There may be times when it is more appropriate to pay another institution/organization via a professional services agreement, rather than a subcontract. If the former situation applies, the institution/organization is called a vendor. In your budget and budget justification, list this payment under Other Direct Costs rather than on the line for subcontracts.
What is the definition of a professional service?
Professional services can be defined as unique, technical, and/or infrequent functions performed by an independent contractor/vendor qualified by education, experience, and/or technical ability to provide services.
- In most cases, these services are of a specific project nature, and are not a continuing, ongoing responsibility of the institution.
- The services rendered are predominately intellectual in character, even though the contractor may not be required to be licensed.
- Examples of professional services typically utilized include laboratory analyses, project/program evaluation, marketing analysis, auditing, statistical analysis, translation services, website and software development/design, and editing services.
Subcontractor vs. Vendor
An organization is considered to be a subrecipient of an award (or subcontractor) when it:
- Determines who is eligible to receive financial assistance;
- Has its performance measured against whether the objectives of the program are met;
- Has responsibility for programmatic decision-making;
- Has responsibility for adherence to applicable program compliance requirements;
- Uses the funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.
In contrast, an organization is considered a vendor when it:
- Provides goods and services within normal business operations;
- Provides similar goods and services to many different purchasers;
- Operates in a competitive environment;
- Provides goods or services that are ancillary to the operation of the program;
- Is not subject to compliance requirements of the program.
- ASU Policy Manual
- Buy out
- Conflict of Interest at ASU and in the UNC system
- Export Controls
- External Professional Activities for Pay
- Faculty Handbook
- Human Subjects, Payments, and Recruitment
- IP Transfer
- Recombinant DNA
- Radiation Safety
- Responsible Conduct of Research
- UNCSO Masters/Policy
- Unmanned aircraft (Drones)
- Policy 602.10 Supplemental Pay