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Hire Purchase Agreement Sample document sample

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									How to Hire a Service Provider
Training Agenda

 Guide Users through New and Improved Website

 Update the Schools and Departments with the new Agreements in place and
  where they can be found on our Website

 Purchasing Role

 Who is considered a Service Provider

 Services Agreement Process

 Review the Existing/New Forms

 What is an Independent Contractor

 Highlight the Insurance Requirements for ALL Service Providers

 Review Commodity Codes – 70+



2
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 agreement‟s to conclusion

 Departments having contract questions from suppliers should contact
  Purchasing for review and commentary

 Purchasing coordinate‟s between the University and the supplier
  during contract negotiations




               We Have a Shared Responsibility in the Process
 3
Why do we have Purchasing Policies, Practices and
Processes?

                                                                                Employ Best Business
                                                                                Practices

                                                                   Create Opportunity
                                                                   Spend Dollars Wisely


                                             Reduce Liability
                                             Reduce Reputational Risk


                      Meet Audit Requirements
                      Meet IRS Regulations

 Comply with Various
 Government Organizations
 (e.g. FAR, OMB, etc)

        Statutory                                                                         Value for Money
      Requirements

 4
FAR – Federal Acquisition Regulation: Basic Rulebook for Government Contracts
OMB – The Office of Management and Budget
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.”


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
 Short-term casual employment is limited to a maximum of 560 hours in a rolling twelve-
  month period

  5
Sample Service Providers



                           “Service Provider”

                                    Web
     Engineers                    Designers                  Strategic
                                               Business     Consultants
                       Graphic                Consultants
                      Designers

    Architects
                                  Auditors                    PR &
                                                            Marketing
                 Accountants                  Engineers




6
Service Agreements Process
                                               Option
                                               Review


     Defining Your         Sourcing Your                Finalizing an
        Needs                 Needs                      Agreement            Purchase Order




Developing            University Wide List      Negotiating Terms        Creating a
 Statement of Work,     (UwPA)                     and Conditions            Requisition
 Time Lines, Quality   Identifying Vendors       Getting Necessary        Obtaining approvals
 & Service                                         Signatures                such as Prior
 requirements, etc.    Obtaining Bids                                       approvals, DAF and
                                                  Ensuring Insurance        Sole/Single Source
Contact the           Confirming Order           Requirements are          Approval
 Purchasing Office                                 Met
                       Validating Vendor                                   Reviewing with
 for Advice and                                   Resolving Intellectual    Purchasing
 Review                                            Property Issues           including
                                                                             Compliance and
                                                                             Exceptions

 7
If a Vendor wants to make changes to a Contract…
   Department/School needs to contact Director for Service Agreements to request a
    Word Version of Service Agreement
   Department/School to provide Supplier Contact Information, Department/School
    Main Contact for the Engagement and a Scope of Work (To ensure correct Service
    Agreement is being used)
   Purchasing will send Word Version of Service Agreement to Supplier and cc
    Department/School contacts (Main Contact and the person processing the
    Requisition)
   Supplier to make edits for audit trail purposes to ensure understanding of changes
    for Purchasing
   Supplier will return to Purchasing directly for review
   Purchasing will communicate with Supplier for negotiations and provide a separate
    email to Department/School of status, as appropriate
   Once finalized, Purchasing will send final version to Department/School and
    Supplier
   Supplier will send signed copy to Department/School for submission for Requisition
8
Purchasing Bid and Justification Policies
                     •   Requires one of the following:
                     •   Written Bid(s)
     $1 - $24,999    •   Proposal(s)
     (non-UwPA)
                     •   Quote(s)




                     • Three Written Bids, Quotes or Proposals
                     • Single/Sole Source form must be approved by Senior Level Officer in
$25,000 or Greater     the department prior to submission to Purchasing at this dollar
     (non-UwPA)        threshold.
                     • Make sure your justification clearly defines WHY you chose to
                       Sole/Single source and provide a clear cost reasonableness.

                                                                            • Requires:
                                             $0 and higher                  • Written quote or
                                                 UwPA                         proposal and
                                           (University wide                 • Executed Scope of
                                         Purchase Agreement)                  Work
                                         (PWC, Veritude, Apply Yourself )
 9
   Why are Agreements Important to Columbia University?
                       Indemnification          Limitation of Liability        Use of Columbia
                                                                            Confidential Information

                   To secure against loss or   Reduces Responsibility to    Protects all information
Terms/Conditions   damage and provides         determine accountability     for University and
                   compensation                of the Services performed    Supplier

                   Protects CU and Supplier    Protects CU and Supplier


                      Acceptance of              Ownership of Work             Use of Columbia
                     Deliverables/Work               Product                   University Name
                          Product

                   Ensures we get what we      Defines exclusive right to   Protects the Reputation of
                   are paying for and sets     results and the by           Columbia University
                   expectations                products of an
 Protects the                                  engagement
                   CU and Supplier to Agree
  University




    10
A Purchase Order or Agreement for my Service?

      Go to the Purchasing Website to review Service Provider
      Drop Down menu for the Commodity that Applies
                                 • Binding Contract between the
                                   University and the Supplier
      Purchase Order Only        • Requires SOW
                                 • Required upon request Certificate
                                   of Insurance

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



 11
Why a PO terms and conditions only versus PO +
Service Agreement (SA) terms and conditions?

 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)



 12
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 will be
  provided to you electronically which will allow you to pay the supplier
  through AP/CAR.
 Refer to the Requisition Checklist for necessary Supporting
  Documentation Needed for YOUR Requisition
      – Pink: Existing Suppliers in Purchasing System (CAPS)
         •   Note: Contact Purchasing if not sure if the Supplier has been set-up
             previously

      – + Blue: Depending on the $ Threshold
      – + Green: Access Patient Health Information

  Accuracy is Key, so Make Sure ALL Documents are Submitted to Purchasing for
                           Timely Turn Around for a PO
 13
Requisition Checklist
The Service Agreement Teams encourages you to print for reference for each file
submitted through FFE.

        Approved Requisition – DAF                      Independent Contractor Verification
        Authorization                                   Worksheet (does not apply to LLC or
                                                        Incorporated Suppliers) aka
        Valid Certificate of Insurance (COI) for        Consultant Worksheet
        Service Agreements ONLY
                                                        Resume, Client List and Company
                                                        Brochure (Sole Proprietors may not have a Company
         Signed Agreement by Supplier - does            Brochure/Website)
         not apply to PO only Commodities
                                                       Vendor Questionnaire (refer them to
        Scope of Work (SOW) signed by                  Purchasing Website - “For Vendors”)
                                                       International Consultants NOT
        Dept./School and Supplier
                                                       REQUIRED
                                                       If applicable, Business Associates
        RFP Summary Sheet                              Addendum, signed by CU Medical
                                                       Center Compliance Officer

        Sole/Single Source Justification (Greater      All Order Types should be “CP” for
        than $25K)                                     “Contract” when chosen in FFE



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Forms/ Supporting Documents
Document                                             What is Included                                  What to do
Scope of Work (SOW)                                  Scope of Services Requested                       Go to the Purchasing website f or access to
                                                     Detailed Description of Services Objective        the standard SOW template. This must be
Clearly outline what you are buying, when, how       If applicable, key Deliverables (Phases)          used f or Service Providers that are only
and where prior to the start of service delivery ~   Resources to complete the Scope                   required to use a Purchase Order and
                                                     What is the f inal product/service?               Service Agreement.
key to a successful engagement with your
                                                     Payment Terms
supplier                                             Signatures

Vendor Questionnaire                                 This on-line f orm is to be completed by all      Provide your vendor with the site address
                                                     vendors that have not been used previously        or contact Purchasing so that we are able
Provides data regarding the vendor that has          through the Purchasing system or are making       to contact the vendor f or updates.
been input and verified by Purchasing.               updates to their inf ormation.                    http://procurement.columbia.edu/purchasin
                                                                                                       g/qualif ication/index.html

Client List                                          Customer listing provided by vendor. This         Contact Purchasing f or assistance what
                                                     enables us to verif y that Columbia is not the    needs to be included on a client list.
Provides a list of the vendors current and past      only customer f or a vendor. This enables us to
clients.                                             ensure that the vendor meets the IRS
                                                     def inition of INDEPENDENT CONTRACTOR.

Resume                                               Work Experience, Dates, Clients                   No action necessary, standard resume
                                                                                                       f ormat.
Provides extensive experience in their field
Brochure                                             Service Of f erings                               Contact your vendor f or access to their
                                                     Locations                                         promotional brochure or web site.
Provides information regarding the services          Key Principals
available to any customer. Available via print       Customer List
or website

 15
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.”
    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 for an EMPLOYEE
    Independent Contractor Questionnaire Worksheet Certification

    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:

         –   (1) Behavior Control (2) Financial Control (3) Individual’s Relationship with the University




    16
IRS Litmus Test for Independent Contractor vs.
Employee
     Behavioral Control                        Financial Control                      Type of Relationship
Behavioral controls are evidenced       Financial controls are evidenced by     The relationship between the
by facts that determine whether the     facts that determine whether the        individual performing services and
employer has a right to direct and      employer has a right to direct or       the employer is evidenced by
control how the individual performs     control the financial/business          examining how the employer and
the tasks for which the individual is   aspects of the individual's business    the individual perceive their
hired, including the type of            activities, including:                  relationship, including
instructions the employer gives the
individual and how the individual       (1)   the extent to which the           (1)   whether a written contract
obtains training for providing such           individual is reimbursed for            exists explaining the
services.                                     business expenses,                      employer's and individual's
                                        (2)   the extent of the individual's          intent
                                              investment in the business        (2)   the provision of, or lack of
                                              and whether a profit or loss is         EMPLOYEE benefits
                                              realized                          (3)   the permanency of the
                                        (3)   the extent to which the                 relationship
                                              individual offers similar         (4)   the right to terminate the
                                              services to the relevant                relationship,
                                              market                            (5)   the extent to which services
                                        (4)   how the employer pays the               are performed that are a part
                                              individual, such as hourly,             of the employer's regular
                                              salary, or a flat fee.                  business activities..



17
Examples of an “Employee” vs. “Independent
Contractor”
    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.
    An EMPLOYEE„S services are integrated into the business operations because the services are important
     to the success or continuation of the business. This shows that the EMPLOYEE is subject to direction
     and control.
    An EMPLOYEE works for an employer who hires, supervises, and pays assistants. An INDEPENDENT
     CONTRACTOR hires, supervises, and pays assistants under a contract that requires him/her to provide
     materials and labor, and to be responsible only for the result.
    An EMPLOYEE has a continuing relationship with an employer. A continuing relationship may exist
     where work is performed at frequently recurring, although irregular, intervals.
    An EMPLOYEE has set hours of work established by an employer. An INDEPENDENT CONTRACTOR is
     the master of his/her own time
    An INDEPENDENT CONTRACTOR is free to work when and for whom he/she chooses.
    An EMPLOYEE works at a location or on a route designated by an employer. Generally an INDEPENDENT
     CONTRACTOR would not be required to work at a location designated by the contractor, unless required
     by the nature of the work to be performed.




18
Insurance Requirements: Commercial vs.
Professional
     Commercial General Liability                                       Professional Liability

     • Provides coverage for your                               • Designed to pay for economic
       business if an individual or another                       damages caused by negligent
       business claims your company or                            acts, errors or omissions for which
       your EMPLOYEE was negligent                                you’re legally liable.
       and responsible for bodily injuries,
                                                                • Protects you if, in your
       property damage, financial loss,
                                                                  professional capacity, you do or
       personal injury or advertising
                                                                  fail to do something that causes
       inquiry
                                                                  financial loss to a third party.
     • Contractual Liability
                                                                • Covers professionals as Doctors,
          •Breach (Confidentiality, SOW)                          Lawyers, Executive Search,
                                                                  Accountants, Data Analysis,
     • Pays for Defense Costs
                                                                  PR/Marketing, Web Designers



 Examples: A visitor could slip, a competitor could sue       Examples: Failure to perf orm services as requested or
 f or f alse advertising, a client could sue f or damage to   design, misrepresentation, f ailure to make
 their property value while in your care, a f ormer client    recommendations, breach of client conf identiality,
 could sue f or libel or slander                              unintentional dissemination of f alse or misleading inf o.

19
Insurance Requirements: Umbrella Policy



                        “Umbrella Insurance”

                                      Is an option that can be utilized by Service
           Commercial
            General
                                       Providers in the event their primary Commercial
            Liability                  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,
           Automobile                  Service Provider can purchase an additional
                                       $500K Umbrella Policy that would cover both.



 The Purpose of Insurance is to Mitigate and Manage Risk to the University which
                               Will Not be Waived.
 20
Sample ACORD Certificate of Insurance (COI)

    A Certificate of Insurance (COI) 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

    Renewed on an annual basis

    PO Suppliers are not required to
     provided a COI however, this will not
     release them of the obligation to carry
     the appropriate coverage(s)

    The last two sections must read…




21
Process Flow – Purchase Order and Standard
     PO




Standard




           A clearly defined Statement (Scope) of Work is needed for both.

22
Process Flow – Custom

 Custom




          A clearly defined Statement (Scope) of Work is needed for both.

23
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                       Extension to the        Increase in Dollar
      services remain the                       Period of Performance   Value, same Scope
      same.
 2.   Make Sure you provide
      detailed supporting                         Change Order 3          Change Order 4
      documentation
                                                                        Change in Language
 3.   Ensure Certificate of                     Extension to Period
                                                                        of the Executed
      Insurance is up-to-date                   and Increase
                                                                        Agreement


Example:                                                    NOT Change Order
• Valid CO: Executive Search Firm Change
   Order where the Salary is Higher than
   Expected or the Search takes longer.                     Changes in SOW
• Invalid CO: If it is a New search, a New                  beyond Original Scope
   Requisition will need to be processed with
 24New Support Documentation.
Process Flow: Change Order and Financial
  CO




Financial




 25
Changes For Service Providers Transaction Process
         Greater                     Improved                        Refined
       Collaboration               Communications                   Processes




• Purchasing will work with   • Purchasing will be           • Require Requisitions to
  Schools and Departments       offering training to           be submitted PRIOR to
  to ensure the proper          individuals to ensure          work starting
  documentations are            support documents are
                                                             • PO specific Service
  completed to ensure a         precise and to
                                                               Providers
  timely PO issued for          expectation to avoid any
  purchases                     bottlenecks in the process   • Continue to Evaluate
                                                               Alternative Processes




  26
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




       Update on Open Questions                        Ad-Hoc Transaction Support


           We‟re All In This Together to help Expedite the Process for a PO!
27
How do I Submit Documentation to Purchasing?
Through one of 3 methods:
 BEST: Email documents to Purchasing using the Fax Server
          –   Email to purchsrv@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 Make Copies
 28
Bottle Necks which delay the Process for a PO to be
created – Purchasing‟s Average is 12 Business Days

    Agreements signed by an unauthorized Columbia University (CU) EMPLOYEE:                                              Only
     those designated by the University Trustees are permitted to Sign Agreements on behalf of Columbia

    Scope of Work not accurately completed or signed:                        The Department/School hiring the Service
     Provider must countersign. Purchasing does not sing SOW since we are not agreeing to deliverables

    Certificate of Insurance:           It is important the COI is accurately completed (refer to slide 19) and the correct
     Insurance coverage are captured for the respective Commodity. Please double check the requirements on the website.

    Sole Source Justification:             Please make sure it clearly justifies why this provider is the only one who can
     perform the services and the cost reasonableness since it was not competitively bid.

    Vendor Questionnaire not completed:                      All Vendors must complete, if the provider does not have an EIN,
     then Social Security Number should be used

    Correct version of the contract not being used:                        Please disregard files saved on your hard drive and
     use the ones on our website since they continuously are updated

    Business Associates Addendum:                      Make sure the supplier and the person on the BAA from CU perspective
     has signed it prior to submission

    Dollar Value on Requisition:               Make sure the dollar value of the Requisition matches the SOW value

    Proper Use of Agreements versus a PO only:                     If you are not sure, please contact one of us on the Service
     Agreements team to assist



29
 Update Your Contact Lists for Service Agreements!

           Name                   Email            Phone Number



           Joe O‟Brien     j.obrien@columbia.edu    212.854.3664



Service
           Fatima Suarez   fs2257@columbia.edu      212.854.7551
Provider

Team
           Carlos Arias    caa2130@columbia.edu     212.851.7346




   30
Additional Information You May Need from Purchasing

 Purchasing Website: http://www.columbia.edu/purchasing

 Complete Listing of University wide Purchasing Agreements

 News Updates

 Library of Standard University Forms

 Link to Accounts Payable Procedures

 Link to WebPur

 Link to Risk Management Website

 Purchasing Policies and Guidelines

 Team Leaders for Purchasing


31
FFE REQUISITION PROCESS
     SCREEN SHOTS
Financial Front End System (FFE) Requisition Process




         “PO TYPE”
STEPS:

1.    All Service Agreements
      “CP” so choose
      “CONTRACT”

2.    Enter Period of
      Performance “Start” and
      “End” Dates




 33
FFE…
 “ACQUISITION TYPE”
1.    All Service Agreements
      “BUY”

     “PURCHASE TYPE”
1.    Choose any of the “first”
      four

          Competitive – Did you
           competitively bid for the
           services?

          Sole – Is the Service
           Provider the only one
           who can perform these
           services?

          Preferred – Does the
           Service Provider have a
           negotiated Agreement?

          Single – Use if you
           answered “NO” to the
 34        first three “Purchase
           Types”
FFE – ALL Service Agreements have Supporting
Documents




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