Consultancy contract characteristics
| Criteria | Consultancy Characteristic |
|---|---|
| What is the nature of the work required? | Consultants are individuals, partnerships or corporations engaged to provide professional, independent and expert advice or services.
The work involves the application of specialist professional knowledge or expertise that cannot be obtained in-house.
It involves the development of an intellectual output, such as research, evaluation, advice or recommendations, to assist the entity in makings decisions.
It involves a one-off task, a set of tasks or irregular tasks (meaning that it is ill-suited to the engagement of permanent staff).
The work that will be performed is an accessory to the entity’s business. |
| Under what direction or control will the work be performed? | Performance of the services is largely left to the discretion and professional expertise of the consultant.
Performance is undertaken without the entity’s direct supervision. |
| Who will own the contract outputs? | The output reflects the independent views or findings of the individual or the consultant’s organisation.
The output is being produced for the entity.
The output may not belong to the entity. However, the contract may specifically require the transfer of ownership of relevant intellectual property. |
| Will the contracted party use entity resources? | The Consultant may provide their own equipment.
The consultant may work from their own premises for some or all of the assignment*. |
*Where highly classified work is being undertaken, it is reasonable to expect that a consultant might work at the entity’s premises, using the entity’s equipment/supplies.
Common examples of consultancy services
An individual or a business providing professional services (supplier), usually specified as deliverables in a contract, and which requires independent and intellectual output is likely to be a consultant.
- The supplier is ultimately responsible for ensuring quality, timely delivery and performance management of individuals working on the deliverables.
- The engagement may include a project team located within an entity, but the output produced for the entity is largely independent advice.
- The supplier is usually paid as the agreed milestones are reached, or when a task or project is completed.
- The output (deliverables) may be identified as the independent work of the supplier.
An individual providing professional services as part of an entity, for example as part of a project team, and which is directed by the entity is likely to be a contractor.
- The contractor is under the direct supervision of the entity and the entity is responsible for managing the contractor’s work, including tasking and deliverables, timeliness of delivery, quality assurance and wider performance management.
- The contractor is usually part of an entity work unit/team.
- The contractor is likely to undertake the work at the entity’s premises or using the entity’s infrastructure. The contractor is normally paid on a time worked basis.
EXAMPLES
Finance and accounting
- A supplier engaged primarily to advise on the financial viability of a government business enterprise would be a consultant.
- An individual engaged through a supplier, or a supplier primarily to provide routine accounting services under the direction of an entity would not be a consultant.
Auditing
- A supplier engaged to undertake a program of audits or specific ad-hoc audits and produce independent findings for the entity would be a consultant.
- An individual engaged through a supplier, or a supplier to undertake routine internal audit functions of a government entity within the internal audit function of the entity and under direct supervision would not be a consultant.
Information Technology
- A supplier engaged to develop an information technology strategic plan and/or to develop specifications for the systems and/or to provide advice on implementation would be a consultant.
- An individual engaged through a supplier, or a supplier engaged to undertake routine implementation under direction and in accordance with specifications, for example, supplying or writing the software and constructing the systems, would not be a consultant.
Program Evaluations
- A supplier engaged primarily to provide independent high-level policy advice on the outcomes of a government program and to make recommendations would be a consultant.
- An individual engaged through a supplier, or a supplier engaged to collect and analyse data regarding a program under the direction of an entity would not be a consultant.
Training
- A supplier engaged to provide advice on training needs and to develop training programs would be a consultant.
- An individual engaged through a supplier, or a supplier engaged to deliver the routine training would not be a consultant.
Legal
- A legal firm engaged by the entity to provide independent legal advice would be a consultant.
- An individual engaged through a supplier, or a supplier engaged to provide legal advice to a government entity within the internal legal function of the entity and under direct supervision would not be a consultant.
