Procurement - Consultants and Independent Contractors

Definition of Consultant or Independent Contractor:

  • A Consultant (hereafter referred to as an Independent Contractor) refers to an individual or firm engaged to provide services specified in an agreement that includes a clear description of the activities, services, reports, and deliverables to be provided.
  • An Independent Contractor must perform services that are clearly differentiated from those of an Employee. UMB’s definitions and applications of these two categories govern IO’s procurement of non-US consultants through MGIC.

Requesting Department - read the following requirements below. Each section will provide key documents that we will need to be completed and signed to process your inquiry. Please send all documents to globalhub@umaryland.edu

Things You Need to Know?

  • The International Operations division may be able to procure Independent Contractor services through MGIC if the provider is paid to a bank account outside the U.S.
  • IO will issue an Independent Contractor Services Agreement following MGIC policies and MGIC’s standard terms and conditions. The MGIC Agreement template complies with applicable laws and taxation requirements of the jurisdiction under which the agreement is made, and has been reviewed by legal counsel. The agreement also includes clauses related to intellectual property, confidentiality, and conflict of interest. No changes to the MGIC template may be made without IO approval. Any special provisions or requirements by the UMB source of funds for the procured service must be communicated to IO in advance.
  • IO executes and administers the Agreement and any required Modifications. The UMB Requesting Unit develops the Scope of Work and deliverables, directly manages the work of the independent contractor, and authorizes payment upon satisfactory performance.
  • Incorrectly utilizing an independent contractor for work that should be performed by an Employee may result in liability by UMB for fines and for retroactive payment of benefits, compensation, tax withholdings, and other legally required contributions, both in the contractor’s country of tax residence and in the United States.
  • IO must follow UMB’s differentiation of Independent Contractor and Employee when procuring services through MGIC. UMB units contemplating the engagement of a consultant or independent contractor for work outside the U.S. should utilize the UMB CHECKLIST and consult their School’s Finance and Administration team to ensure adherence to UMB’s classifications.
  • Independent Contractors are responsible for paying their own country’s income taxes and other statutory payments required by their country of tax residency.
  • Independent Contractors who are foreign nationals may additionally be subject to U.S. income tax withholdings, depending on their tax residency and the place of performance of their scope of work. U.S. income taxes applicable to foreign nationals are paid through MGIC and are charged to the UMB Requesting Unit at the prevailing tax rate. Requesting Units should contact IO well in advance to discuss the applicability and rate of US taxes required to be withheld, and should include this cost in project budgets.
  • IO must screen selected vendors against foreign sanctions watch lists and may not issue a PO to a vendor with a positive match.
  • All purchases of Independent Contractor Services above US $5,000 through MGIC require a competitive procurement process or a sole-source justification.
  • All purchases of Independent Contractor Services above US $25,000 through MGIC require an RFP (Request for Proposals) and Competitive Bid Committee or a sole-source justification.

Summary Of Requesting Unit’s Responsibilities Throughout MGIC Procurement Process

  1. Contact the Global Hub (globalhub@umaryland.edu) to request procurement services. Provide as much information as possible including the services needed, location and estimated date, estimated cost, and existing scope of work if available.
  2. Complete the offline Purchase Requisition Form.
  3. Develop the scope of work, deliverables, payment schedule, and other inputs for a competitive RFP or a sole-source procurement, in consultation with IO.
  4. Assist in identifying viable service providers through industry/academic/research networks.
  5. Participate in a Bid Committee if applicable.
  6. Contribute inputs to Sole Source Justification memo if applicable.
  7. Assist IO in obtaining the following additional forms required to execute the Agreement, when the contractor is known to the Requesting Unit and has an existing business relationship:
    1. Payee Bank Details Verification Form (must be a bank account outside the U.S.) if the payment details are not provided on the invoice. 
    2. Applicable IRS (Internal Revenue Service) taxpayer form (Foreign Source Statement, W8 or W9 – see SOP for guidance).
      1. If Contractor is not a U.S. citizen or resident alien, the contractor shall provide a completed W-8BEN Form (non - US citizen) (individuals) or W8-BEN E Form (vendors) for services performed in the United States, or a Foreign Source Statement (FSS) for services performed outside the United States.
      2. If the Contractor is a U.S. resident for tax purposes, the Contractor shall provide a W-9 Tax Form regardless of where the services are performed.
  8. Manage and supervise contractors, to ensure deliverables are completed timely and at expected quality, and confirm satisfactory completion of contract terms when requesting IO to make payment.

Required and Sample Documents

Required Documents 
  1. Purchase Requisition Form
  2. Scope of work
  3. Supporting Documents 
  4. Sole-Source Justification Form (if applicable)
  5. Score Sheet for Procurement (View tabs for instructions)
Sample Documents 
  1. Sample of Offline PRF (Purchase Requisition Form) filled
  2. Sample of Scope of Work
  3. Sample of Payment Schedule
  4. Sample of Sole-Source Justification
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