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XIII. Procurement of Professional Services

  1. PROFESSIONAL SERVICES CONTRACTS (SUBCONTRACTS)

    Professional service subcontracts must be developed and implemented whenever the subrecipient uses professional fees from an Office of Criminal Justice Program (OCJP) grant award to pay for direct services to clients that the subrecipient’s staff will not provide. 

    Types of Subcontracts:

    Project Based Professional Service Subcontracts: OCJP requires subrecipients to use professional service subcontracts when a subrecipient is planning to subcontract with one provider to carry out multiple pieces of the OCJP funded project. For example, a City may subcontract with a local nonprofit agency to fulfill service expectations of their overall grant funded project. Project based professional service subcontracts require a detailed annual budget to be submitted for each year of the subcontract.   Project Based Professional Service Subcontracts require the use of the Subcontract Monitoring Form (Appendix F) for oversight purposes.  See Section D of this chapter.

    Fee for Service Subcontracts: OCJP requires subrecipients to use professional fee for service subcontracts for direct services to clients such as counseling services, nursing services, etc. when these services are not provided by subrecipient staff.  Professional fee for service subcontracts do not require a detailed annual budget to be submitted for each year of the subcontract; budget information is only required in the payment Terms and Conditions section of the subcontract.  Subrecipients are required to provide oversight of Fee for Service Subcontracts according to Section D of this chapter, however, the use of the Subcontract Monitoring Form (Appendix F) is not required.

    Subrecipients must secure professional services through competitive bidding or the use of competitive negotiation. All Requests for written Proposals (RFPs), Invitations to Bid, or other competitive bidding processes and documents are subject to prior written authorization of OCJP before being undertaken by the subrecipient. For more information concerning non-profit competitive bidding for professional services go to Section 5 of the Accounting and Financial Reporting for Not-For-Profit Recipients of Grant Funds in Tennessee.

    The subrecipient agency must submit a draft of the professional services subcontract to the agency’s OCJP Program Manager, for prior written authorization. Additionally, a detailed description of the competitive bidding process, if required by the authorizing agency, used for that professional services subcontract is to be submitted to the agency’s OCJP Program Manager. Subrecipients may draft subcontracts for multi-year service cycles but any changes to that subcontract during the life of the subcontract must be submitted to the agency’s OCJP Program Manager for prior authorization. Subrecipients using subcontracted professional services must be in compliance with all IRS requirements.

    Subcontracts must be authorized by OCJP Program Manager before an agency may execute the subcontract; the prior authorization process must occur before the start date of the subcontract. After the OCJP Program Manager has reviewed and authorized the draft of the professional services subcontract, the subrecipient may acquire the appropriate signatures on the subcontract. OCJP may withhold reimbursement payment for professional services if the agency did not request authorization of the subcontract before the start date of the subcontract.

    ** The subrecipient must submit a copy of the signed professional services subcontract to the agency’s OCJP Program Manager.  **

    Subrecipient agencies are accountable to OCJP for the work and performance of their Contractor as procured through a professional service subcontract. Professional service subcontracts must include annual budget information for each year that the subcontract is in effect. Project based professional service subcontracts require a detailed annual budget to be submitted for each year of the subcontract. Professional fee for service subcontracts do not require a detailed annual budget to be submitted for each year of the subcontract; budget information is only required in the payment Terms and Conditions section of the subcontract. Subrecipients must keep a file, on-site, that includes the original professional service subcontract and approved budget information. 

    OCJP does not review professional service subcontracts for agency services such as data entry, accounting services, cleaning services, lawn services, etc.  If the OCJP grant fund source allows payment for these agency services, OCJP will not require a copy of the professional service subcontract the agency may have with its provider for these services.

    Subrecipients should include professional service subcontract costs in the Professional Fees budget line.
     
  2. PREPARING A PROFESSIONAL SERVICE CONTRACT (SUBCONTRACT)

    See Appendix E OCJP Required Subcontract Language
     
  3. CONSULTANT RATES OF PAYMENT 

    Consultant rates of payment are to be reasonable and consistent with fees for similar services in the market place.  The consultant rate maximum limit is $650 per day or $81.25 per hour for new consultant rate agreements executed on or after June 1, 2014. This does not mean that the rate can or should be the maximum limit for all consultants. Consultant rates should be consistent with current market value for the service.  The consultant rate agreement file must contain a documented market analysis and justification of the agreed upon rate.

    Consultant rate agreements negotiated and executed prior to June 1, 2014 require prior OCJP approvaif market conditions necessitate a rate exceeding the current rate located in the subrecipient consultant agreement or in excess of $450 per day.

    Consideration will be given to compensation including fringe benefits for those individuals whose employers do not provide the same.  In addition, when the rate exceeds the maximum daily rate allowed (excluding travel and travel-related costs – see Chapter IX - Travel of the OCJP Administrative Manual for more information regarding travel regulations and travel-related costs), prior written authorization from OCJP is required.

    The term daily rate refers to an eight-hour day. An eight-hour day may include preparation, evaluation, and travel time in addition to the time required for actual performance.  Please note, however, that this does not mean that the rate can or should exceed the maximum daily rate allowed by the fund source for all consultants.  Rates should be established on a case-by-case basis and must be reasonable and allowable in accordance with OMB cost principles. Consultant daily rates greater than the maximum daily rate allowed by the fund sourcewhich are part of the original application and that contain appropriate justification and supporting data will be approved on a case-by-case basis.

    1. Consultants associated with Educational Institutions:  The maximum rate of compensation that will be allowed is the consultant’s academic salary projected for 12 months, divided by 260.  These individuals normally receive fringe benefits which include sick leave for a full 12-month period even though they normally only work nine months per year in their academic positions.
       
    2. Consultants Employed by Local Government:  Compensation for these consultants will only be allowed when the unit of government will not provide these services without cost.  If a local government employee is providing services under a Federal grant and is representing their agency without pay from their respective unit of government, the rate of compensation is not to exceed the daily salary rate for the employee paid by the unit of government.  If the local government employee is providing services under a Federal grant and is not representing their respective agency, the rate of compensation is based on the necessary and reasonable cost principles.
       
    3. Independent Consultants:  The rate of compensation for these individuals must be reasonable and consistent with that paid for similar services in the market place.  Compensation may include fringe benefits.  Resources to determine current market value include:
      1. Competitive contract bids
      2. The Bureau of Labor Statistics Wage Data by Area and Occupational website.

      Subrecipients should include speaker fees in the Travel, Conferences and Meetings budget line.  Subrecipients with conferences or meetings with speakers compensated with grant funds must complete a Notification of Speaker Agreement (See OCJP Appendix N: Notification of Speaker Agreement) submit this documentation to OCJP 15 days prior to the event. Refer to Chapter  IX  Travel, Conferences and Meetings for more information.

  4. OVERSIGHT OF A PROFESSIONAL SERVICE CONTRACT (SUBCONTRACT)

    Professional services subcontract oversight is a key priority for the distribution of federal funds.  Subrecipients must have a process for approving, revising, and monitoring professional service subcontracts.  Monitoring policies should clearly address both program and fiscal monitoring of professional services subcontracts. 

    The Subcontract Monitoring Form (Appendix F) should be used to record appropriate test work and conclusions and retained as evidence of monitoring grant funded Project Based Professional Service Subcontracts.  Subcontract monitoring must be conducted by the agency within 6 months of the subcontract start date and then again periodically for multi-year Project Based Professional Service Subcontracts.  The completed form should be retained in the grant file and available for inspection by OCJP staff.

    State agencies should follow and use state and internal monitoring policies and forms.

    1. Programmatic Monitoring – Determines if service delivery is consistent with subcontract provisions.  Programmatic monitoring may include any or all of the following:
      1. Reviewing the subcontract to determine what service the subcontract is to provide and if this service is being provided;
      2. Reviewing the subcontractor’s reports and other materials to determine if services are being provided;
      3. Interviewing direct services delivery staff and others to determine if the services are being performed according to the contract, and/or
      4. Conducting on-site reviews to check the nature and quality of the services being provided.
    2. Fiscal Monitoring – Examines the subcontractor’s financial records and procedures as they pertain to the subcontract.  Fiscal monitoring may include any or all of the following:
      1. Reviewing the subcontractor’ invoices to the subrecipient agency;
      2. Comparing the subcontract budget to the actual costs;
      3. Obtaining reasonable documentation that services billed were actually delivered according to the contract; and/or Comparing invoices with supporting documentation to determine that costs were allowable.

This Page Last Updated: November 20, 2017 at 10:35 AM