About Professional Service Contracts
The Professional Services Contract (PSC) is used to formalize and document a relationship between an independent contractor and the university. It is to be used for unique, professional, or technical services that are predominantly intellectual in nature, require specialized knowledge, and are part of a specific project—not ongoing.
It is intended for use with independent contractors (IC) who are U.S. citizens or resident aliens (a Green card copy is required) and where the contract value is greater than or equal to $600. In general, an individual is an IC if the university has the legal right to control or direct only the results of the work and not the means and methods of accomplishing the result. An individual who performs services that are subject to the will and control of the university regarding what must be done and how it must be done, is an employee and should be paid via MSU Payroll.
A PSC and requisition are no longer needed when paying honoraria, speaker, or performer fees. Payments for these specific services can be processed on a DV along with a completed Honoraria/Speaker/Performer Checklist. See Section 71 of the MBP for more information.
The system process for a Professional Services Contract is no different than a regular requisition and purchase order—all approvals must be acquired through the Finance System. Additional requirements:
- In the Document Overview tab of the requisition, include “PSC” in the Document Description field.
- In the Vendor tab of the requisition, search and select the name of an approved vendor from the vendor lookup.
- In the Items tab of the requisition, enter the quantity or non quantity item as appropriate.
- An example of a quantity item would be a service with an hourly rate.
- An example of a non-quantity item would be lump sum payment(s).
- Enter the full description of PSC services in the Item Description field.
- In the Payment Information tab of the requisition, include the PSC start and end dates.
- In the Additional Institution Info tab of the requisition, enter an amount in the PO Total Cannot Exceed field, if applicable.
- In the Notes and Attachments tab of the requisition, attach the appropriate forms for review.
- The completed and signed PSC form that does not include sensitive data or SSN.
- Sole/single source justification letter if the total is over $15,000.
- Scope of work, quote, proposal, or other documentation provided by the supplier.
PSC Invoice Processing
- Send invoices directly to Accounts Payable with the PO number referenced.
- Invoice documents will route directly back to the fiscal officer for approval, using the Finance System workflow.
- The Finance System workflow requires AP to upload an invoice which routes back to the fiscal officer after transaction is initiated.
The PSC form has been amended to disallow sensitive data such as social security numbers. You may obtain this information and send it via campus mail to Purchasing or call (517) 355-0357.
All Contract and Grant Administration approvals happen at the purchase order level.