KERN COMMUNITY COLLEGE DISTRICT

Transcription

1 KERN COMMUNITY COLLEGE DISTRICT M E M O R A N D U M TO: KCCD Administrators, Managers and Executive/Administrative Assistants FROM: Thomas J. Burke DATE: January 8, 2013 (Revised October 1, 2016) RE: Independent Contractor Agreement, Checklist and Certificate of Insurance FREQUENTLY ASKED QUESTIONS and ANSWERS Many of you have raised questions about the appropriate and proper use and implementation of the District Independent Contractor Agreement ( ICA ), Checklist and Certificate of Insurance. Some of you may have never needed nor will ever need to implement this information. So, in an effort to inform all of you, we have prepared the following frequently asked questions with answers and guidelines as a means to help you gauge the need for and to fill in information needed to process a standard form contract. The ICA is a contract that serves to document the engagement of vendor or contractor services for which the District is bound and to provide a method of mitigating potential risk of liability to the District. Accordingly, please review and comply with these guidelines. 1. What is an ICA? An ICA is a contract used to bind the District and any contractor, vendor, company or individual person for purpose of engaging services for which the District pays compensation ( Contractor ). The ICAs are submitted to Business Services at the District Office for processing once the checklist, agreement, insurance and signatures are complete. 2. Which Contractors/Services need to be processed under an ICA? Any Contractor that renders any kind of services (with very few exceptions) that the District wishes to engage and the District commits to pay for such service should be engaged through an Independent Contractor Agreement, checklist and certificate of insurance ( ICA ). If you plan to issue a PO for services, ask yourself FIRST if a contract is in place and if one is needed. Examples of Contractors/Services: Water delivery, coffee delivery, HVAC, electrical or plumbing repairs, piano tuning/repair, topic or workshop speakers, lecturers, consultants, software licensing, strategic planners, renting bounce houses, umbrella installers, ice cream social providers, linen rentals, booth exhibitors, outdoor water fountain repair, landscape, lecturer, curriculum development consultant, photography, zumba instructor, maintenance not handled by M&O, pest control, document shredding, performers, waste material pickup, presentation providers, trainers, data collectors, and rug cleaners. Note: Referees and umpires are now hired under a separate contract, meaning you don t need to complete an ICA for them. NOTE: Vendors like Pepsi/Coke/Staples/Stinsons should have much more extensive contracts with the District so these don t require an Independent Contractor Agreement as discussed herein. The same applies when servicing district vehicles at Toyota, or for the sandwich or pizza delivery person - no need for an ICA. When in doubt, call Jana Durham (ext. 5117) in Business Services at the district office for a determination. No construction or construction maintenance projects are to be processed via ICA, but the District has established standard small and large construction contract forms specifically designed for those purposes. 3. What if the Individual doesn t have insurance? Under most circumstances, the Contractor will have insurance and you will need to request a Certificate of Insurance form from them that should accompany the contract and checklist. If a Contractor absolutely has no insurance, then that fact should trigger the question of why we are engaging someone who is uninsured and to consider the potential risks involved in doing so. If after consideration you determine that it is prudent and in the best interest of the District to

2 January 8, 2013/Revised October 1, 2016 Page 2 engage that uninsured Contractor, an ICA is still needed, however, a supplemental form called the General Release and Waiver of Liability Form will need to be signed and attached to the ICA instead of the insurance certificate. If the individual is a minor, there is a place for signature of guardian/parent that suffices. NOTE: This General Release form is not intended to nor should be used in lieu of insurance if the individual has an insurance policy. Do not use the short cut form simply because it would be easier, timelier or otherwise. KCCD/Colleges need the maximum protection that comes under the insurance coverage that the Contractor carries in the event of a mishap. As an example: The uninsured icemaker contractor drives his/her truck onto the campus and accidentally runs through the cafeteria doors busting the side of the building which causes the truck back doors to fly open and a huge block of ice drops out and onto a student s foot, breaking it (the foot, not the ice) to the tune of $250,000 in costs for emergency medical and therapy bills, because the student is horribly disfigured and has developed posttraumatic stress and is now afraid of ice or anything cold and the cafeteria is in for a major facility repair..okay it s bad and very sad. So, the District has no recourse to recover from the student s/district s claims against the icemaker contractor because he/she was uninsured. So the General Release form is to be used only as the exception to the rule. 4. Where can I find the ICA, Checklist and General Release forms? These forms are posted on the KCCD website under Business Services/Contracts/Agreements/Grants. 5. Why do we need an ICA Checklist? The checklist serves to obtain information via question and answer that the contractor is to complete. This allows the District to clearly define whether or not the contractor legally qualifies as independent to which the District must comply. This form is to be completed by the contractor, who may discontinue at the STOP HERE point on the form if they have the documentation clearly indicating that he/she/it qualifies as an independent contractor. 6. How much Insurance do we require? The insurance needs to be provided via a standard certificate of insurance form from the Contractor that needs to name KCCD as additional insured and include the following insurance coverage: (1) commercial general liability insurance (including contractual, products and completed operations coverages, bodily injury and property damage liability insurance) with single combined limits of not less than $1,000,000 per occurrence; (2) commercial automobile liability insurance for "any auto" with combined single limits of liability of not less than $1,000,000 per occurrence; (3) professional liability insurance (errors and omissions) with a limit of liability of not less than $1,000,000 per occurrence; and (4) workers' compensation insurance as required under state law. The Contractor s policy shall contain an endorsement naming the Kern Community College District as an additional insured insofar as the agreement is concerned, and provide that written notice shall be given to the District at least 30 days prior to cancellation or material change in the form of the policy or reduction in coverage. 7. When do I process an ICA? Before services are rendered - 8. What about Volunteers and/or Vendor Fair Participants do we need to process an ICA for them? No. Volunteering is processed through the HR Department and they have custom forms for that purpose. However, Contractors who are invited to participate at an on-site campus vendor fair, or like event, are not considered volunteers, and for this kind of an event, because of the sheer numbers of outside participants, an ICA is simply not feasible. Accordingly, in lieu of an ICA, and as an alternate means of protecting the District, at the time of check in at the campus the day of the event each vendor/contractor will need to sign a Hold Harmless Form that is a one paragraph short form that consists of a hold harmless clause basically committing them to not take legal action against the District as a result of

3 January 8, 2013/Revised October 1, 2016 Page 3 participating in our vendor/fair. This Hold Harmless Form may be found under the KCCD website under Business Services and Facilities/Forms/Contracts/Hold Harmless Form. The Hold Harmless Form once signed are to be retained on file at the campus site and do not require board of trustee ratification. However, each site will be held responsible and accountable for obtaining and maintaining records of these signed forms. 9. How do I complete the ICA on my own, what information do I need to get? Please do not forward a blank ICA form to a contractor/vendor and ask them to complete it. As the initiator and deal maker, it is the campus initiator s responsibility to fill in (meaning type in) all the blanks first, and then submit it to the Contractor/Vendor for signature. To do this you will the following: a) Check the box to specify the campus site that is hiring the services; b) Type the name of the Contractor, social security/federal ID number and address; c) Type in the date(s) the Contractor will be rendering services; d) Type a brief description of the kind and nature of services to be performed; e) Type in the compensation in the form of a total fee (estimation of total fee is acceptable). If it is for multiple jobs over a longer term, then calculate the entire cost during the entire term that we are obligated to pay; f) In the box for Office Use Only type the FOAPAL. If you are separating out the services/materials etc., then provide the breakdown totals for each FOAPAL, as applicable; g) Under Termination/Notices please type in the name and address of the Contractor; h) The signature page should be signed by the Contractor with the name printed and signature dated. The campus personnel who is initiating the hiring of the Contractor is the Initiator and needs to sign and date, as well as obtaining the other signatures from the others listed on the signature page. Please keep a copy of the ICA at this point in your office; i) The campus signed ICA packet needs to go to District Office Business Services for signature by the Chief Financial Officer. If the Vice Chancellor of Human Resources needs to sign it, Business Services will obtain it. AFTER THAT..Business Services will add the ICA to the other collected group of ICAs for submission to the Board of Trustees for ratification. Financial thresholds dictate processing of ICAs. Individual ICAs under $20, in value are collectively submitted as a group ratification board item by the District Office Business Services for ratification by the Board of Trustees. Individual ICAs that exceed $20, in value, are individually submitted as an individual board item by the District Office Business Services for ratification by the Board of Trustees. For any contract over $50,000.00, the same process applies but the signed ICA/contract will be scanned and returned to the campus initiator and it is the campus responsibility to post to Boarddocs as an individual item recommended for approval and not ratification. You may assume a contract has been ratified and/or approved following the board meeting for which it is submitted unless you hear from Business Services to the contrary. All signed ICAs are retained at the District Office Business Services. Due to the volume of ICAs processed daily, a fully executed copy of the ICA will not typically be returned to the campus for secondary filing as a convenience. Any actual need for fully executed ICAs will be forwarded upon request. 10. How soon can the Contractor start and how soon can we pay for services?: This is $$ threshold driven: a. UNDER $50,000.00: For ICAs valued UNDER $50,000.00, once the signatures have been obtained and submitted to DO Business Services AND the CFO has signed it, you may

4 January 8, 2013/Revised October 1, 2016 Page 4 immediately proceed with the Contractor s services. Only after the services are satisfactorily completed, may payment be issued to Contractor. b. OVER $50,000.00: For ICAs valued OVER $50, NO SERVICES MAY COMMENCE UNTIL AFTER BOARD APPROVAL. Only after the services are satisfactorily completed, may payment be issued to Contractor. Keep in mind, however, that contracts exceeding $50, probably require a more extensive contract under separate conditions, so an ICA would not generally be used in these instances. 11. How long is the ICA effective when does it expire? The contract is effective for the dates of services in the contract that you provide on the form - so that is controlled by you and the Contractor. The contract then dictates when those services are to be rendered. For extended services, yes, you may engage a contractor for a longer period but not to exceed a total of five (5) cumulative, successive years during which time you may use their services on an as-needed basis, or a regular basis, however it is described and dictated in the contract you prepare. If prepared in that manner, then that longer engagement should also be reflected in the estimated total cumulative compensation over a multi-year term, and consideration given to the encumbering of funds and estimation of use over the entire period of the term. 12. How do we know if another department has already processed an ICA for someone we want to hire? There is a posting of current ratified ICAs and dates of service/contract term/scope of work on the KCCD website under BUSINESS SERVICES/CONTRACTS/INDEPENDENT CONTRACTOR AGREEMENT MASTER LIST as of October 1, This list is updated periodically as new contractors are ratified and added to the list. If you are not sure call ext 5117 and ask Jana. Keep in mind that just because one person in one department completes an ICA for a contractor for their special dates of service needs, does not mean that the services you need or dates needed from the same contractor are covered under the contract prepared by another department/person. So, you will need to complete another ICA if scope of services and/or dates of services are different. However, if you hire a contractor for an entire year (or for 5 years) and you estimate the cost for the entire period in the contract, you can use them, on an as-needed basis during the entire term. 13. How do I know what FOAPAL to use? If you do not know what FOAPAL to use, ask the supervisor responsible for the budget unit requiring the services. FOAPALs must be included on page 1 of all ICAs. 14. How many people actually have to sign on the signature page? Signatures need to be obtained by as many on the form as is required that are in the position/title at the site initiating the contract. So, if there is no one employed at a particular level, find out if another has been delegated/designated to sign. If not, go to the next signatory until completed. 15. What if the Foundation(s) wants to pay for services to be rendered then what do we do? If the Foundation is going to pay for services, i.e., for a Foundation event at one of the campuses, then the Foundation contracts directly for that and they have their own forms, but should use the District s guidelines in doing so. If the Foundation pays for services to be performed as a District event at one of our campuses, then an ICA should be used and processed as prescribed herein. If a campus facility is used, then the Foundation needs to enter into a Facility Use Agreement with the College. If the services are for some kind of upgrade or repair, then because this involves workers working on KCCD s physical buildings, the District will enter into the contract with the Contractor, and the Foundation will reimburse the District.

5 January 8, 2013/Revised October 1, 2016 Page Authorized Signatories-RESTRICTED: ONLY the Chancellor of the Kern Community College District and the Chief Financial Officer of the Kern Community College District are authorized signatories on any contract/agreement/grant/mou or other commitment that the District enters into on behalf of its campuses. No one else is authorized to sign a contract on behalf of a campus or the District. I hope this helps everyone to better understand the process of using and why we use the Independent Contractor Agreement. Sound business judgment and basic good sense will need to be applied to make certain determinations about independently contracting vendors and may be coordinated through the district office Business Services for assistance. As time progresses, these guidelines may be revised as needed, so please feel free to refer to this posting on our website to aid in this process. Of course, if you have any questions, please feel free to call Business Services at Ext 5117 and we will be happy to guide you through the process. Thank you all for your help with this process. TJB/jpd