|Subject:||Subcontract agreements with small or potentially financially unstable organizations||No. 89-14, Formerly 79-2|
|Date: August 21, 1989|
(Note: This Important Notice is being sent to Account Managers, Chairpersons, Deans and Chancellors. Please forward to others who have a need to know.)
The University has, in the past, occasionally encountered financial problems resulting from subcontract agreements with small, financially unstable organizations. Such problems arise not only when the University is engaged as a subcontractor but also when it issues a subcontract to another organization. Typical problems include the following:
All future subcontract agreements will include the following condition so that the University will be protected against a recurrence of these problems:
As a part of any subcontract process, a review of the organization's financial history will be required. An exception to this condition will be made for the following subcontracting organizations:
- Another university.
- A large or well-known organization.
- An organization with which we have had previous satisfactory dealings.