Chapter 3: Acquisitions
Purchasing
Capital equipment may be purchased when the equipment is essential, contractually authorized, and not available or accessible from existing inventory.
Screening
Screening should be made prior to new purchases, contact Accounting Services to check for available existing equipment prior to purchase. If shareable equipment is identified, and use is allowable, an agreement may be negotiated between the two departments.
External screening is a requirement specified in some government sponsored agreements. Details regarding what needs to be screened can be found in each individual contract. It is the responsibility of the Principal Investigator (PI) to ensure that external screening has been fulfilled prior to the purchase of property.
Sponsored agreements may have screening requirements:
Department of Defense
In the Federal Acquisition Regulation, the Department of Defense specifies the following screening requirements for contract fund acquisitions.
Industrial Plant Equipment (IPE) is defined as equipment used for any of the following purposes: cutting, abrading, grinding, shaping, forming, joining, testing, measuring, heating, treating, or otherwise altering the physical, electrical or chemical properties of materials, components, or end items entailed in manufacturing, maintenance, supply, processing, assembly, or research and development activities. IPE with acquisition cost greater than $15,000 must be screened by submitting form DD-1419 to the ONR.
DOD - Definition and Categories of Industrial Plant Equipment (IPE) a. Industrial Plant Equipment (IPE) means plant equipment with an acquisition cost of $15,000 or more used for cutting, abrading, grinding, shaping, forming, joining, heating, treating, or otherwise altering the physical properties of materials, components or end items entailed in manufacturing, maintenance, supply, processing, assembly, or research and development operations.
b. Categories of IPE
Industrial Furnaces, Ovens, Physical Properties Testing, Equipment Environmental Chambers, Rolling- Mills, Drawing, Machines, Metal Finishing Machines, Portable Machine Tools, Metal Working, Machine Accessories, Scales, Balances, Optical Instruments, Foundry Equipment, Chemical Analysis and Laboratory Instruments, Rubber and Plastics Working- Machinery, Marking, Assembly, and Miscellaneous Industrial Machinery, Chemical and Pharmaceutical Products Manufacturing Machinery, Metalworking Saws, Filing Machines, Planers, Shapers, Welding, Heatcutting, Metalizing Equipment, Electrical and Ultrasonic Erosion Machines, Drilling and Tapping Machines, Miscellaneous Machine Tools Boxing- Machines, Broaching Machines, Secondary Metal Forming and Cutting Machines, Metalworking, Lathes, Lasers, Grinding Machines, Milling- Machines, Specialized Semiconductor and Microelectronic Circuit Board, Manufacturing Machinery
Acquisition is not authorized until the Defense Industrial Plant Equipment Center (DIPEC) returns a Certificate of Non-Availability.
NASA
In the NASA supplement to the Federal Acquisition Regulation (NFARS 1852.245-70) NASA specifies the following screening requirements for property acquired on NASA contracts.
Automated Data Processing Equipment (ADPE) with acquisition cost greater than $25,000 must be screened by submitting form DD-1851 to the ONR office in Chicago. Acquisition is not authorized until NASA approval is received.
Centrally-reportable equipment is defined as plant equipment, special test equipment (including components), special tooling and non-flight space property that is commercially available, identifiable by a manufacturer and model number, and valued at $5,000 or more.
Centrally-reportable equipment must be screened by submitting form DD-1419 to the ONR office in Chicago. Acquisition is not authorized until NASA approval is received.
Section 3.4
3.4.5 NASA - Centrally Reportable Equipment
a. Centrally Reportable Equipment means plant equipment, special test equipment (including components), special tooling, and non-flight space property (including ground support equipment) which:
(1) Is generally commercially available and used either as a separate item or as a component of a system
(2) Has an acquisition cost above the threshold specified in the contract
(3) Is identifiable by a manufacturer and model number.
"Space Property" means property peculiar to NASA aeronautical and space programs. It includes such items as aircraft, space vehicles, engines, similar components, and related support equipment.
Certain Federal contracts allow for screening, and acquiring Government surplus equipment when purchase of new equipment is not intended. In such cases, the above procedures may be used to determine the availability of surplus equipment as Govemment-furnished equipment (GFE).
Capital Equipment Account Codes
Purchase requisitions should contain accurate descriptions of capital equipment to be acquired. When purchasing capital equipment, it is important for the requestor to ensure the appropriate account code is used.
E036 Communications Equipment
E037 Furniture and Fixtures
E042 Computer Equipment
E048 Office Furniture & Equip
E050 Other Equipment
E051 Boats/Marine Equipment
E052 Technical/Scientific
E053 Vehicles
Receipt of the property is recorded in Accounting (Accounts Payable) when the vendor invoice payment is processed. The entry of payment initiates a flow of data through Banner creating a capital asset equipment record.
Split Funding - Capital Equipment Purchases
- University Funding: Departments may purchase equipment from multiple University funds. When an equipment purchase is funded from multiple sources, the equipment becomes the inventory of the first or prominent funding department.
- University / Sponsored Funding: To satisfy cost sharing requirements of a project, equipment may be purchased using both sponsored project and University funds. However, University funding may be lost if the sponsor retains title or reserves the right to request title to the equipment upon termination of the project.
- Multiple Sponsored Funding: Capital equipment funded from two or more sponsors presents conflict with the title-holder. Shared funding of equipment from more than one sponsoring agency is not permitted without prior agreement from the sponsors.
Sponsor-Funded Equipment
Contracts and grants must state equipment to be purchased in the proposal and approved in the budget.
Sponsoring agencies may have specific requirements and restrictions on purchasing new equipment. This includes general purpose equipment and special purpose equipment.
- General Purpose Equipment is defined as equipment, which is not limited to research, medical, scientific or other technical activities. Examples include office equipment and furnishings, modular offices, telephone networks, information technology equipment and systems, air conditioning equipment, reproduction and printing equipment, and motor vehicles.
- Special Purpose Equipment is defined as equipment which is used only for research, medical, scientific, or other technical activities. Examples of special purpose equipment include microscopes, x-ray machines, surgical instruments, and spectrometers.
For example, the National Science Foundation has general conditions for restrictions on specific items, such as computers:
NSF GC-1, 6-c
Conditions for Acquisition and Use of Equipment.: The awardees will assure that each purchase of equipment is necessary for the research or activity supported by the grant , not otherwise reasonably available and accessible, of the type normally charged as a direct cost to sponsored agreements, and acquired in accordance with organizational practice.
(NSF GC1-2) General Purpose Equipment. Expenditures for general purpose equipment (see GPM Section 612.2c) are unallowable unless the equipment is primarily or exclusively used in the actual conduct of the research.
(GPM 612.2 c. GENERAL PURPOSE EQUIPMENT means permanent equipment that is usable for other than research, medical, scientific or technical activities, whether or not special modifications are needed to make it suitable for a particular purpose. Examples of general purpose equipment include office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles and computer equipment.)