XIII. Procurement of Professional Services

Professional service subcontracts must be developed and implemented each time the subrecipient uses professional fees line item from an Office of Criminal Justice Program (OCJP) grant award to pay for services that the subrecipient’s staff will not provide. Subrecipients may not enter into a subcontract without obtaining prior written authorization from their OCJP Program Manager.

1.  Types of Subcontracts

Project Based Subcontracts: OCJP requires subrecipients to use professional service subcontracts when a subrecipient is planning to subcontract with one provider to carry out multiple pieces of the OCJP funded project. For example, a City may subcontract with a local nonprofit agency to fulfill service expectations of their overall grant funded project.

Project-based professional service subcontracts require a detailed annual budget to be submitted for each year of the subcontract and may either use the Subcontract Monitoring Form (Appendix F) for oversight purposes or their own monitoring tools so long as their tools capture all the same information that is contained on the Subcontract Monitoring Form (Appendix F). See Section 5 of this chapter.

Fee-for-Service Subcontracts: OCJP requires subrecipients to use fee-for-service subcontracts for specific and limited direct services to clients such as counseling services, nursing services, etc. when these services are not provided by subrecipient staff. Fee-for-service subcontracts do not require a detailed annual budget to be submitted for each year of the subcontract but do require a fee scale set for specific activities delineated in the contract and at a rate comparable to the going rate for the service within the specific community; budget information is only required in the payment Terms and Conditions section of the subcontract. Fee for Service Subcontracts are rarely approved, accept in specific circumstances, such as for individual therapy sessions. Fees should be market value for the individual service.

2.  Setting Up a Subcontract

a.  Procurement Policies

Subrecipients must secure subcontracted services through competitive bidding or the use of competitive negotiation. All Requests for written Proposals (RFPs), Invitations to Bid, or other competitive bidding processes should follow approved agency procedures and compliant with applicable state and local guidance. For more information concerning competitive bidding for professional services see Uniform Guidance 200.319-323.

Grantees must utilize their agency cost thresholds and written purchasing procedures, which must follow Uniform Guidance 200.318-323, when acquiring subcontracted services. The subcontracting agency may be required to meet fiscal standards prior to the execution of the subcontract if they are currently not being met.

Subrecipient agencies pursuing a Project Based Subcontract must obtain the provided Pre-Award Risk Assessment and the required accompanying documentation from the subcontracting agency. The subrecipient agency should review the assessment to determine if the subcontracting agency can provide proper fiscal oversight for the subcontract and if the agency is fiscally solvent and not on the debarred list.

b.  Required Language

Both Professional Service and Fee-for-Service Subcontracts must include the language found in Appendix E - Required Subcontract Language.

A Sample Subcontract Form with the required language located in Appendix E is available to download.

c.  Federal Award Information Notice (FAIN), Special Conditions and Certifications

Subrecipients should provide subcontracting agencies with all Federal Award Information, Special Conditions and Certifications/Assurances that they receive from OCJP, obtain signatures from the subcontracting agency, and save the executed documents along with the subcontract in the OCJP grant file.

Federally funded Subcontracts must include a Federal Award Information Notice (FAIN) that is similar to the Attachment B for all federally funded subcontracts.  Reference the example provided in Appendix E Required Subcontract Language.

d.  Subcontract Budgets

Subrecipient agencies are accountable to OCJP for the work and performance of their Contractor as procured through a subcontract. Subrecipients must keep a file, on-site, that includes the original subcontract and approved budget information.

Professional Service Subcontracts require a detailed annual budget to be submitted for each year of the subcontract.

Fee-for-Service Subcontracts do not require a detailed annual budget to be submitted for each year of the subcontract; budget information is only required in the payment Terms and Conditions section of the subcontract.

Regardless of subcontract type, subrecipients must keep a file, on-site, that includes the original subcontract and approved budget information.

3.  OCJP Authorization

The subcontract must be reviewed and authorized by OCJP before an agency may execute the subcontract. The prior authorization process must occur before the start date of the subcontract. Subrecipients may draft subcontracts for multi-year service cycles, but any changes to that subcontract during the life of the subcontract must be submitted to the agency’s OCJP Program Manager for prior authorization.

The subcontract must be reviewed and authorized by OCJP before an agency may execute the subcontract. The prior authorization process must occur before the start date of the subcontract. Subrecipients may draft subcontracts for multi-year service cycles, but any changes to that subcontract during the life of the subcontract must be submitted to the agency’s OCJP Program Manager for prior authorization.

The subrecipient agency will submit a draft of all subcontracts to the agency's OCJP Program Manager for review.

Drafts of Project Based Professional Service Subcontracts should be emailed to program managers; in the body of the email agencies should affirm the Pre-Award Risk Assessment has been completed and the agency is solvent and not debarred or suspended.

After the OCJP Program Manager has reviewed and authorized the draft of the subcontract, the subrecipient may acquire the appropriate signatures on the subcontract. OCJP may withhold reimbursement payment for professional services if the agency did not request authorization of the subcontract before the start date of the subcontract.

** The subrecipient must submit a copy of the signed subcontract to the agency’s OCJP Program Manager. **

4.  Consultant Rates of Payment

Consultant rates of payment are to be reasonable and consistent with fees for similar services in the marketplace. This does not mean that the rate can or should be the maximum limit for all consultants. Consultant rates should be consistent with current market value for the service. The consultant rate agreement file must contain a documented market analysis and justification of the agreed upon rate. The market analysis must be provided to OCJP for its subcontract review.

Evaluation of consultant rates will include consideration for compensation which includes fringe benefits versus rates do not. For example, a higher rate within the maximum daily rate might be allowed for similarly qualified consultants who do not receive fringe benefits. Consideration will be given to compensation including fringe benefits for those individuals whose employers do not provide the same. In addition, when the rate exceeds the maximum daily rate allowed (excluding travel and travel-related costs – see Chapter IX - Travel of the OCJP Administrative Manual for more information regarding travel regulations and travel-related costs), prior written authorization from OCJP is required.

The maximum rate for consultants is $81.25 per hour or $650 per day.

The term daily rate refers to an eight-hour day. An eight-hour day may include preparation, evaluation, and travel time in addition to the time required for actual performance.  Please note, however, that this does not mean that the rate can or should exceed the maximum daily rate allowed by the fund source for all consultants. Rates should be established on a case-by-case basis and must be reasonable and allowable in accordance with OMB cost principles. Consultant daily rates greater than the maximum daily rate allowed by the fund source which are part of the original application and that contain appropriate justification and supporting data will be approved on a case-by-case basis.

a.  Consultants associated with Educational Institutions: The maximum rate of compensation that will be allowed is the consultant’s academic salary projected for 12 months, divided by 260. These individuals normally receive fringe benefits which include sick leave for a full 12-month period even though they normally only work nine months per year in their academic positions.

b.  Consultants Employed by Local Government: Compensation for these consultants will only be allowed when the unit of government will not provide these services without cost. If a local government employee is providing services under a Federal grant and is representing their agency without pay from their respective unit of government, the rate of compensation is not to exceed the daily salary rate for the employee paid by the unit of government. If the local government employee is providing services under a Federal grant and is not representing their respective agency, the rate of compensation is based on the necessary and reasonable cost principles.

c.   Independent Consultants: The rate of compensation for these individuals must be reasonable and consistent with that paid for similar services in the marketplace. Compensation may include fringe benefits. Resources to determine current market value include:

•Competitive contract bids

•The Bureau of Labor Statistics Wage Data by Area and Occupational website.

Subrecipients should include speaker fees in the Travel, Conferences and Meetings budget line. Subrecipients with conferences or meetings with speakers compensated with grant funds must complete a Notification of Speaker Agreement (See OCJP Appendix N: Notification of Speaker Agreement) submit this documentation to OCJP 15 days prior to the event. Refer to Chapter IX Travel, Conferences and Meetings for more information.

5.  Oversight of a Professional Subcontract

Programmatic Monitoring – Determines if service delivery is consistent with subcontract provisions. Written documentation of subcontract monitoring must be maintained. Project Based Subcontract Programmatic monitoring may include any or all the following:

a. Reviewing the subcontract to determine what service the subcontract is to provide and if this service is being provided;

b. Reviewing the subcontractor’s reports and other materials to determine if services are being provided;

c.  Interviewing direct services delivery staff and others to determine if the services are being performed according to the contract, and/or

d.  Conducting on-site reviews to check the nature and quality of the services being provided.

Fiscal Monitoring – Examines the subcontractor’s financial records and procedures as they pertain to the subcontract. Fiscal monitoring may include any or all the following:

a.  Reviewing the subcontractor’ invoices to the subrecipient agency;

b.  Comparing the subcontract budget to the actual costs;

c.   Obtaining reasonable documentation that services billed were delivered according to the contract; and/or comparing invoices with supporting documentation to determine that costs were allowable

Subcontract oversight is a key priority for the distribution of state and federal funds for both Project Based and Fee for Service Subcontracts. Subrecipients must have a process for approving, revising, and monitoring subcontracts. Monitoring policies should clearly address both program and fiscal monitoring of professional services subcontracts.

The Subcontract Monitoring Form (Appendix F), or a similar monitoring document containing these items at minimum along with a substantive fiscal and programmatic monitoring, may be used to record appropriate test work and conclusions and retained as evidence of monitoring grant funded Project Based Subcontracts. Subcontract monitoring must be conducted by the agency within 6 months of the subcontract start date and then again annually for multi-year Project Based Subcontracts. The completed monitoring form (either the agency’s own form or the Subcontract Monitoring Form (Appendix F) should be retained in the grant file and available for inspection by OCJP staff- see below for additional details on Monitoring Project Based Subcontracts.

Subrecipients are required to provide oversight of Fee-for-Service Subcontracts and be able to demonstrate how they do this during their OCJP monitoring; however, the use of the Subcontract Monitoring Form or its equivalent is not required.

State agencies should follow and use state and internal monitoring policies and forms.

Project Based Subcontract Monitoring: When a subrecipient is planning to subcontract with one provider to carry out multiple pieces of the OCJP funded project it is imperative that the subrecipient provide proper oversight of the subcontractor to ensure the project is being implemented in a manner consistent with the contract scope of service. Project Based Subcontracts have minimum requirements for both programmatic and fiscal monitoring.