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Professional Contracts FAQs

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  1. A company has sent me a scanned pdf document of a contract for review and approval. Is that acceptable?
  2. Answer
  3. I have been invited by a company to give a lecture about their pharmaceutical product. They will pay me $3,500. This is the first time I have had any professional dealing with this company. Can I just collect the $3,500 payment as “exempt honorarium” without going through UPI?
  4. Answer
  5. I have been requested by a hospital in Durango to provide clinical services to their patients once a month. Do I need any advance approval?
  6. Answer
  7. What is the amount of tax that UPI will charge on the collections under a contract?
  8. Answer
  9. Does the Chair of my Department have to sign the contract through which I will provide professional services to a company?
  10. Answer
  11. If I do not go through UPI and decide to sign a contract on my own, will I be covered by the university’s self-insurance trust (for professional liability) and will I be covered by the professional liability caps contained in the Colorado Governmental Immunity Act?
  12. Answer
  13. Does UPI set rates of compensation for SOM faculty members for professional service contracts?
  14. Answer
  15. Three times a year I am invited by a pharmaceutical company to attend a meeting to advise their management about the latest market developments. They offer to pay me $2,500 for each meeting. Can I collect these payments directly as exempt honoraria without going through UPI?
  16. Answer
  17. I have been invited by a pharmaceutical company to perform services as an investigator for a clinical trial on a product they are trying to develop and get approved by the FDA. Does the contract go through UPI?
  18. Answer
  19. From where does UPI derive its authority vis-à-vis the School of Medicine?
  20. Answer

1. A company has sent me a scanned pdf document of a contract for review and approval. Is that acceptable?

No. In all circumstances, contract language will need to be modified to reflect the requirements of Colorado state law and the policies of the University of Colorado. Moreover, companies may seek to impose onerous and undesirable terms and conditions on the School of Medicine and its faculty members. For these reasons, all draft contracts must be provided in Word so that the necessary changes in language can be made (using track changes to facilitate review).

2. I have been invited by a company to give a lecture about their pharmaceutical product. They will pay me $3,500. This is the first time I have had any professional dealing with this company. Can I just collect the $3,500 payment as “exempt honorarium” without going through UPI?

Maybe. While a single modest payment for your participation in a one-time event, such as giving a lecture, may constitute exempt honorarium that does not need to be billed and collected by UPI, you will still need to seek approval from the SOM Conflicts of Interest Committee because this involves paid speaking about a pharmaceutical product on behalf of industry. A copy of the SOM Policy on Conflicts of Interest and Speaker Bureaus (May 2011) can be found under the Policies section and a link to the SOM Faculty Affairs web site (with instructions on how to submit a request to the SOM committee) can be found under the Links section.

3. I have been requested by a hospital in Durango to provide clinical services to their patients once a month. Do I need any advance approval?

Yes. Since this involves the performance of clinical services at an external healthcare facility, you will need advance approval from the Sites of Practice committee. The form to submit an approval request to the Sites of Practice committee can be found under the Forms section.

4. What is the amount of tax that UPI will charge on the collections under a contract?

The amount of tax charged by UPI to payments collected under a contract may include 10% to cover the SOM Academic Enrichment Fund (AEF) assessment, depending on the contract classification. The classification is determined by the UPI Finance Department based on the contract classification chart which can be found under the Official Documents section. You may wish to familiarize yourself with this chart so that you can increase your rates to cover the internal assessments that will be charged to contract collections.

5. Does the Chair of my Department have to sign the contract through which I will provide professional services to a company?

No. While we need notification of your Department Chair’s approval through an email message, the Department Chair does not need to sign the contract. Only the Executive Director of UPI needs to sign the contract on behalf of SOM and the participating faculty member. By having only one signature on our side, we can reduce the time needed to complete the contract.

6. If I do not go through UPI and decide to sign a contract on my own, will I be covered by the university’s self-insurance trust (for professional liability) and will I be covered by the professional liability caps contained in the Colorado Governmental Immunity Act?

No. Both the statutory liability caps and coverage by the university self-insurance trust (and any supplemental insurance policy) are reserved for faculty members performing services within their official capacity as university employees. By bypassing UPI and signing a contract individually, a faculty member will likely be deemed to be acting in his or her private capacity and therefore not covered by the statutory liability caps or by the self-insurance trust.

7. Does UPI set rates of compensation for SOM faculty members for professional service contracts?

No. As a general matter, faculty members establish their own rates (in consultation with their departments) for the performance of contractual services. In setting a rate, faculty members should be aware of the internal assessments that will be charged to payments collected by UPI. You may wish to familiarize yourself with the contract classification chart (which determines the amount of the assessment) under the Official Documents section, so that you can increase your rate to cover the internal assessments that will be charged to contract collections.

8. Three times a year I am invited by a pharmaceutical company to attend a meeting to advise their management about the latest market developments. They offer to pay me $2,500 for each meeting. Can I collect these payments directly as exempt honoraria without going through UPI?

No. While a $2,500 payment may be modest, this is not a one-time payment for a single occurrence event (rather these are ongoing payments for recurrent consulting activities). Therefore, these payments do not meet the definition for exempt honorarium and must flow through UPI in accordance with the standard contract process.

9. I have been invited by a pharmaceutical company to perform services as an investigator for a clinical trial on a product they are trying to develop and get approved by the FDA. Does the contract go through UPI?

No. Contracts for faculty members to participate as investigators/researchers on a clinical trial are handled by the university Office of Grants and Contracts, not by UPI.


10. From where does UPI derive its authority vis-à-vis the School of Medicine?

UPI derives its authority from Colorado state law found at Colorado Revised Statutes § 23-20-114(2). Details about UPI’s role and responsibilities are contained in the Operating Agreement between the University of Colorado and UPI. This document can be found under the Official Documents section.