1.2. Definitions
The following terms and their definitions are used throughout this manual:
Acquisition Cost: The cost to acquire a tangible capital or non-capital asset including the purchase price of the asset, the cost of placing the asset in location and bringing the asset to a condition necessary for normal or expected use.
Administrative Contracting Officer (ACO): An authorized representative of the federal Government’s Contracting Officer appointed in accordance with agency procedures, responsible for administering the contract requirements and obligations relating to Government property in the possession of a contractor. Also referred to as the Property Administrator.
Cannibalize: The removal of serviceable parts from one item of equipment to use with another item of equipment.
Capital (Permanent) Equipment: A tangible item that is durable, non-expendable, meets the university capitalization rules (has a total acquisition cost of $5,000 or greater and a useful life of at least one year), and is by itself functionally complete for its intended purpose. Capital equipment can include both Standalone Equipment and Fabrications and may also be referred to as Fixed Assets.
Capitalization Rules: The thresholds by which property is determined to be capital equipment and exempt from indirect costs. These thresholds are:
- The equipment must have a total acquisition cost greater than $5,000.
- Once in service, the equipment must have a useful life of at least one year.
Computers and Electronic Devices: Machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or “peripherals”) for printing, transmitting, and receiving, or storing electronic information. Computers and electronic devices are considered non-capital property if they cost less than $5,000. If a computer or electronic device costs more than $5,000, it is considered capital equipment.
Contracting Officer: The duly authorized individual delegated by appropriate authority to enter a contract and thereafter administer the contract on behalf of the federal Government.
Deliverable Fabrication: Equipment that is being built for an external entity that will retain title to the finished equipment. A deliverable is not considered special test equipment.
Dual-Use Equipment: Items with both commercial and military applications, including those that were designed with no intrinsic military function but that may have a potential military application (i.e., computers, solar cells, optical instruments, light aircraft, lasers, etc.).
Fabrication that is considered Capital (Permanent) Equipment: The transformation of materials, consumable and non-consumable supplies, and hardware into a one-of-a-kind piece of equipment or scientific instrument that meets a unique research need and cannot be commercially obtained. This tangible, durable, non-expendable item has a total acquisition cost of $5,000 or greater and a useful life of at least one year and is by itself functionally complete for its intended purpose. In addition:
- Every component must be necessary and essential for the function of the entire fabrication to the extent that the removal of one component would diminish the operation of the entire fabrication.
- Applicable fabrication costs may include materials and supplies that are integrated into the fabricated unit, freight, construction, installation, training, or assembly labor.
- Materials and supplies that are necessary for the construction process or testing of the fabrication but are not integrated as final components of the fabricated unit must be charged as supplies and are not capitalizable fabrication costs. Examples of this would be fuels, gasses, or compressed air.
Fabrication Cluster: A multi-component item that is connected so it acts as one unit. Any individual piece within the cluster that is replaced would need to cost $5,000 or more, otherwise it is considered a repair to the cluster.
Federal Interest: The dollar amount associated with acquired equipment or supplies under a federal award that is the product of the (a) federal share of total project costs in that award and the (b) current fair market value of the property that is acquired, to the extent the costs of acquiring the property were included as project costs.
Fixed Assets: See definition for “Capital Equipment.”
General Purpose Equipment: Equipment that is not specifically limited to research, scientific, medical, or other technical activities, such as office equipment or furnishings, modular offices, laboratory furniture, telephone networks or infrastructure, information technology equipment and systems, air conditioning equipment, reproductions and printing equipment, and motor vehicles. Section 2 CFR 200.439(1)(2) of the Uniform Guidance states that expenditures for general purpose equipment are unallowable as direct costs on Federal awards. Refer to the Purchase, Use and Disposition of Sponsor Project Equipment Cost Principles Procedural Statement for further information.
Government Property: All property owned or leased by the federal Government. Such property provided under contracts with the university includes:
- Government-Furnished Property (GFP). Property in the possession of or acquired by the Government and subsequently delivered to or otherwise made available to the university for use under specified contracts and/or grants.
- Contractor-acquired property. Property acquired, fabricated, or otherwise provided by the university for performing a contract and/or grant, and to which the Government has title in accordance with contract or grant terms and conditions.
Intangible Property: Property having no physical existence, such as trademarks, copyrights, patents and patent applications and property, such as loans, notes and other debt instruments, lease agreements, stock, and other instruments of property ownership (whether the property is tangible or intangible).
Material: Property which may be incorporated into or attached to an end item to be delivered under a contract or may be consumed in the performance of a contract or may be a component part of a larger assembly. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies.
Negative Property Report: Term referring to a property report submitted to the sponsor that does not contain any reportable property.
Non-Capital Property: Tangible items that are non-consumable but do not meet the capitalization rules are considered non- capital property, such as computers and electronic devices.
Plant Equipment: Property of a capital nature (including equipment, machine tools, test equipment, furniture, vehicles, and accessory and auxiliary items) for use in manufacturing supplies, in performing services, or for any administrative or general plant purpose. It does not include special tooling or special test equipment.
Property Administrator: See definition for “Administrative Contract Officer.”
Sensitive Property: As defined by the General Services Administration, “sensitive property” includes all items—regardless of cost—that require special control and accountability due to unusual rates of loss, theft or misuse, or due to national security or export control considerations. This property includes information technology equipment with memory capability, cameras, communications equipment, and other electronic and computing devices.
Special Purpose Equipment: Equipment that 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.
Special Test Equipment: Either single or multipurpose integrated test units engineered, designed, fabricated, and/or modified to accomplish special purpose testing in performing a contract or grant. Special test equipment is not considered permanent equipment but must be reported to the sponsor when it is government tiled. Equipment that can be made suitable for general purpose use with relatively minor expense is not considered special test equipment.
Special Tooling: Consists of jigs, dies, fixtures, molds, patterns, taps, gauges, and all components of these items necessary for installing special test equipment.
Supplies: Tangible property that is not considered either capital or non-capital property. Most supplies are consumable and are used up during a sponsored project. Refer to: 2 CFR 200.1 Supplies