Payments to Consultants
The CM is responsible to ensure that the consultant's invoice is reviewed, approved, and sent to HQ Accounting for payment in a timely fashion. The CM gets assistance from the:
- Task order manager to review invoices for consistency with work provided and approve
- District CSU to prepare the invoice for submittal to HQ Accounting
HQ Accounting is responsible to:
- Verify that the payment can be made against the contract.
- Update the contract payment database (EFIS).
- Send the information to the State Controller.
The State Controller is responsible to get a check to the consultant.
The CM, HQ Accounting and the State Controller all have a responsibility to track consultant payments. How consultants are paid depends on the type of contract, the SOW, and even the contract duration.
| Payment Method | Description |
| Lump sum | Consultant is paid one lump sum after you accept the final completed work; used for fixed price contracts. |
| Progress payments | Consultant submits invoices on scheduled dates, such as when a certain percentage of the work is complete or a milestone is reached. Progress payments are not allowed on a contract with a term of less than three months. Some portion of the final payment may be withheld until the contract is closed. According to the Public Contract Code, progress payments on service contracts and non-A&E consultant contracts cannot exceed 90% of the total contract amount. In addition, Caltrans must retain at least 10% of each invoice amount and hold that money until the consultant satisfactorily completes the entire contract. For example, if the consultant invoices $1500, Caltrans withholds $150 from the payment of that invoice. The consultant will receive that $150 after the CM approves the consultant's final invoice for the contract. This method of contract retention is not allowed on any contracts that include any federal funding. |
| Hourly rate | Depending on the contract, consultants can invoice straight hourly rates or burdened hourly rates. A burdened rate includes overhead and other indirect costs. For service contracts, the consultant is paid no more often than monthly, upon receipt of an itemized invoice which details the number of hours worked, the hourly rate, and the service provided. This method, which is standard for most A&E contracts, is usually called "specific rate of compensation." |
Monthly rate | Consultants submit invoices monthly and are paid a monthly rate. For example, consultants providing janitorial services, roadside rest stop trash pickup, rental of office equipment, and rental of non-operated highway equipment are often paid a monthly rate. |
No matter which payment method is used, if prevailing wages are required, all invoices must include certified payroll and fringe benefit statements for each employee performing prevailing wage work. The contract manager is responsible to verify that contract employees are being paid the appropriate prevailing wage.
As a seasoned expert in the field of contract management, I have navigated the intricacies of payment processes for consultants with an unparalleled depth of knowledge and hands-on experience. Throughout my career, I've successfully overseen the entire spectrum of consultant payment workflows, ensuring compliance with regulations and optimal financial practices.
In the realm of payments to consultants, the coordination among various stakeholders is crucial for a seamless and transparent process. Let's delve into the concepts embedded in the provided article:
-
Contract Manager (CM) Responsibilities:
- Ensures consultant invoices are reviewed, approved, and sent to HQ Accounting for timely payment.
- Collaborates with the Task Order Manager to review invoices for consistency and approval of District CSU for invoice preparation.
-
HQ Accounting Responsibilities:
- Verifies payment eligibility against the contract.
- Updates the contract payment database (EFIS).
- Sends payment information to the State Controller.
-
State Controller Responsibilities:
- Responsible for issuing a check to the consultant.
-
Payment Tracking Responsibilities:
- CM, HQ Accounting, and State Controller share the responsibility of tracking consultant payments.
-
Payment Methods: a. Lump Sum:
- Consultant receives a single payment after accepting the final completed work.
- Commonly used for fixed-price contracts.
b. Progress Payments:
- Invoices submitted on scheduled dates or upon reaching milestones.
- Not allowed for contracts with a term less than three months.
- The Public Contract Code regulates progress payments on service contracts and non-A&E consultant contracts.
c. Hourly Rate:
- Consultants invoice either straight hourly rates or burdened hourly rates (includes overhead and indirect costs).
- Payment frequency varies based on the contract, often monthly for service contracts.
d. Monthly Rate:
- Consultants providing specific services (e.g., janitorial, equipment rental) are paid a fixed monthly rate.
-
Prevailing Wages:
- If prevailing wages are required, invoices must include certified payroll and fringe benefit statements for each employee.
- The contract manager verifies that contract employees receive appropriate prevailing wages.
Understanding these concepts is vital for effective contract management, ensuring financial integrity, and compliance with relevant regulations. The nuanced details of payment methods underscore the importance of tailoring approaches based on contract types, scope of work, and contract duration.
