What is an Other Significant Contributor (OSC) and how can it help my grant application?

 An Other Significant Contributor (OSC) is someone who will contribute to the scientific development or execution of an NIH-funded project without committing any measurable effort (person months or percent effort) to the project. OSCs are not considered senior/key personnel, but they can contribute meaningfully to the project, typically on a limited time basis.  

Including individuals as OSCs is common when including individuals in an advisory or other specific role, such as if you are using an innovative methodology and may need occasional advice from the individual who developed it in their laboratory. Using the OSC designation, if the person is willing to serve in this unpaid role, brings some advantages:

1. Save on expensive salaries.  If you plan to occasionally consult with a high-paid individual from your institution during the course of your study, using the OSC designation avoids the need to budget a percentage of an expensive salary and the associated indirect costs.  Even 2% of a salary at the NIH salary cap can eat into your budget. Keep in mind that most people do not want to work for free.  However, senior investigators who are already close to the maximum allowed effort on grants and expect only a minimal level of involvement with your project may actually prefer the OSC arrangement (see #3 below).
2. It allows you to include a biographical sketch (biosketch) from an expert in the field.  It may be difficult to get the world's expert in your discipline to join the research team.  However, they may agree to serve as an OSC and be available as someone you can occasionally bounce ideas off of during the course of the project.  OSCs are not considered key personnel, but their biosketches are included in the application package, which can strengthen the credibility of your research team.
3. It helps well-funded investigators to stay under the effort cap. A highly-recognized leader in their field is likely to have multiple grant awards. Effort is capped at 12 person months per year, which essentially means that a person can't work more than 100% of the time. If you need a distinguished expert to advise at a high level or be available for occasional questions, including them as an OSC might also make it easier for them to assist with your project without overcommitting their effort.

If the OSC role does not seem appropriate for your external collaborator, here is some information on Consultants that may be helpful: Role Confusion: How to tell the difference between Co-Investigators, Consultants, and others for an NIH proposal.