Equipment Disposition

Equipment Definition

Federal definition of Equipment and Acquisition Costs:

2 CFR 200.33 Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000.

2 CFR 200.2 Acquisition costs:  “Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation may be included in, or excluded from the acquisition cost in accordance with the institution's regular accounting practices”

UW Equipment Office policies:

Equipment Definition:  Tangible property other than land, buildings, improvements other than buildings, or infrastructure with a unit cost (including ancillary costs) of $5,000 or more which is used in operations and with a useful life of more than one year.  Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to, or an integral part of, the building or structure, it is to be classified as equipment and not buildings.  

FAQ: Tangible assets acquired through donation, gift, purchase, loan, capital lease, or self-construction, with a life expectancy of more than one year and a total acquisition cost of $5,000 or more (total purchase price including shipping, handling, tax, etc.) should be assigned an appropriate University equipment identification tag and inventoried. 


Equipment Purchase Approval

Purchase of equipment requires written approval of federal sponsors, unless waived in the Award or sponsor Terms & Conditions.

  • Federal Government defines computing devices with an acquisition cost greater than $5,000, as “General Purpose Equipment” (GPE) (2 CFR 200.48 & 200.94)
  • GPE must have prior written approval of the sponsor (2 CFR 200.439)
  • Specific inclusion of the computing device in a proposal is considered prior written approval if funded
  • If not in proposal, document how the computer benefited in the award and why it was not included in the proposal budget

Equipment Cost Allocation

Cost of equipment should be allocated on the use basis at the time the Equipment was purchased; the costs does not need to be re-allocated throughout the award period or life of the equipment based on actual usage.

Federal regulations allow for other use of the equipment in the following order of preference:  

  • Award under which equipment was purchased
  • Sponsor (e.g., if the Award is NIH then other NIH programs)
  • Other Project/Programs supported by the Federal Government
  • Other non-federal projects/programs

Source:  2 CFR 200.313

Re-allocation of the cost of the equipment to other awards is also not necessary as it:

  • increases the administrative burden on central business units and the department,
  • creates an audit risk, and
  • is at risk for over-allocation. 

Equipment Disposition

Based on 2 CFR 200.313, title to equipment purchased on a federal Award:

  • Is only completely vested with the UW (the government does not have conditional title) if the Award specifically states that the recipient has unconditional title (example terminology:“without further obligation to the government” or “exempt”) and therefore there is no obligation to the federal government at the end of the award.This means that the equipment is “exempt” from the standard regulation; In this case, the government may still require transfer of the item either back to government or another entity such as when a PI moves to another institution and takes their award with them.
  • Is generally vested with the UW (not the department but the UW as UW is the recipient) as a “conditional title”.This means the government retains rights to the equipment and, for example, is entitled to reimbursement of the cost of the item if the UW wants to keep or sell it. In this case, the equipment is “non-exempt” from the standard regulation.

Upon either completion of the Award or the equipment is no longer needed for the Project, the department who purchased the equipment may take the following actions:

  • Internal Transfer

The following procedure is applicable for both Exempt and Non-exempt equipment:

Transferring possession of the equipment to another department does not require sponsor approval since title is with the UW, not the department. 

If the receiving department pays the giving department for the equipment, the funds used by the receiving department cannot be:

  • From a federal award (otherwise the USG is paying for the same equipment twice)
  • From a sponsor or other resource that requires title to any equipment purchases (otherwise both the government and the sponsor would claim ownership)

The receiving department assumes responsibility for the equipment and must adhere to the provisions below.

  • For actions other than Internal Transfer, the following applies:
    • If title is granted as Exempt, equipment disposition must follow UW policy.
    • If the title is Non-exempt, then the following applies:
    1. If the current fair market value is <$5,000:
      • There is no additional obligation to the government, the department can do what it wants with the equipment.If the equipment is sold there is no obligation to give any of the proceeds to the government.
      • Disposition must follow UW policy for the sale or transfer of the equipment.
    2. If the current fair market value is >$5,000:
      • If the equipment is sold to a non-UW entity, the proceeds from the sale must be refunded to the Agency less 10% of the sale amount or $500, whichever is less (UW gets to retain this amount to cover the administrative costs of the sale).

        If the department wants to retain the equipment for use on the project or other current or previously federal funded projects, the Agency still has rights to this equipment. The department may request disposition from the Agency, and if granted ownership, then the UW will have title. If the department receives disposition instructions from the Agency but the department does not follow those instructions, title to the equipment is retained by the government.

      • If the department wants to use the equipment on another project or program that has never received federal funding then the department must request disposition from the government to transfer title from the government to the UW. If the department wants to use the equipment on another project or program that has currently or previously received federal funding, then the department does not need to request disposition from the government.This is true even if the project is not currently being funded by a federal source.