Contracts for Services

Chapter 1

GENERAL AND ADMINISTRATIVE INFORMATION
 Section: 1:060

Contracts for Services

Established: 03/1999
Revised: 07/08/2024
Responsible Office: Division of Finance and Business Services

Policy Statement

A contract is required for any services that the University obtains involving payment in excess of $500 (excluding travel expenses). A contract may not be necessary for those services involving payment of less than $500 unless the agreement includes intellectual property rights (ex. photography, editing, or creation of anything that the University will need to own the rights too). Contracts with nonresident aliens (NRA’s) are subject to specific IRS requirements and require special handling as described below.

Grants & Contracts

If payment is to be made from grant funds, the contract should be reviewed and approved by the Office of Sponsored Program Administration. Questions involving the expenditure of grant funds, including the type of contract, and its processing, should be directed to the Sponsored Programs Administration (573-882-7560 or muresearchospa@missouri.edu).

Contracts for Services

Contracts – Shared Services processes service contracts or agreements that do not involve grant funds. Questions about whether a contract or agreement is necessary should be directed to Contracts – Shared Services (mucontract@missouri.edu or 573-882-7254). Contracts – Shared Services also reviews other agreements that contain legal terms and conditions such as student clinical experience agreements, use of facilities/resources agreements, cooperative program agreements with other educational institutions. More information can be found at https://finance.missouri.edu/transaction-processing/contracts/.

Approval Process

Deans, directors, and department chairs have established individual approval procedures for their units. Questions concerning the approval process for a specific unit should be referred to the designated business & finance officer of the college, division, or department.

Preparing a Contract

Standard form contracts offer department representatives the opportunity to complete a contract by “filling in the blanks.” Common standard form can be found at https://finance.missouri.edu/forms/.  If none of the standard form contracts are appropriate for the services being provided, contact the Contracts – Shared Services at mucontract@missouri.edu or 573-882-7254 for assistance.

Processing a Contract

    1. Forms should be completed in full (describing the scope of the work as specifically as possible) and signed by the other party before the start date.
    2. Enter the contract in the Missouri Contract System portal for review and execution on behalf of the university.

      Contracts – Shared Services hosts Missouri Contract System, a PawPrint-protected platform that offers the easiest way to create and submit speaker/lecturer, consulting, and other standard templates. To gain access and training, please contact your division business & finance officer or email us at mucontract@missouri.edu. The Missouri Contract System also provides real-time status of your documents during the review and signature process and a searchable electronic repository of all your fully signed contracts.

       
    3. After the contract is signed on behalf of the University, a fully executed copy can be downloaded from the Missouri Contract System.

Payment for Services

Payment is initiated by sending a Voucher (UM 12) to Accounts Payable Shared Services, 325 Jesse Hall. For payments to NRA’s see below.

Payment in Excess of $500

If the payment is in excess of $500 (excluding travel expenses), some type of support documentation is required:

  • Attach a copy of the fully signed agreement to the voucher.
  • Or include the contract number on the voucher.

Reimbursement for Travel Expenses

Travel expenses will be reimbursed in accordance with standard MU policies and procedures.

Contracts Involving Nonresident Aliens (NRA)

  1. To make a payment to an NRA, submit the following documents to Accounts Payable Shared Services at least one week prior to the date the check is to be issued:
    1. Personnel Action Form for Individual Not Employed (UM376). The department should complete this form following the form instructions. Contact the HR Payroll Office if you have questions on how to complete this form. In the blank space at the bottom of Form UM376, indicate the purpose of payment and the amount to be paid.
    2. A completed IRS Form W-8-Certificate of Foreign Status.
    3. A completed IRS Form 8233- Exemption Form Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual.
    4. A copy of the approved agreement or contract with the NRA.
      NOTE: If Contracts – Shared Services or Sponsored Programs Administration have not yet approved, submit an unapproved copy.
    5. If the items listed in b., c., and d. are not yet available, indicate their status and expected completion date. The payment cannot be made until the W-8 and the approved contract is received in Accounting Services. If the IRS Form 8233 is not completed by the time payment is made, income tax will be withheld at 30 percent. If it is determined at a later date that the payment should have been withheld at a lower rate or exempt, the individual will need to file for a refund from the IRS.
  2. If the NRA’s tax status has not been properly documented, IRS regulations require 30 percent withholding on all payments. To avoid withholding when it is not otherwise required, document the NRA’s tax status on IRS Form 8233, which replaces UM 370. Proper documentation also requires that the NRA complete a W-8.
    1. The Office of International Student and Scholar Services (OISSS) is responsible for making taxability determinations regarding NRA’s. The NRA will need to visit the OISSS to complete the forms.
    2. The following information is needed for determining the tax rate or exempt status:
      • Nonresident alien’s name.
      • Taxpayer identification number.
      • Permanent home address.
      • Country of legal residence.
      • Type of visa.
      • Immigration status.
      • Specific information regarding the reason for payment.
    3. Often an NRA is visiting the U.S. for a short period of time and has not obtained a taxpayer identification number. The NRA has two options:
      • Apply for a taxpayer identification number from the Philadelphia IRS Office before the trip; or
      • Apply for a taxpayer identification number upon arrival in the U.S. and provide MU Payroll Office with receipt of the application.
  3. Payments will be issued through the Payroll/Personnel Hand Drawn Check System. However, as noted above, all NRA contract payments must be submitted to Accounts Payable Shared Services for payment. Accounts Payable Shared Services will coordinate processing with the HR Payroll Office.

Resources:

Contracts – Shared Services
Sponsored Programs Administration
HR Payroll