Purchase, Use, and Disposition of Equipment on Sponsored Awards
Proposal
The proposal budget should include the cost of the equipment as well as any shipping costs, required maintenance, or other associated costs. The budget justification should clearly document why the equipment is needed for the project and how it will be utilized to complete the project aims or scope of work. Federal funds should only be requested for equipment necessary to complete the project that is not already available at the university. Equipment purchases should typically be budgeted in the first year of the project period, purchasing items of equipment at the end of the period of performance is typically unallowable unless there are unique circumstances that would justify an exception and sponsor approval. Any equipment purchased with sponsored funds is expected to be used to directly benefit the project. In some cases, planned purchases of large items of lab equipment may need to be reviewed by the Environmental Health & Safety Office at GMU to confirm that there is adequate space for installation and any required electrical or safety modifications can be accommodated.
Award
Regulations regarding the use and purchase of equipment vary depending on the sponsoring agency and the award mechanism. For grants, the award terms and conditions, agency guidelines, and terms of the U.S. Office of Management and Budget’s Uniform Guidance should be followed. For contracts, guidelines regarding purchase and use of equipment can be found in the Federal Acquisition Regulation (FAR) 52.245-1, contract terms, and agency guidelines.
Section 2 CFR 200.313 (c) and 2 CFR 200.439(1)(2) of the Uniform Guidance contains information on proper use of equipment purchased with grant funds. Expenditures for special purpose equipment are allowable, provided they are necessary to the completion of the project and have prior sponsor approval when required. If the award budget includes equipment purchases, the award terms and conditions should be carefully reviewed to determine what the sponsor requirements are in terms of ownership, tracking, and reporting. Sponsor guidelines may be more restrictive than the Uniform Guidance requirements. The award terms and conditions and sponsor guidelines should be reviewed closely if the need to purchase an item that meets the definition of equipment arises during the project that was not included in the originally approved proposal budget. Some sponsors require prior approval for equipment purchases or significant changes to the budget. Equipment purchased with federal funds must be used only as authorized by the award. Special purpose equipment should only be charged to the award when it is necessary to fulfill the objectives of the project and the cost is reasonable, allowable, and allocable as defined by Uniform Guidance 2 CFR §200.403-405.
Equipment purchased under federal contracts (contractor acquired property) or provided to GMU by the government (government furnished property) must be managed in accordance with the FAR requirements and specific contracts terms. Contractor acquired property or government furnished property under a federal contract may not be used for any other contract or purpose without sponsor approval.
GMU’s equipment procedures are applied uniformly to both federal and non-federally funded sponsored awards, but it is also important to know the specific equipment requirements or restrictions that may apply for each non-federal sponsor.
Use, Management, & Disposition
The federal definition of equipment (under Uniform Guidance) is tangible personal property having a useful life of more than one year and per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the recipient or subrecipient, or $10,000 (2 CFR 200.1). GMU’s current capitalization threshold is $5,000. All equipment with a per unit acquisition cost of $5,000 or more and an expected useful life of more than one year is recorded in GMU’s central inventory.
The award document or agency guidelines typically state whether the title to purchased equipment vests with the recipient or with the sponsor. If the title vests with GMU, the university has ownership of the equipment and may retain the equipment at the end of the project with no further reporting required. When the title vests with the sponsor, equipment must be tracked and reported (typically on an annual and final basis), and GMU must request disposition instructions at the end of the project performance period. For most federal grants, GMU retains a conditional title to equipment during the project period meaning that title is withheld by the federal agency until the conditions and requirements specified in the terms and conditions of the award have been fulfilled (2 CFR 200.313). GMU can request to retain the equipment for use on other related research or future grants from the awarding agency at the conclusion of the federal award. If approved, the title will be transferred to GMU and no further reporting is required.
Under federal contracts, the title to government furnished equipment (items provided by the sponsor to GMU, not purchased with sponsored funds) always vests with the government regardless of the dollar value of the equipment. Instructions for final disposition and return of equipment items are usually provided during the closeout of the award. Title to contractor acquired property (purchased with contract funds) under federal contracts must be managed and dispositioned in accordance with the FAR requirements identified in the contract. All items of equipment must be tracked and regularly inventoried. Any contractor acquired or government furnished equipment identified as excess to the contract and no longer needed for the originally intended purpose should be dispositioned as soon as possible.
Equipment Tracking & Management
Federal regulations require that GMU maintain a property management system that allows us to track and manage assets responsibly and accurately. The Fixed Assets Office in Fiscal Services is responsible for tracking and providing oversight of university equipment. Any equipment purchased on sponsored awards in which the title vests with the university becomes the property of George Mason University, not a department or employee, regardless of the source of funding used for the purchase. Faculty transferring to a new educational institution or wishing to loan equipment to collaborators at other institutions must follow university procedures regarding equipment. For more information on loans to external parties including the types of loans that are permitted and the required forms, please review the information found at https://fiscal.gmu.edu/equipment/transfer-assign-loan-equipment/.
Faculty should work closely with their department and college research administrators and equipment liaisons to obtain approvals before initiating any loans or removing any items of equipment from campus facilities.
Frequently Asked Questions:
I am leaving the university and have an active sponsored award that I am transferring to my new institution. Can I take a piece of equipment that I purchased with funds from that award to my new institution?
The transfer of equipment may be allowable for active awards depending on the award terms and conditions and subject to university approval. Contact your Department Chair, Associate Dean for Research, and Department Research Administrator regarding any equipment that will need to be transferred to the new institution. PIs should work with Fiscal Services Fixed Assets Office, and also work with the Legal Affairs Office for an MOU reflecting that the transfer of any equipment is in “as-is” condition.
A subcontractor or collaborator on my project needs to utilize equipment purchased by GMU with grant sponsored funds. Can I loan the equipment to them for use on the project?
This type of loan is permissible in certain circumstances, but does require completion of the university property loan form and approval prior to the transfer of any items. Please refer to Fiscal Services, Transfer, Assign & Loan Equipment for additional information.
I want to take a piece of equipment from my lab or office to use at home, is this permissible?
Desktop PCs and other large items may be lent to faculty and staff for use at their homes or at alternate locations. This equipment is to be used for Mason business purposes only. Please refer to Fiscal Services, Transfer, Assign & Loan Equipment for additional information.
Additional GMU Resources:
University Policy 2104-Inventory Control of Office and Educational Equipment and Furniture