PCS 201: Equipment Acquisition—General

To define general guidelines for the acquisition of university-funded and sponsored-funded equipment

48 Code of Federal Regulations §§ 45 and 52

United States. Office of Management and Budget. OMB circulars A-21, attachment J, and A-110, attachment N

Arizona Board of Regents Policy Manual - 3-607

Property Control

Financial Services

Purchasing and Business Services

Individual departments may purchase equipment using state, local, sponsored, and agency funds. Regardless of the source of funds, all purchases must be made in accord with applicable federal and state law and Board of Regents’ and university policy. Equipment also may be acquired by gift, donation, or lease/purchase; or it may be furnished by the government.

Equipment having a life expectancy of one year or more and a unit cost of $5,000 or more that is purchased for basic and applied research in the sciences and engineering is, to the extent permitted by law, exempt from sales tax. Also exempt are designing, developing, or testing prototypes, processes, or new products. This exemption includes research and development of computer software that is embedded in or an integral part of the prototype or new product or that is required for exempt machinery or equipment to function effectively.

For purposes of this exemption, research and development do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in basic and applied research in the sciences and engineering, or other nontechnical activities or technical services.

The exemption of sales tax does not apply to equipment with a life expectancy of less than one year or project cost of less than $5,000. (Fabricated equipment acquired at less than $5,000 is capitalized as long as the completed fabrication is greater than $5,000.) Such items include expendable supplies; janitorial equipment and hand tools; office equipment, furniture, and supplies; tangible personal property used in selling and distributing activities; motor vehicles; shops, buildings, docks, depots, etc.; and motors and pumps used in drip irrigation systems.

ASU may acquire ownership of equipment in several ways including, but not limited to, the following:

1. purchase or fabrication of equipment using state, local, sponsored, or agency funds
2. purchase or fabrication of equipment using federal or nonfederal sponsored funds for which the award document states that ASU retains title upon receipt of the equipment

   Note:

   Restrictions related to the use and disposition of such equipment may apply.

3. purchase or fabrication of equipment using federal or nonfederal sponsored funds for which equipment title is vested with the sponsor and subsequently transferred to ASU at the completion of the project

   Note:

   Restrictions related to the use and disposition of such equipment may apply.

4. donation of equipment from corporations, foundations (including the ASU Foundation), other institutions or entities (e.g., trusts, partnerships, other noncorporate business entities), or individuals

   and

5. lease/purchase of equipment after the lease/purchase option has been exercised.

   Note:

   Normally lease/purchase equipment is treated as university equipment when the first installment payment is made.

ASU may acquire use of equipment by receiving the following:

1. government-furnished equipment (GFE), with title vesting with the government
2. loaned equipment, with title remaining with the property lender

   or

3. purchased or fabricated equipment using federal or nonfederal sponsored funds for which equipment title remains vested with the sponsor.