In a somewhat related area, we're having a discussion at ISU right now on whether it is appropriate for a consultant to be considered an "Investigator" under the PHS FCOI regulations.

I think that the answer is "no" and that they should be treated as a vendor,  The rationale is that a consultant should not be designing, conducting, or reporting the research - those activities should be provided by the prime's employees and/or  subrecipients/collaborators.

This viewpoint seems to coincide with the A-133 vendor definitions.

One of the issues that arose during discussions was what to do when a PI wants to hire someone to design, conduct and report on the research (i.e. be an Investigator under PHS regs) but that person isn't employed by an entity or exist as an LLC. The determination we came to is that that individual either must be employed by the university or must incorporate so that we can then treat them as a subrecipient, rather than as a consultant.

I don't think that a consultant's fee is all profit, just fyi; just like universities, they have costs, both direct and indirect, that have to be covered by the fee.  Anything above those costs would be profit.

Rochelle R. Athey, CRA
Director
Office of Sponsored Programs Administration
Iowa State University
1138 Pearson Hall
Ames Iowa 50011-2207
Phone:  515-294-7723
Fax:  515-294-8000

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Young, Katherine S
Sent: Friday, June 08, 2012 6:25 AM
To: xxxxxx@lists.healthresearch.org
Subject: Re: [RESADM-L] Consultant Fees

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]

====================================================================== 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> http://www.healthresearch.org (click on the "LISTSERV" link in the upper right corner)

A link directly to helpful tips: <http://tinyurl.com/resadm-l-help> http://tinyurl.com/resadm-l-help ======================================================================

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

====================================================================== 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> http://www.healthresearch.org (click on the "LISTSERV" link in the upper right corner)

A link directly to helpful tips: <http://tinyurl.com/resadm-l-help> http://tinyurl.com/resadm-l-help ======================================================================

======================================================================
 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)

 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help ======================================================================

======================================================================
 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)

 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help
======================================================================