is generated, you will be able to pay
  the Service Provider

Requisition Checklist
Approved Requisition DAF Authorization Valid Certificate of Insurance (COI) for Service Agreements Only Signed Agreement by Supplier does not apply to PO only Commodities Scope (Statement) of Work (SOW) RFP Summary Sheet Sole/Single Source Justification (Greater than 25K) Independent Contractor Verification Worksheet (does not apply to LLC or Incorporated Suppliers) aka Consultant Worksheet Resume/Company Brochure Vendor Questionnaire (refer them to Purchasing Website - For Vendors If Applicable, Business Associates Addendum signed by CU Medical Center Compliance Officer
Accuracy is Key, so Make Sure ALL Documents are
Submitted to Purchasing for Timely Turn Around
for a PO
Note http//procurement.columbia.edu/purchasing/h
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Forms/ Supporting Documents
Document What is Included What to do
Scope of Work (SOW) Clearly outline what you are buying, when, how and where prior to the start of service delivery key to a successful engagement with your supplier Scope of Services Requested Detailed Description of Services Objective If applicable, key Deliverables (Phases) Resources to complete the Scope What is the final product/service? Payment Terms Signatures Go to the Purchasing website for access to the standard SOW template. This must be used for Service Providers that are only required to use a Purchase Order and Service Agreement.
Vendor Questionnaire Provides data regarding the vendor that has been input and verified by Purchasing. This on-line form is to be completed by all vendors that have not been used previously through the Purchasing system or are making updates to their information. Provide your vendor with the site address or contact Purchasing so that we are able to contact the vendor for updates. http//procurement.columbia.edu/purchasing/qualification/index.html
Client List Provides a list of the vendors current and past clients. Customer listing provided by vendor. This enables us to verify that Columbia is not the only customer for a vendor. This enables us to ensure that the vendor meets the IRS definition of independent contractor. Contact Purchasing for assistance.
Resume Provides extensive experience in their field Work Experience, Dates, Clients Contact Purchasing for assistance.
Brochure Provides information regarding the services available to any customer. Available via print or website Service offering Locations Key Principals Customer List Contact your vendor for access to their promotional brochure or web site.
Note http//procurement.columbia.edu/purchasing/h
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Forms What is an Independent Contractor (aka
Consultant Worksheet) Based on IRS Standards?

• A business firm or an individual that contracts
  with the University to provide services for which
  the University controls or directs at most the
  result of the service, not the means and methods
  of accomplishing the result.
• Independent Contractor Certification
• According the IRS, should the Service Provider be
  treated as an employee or an Independent
  Contractor? (Payroll Tax Withholding)
• New York State withholds Workers Compensation and
  Unemployment Tax Withholding
• Before the performance of services commence,
  departments contracting for services must assess
  the relationship with the individual providing
  services to ensure that individuals hired or
  contracted to perform services are properly
  classified as an employee or an independent
  contractor.
• The three main categories for determining whether
  a relationship should be categorized as an
  employee or independent contractor are
• Behavior Control
• Financial Control
• The Individuals Relationship with the University
  

Note http//procurement.columbia.edu/purchasing/h
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IRS Litmus Test for Independent Contractor vs.
Employee
Behavioral Control
Financial Control
Type of Relationship
Financial controls are evidenced by facts that
determine whether the employer has a right to
direct or control the financial/business aspects
of the individual's business activities,
including (1) the extent to which the individual
is reimbursed for business expenses, (2) the
extent of the individual's investment in the
business and whether a profit or loss is
realized, (3) the extent to which the individual
offers similar services to the relevant market,
and (4) how the employer pays the individual,
such as hourly, salary, or a flat fee.
The relationship between the individual
performing services and the employer is evidenced
by examining how the employer and the individual
perceive their relationship, including (1)
whether a written contract exists explaining the
employer's and individual's intent, (2) the
provision of, or lack of employee benefits, (3)
the permanency of the relationship, (4) the right
to terminate the relationship, and (5) the extent
to which services are performed that are a part
of the employer's regular business activities..
Behavioral controls are evidenced by facts that
determine whether the employer has a right to
direct and control how the individual performs
the tasks for which the individual is hired,
including the type of instructions the employer
gives the individual and how the individual
obtains training for providing such
services.
- An employee must comply with instructions about
when, where, and how to work. Even if no
instructions are given, the CONTROL factor is
present if the employer has the right to give
instructions. - An employee can quit his/her job
at any time without incurring liability. An
Independent Contractor usually agrees to complete
a specific job and is responsible for its
satisfactory completion, or is legally obligated
to make good for failure to complete it.
Note http//procurement.columbia.edu/purchasing/h
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Insurance Requirements Commercial vs.
Professional
Professional Liability
Commercial General Liability

• Designed to pay for economic damages caused by
  negligent acts, errors or omissions for which
  youre legally liable.
• Protects you if, in your professional capacity,
  you do or fail to do something that causes
  financial loss to a third party.
• Covers professionals as Doctors, Lawyers,
  Executive Search, Accountants, Data Analysis,
  PR/Marketing, Web Designers

• Provides coverage for your business if an
  individual or another business claims your
  company or your employee was negligent and
  responsible for bodily injuries, property damage,
  financial loss, personal injury or advertising
  inquiry
• Contractual Liability
• Breach (Confidentiality, SOW)
• Pays for Defense Costs

Examples A visitor could slip, a competitor
could sue for false advertising, a client could
sue for damage to their property value while in
your care, a former client could sue for libel or
slander
Examples Failure to perform services as
requested or design, misrepresentation, failure
to make recommendations, breach of client
confidentiality, unintentional dissemination of
false or misleading info.
Note http//procurement.columbia.edu/purchasing/h
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Insurance Requirements Umbrella Policy
Umbrella Insurance
Commercial General Liability

• Is an option that can be utilized by Service
  Providers in the event their primary Commercial
  General Liability and Automobile are not
  sufficient to meet University requirements.
• An example if the Service Provider has 500K in
  CGL and AL and the CU requires 1MM, Service
  Provider can purchase an additional 500K
  Umbrella Policy that would cover both.

Automobile
The Purpose of Insurance is to Mitigate and
Manage Risk to the University which Will Not be
Waived.
Note http//procurement.columbia.edu/purchasing/h
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Sample ACORD Certificate of Insurance (COI)

• A Certificate of Insurance is an articulation of
  a firms coverage.
• Purchasing will need an updated COI for each
  Requisition even though the supplier is
  performing multiple projects for the University
• The COI is renewed on an annual basis
• Per Service Provider Agreement, Section Titled
  Insurance, 1(a), Products and completed
  operations insurance shall be maintained for 3
  years following termination of this Agreement.
• The last two sections must read

PO Suppliers will not be Required to Provide a
COI however, this will not Release them of the
Obligation to carry the Appropriate Coverage
Note http//procurement.columbia.edu/purchasing/h
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Process Flow Purchase Order and Standard
PO
Standard
A clearly defined Statement (Scope) of Work is
needed for both.
Note http//procurement.columbia.edu/purchasing/h
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Process Flow Custom
Custom
A clearly defined Statement (Scope) of Work is
needed for both.
Note http//procurement.columbia.edu/purchasing/h
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What is a Change Order?
Four Types of Change Orders
Change Orders
Change Order 1
Change Order 2

1. Agreements will not be extended beyond 3 years
   regardless if services remain the same.
2. Make Sure you provide detailed supporting
   documentation
3. Ensure Certificate of Insurance is up-to-date

Extension to the Period of Performance
Increase in Dollar Value, same Scope
Change Order 4
Change Order 3
Change in Language of the Executed Agreement
Extension to Period and Increase
NOT Change Order

• Example
• Valid CO Executive Search Firm Change Order
  where the Salary is Higher than Expected or the
  Search takes longer.
• Invalid CO If it is a New search, a New
  Requisition will need to be processed with New
  Support Documentation.

Changes in SOW beyond Original Scope
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Process Flow Change Order and Financial
CO
Financial
Note http//procurement.columbia.edu/purchasing/h
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University-wide Purchasing Agreements
(UwPA)/Master Agreements

• What are UwPAs?
• Negotiated or bid contracts with select vendors
• Best value
• No need for additional bids
• For a complete listing of all UwPAs, visit
• http//www.columbia.edu/purchasing/purch/pv_list.
  html
• What are Master Agreements?
• These are agreements where the contract terms
  conditions have been negotiated and on file with
  Purchasing
• This does not preclude the competitive bidding
  process and is required for these agreements, but
  if awarded only a standard University Scope of
  Work document is required as supporting
  documentation to the request.

Always BEST to Refer to the UwPAs when Possible
for Savings!
Note http//procurement.columbia.edu/purchasing/h
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Changes For 2009 Service Providers Transaction
Process
Greater Collaboration
Improved Communications
Refined Processes

• Purchasing will work with Schools and Departments
  to ensure the proper documentations are completed
  to ensure a timely PO issued for purchases

• Require Requisitions to be submitted PRIOR to
  work starting
• PO specific Service Providers
• Continue to Evaluate Alternative Processes

• Purchasing will be offering training to
  individuals to ensure support documents are
  precise and to expectation to avoid any
  bottlenecks in the process

Go to the Service Provider Website which Provides
Necessary Documents and Insight
Note http//procurement.columbia.edu/purchasing/h
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Purchasing Will Support You With A Range Of
Project Management Activities
From the Purchasing Office Service Agreement
Team, you can expect
Weekly Requisition Status
Management Plan of Overall Process for Sourcing a
Need
Check-Ins with the Transactions
Support for Onboarding and Training
Update WebPur with Notes
Ad-Hoc Transaction Support
Update on Open Questions
Were All In This Together!
Note http//procurement.columbia.edu/purchasing/h
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How do I Submit Documentation to Purchasing?

• Through one of 3 methods
• BEST Email documents to Purchasing using the
  Fax Server
• Email to purchsrv_at_columbia.edu
• Indicate ONLY the Purchase Requisition Number
  (RAXXXX) in the Subject Line of the email (Add
  sample email)
• Attach all supporting documents
• GOOD Fax documents to Purchasing Using the Fax
  Server.
• Fax number 212-854-2699
• Fax coversheet http//www.columbia.edu/purchasing
  /forms/pdf/faxcoverletter.pdf
• LEAST Inter-campus Mail or Dropping it off at
  the Purchasing Office

Please Make Sure to Include Requisition Number on
Fax Sheet and Make Copies
Note http//procurement.columbia.edu/purchasing/h
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Update Your Contact Lists for Service Agreements!

• Name Email Phone Number
• Carlos Arias caa2130_at_columbia.edu
  212.851.7346
• Fatima Suarez fs2257_at_columbia.edu
  212.854.7551
• Joe OBrien j.obrien_at_columbia.edu
  212.854.3664

Service Provider Team
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Need Information?

• Available Resources to Assist You
• Purchasing Website http//www.columbia.edu/purch
  asing
• Complete Listing of UwPAs
• News Updates
• Library of Standard University Forms
• Link to Accounts Payable Procedures
• Link to WebPur
• Link to Risk Management Website
• Purchasing Policies and Guidelines

Note http//procurement.columbia.edu/purchasing/h
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