2.1. Authorization and Title
Sponsor terms and conditions determine the ownership of title for property (including capital and non- capital property) acquired with award funds. On most federal grants, title to property purchased with award funds vests with the university upon acquisition or is conditionally titled to CU. Although federal contracts are generally governed by FAR 52.245-1 Alternate II, there is less standardization in contract award terms and ownership of title and other property restrictions may vary. Award terms may also identify:
- When specific, prior, written sponsor authorization must be obtained for property purchases, regardless of cost (both budgeted and unbudgeted).
- Reporting requirements for tangible property, capital equipment, or supplies.
- Process for requesting disposition instructions.
Title Vested with the University of Colorado
Federal sponsors have authorization to vest title to CU as either “exempt” or “conditional.” With the former, title is vested as exempt from any further obligation to the Government although CU must still comply with OMB circular stipulations regarding the acquisition, use, maintenance, record-keeping, and disposal. Specifically, the university must ensure that property purchased with federal funds is made available on other federally funded research projects. However, when the university has received title vested as exempt, property may be used and disposed of at the discretion of the university because the Government has no remaining interest in the property.
When title to property is conditional, CU receives title upon acquisition or receipt of the property, but the Government retains interest in this property. Government agencies have the option to reclaim title to any items reported to them within 120 days of the submission of the final property report and/or disposition request. Timeframes for providing disposition instructions can vary by federal agencies.
For both exempt and conditionally titled property, use of the property on other grants is allowable as long as that use does not interfere with the primary purpose for which the property was acquired. Some sponsors may place certain restrictions on the acquisition or use of property acquired with award funds. These restrictions may include requiring the university to obtain prior approval for purchase or may disallow the purchase of particular types of equipment. Sponsored Equipment always requires prior approval.
Title to supplies and other expendable property purchased with grant funds vests with CU upon acquisition. Upon completion of the project, any residual inventories of unused supplies exceeding $5,000 in total aggregate value must be reported to the Government. OMB Circular guidelines revised as of December 24, 2014, identify computers and electronic devices which cost less than $5,000 as supplies for grants. Computers and electronic devices may need to be included in the residual inventory reports for awards that are governed by the revised OMB Circular guidelines.
Title Vested with the Government
Government titled property falls into three categories: contractor acquired, Government furnished equipment, and Government furnished material. For specific instructions on use and maintenance of Government titled property and equipment, see 3.1 Utilization and Maintenance.
Contractor Acquired: This includes property that is purchased by the university on a sponsored award, when the terms and conditions specify that title vests with the Government. Prior approval from the sponsor is needed for property that costs more than $5000, but the specific requirements for prior approval are disclosed in the award terms. The university assumes responsibility for this property and has authorization to use it only on the award for which it was purchased. The university is required by FAR 52.245-1(f) to establish and implement a system with procedures to identify, tag, store, maintain, and account for this property. Although it is not very common, materials and supplies purchased for a particular purpose on the award may also need to be accounted for as they are consumed during the life of the project and at closeout. Unlike equipment titled to the university, use of Government titled equipment on other awards must be specifically authorized by the sponsor.
Government Furnished Property: Government furnished property (GFP) is Government owned property that is provided directly to the university for use on one specific award. An itemized list of GFP accountable to the award must be included in the contract and represents the university’s authorization to possess Government titled property for that purpose. The department notifies OCG immediately when property sent by a sponsor has been received by a PI or department so it can be properly tracked.
Government Furnished Material: Government furnished material (GFM) includes materials and supplies that are furnished to the university by the Government, whose ownership remains with the Government, for use on one specific award. The material may be incorporated into or attached to an end item to be delivered under a contract or may be consumed or expended in the performance of an agreement. Contract documents should clearly identify GFM, including the quantity and value of each item, in order to ensure the materials are accurately accounted for.
Title Vested with the Sponsor
Under the terms of an award, title to property acquired with award funds may vest with the sponsor. This can occur when the university is the prime recipient of an award, when the university is a subcontractor to another entity, or if the university is providing deliverable property to the sponsor as part of the scope of work of the award.
When the university is a subcontractor to another entity, the university’s sponsor may impose more stringent property terms than the prime sponsor. An example of this situation is Jet Propulsion Laboratory (JPL) which has their own terms and conditions regarding property and equipment for their awards, in addition to the prime award terms and conditions, which are incorporated by reference into their contracts. See Section 2.2. regarding receiving furnished property.