Property Control System Manual (PCS)
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| Effective: 3/1/1984 |
Revised: 11/1/2003 |
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PCS 203: Fabricated Equipment |
Purpose
To outline a procedure for acquiring fabricated equipment on a sponsored account
Sources
Federal Acquisition Regulation, Subpart 15.7 (January 1, 1994)
Property Control
Policy
Fabrications are tagged with unique ASU Property Control numbers, with the exception of movable components greater than $5,000 that can be used after the fabrication is dismantled. These items will be tagged separately.
In accordance with Federal Acquisition Regulation (FAR) Subpart 15.703, principal investigators (project directors) shall submit a memorandum detailing why the “equipment” must be fabricated (i.e., not available commercially) to their Office for Research and Sponsored Projects Administration (ORSPA) site officer for approval prior to fabrication when the contract under which the equipment is required exceeds $5 million. All materials regardless of cost are capitalized.
Equipment Acquisitions and Fabrications Exempt from Sales Tax
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.
Procedure
The department notifies the sponsored property coordinator if fabricating equipment.
If the finished fabrication will total $5 million or more and the award is a contract, the department contacts the sponsored property coordinator before proceeding with the fabrication. Agency approval must be requested.
If the award is a grant, the sponsored property coordinator assigns an ASU property control number (ASU PC#) to the fabrication, and sends a memo and fabrication data sheet to the account manager.
When processing Property Requests (RXs) for individual components of fabricated equipment, the department records the assigned ASU PC# in the first line of the item description of the request.
The department uses a 7810 45 or 7810 46 (exempt from sales tax) object/sub-object code on the accounting line of the request. The appropriate commodity code for the type of equipment should be used.
Upon receipt of the components of fabricated equipment, the department prepares receiver reports online in accordance with purchasing policies.
When fabrication is complete, the sponsored property coordinator tags the equipment with the ASU PC# designated for that particular fabrication.
If government- or sponsor-owned material is remaining, the sponsored property coordinator reviews with the principal investigator the excess material left over from the fabrication.
If excess material exists, the coordinator requests disposal instructions from the sponsor or government contracting officer.
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