Equipment Acquisitions – Overview
Included on this page:
- Definitions
- Items Excluded from Tagging Requirement
- Departmental Benefits of Proper Acquisition
- Legal Reasons for Proper Acquisition
- Acquisition Methods
- Federal Acquisitions
- Determining Ownership
- Object Codes for Equipment Purchases
- Receiving
- Forms Required
- Frequently Asked Questions
- Regulations
- Contacts
Definitions
Ancillary Costs - Costs that are directly attributable to asset acquisition, such as freight and transportation costs, site preparation costs, and professional fees, that are necessary to place a capital asset into its intended state of operation. Ancillary costs are capitalized as part of the cost of a capital asset.Capital Assets - Assets that meet the state's capitalization policy such as land, improvement to land, easements, buildings, leasehold improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in state operations and that have initial useful lives extending beyond one year. Capital assets do not include depletable resources such as minerals or timber.
Donated Assets - Assets acquired by gift, donation, or payment of a nominal sum, which is not reflective of the assets' true market value.
Equipment – Tangible property other than land, buildings, improvements other than buildings, or infrastructure with a unit cost (including ancillary costs) of $2,000 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 buldings.
Fair Value - The amount that could reasonably be expected to be received for an investment in a current sale between a willing buyer and a willing seller.
Ownership - An indication as to who is responsible for possible claims against the asset by outside parties (e.g., federal government, state, agency). Ownership tells who has the legal or rightful title to the property.
Unit Cost - Unit cost is the purchase price or fair market value of one piece of equipment and can include ancillary costs such as calibration, installation, freight, trade-in, and sales and excise tax.
Useful Life - An estimate of the total time that an asset is usable and in service.
Sensitive Inventory Items (Small and Attractive Assets) - Assets that do not meet the state's capitalization policy but that an agency considers particularly vulnerable to loss, thus subject to special property control. At the Univeristy, this includes all weapons, firearms, and permanently attached accessories such aas rifles, pistols, flare guns, net guns, tasers, rifle scopes, signal guns, line-throwing equipment, and animal control devides. These must be tagged and inventoried regardless of cost. Proper object codes are listed below:
Items Excluded from Tagging
Items that are excluded from tagging and reporting requirements costing $2,000 or more should be coded 05-40. Examples follow:| Air conditioning units (fixed) | Shelving/room panels |
| Glass/plastic products | Drapes |
| Blinds | Shipboard "over side" items |
| Hot water units | Electrodes |
| Capital projects-remodeling (fixed) | Surgical items (misc.) |
| Marine wet/dry suits | Fishing nets, trawls |
| Building items | Tubes, electron |
| Medical items inserted into a body | Flowmeter heads |
| Carpets | Modular furniture |
| Rubber products | Seismographs (buried) |
| Current meters | Diamond knives |
Departmental Benefits of Proper Acquisition
Departments benefit from proper acquisition of equipment because:- Obtaining the proper equipment assists the department in meeting its research, teaching, and business objectives.
- You are prepared for any audit.
- Your department may lose federal funding if not in compliance.
- Proper acquisition can save your department indirect cost on research equipment.
Legal Reasons for Proper Acquisition
- State: State law requires State/University property to be purchased under the rules and regulations adopted by the legislature and other governing bodies.
- Federal: As a major recipient of federal funds, the University is obligated to follow additional regulations, especially related to advance approval of certain purchases adn reportign of activity with vendors.
Acquisition Methods
Appropriate
Follow the links below to see detailed instructions for any of the following appropriate acquisition methods:- Capital and Operating Leases
- eProcurement
- Fabrications
- Fellowships
- Gifts
- Government Furnished
- Loans
- Procurement Card (under $3,300)
- Purchase Orders (PAS)
- Surplus Property
- Trade-In
- Transfers-In
Inappropriate
- Procurement card (over $3,300)
- Check Request
- Federal Excess
- Purchasing for staff for personal ownership - considered an ethics violation under RCW 42.52.160 (Use of persons, money, or property for private gain).
Federal Acquisitions
Grant and contract acquisitions should be assigned an expenditure code based upon the University/State definitions for supplies and equipment. Sponsor requirements regarding allowable purchases of equipment by grant and contract budgets are dependent upon individual sponsor regulations and/or type of award. The award document, sponsor regulations, and the Grants Information Memoranda (GIM) contain information regarding budget restrictions, prior approval requirements, and rebudgeting.Pre-approval Procedures
- Purchase Requisition Notation - If specifically included in the approved award budget, annotate this by noting "Named in Grant" on the purchase requisition.
- Items Requiring Prior Approval - Some grant and contract sponsors require written approval prior to any equipment purchase. Most contracts require prior agency approval for items costing more than $5,000. Carefully review the grant or contract award document and specific sponsor regulations/guidelines for details concerning acquiring, transferring, and disposing of equipment.
- University Office Requiring Notification - All requests for approval submitted to sponsoring agencies must have the written concurrence of the Office of Sponsored Programs (OSP). Exceptions to this policy are requested under certain Department of Defense (DOD), National Aeronautical and Space Administration (NASA), and Department of Energy (DOE) contracts administered by the Office of Naval Research (ONR). For these exceptions, verification of prior approval for items costing more than $5,000 is required when not specified in the grant or contract.
Expenditure Restrictions
NASA and DOD contracts have established screening requirements for specific kinds of equipment acquired under contracts. Screening approval must be obtained in these situations whether or not the item was part of the approved budget. These agency screening requirements do not generally pertain to grants. The following are significant examples in which these procedures apply:- NASA Contracts - All equipment items costing more than $1,000 must be screened through the NASA Equipment Visibility System (EVS) by using the DD Form 1419. Contact Equipment Inventory's Federal Program Coordinator for the form and instructions.
- DOD Contracts -
- All automatic data processing equipment (ADPE) items which cost over $25,000 must be screened through the Defense Automation Resources Information Center (DARIC), Cameron Station, Alexandriam, Virginia by using the DD Form 1851 (Automation Equipment Requirement form). Contact Equipment Inventory's Federal Program Coordinator for the form and instructions.
- All items classified as industrial plant equipment having an acquisition cost of at least $15,000 must be screened through the Defense Industrial Plant Equipment Center, Memphis, Tennessee by using the DD Form 1419. Contact Equipment Inventory's Federal Program Coordinator for the form and instructions.
- Most DOD contracts require prior approval to purchase items of equipment over $5,000.
Determining Ownership
Ownership:- Tells who has the legal or rightful title to the property.
- Allows the owner to make decisions regarding the property.
- Is especially important during the acquisition and disposition phases as well as the beginning and end of the lifecycle of an asset.
- Is established based on the funding source and the grant or contract language.
- Federal - Equipment purchased with funds provided by a federal grant and/or contract where the federal agency retains title to the property.
- Equipment is purchased and/or furnished by the government for its intended research.
- University is accountable to the federal agency for the item.
- At the end of the research project, the University may be required to return the item or the federal agency may donate it to the University for continued research.
- Agency
- Equipment
purchased with funds provided by private donors through a grant or
contract where the private agency retains title to the property.
- Equipment is purchased and/or furnished by the private agency for its intended research.
- University is accountable to the private agency for the item.
- At the end of the research project, the University may be required to return the item or the private agency may donate it to the University for continued research.
- State - Equipment purchased, gifted, or transferr-in on a state or gift budget is University titled, adn falls under State property regulations along with any federal or private grant/contract where title is not retained by the agency at the time of acquisition.
Object Codes for Equipment Purchases
Below is a listing of the object codes that Equipment Inventory reviews. A detailed description of these codes is located on Financial Accounting's Object Codes for Expenditures website.| 05-10 | Sensitive Inventorial items (Less than $2,000) |
| 05-40 | Non-capitalized Equipment (Less than $2,000) |
| 05-41 | Non-capitalized Equipment - M&E Tax Exempt ($1,000 - $1,999) |
| 05-43 | Computing Supplies (Consumable) |
| 05-45 | Computer Software/Licenses (Each unit/license/user cost less than $2,000) |
| 05-99 | Miscellaneous Consumables |
| 06-10 | Computing Equipment ($2,000 - $4,999) |
| 06-11 | Computing Equipment ($5,000 or more) |
| 06-12 | Computing Equipment - M&E Tax Exempt ($2,000 - $4,999) |
| 06-13 | Computing Equipment - M&E Tax Exempt ($5,000 or more) |
| 06-14 | Computer Cluster ($2,000 - $4,999) |
| 06-15 | Computer Cluster ($5,000 or more) |
| 06-16 | Computer Cluster - M&E Tax Exempt ($2,000 - $4,999) |
| 06-17 | Computer Cluster - M&E Tax Exempt ($5,000 or more) |
| 06-90 | Other Equipment (Non-computing) ($2,000 - $4,999) |
| 06-91 | Other Equipment (Non-computing) ($5,000 or more) |
| 06-92 | Other Equipment (Non-computing) - M&E Tax Exempt ($2,000 - $4,999) |
| 06-93 | Other Equipment (Non-computing) - M&E Tax Exempt ($5,000 or more) |
| 06-96 | Equipment Pass Through |
- The following equipment items must be tagged by the receiving department upon receipt:
- Items acquired by purchase, gift, or transfer.
- Items furnished or loaned to the University from federal agencies for at least six months that cost $2,000 or more.
- Official government transfer documents must accompany equipment upon arrival.
- Equipment Inventory's Federal Program Coordinator should be contacted to ensure proper processing of all transfer documents regardless of cost.
- Items received from federal agencies costing less than $2,000 do not need to be tagged upon receipt but must be monitored and accounted for separately by the receiving department.
- Official government transfer documents must accompany equipment upon arrival.
- Equipment Inventory's Federal Program Coordinator should be contacted to ensure proper processing of all transfer documents regardless of cost.
- The department should create evidence of receipt by signing and dating a receiving report or transfer document upon delivery of equipment.
- Designated individuals (inventory contacts) in each department are to be authorized to check the condition of the equipment, sign for delivery, tag equipment within 24 hours of receipt, and either enter the information into the Asset Entry/Inquiry Screen of OASISor submit a completed UW Equipment Information (Orange) Card to Equipment Inventory.
- The department should maintain the following documents for a minimum of four, and preferable six, years for audit research purposes (see the General Record Retention Schedule):
- Recieving and shipping documents
- Evidence of receipt (usually an authorized signature and date on a receiving report or transfer document upon delivery)
- Official government transfer documents of federally furnished or loaned equipment
- Receipts on purchased items under $10,000 which are processed through the Accounts Payable Rapid Invoice Proccess (RIP).
- Copies of signed invoices from Accounts Payable for payment of invoices of $10,000 or more. Accounts Payable will forward an invoice/receiving report to obtain departmental approval for payment of invoices of $10,000 or more.
Forms Required
- DD Forms 1419 and 1851 may be required if the equipment purchased is federally funded. Contact Equipment Inventory's Federal Program Coordinator for assistance when purchasing federal equipment.
- Optional - UW Equipment Information (Orange) Card
Frequently Asked Questions
For frequently asked questions related to this topic, please visit our FAQ page.
Regulations
State Administrative and Accounting Manual (SAAM), Chapter 30: Capital Assets
University of Washington Administrative Policy Statements:
Federal Regulations:
Contacts
State/University Titled
Equipment: 206-543-4663 or eio@u.washington.edu
Federally Titled
Equipment:
206-543-4640 or 206-616-4046
