POLICY

General

It is the policy of the National Cancer Institute-Frederick (NCI-Frederick) to utilize consultants in the performance of requirements when specialized knowledge or expertise is not available at the NCI-Frederick. The use of consultants shall comply with applicable contractual and regulatory requirements, and with the requirements provided herein. When performed in direct support of the NCI-Frederick contract work scope activities, all associated consultant fees may be treated as contract costs in accordance with this policy. All consulting requests require NCI-Frederick Contracting Officer Authorization (COA) prior to commencing work. This policy is not intended to cover temporary employees, guest lecturers/visiting scientists/researchers, or speakers invited to participate in seminars. (See P&P Nos. 310 and 327). Treatment of seminar speakers will be handled in accordance with general policy guidelines of each operating contractor at the NCI-Frederick.

Independent Contractor Requirement (Consultant Definition and Responsibility)

A consultant is an independent contractor, whether an individual or company, that possesses unique expertise or expert knowledge in a particular business or technical area not readily available elsewhere within NCI-Frederick. Consultants provide advice, guidance, ideas and recommendations to assist NCI-Frederick in meeting its business objectives.

As independent contractors, consultants are responsible to the NCI-Frederick for the results accomplished by their work and are not subject to control or direction by NCI-Frederick as to the means and methods of accomplishing the required results.

Contractor agreements for consulting services may be entered into only when the individuals perform their service as independent contractors, and not as employees. This policy is in accordance with the Internal Revenue Service (IRS) regulations (Pub. 15A, Section 2) identifying independent contractor versus employee. The following key criteria must be considered in making the vital determination of status:

1. The individual must be free of the close control over the details of performance as is the case with an employer-employee relationship. Training and tools will not ordinarily be provided. Requirements and advantages applying to employees will not apply to the independent contractor, except to meet basic needs such as health and safety requirements.
2. The effort to be accomplished must be unique and serve the special needs of the NCI-Frederick. Similar requirements should not occur with any frequency, and not be of such a nature that performance by an employee would be expected.

Detailed criteria to assure that these important requirements are met are available from the Operations and Technical Support (OTS) contractor through the Research Contracts Department and/or the Human Resources (HR) Department.

Avoidance of Conflict of Interest Situations

Care must be exercised to avoid conflict of interest situations where: 1) a consultant’s past, present, planned, or potential interests, activities or relationships may diminish the consultant’s capacity to give impartial, technically sound, objective assistance and advice; 2) the consultant will acquire internal or proprietary information, which will provide to him/her an unfair competitive advantage in seeking awards; 3) the consultant is related to a NIH or NCI-Frederick contractor employee; and/or 4) the consultant was previously an employee of NCI-Frederick or operating contractor. The Research Contracts Department must be consulted if there is any potential for a conflict of interest. The prospective consultant shall sign a Consultant Agreement that includes a conflict of interest certification.

Liability and Limitation

1. IRS regulations provide guidance for employers in classification of individuals as independent contractors or employees. The classification of individuals as independent contractors when, in fact, they are employees, can result in significant penalties and interest assessed for failure to withhold payroll taxes. Consequently, only individuals meeting the IRS criteria for independent contractors will be utilized as consultants.
2. Consultant records may be audited by the IRS to assure that “Consultants” do, in fact, perform as independent contractors. If the IRS determines that an individual was utilized in a manner indicative of an employer/employee relationship, assessment of payroll withholding taxes, interest, and penalties could occur.

Determination of Status

To determine whether an individual is an employee or an independent contractor under common law, the relationship of the worker and the business must be examined.

As follows, the IRS, in Pub. 15A, Section 2, titled: Employee or Independent Contractor has stated three categories that provide evidence of the degree of control and independence that must be considered when determining whether a worker is an employee or an independent contractor:

1. Behavioral Control: Facts that show whether the business has a right to direct and control how the worker does the task for which the worker is hired include the type and degree of…
1. Instructions that the business gives the worker
2. Training that the business gives to the worker
2. Financial Control: Facts that show whether the business has a right to control the business aspects of the worker’s job include:
1. The extent to which the worker has un-reimbursed business expenses
2. The extent of the worker’s investment
3. The extent to which the worker makes his or her services available to the relevant market
4. How the business pays the worker
5. The extent to which the worker can realize a profit or loss
3. Type of Relationship: Facts that show the parties type of relationship include:
1. Written contracts describing the relationship the parties intended to create
2. Whether or not the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay
3. The permanency of the relationship
4. The extent to which services performed by the worker are a key aspect of the regular business of the company

The greater the degree of control exhibited by the employer the more likely a finding that the individual will be regarded as an employee.

PROCEDURE

A completed Proposed Consultant Request Form (Attachment 1), Independent Contractor vs. Employee Questionnaire (Attachment 2), the Proposed Consultant’s Curriculum Vitae, and Purchase Requisition is submitted to the Acquisitions and Logistical Services (ALS) Department.

The appropriate ALS department (Research Contracts) will forward selected documentation to the HR Director. The HR Director makes the determination as to whether the worker is an independent contractor based on a review of the Proposed Consultant’s Curriculum Vitae, the Proposed Consultant Request Form (Attachment 1) and the Independent Contractor vs. Employee Questionnaire (Attachment 2).

If the HR Director has determined that the worker is not an independent contractor, he/she will discuss other options with the requestor and/or the Research Contracts Department, and upon consultation with Research Contracts, return the entire package to the requestor for alternative action.

If the HR Director has determined that the worker is an independent contractor, the requestor will forward the complete consultant package to the Research Contracts Department (see below).

Consultant Package

The Consultant package includes:

1. Proposed Consultant Request Form (Attachment 1)
2. Independent Contractor vs. Employee Questionnaire (Attachment 2)
3. Purchase Request Form (Attachment 3)
4. Form W-9 or Form W8-BEN (if Foreign National) (Attachment 4)
5. If applicable, copy of Foreign National Information Form (Attachment 5)
6. Proposed Consultant’s Curriculum Vitae

Fees

Fees will be paid in accordance with contract terms set forth in the Consulting Agreement (Attachment 6). The rate for consulting services will vary, depending on the experience of the consultants in their field of specialization and the service to be performed. Proposed fees must be adequately justified in accordance with the requested service. Funds designated for consultant fees will not be used for other purposes, i.e., lodging, transportation, per diems, etc. Consultants are responsible for preparation and submission of invoices as specified in the Consulting Agreement. All invoices should be accompanied by a copy of the work product delivered as part of the Consultant’s Agreement with the NCI-Frederick.

Expenses

NCI-Frederick will be liable for those expenses outlined in the Consulting Agreement. Reimbursement of expenses is subject to the applicable Federal Travel Regulations, and will be made in accordance with the terms set forth in the Consulting Agreement. Receipts for expenses will be attached to the detailed invoice.

Safety and Health Requirements

When the consultant’s work is being performed at the NCI-Frederick, the consultant will: 1) comply with safety regulations as may be promulgated in the NCI-Frederick Safety Manual, 2) adhere to the rules and regulations prescribed by the authorities of the National Cancer Institute and Fort Detrick.

Modifications

Requests for modifications to Consulting Agreements must be submitted to the Research Contracts Department by a memorandum or e-mail from the requestor and authorized by the individual responsible for that project. Such modifications shall be reviewed by the Human Resources Department, as necessary, to verify compliance with the IRS Guidelines.

Consultant Invoices

Invoices shall be completed by the consultant and submitted on Consultant’s business letterhead. The approved SAIC-Frederick Invoice Form (Attachment 7) may be used in cases where an individual is serving on a committee or board.

Payments

The invoice must describe the nature and scope of work performed and include, as a minimum, the following:

1. Contract number and/or Purchase Order number.
2. A brief description of specific tasks or services performed, which will include: documentation of hours expended and services performed adequate to allow an individual unfamiliar with the business area to understand, in general, what type of services were performed and detailed enough to satisfy the needs of the technical manager.
3. Where and for whom each task was performed.
4. The date and the amount of time spent for each task or service that was performed.
5. The preparation and delivery of a report or study, identification of the deliverable, and the company representative to whom it was delivered, and marked confidential if appropriate.
6. Detailed account of all allowable expenses with receipts attached.
7. For Foreign Nationals, hours worked must be separated into those worked offsite and those worked at the NCI-Frederick.
8. Consultant’s signature.

All invoices for consulting fees and expenses are to be received by the OTS Accounts Payable Department; and then routed through the OTS Research Contracts Department for approval. Approved invoices will be submitted to the OTS Accounting Department for payment. Payment requests must indicate if the check is to be picked up in Accounting by the Consultant; otherwise, payment will be made accordingly.

RESPONSIBILITIES

Requestor

Completes the Consultant Request form (Attachment 1), the Independent Contractor Vs. Employee Questionnaire (Attachment 2) with all required signatures, and the Purchase Request (Attachment 3) with resume or CV and forwards package to Acquisitions and Logistical Services (ALS). If it is determined that the individual is a consultant all additional information included in a consultant package must be submitted.

Research Contracts Department

Forwards the Consultant Request form (Attachment 1), the Independent Contractor vs. Employee Questionnaire (Attachment 2), and Purchase Request (Attachment 3) and resume/CV to Human Resources for review and approval. Research Contracts reviews the rates for reasonableness and begins to assemble the purchase package, including the COA, rate quote, consulting agreement, etc.

Human Resources Department

Reviews the questionnaire and makes a determination that such person qualifies as a consultant.