Subcontracting TO Ohio University
If you are the lead PI/PD on a grant on which OHIO is a subcontactor, your subcontract award will be treated as any other externally funded project. In order for your project account to be established, you will need to have the minimum documentation as set forth in policy 19.045 and the award management process illustrated at the beginning of this section will be followed.

Subcontracting BY Ohio University
If you plan on using another entity (business or another institution of higher education) to complete some portion of your proposed scope of work, you will need to utilize a subcontractor. In most cases, you will have identified the need for this in your proposal, with the help of your pre-award manager at ORSP (see the Grant Submission Process section of this handbook). If you have not received approval from your sponsor to enter into a subcontract to complete a portion of work, your ORSP post-award manager will assist you in obtaining approval from appropriate official of your sponsor.

Identifying a subcontractor at the proposal stage is important both for sponsor approval, but also for creating an exemption to OHIO 's bid policy. The designation of a specific subcontractor in a proposal that is subsequently funded constitutes the use of that entity as a condition of the award. This automatically exempts you from going through the bid process.

Subcontract Generation
Now that you’ve received approval from both the sponsor and OHIO to enter into a subcontract, the time has come to create the legally binding document. A subcontract is a document that legally transfers responsibility to complete a portion of the proposed scope of work and money to another entity for the purpose of meeting the goals of your proposed project. This document is generated by your ORSP post award manager.

If you have an identified subcontractor in your funded proposal, ORSP will automatically create a subcontract and issue the document on your behalf. A subcontract is not binding until the authorized official of the subcontracting entity and the ORSP director have both endorsed the document. Some subcontracts require significant negotiation of terms with a potential entity and may be subject to some time delays. If you have not identified a subcontractor in your proposal, but will need one, you must receive approval from your sponsor before a document will be generated by ORSP.

Encumbrance of Subcontractor Funds
Once a fully executed (both parties signatures have been obtained) subcontract has been received into the ORSP office, the ORSP grants specialist will request a purchase order be generated from the Procurement Office in the Vice President for Finance and Administration Division. This act will encumber the funds from your restricted account to pay your subcontractor not more than quarterly. Procurement will notify ORSP of the newly established purchase order and an ORSP staff member will contact you with all pertinent information regarding the purchase order, including instruction on how to manage it. The Procurement Office will send a purchase order to your subcontractor on your behalf. The subcontract generated by ORSP will instruct the subcontractor to include a university FMS account number and a purchase order number on all invoices.If for some reason all of the encumbered funds are not needed, ORSP will work with GCA and Procurement to deobligate the funds and allow you to rebudget those funds with sponsor approval.

PI/PD Responsibilities
As mentioned before, the PI/PD on the grant is responsible for managing a subcontract, programmatically and fiscally. Each original invoice that you receive from your subcontractor must be approved by endorsing it with your signature then forwarding that original to GCA for payment. It is important to note that only the PI/PD (not support staff) should be approving payment to subcontractors as the PI/PD is liable should payment be made without work being completed to satisfaction. If for some reason your subcontractor is not performing as promised, you must request your ORSP post-award manager issue a stop work order from OHIO. This order will cease your professional relationship with this subcontractor specifically for this project. As necessary, ORSP will also assist you in obtaining approval from your sponsor to engage in another subcontracting relationship.

DON'T FORGET: Each original invoice that you receive from your subcontractor must be approved by endorsing it with your signature, then forwarding that original to Grant and Contract Accounting for payment.

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