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When to Use What Method of Contract/Payment

Purchase Cards should be used for:

  • Small purchases
  • Routine consummables
  • Non-negotiable purchases
  • Standard “consumer” products
  • No on-site services are provided in the purchase

Purchase Orders should be used when:

  • Terms of the purchase are negotiable
  • On-site services will be provided (e.g., installation; or the purchase is for on site services only)
  • Value of products exceeds $50,000 [?]
  • Product defects may not be known immediately (e.g., poor construction on furniture)
  • Custom made products are involved

There may be vendors with whom it would be better to use an “independent contractor” agreement with, and pay the “work orders” with purchase cards.

When should I use a Consultant’s Agreement?

The individual or company is an independent contractor. See IRS guidelines on “Employee or Independent Contractor?” When in doubt as to whether the hire is an independent contractor or temporary employee, check with the director of human resources, x5605 or x5411.

Someone who brings special personal (intellectual) expertise to the college and is not an employee: e.g.,

  • Mary Smith will advise on the best process for us to raise money
  • John Jones will provide expertise on the issue of pond maintenance
  • Sally Marsh will develop a website for the department
  • Michael Dow will coach the ice hockey club

See: Template Forms for Consultant’s Agreement

When should I use an Independent Contractor’s Agreement?

The individual is an independent contractor.
See IRS guidelines on “Employee or Independent Contractor”.

The individual or company is providing physical services to the college. Typically facilities and grounds will be managing the contract

  • Outsourced window washing
  • Trash removal
  • Painting
  • Special cleaning services
  • Other special projects, such as construction, renovation, etc.


Special features: can create one agreement, and “add” to it using “work orders” for repeat services.

Management issues: make sure contract agreement is kept up to date, and that certificates of insurance are filed annually.

See: Template Forms: Independent Contractor Agreement. Check with facilities and grounds for more information.

 
 

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