Look to A-133 for guidance on differentiating between a Vendor and a Subrecipient and whether or not a Consultant is providing professional services or performing scope activities.  You must get to the purpose of the activity.  Are they doing the work for you (Vendor) or with you (Subrecipient).

I disagree with the CFO that the fee is entirely profit, and this may just be the words of choice.  A portion of the fee may be profit, but presumably they will have costed the fee to include only a margin of profit.  Be careful to determine if your sponsor allows for commercial profit.

Kathy

Sent from my iPad

On Jun 7, 2012, at 7:19 PM, "Robert Bienkowski" <xxxxxx@GMAIL.COM<mailto:xxxxxx@GMAIL.COM>> wrote:

Hi Gloria,
I agree with your CFO. From his perspective,  paying a consultant and paying a vendor are both expenses...money out the door of your (his) institution. And they both have to be justified.
What is the difference between paying for the high level "intellectual" services of a management consultant, the practical services of a software maintenance company, and the absolutely essential services of laundry?
Regards
Bob Bienkowski

On Thu, Jun 7, 2012 at 4:09 PM, Gloria Greene <<mailto:xxxxxx@uah.edu>xxxxxx@uah.edu<mailto:xxxxxx@uah.edu>> wrote:
I have a dilemma and need some help/clarification with a situation.

My CFO believes that a consultant’s fee is “profit.”  I disagree with him.  I believe that a fee for services is not a profit, and should therefore not be classified as profit.  His position is a consultant and vendor are one in the same and therefore any money made is “a profit.”

I told him that comparing a vendor to a consultant are the same as comparing apples and oranges.  They are not the same.  The consultant provides a services the vendor provides a commodity (item, materials, etc).  These are not the same.

Can someone help me!  If I am wrong, then please let me know that as well.  I view help as setting me straight and educating me.  If you can provide me with any written guidance on this matter to further make my case that will be welcomed as well.

I appreciate this group and its insight.

Regards

Gloria Greene, MA, CRA
Director
UAHuntsville, Office of Sponsored Programs
SRA-Alabama Chapter, Vice President-Elect
301 Sparkman Drive, VBRH E26
Huntsville, AL  35899
Voice: (256) 824-2657<tel:%28256%29%20824-2657>
Fax: (256) 824-6677<tel:%28256%29%20824-6677>
Email: <mailto:xxxxxx@uah.edu> xxxxxx@uah.edu<mailto:xxxxxx@uah.edu>

"The person who knows 'how' will always have a job. The person who knows 'why' will always be his boss."   -- Diane Ravitch

Please do not print this email unless necessary.
Take Charge, Go GREEN!
[yep]

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Robert S Bienkowski, PhD
<mailto:xxxxxx@gmail.com>xxxxxx@gmail.com<mailto:xxxxxx@gmail.com>

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======================================================================
 Instructions on how to use the RESADM-L Mailing List, including
 subscription information and a web-searchable archive, are available
 via our web site at http://www.healthresearch.org (click on the
 "LISTSERV" link in the upper right corner)

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