• Consulting Contracts Policy and Procedures Guide

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The University of Texas System
Business Procedures Memorandum
43-04-98
Consulting Contracts Policy and Procedures
Guide
Background
Current law has established eleven oversight requisites for agencies using consultants, and since different
sources have promulgated these requisites, the distinctions among them are not always obvious. The
oversight requirements, along with informational and explanatory comments pertinent to their
accomplishment, are provided in the Attachment.
Policy and Contract Award Requirements
It is the policy of The University of Texas System that all consulting contracts be awarded in accordance
with the provisions of the following state statutes and relating rules and guidelines promulgated by the
Governor's Budget and Planning Office and the State Comptroller:
Texas Government Code, Sections 2254.021 - 2254.040;
Notice to State Agencies - Consulting Services Contracts (current version dated
January 30, 1995);
Governor's Budget and Planning Office Letter of November 17, 1993
Regarding Requirements for Consultant Contracts; and
Current General Appropriations Act, Article IX, Section 52 and Section 92
Definitions
The definitions provided below are those found in the statutes which determine the review requirements
for consultant contracts:
"Consultant" means a person that provides or proposes to provide a consulting
service. The term includes a political subdivision but does not include the
federal government, a state agency, or a state governmental entity.
"Consulting services" means the service of studying or advising a state agency
under a contract that does not involve the traditional relationship of employer
and employee. Consulting services as used in Texas Government Code
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2254.021 - 2254.040 has generally been interpreted to mean services which
include study and advice with respect to some aspect of an agency's operations
or management. Most contracts which are not professional services or routine
services are consulting services. It is possible, however, for a one-time
non-routine service to be a true service, rather than a consulting service, so long
as the elements of studying and advising the agency as to an aspect of agency
operations or management are not present.
"Major consulting services contract" means a consulting services contract for
which it is reasonably foreseeable that the value of the contract will exceed
$15,000.
The following definition has been provided to help alleviate the confusion
that sometimes occurs in the employment of consultants and other
providers of professional services.
"Professional Services" as defined in Texas Government Code, Section
2254.002 means those services performed within the scope of practice, as
defined by state law, of accounting; architecture; land surveying; medicine;
optometry or professional engineering, or provided in connection with the
professional employment or practice of a person who is licensed as a certified
public accountant; an architect; a land surveyor; a physician (including a
surgeon); an optometrist or a professional engineer.
In addition to the professions listed above, Texas Government Code, Section
2254.024 has exempted the following practitioners of professional services
from the consulting service rules: a private legal counsel, an investment
counselor, an actuary, a medical service provider or a dental service provider.
Services provided by the above professional practitioners are not part of nor
subject to rules governing consulting services. See Texas Government Code,
Section 2254.003 regarding the selection of a provider for "professional
services." Professional service contracts are subject to Regents' Rules and
Regulations Part One, Chapter I, Section 9; Part One, Chapter III, Section 4;
and Part Two, Chapter IV, Sections 1, 3, 4, and 5. Contracts for architectural
and engineering services related to a construction project, and other ancillary
construction service contracts are subject to Regents' Rules and Regulations
Part Two, Chapter VIII.
When a Consultant may be used
Texas Government Code, Section 2254.026 states that agencies may use consultants only if:
1. there is a substantial need for the consulting services; and
2. the agency cannot adequately perform the services with its own personnel or obtain
the services through a contract with a state governmental entity.
Consulting Contracts General Guidelines
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All consulting contracts exceeding $15,000 shall be reviewed and approved by the appropriate Executive
Vice Chancellor prior to the institution executing the requirements of the above statutes, rules or
guidelines. An amendment, renewal, or extension of a major consulting services contract, or an
amendment, renewal, or extension of a consulting services contract which is not a major consulting
services contract, but will become one because of the amendment, renewal, or extension, must be
reviewed and approved by the appropriate Executive Vice Chancellor prior to executing the requirements
of Texas Government Code 2254.030 ("Renewal; Amendment; Extension"). A copy of such contracts in
the amount of $15,000 or less shall be provided to the appropriate Executive Vice Chancellor for
information upon award.
This policy applies to all consultant contracts entered into by U. T. System Administration or any
component institution that is funded or paid from monies:
q appropriated by the Legislature
q derived from the exercise of the statutory duties of a state agency (institution of
higher education)
q received from the federal government, unless a federal law or regulation conflicts
with the application of Texas Government Code, Sections 2254.021 - 2254.040
All consulting service contracts required to be published in the Texas Register must be submitted to the
Texas Secretary of State through The University of Texas System Office of the Board of Regents.
None of the funds appropriated to an institution of higher education may be used to enter into a
consultant service contract with any individual who has been employed previously by that institution
within the past twelve months, current General Appropriations Act. In addition, Texas Government
Code, Section 2254.033 imposes certain disclosure requirements for any proposed consultant who was
previously employed during the preceding twenty-four months.
All consulting service contracts entered into by U. T. System Administration or component institutions
shall be in accordance with the Code of Ethics and established purchasing/contracting practices and
procedures as guided by Part One, Chapter I, Section 9; Part One, Chapter III, Section 4; and Part Two,
Chapter IV, Sections 1, 3, 4, and 5 of the Regents' Rules and Regulations.
Intersystem Agreements
Employees of one institution of The University of Texas System may serve as a consultant to another
institution or agency of the state provided the chief administrative officer of each institution or agency
approves the Intersystem Agreement contract in advance and forwards a copy of the approved contract to
the appropriate Executive Vice Chancellor.
Docket Procedures
All consultant contracts in the amount of $250,000 or more, or with a foreign entity, should be approved
by the Board of Regents via the institutional docket.
Attachment
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Provided by:
Office of the Controller
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Last Updated January 21, 1999
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The University of Texas System Administration
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