Property Control System Manual (PCS)

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Effective: 3/1/1984

Revised: 3/1/2014

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PCS 202: Purchased Equipment

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Purpose

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

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Sources

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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

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Applicability

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All equipment purchased with state, local, or sponsored funds for which title vests with ASU or the sponsor upon acquisition

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Policy

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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 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.


Equipment Purchased with University or Sponsored Funds

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, Financial References Web page for a list of object/sub-object codes).


Determining Factors Affecting Installation or Use

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

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, 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). Departments considering purchasing used equipment from other university departments should be directed to PCS 210, “Interdepartmental Acquisition of Used Equipment,” for procedures.


Equipment Purchased with Sponsored Funds

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 Property Control.

In most cases, a project director may purchase equipment using sponsored project funds when the equipment is budgeted in the contract or grant. Contact the sponsored projects officer before purchasing equipment with sponsored funds to determine allowability.

Note: For sponsored equipment acquisitions not itemized in the approved budget, prior approval must be obtained through one of the following methods:
  1. ORSPA Action Form—This form is used to request internal approval from the Office for Research and Sponsored Projects Administration.
  2. Request from sponsor—Notify the sponsored projects officer to request prior approval from the sponsor.

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Procedures

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Equipment Costing More than $10,000, but Less than $20,000

Before purchasing the equipment, the department must screen throughout the college or vice presidential area for available, comparable equipment.

If comparable equipment is available within the college or vice presidential area, the department contacts the custodian of the equipment to inquire about transfer, shared usage, or sale of the comparable equipment.

If the custodial department’s head is willing to transfer, share, or sell the comparable equipment, the department:

  1. if a monetary transfer is stipulated by the agreement, prepares a IX/J1 document transferring funds between department accounts
  2. and

  3. if a Property Control tag is affixed to the equipment, notifies the Property Control office of the custodial and location changes.

If the custodian is not willing to transfer, share, or sell the comparable equipment, the department purchases the required equipment in accordance with the Purchasing Procedure Guide.

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

  1. prepares an off-campus purchase request (RX) or an Internal Purchase Order (PO)
  2. obtains necessary approvals

    and

  3. sends the document to Purchasing and Business Services.
    Note: By purchasing new equipment, the ordering department is certifying that comparable equipment is not available within the college or vice presidential area.

Equipment Costing $20,000 or More

The department:

  1. prepares an off-campus purchase request (RX) or an Internal Purchase Order (PO)
  2. obtains necessary approvals

    and

  3. sends the document to Purchasing and Business Services.

Property Control reviews the screening report from Purchasing and Business Services and determines if comparable equipment is available within the university. If it is not, a certificate to document the results of the screening is prepared and filed.

If comparable equipment is available within the university, Property Control contacts the custodian of the equipment to inquire about transfer, shared usage, or sale of equipment.

If the custodian is not willing to transfer, share, or sell the comparable equipment, Property Control prepares a screening certificate to document the results of the screening.

If the custodian is willing to transfer, share, or sell the comparable equipment, Property Control contacts the ordering department and provides information about the custodial department and the location of the equipment.

The department follows the procedure in PCS 209, “Acquisition of Equipment for Resale,” and notifies Purchasing and Business Services to cancel the purchase order.

Property Control prepares a screening certificate to document the results of the screening.

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Cross-References

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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.”

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