PCS 202: Purchased Equipment

To ensure that equipment purchases are made in accord with federal and state law and Board of Regents’ and university policy

United States. Office of Management and Budget. OMB circulars A-21 and A-110

Arizona Board of Regents Policy Manual - 3-801, 3-803

Property Control

Financial Services

Purchasing and Business Services

All equipment (other than vehicles) purchased with state, local, or sponsored funds for which title vests with ASU or the sponsor upon acquisition

Equipment purchases using state, local, or sponsored funds must be made in accord with applicable federal and state law and Board of Regents’ and university policy.

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.

Coding Requisitions

Capital equipment requisitions must reflect proper object and commodity codes (7810 01– 99) and must be used to classify purchases (see the Financial Services Policies and Procedures Manual—FIN 430, “Expenditure Coding,” for a list of object/sub-object codes).

The requesting department is responsible for determining all factors affecting the installation or use of equipment, including, but not limited to:

1. utilities availability
2. space requirements
3. floor loading capacity

   and

4. building accessibility.

Screening for availability of existing equipment within the department (or similar unit) is the responsibility of the requesting department for equipment costing more than $10,000 but less than $20,000. Property Control will screen for equipment costing $20,000 or more. Screening must be documented by department personnel on the department copy of the purchase order.

If the equipment is available elsewhere on campus, the acquiring department should attempt to purchase the equipment, share usage, or make arrangements with the custodial department to transfer the equipment at no cost (see PCS 210, “Interdepartmental Acquisition of Used Equipment,” and PCS 502, “Transferring Equipment between Departments at Zero Cost.”

Under certain circumstances Purchasing and Business Services will assist departments in purchasing used equipment (e.g., from ASU Surplus Property and Recycling, the Arizona Department of Administration’s Surplus Property Management Office, or other salvage facilities). However, Purchasing and Business Services’ assistance is not required when purchasing used capital equipment (unless it is purchased through ASU Surplus Property and Recycling). Departments considering purchasing used equipment from other university departments should be directed to PCS 210, “Interdepartmental Acquisition of Used Equipment,” for procedures.

Before purchasing used equipment, an individual must obtain approval from the department chair, dean, director, or designee. Approval may be given in a memo or as a statement on the requisition.

Purchasing and Business Services is not obligated to assist the department in purchasing used equipment unless it is purchased from the Arizona Department of Administration’s Surplus Property Management Office.

Capital Budget

Most purchases require equipment to be in an approved capital budget. If the equipment is not budgeted, the supervisor’s or sponsor’s approval may be necessary before purchasing.

The title to equipment purchased with sponsored funds may change depending on the terms of the contract or grant; however, a standard provision of sponsored equipment purchases requires that such equipment shall be used only for the purpose for which it was purchased according to the contract or grant.

To determine the title of equipment purchased with sponsored funds, contact the sponsored property coordinator.

In most cases, a project director may purchase equipment using sponsored project funds when the equipment is budgeted in the contract or grant. However, some awards require specific prior approval on certain types of equipment, e.g., automatic data processing equipment (ADPE), even if listed in the approved budget. Contact the sponsored projects officer before purchasing equipment with sponsored funds to determine allowability.

The department must prepare an off-campus purchase request (RX) or an Internal Purchase Order (PO) and obtain necessary approvals to permit the document to be forwarded to Purchasing and Business Services.

The department must

1. screen throughout the college or vice presidential area for available comparable equipment before purchasing the equipment.

If comparable equipment is not available within the college or vice presidential area:

2. prepare an off-campus purchase request (RX) or an Internal Purchase Order (PO) and obtain necessary approvals. Send the document to Purchasing and Business Services.

   Note:

   By preparing a requisition, the ordering department is certifying that comparable equipment is not available within the college or vice presidential area.

If comparable equipment is available within the college or vice presidential area:

3. contact the custodian of the equipment to inquire about transfer, shared usage, or sale of the comparable equipment.

If the custodian is not willing to transfer, share, or sell the comparable equipment:

4. prepare an off-campus purchase request (RX) or an Internal Purchase Order (PO) and obtain necessary approvals. Send the document to Purchasing and Business Services.

If the custodian is willing to transfer, share, or sell the comparable equipment:

5. follow the procedure in PCS 209, “Acquisition of Equipment for Resale.”

For more information on purchasing state surplus property, see PCS 208, “Acquisition of Equipment from the State Surplus Program.”

For more information on decisions before purchasing capital equipment, see the Purchasing and Business Services Policies and Procedures Manual—PUR 206, “Equipment with Support Requirements.”

For the university policy on the purchase of used equipment, see the Purchasing and Business Services Policies and Procedures Manual—PUR 401–05, “Used Equipment.”