Chapter 10: Subcontractor Control

Subcontractor Requirements – Government Owned Equipment

Acquisition – When the subcontract allows for the subcontractor to acquire on behalf of Michigan Technological University as Government property, it must ensure the University has obtained all necessary approvals as stipulated in the contract between the University and Government. Copies of the acquisition documents, including paid invoices, are forwarded to Financial Services and Operations at Michigan Tech with the subcontractor’s request for payment.

Receiving – When equipment is ordered by the subcontractor, equipment/material should be shipped directly to the subcontractor location. Shipments are inspected and the receiving date is noted on the applicable invoice for future reference. If there are any discrepancies or damage in the shipment it should be handled immediately.   When equipment is received by loan from a federal agency, the applicable paperwork (such as the shipping documents and sponsor’s identification paperwork) must be forwarded to Financial Services and Operations.

Identification – Subcontractors will be issued Michigan Tech and Government tags to be affixed to Government equipment. Both tags will be affixed to equipment in a visible location so as not to interfere with the operation of the equipment when the equipment is received.   The location of equipment is then reported to Michigan Tech by the subcontractor on the property tagging form.

Records – The University will maintain the official property records for all government property. The subcontractor must maintain the same data as required by Michigan Tech. 

Movement – Government property should not be removed from the site of the subcontractor without prior written permission from Michigan Tech.

Storage – Government property in the possession of the subcontractor should be secure, easily identifiable, and stored in such a way to ensure that it is always protected. If equipment becomes idle, or is no longer needed, at any time during the research project the subcontractor should request disposition instructions from Michigan Tech.

Physical Inventory – Records of physical inventory of all Government property in the possession of the subcontractor must be done at least once every year.

Reports – Government required reports must be submitted to Michigan Tech Financial Services and Operations for processing.

Fabrication – When equipment is fabricated and the total acquisition cost exceeds $5,000 it must be added to the subcontractor’s equipment records and the information also transmitted simultaneously to Michigan Tech.

Use – Government property in the possession of the subcontractor may only be utilized for the purpose of the contract.

Maintenance – The subcontractor is responsible for preventative maintenance on all government equipment. Should any major repairs be necessary, written approval from Michigan Tech is required.

Disposition – Prior to any Government property being scrapped, traded-in, dismantled for parts or transferred, the subcontractor must request authority from Michigan Tech. Additionally, the subcontractor must immediately report to the University all cases of loss, damage, or destroyed government property.

Contract Property Closeout – The subcontractor must complete a final physical inventory at the completion or termination of the subcontract. Disposition instructions will be given to the subcontractor of all Government property in these situations by Michigan Tech Financial Services and Operations.