This page will help you assess your professional (i.e., consultant) services practices. It is intended for organizations that are submitting a proposal to the U.S. National Science Foundation or have received an NSF award.
Specifically, this page will help your organization verify that:
- Your organization has a consultant services policy, approved by management and distributed to staff for official use, that details compliant requirements.
- Professional services costs are supported by pre-award checks, cost-price analysis and an enforceable agreement.
- Professional services are managed to ensure services are provided before payment and that payments are in line with the written agreement.
- Professional service agreements are regularly reviewed and closed in a timely manner.
On this page
What are professional services?
Consultant services, also referred to as professional services, are services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the proposing or awardee organization.
Costs of professional services are allowable when reasonable in relation to the services rendered and when not contingent upon recovery of costs from the federal government.
Requirements for professional service management
NSF requirements
- Grant General Conditions (GC-1)
- Cooperative Agreement Financial and Administrative Terms and Conditions (CA-FATC)
Federal requirements and resources
- 2 CFR 200.459 "Professional service costs"
- FAR Part 31 205-33 "Professional and Consultant Service Costs"
- FAR Subpart 31.2 "Contracts with Commercial Organizations"
- 2 CFR 180 "OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)"
Special note: Although uncommon, some organizations engage professionals associated with or at an international branch campus of a US Institute of Higher Education (IHE) or a foreign organization, through an intra-university agreement. Please be aware that there are additional requirements for these types of arrangements. Please consult PAPPG Chapter I.E.2.c, special terms and conditions in the notification of award and Public Law 115-232 Section 889 "John S. McCain National Defense Authorization Act for Fiscal Year 2019."
Checklist for assessing your organization's policies
In addition to being required, when reviewing professional service costs, external reviewers will almost certainly ask your organization to demonstrate that this check was done prior to engaging a professional. Your organization should maintain this documentation in the professional's contract file.
Engaging professional services constitutes procuring goods and services. Every organization is required to have a written procurement policy (2 CFR 200.318(a)); procedures for engaging professional services should be a subset of those procedures.
We recommend that you adopt this practice. The differences can be subtle but important:
- Professional service agreements are generally issued to individuals (or sometimes organizations) that provide similar services to different clients, normally operate in a competitive environment, and are not usually subject to compliance requirements of the federal program. Professional service individuals/entities provide goods or services for the benefit of the pass-through entity, rather than for a public purpose specified in authorizing statute.
- Subaward agreements are used to transfer a portion of effort under a federally funded award to an entity to carry out activities for a public purpose specified in authorizing statute. Subrecipients typically have performance measured in relation to whether the objectives of a federal program are met, has responsibility for programmatic decision making, and is responsible for adherence to applicable federal program requirements specified in the federal award.
In addition to being required, when reviewing professional service costs, external reviewers will almost certainly ask your organization to demonstrate that this check was done prior to engaging a consultant. Your organization should maintain this documentation in the associated contract file.
A standard template, fully completed, promotes compliance and enforcement, and is an essential element for demonstrating reasonableness and allocability.
All agreements should at a minimum include:
- The name of the professional/entity.
- A description of services to be provided (scope of work).
- The rate of pay
- The period of performance.
- Other data (e.g., cost information on indirect costs, travel, per diem and supplies).
- Applicable provisions identified in 2 CFR 200 Appendix II, "Contract Provisions for Non-Federal Entity Contracts Under Federal Awards."
- Any other provisions required by the prime award.
Cost/price analysis must be performed for every professional service engagement and could consist of one or more of the following:
- Collection and review of bids.
- Comparison of proposed rates with rates paid for similar services in the past.
- Comparison of rates paid to the proposed professional/entity for similar services with federal and non-federal clients.
Documenting the outcome of that analysis is important to establish the reasonableness of the rate paid to the professional/entity.
Adequate delivery of services can be documented as simply as a signature on the payment form certifying that services have been delivered or through more detailed processes that might include detailed timesheets/activity records or copies of professional service outputs. Verifying that services have been delivered and are supported by an invoice can help support the reasonableness of costs.
We recommend that you implement this practice. Regularly reviewing open professional (and other) service contracts is a good way to identify issues early and ensure that services/outputs are being delivered in a timely manner.
Closing out completed contracts is a good time to ensure that all services/outputs have been delivered, final payments have been made and that the contract file contains all necessary information.
Frequently asked questions
Awardees often have good practices, but either lack or have not fully documented related policies, procedures and documentation. Written guidance and documentation are essential to demonstrate good practices and ensure consistent implementation. Common concerns include:
- Professional services policies and procedures are not documented.
- Service agreements aren't documented or lack required elements.
- Organizations don't verify and/or document that professional services have been received prior to payment.
- Organizations don't perform and/or document cost/price analyses before issuing professional service agreements.
Yes. Reasonable fees, travel allowances and per diem (or meals provided in lieu of per diem) may be paid for speakers at a conference. The professional service agreement should include language that reasonable travel costs to the conferences will be reimbursed.
