I greatly appreciate the number of responses to my inquiry about payment of
subcontract invoices. It seemed to generate a certain amount of interest.

 Actually, if the prime contract is cost-reimbursement, and the subcontracts
are cost-reimbursement as well, it is important to get invoiced and pay your
subcontractor's invoices quickly so that the subcontractor's costs can be
included in your invoice to the prime.

 If you are operating on an accrual basis, which allows you to pay your
subcontractor 30 days after their invoice is charged, the prime (if they pay on
time) should be paying your invoice at about the time that you are issuing
payment to the subcontractor.

 On a cost-reimbursement contract, you cannot withhold payment to your
subcontractor contingent upon payment from the prime contractor (since the
subcontractor's costs need to be included in your invoice to the prime.

 None of this is a problem if your prime contractor is paying your invoices
in a timely manner, of course.  The genesis of my initial inquiry was that
we've been dealing with a situation or two where this is not the case. Paying
your subcontractor's invoices on time (as one should) when your prime
contractor is not paying on time increases the financial exposure to the
institution for those unreimbursed subcontract costs.  We'd like to minimize
this risk where possible and/or pass it down to the subcontractor(s).

 Again, I appreciate the many responses I received.  Further thoughts are
encouraged! Thanks.

Jim Ball
Associate Director
The Ohio State University Research Foundation
xxxxxx@OSU.EDU