§ 200.313 - Equipment.

§ 200.313 Equipment.

See also § 200.439.

(a) Title. Subject to the requirements and conditions set forth in this section, title to Title to equipment acquired under a the Federal award will vest upon acquisition in the non-Federal entity. Unless a recipient or subrecipient subject to the conditions of this section. This title must be a conditional title unless a Federal statute specifically authorizes the Federal agency to vest title in the non-Federal entity recipient or subrecipient without further responsibility to the Federal Government , (and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity ). A conditional title means a clear title is withheld by the Federal agency until conditions and requirements specified in the terms and conditions of a Federal award have been fulfilled. Title for equipment vested in a recipient or subrecipient is subject to the following conditions:

(1) Use the equipment for the authorized purposes of the project during the period of performance , or until the property is no longer needed for the purposes of the project.

(2) Not encumber the property without While the equipment is being used for the originally-authorized purpose, the recipient or subrecipient must not dispose of or encumber its title or other interests without the approval of the Federal awarding agency or pass-through entity.

(3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section.

(b) General. A state State must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state State laws and procedures. Other non-Federal entities must follow Indian Tribes must use, manage, and dispose of equipment acquired under a Federal award in accordance with tribal laws and procedures. If such laws and procedures do not exist, Indian Tribes must follow the guidance in this section. Other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow paragraphs (c) through (e) of this section.

(c) Use.

(1) Equipment must be used by the non-Federal entity in the program or project The recipient or subrecipient must use equipment for the project or program for which it was acquired and for as long as needed, whether or not the project or program continues to be supported by the Federal award, and the non-Federal entity . The recipient or subrecipient must not encumber the property equipment without prior approval of the Federal awarding agency or pass-through entity. The Federal awarding agency may require the submission of the applicable common form forms for reporting on equipment. When no longer needed for the original project or program or project, the equipment may be used in other activities supported by the Federal awarding agency, in the following order of priority:

(i) Activities under a other Federal award awards from the Federal awarding agency which that funded the original program or project, ; then

(ii) Activities under Federal awards from other Federal awarding agencies. This includes These activities include consolidated equipment for information technology systems.

(2) During the time that equipment is used on the project or program for which it was acquired, the non-Federal entity recipient or subrecipient must also make the equipment available for use on other projects or programs currently or previously projects supported by the Federal Government, provided that such use will not interfere with the work on the projects or program purpose for which it was originally acquired. First preference for other use of the equipment must be given to other programs or projects supported by the Federal awarding agency that financed the equipment and second . Second preference must be given to programs or projects under Federal awards from other Federal awarding agencies. Use for non-federally-funded programs or projects is also permissible. User fees should be considered if , provided such use will not interfere with the purpose for which it was originally acquired. The recipient or subrecipient should consider charging user fees as appropriate.

(3) Notwithstanding the encouragement in § 200.307 to earn program income, the non-Federal entity recipient or subrecipient must not use equipment acquired with the Federal award to provide services for a fee that is less than a private companies company would charge for equivalent similar services unless specifically authorized by Federal statute for . This restriction is effective as long as the Federal Government retains an interest in the equipment.

(4) When acquiring replacement equipment, the non-Federal entity may use the equipment to be replaced as a recipient or subrecipient may either trade-in or sell the property equipment and use the proceeds to offset the cost of the replacement propertyequipment.

(d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, Regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient or subrecipient must manage equipment (including replacement equipment) utilizing procedures that meet the following requirements:

(1) Property records must be maintained that include a description of the property, a serial number or other another identification number, the source of funding for the property (including the FAIN), who holds the title holder, the acquisition date, and the cost of the property, the percentage of Federal participation in the project costs for the Federal award under which the property was acquiredFederal agency contribution towards the original purchase, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property.

(2) A physical inventory of the property must be taken conducted, and the results must be reconciled with the property records at least once every two years.

(3) A control system must be developed in place to ensure adequate safeguards to prevent for preventing property loss, damage, or theft of the property. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program.

(4) Adequate Regular maintenance procedures must be developed in place to keep ensure the property is in good proper working condition.

(5) If the non-Federal entity recipient or subrecipient is authorized or required to sell the property, proper sales procedures must be established in place to ensure the highest possible return.

(e) Disposition. When original or replacement equipment acquired under a Federal award is no longer needed for the original project or , program, or for other activities currently or previously supported by a Federal awarding agency, except as otherwise provided in Federal statutes, regulations, or Federal awarding agency disposition instructions, the non-Federal entity the recipient or subrecipient must request disposition instructions from the Federal awarding agency or pass-through entity if required by the terms and conditions of the Federal award. Disposition of the equipment will be made as follows, in accordance with Federal awarding agency or pass-through entity disposition instructions:

(1) Items of equipment Equipment with a current per unit fair market value of $5$10,000 or less (per unit) may be retained, sold, or otherwise disposed of with no further responsibility to the Federal awarding agency or pass-through entity.

(2) Except as provided in § 200.312(b), or if the Federal awarding agency or pass-through entity fails to provide requested disposition instructions within 120 days, items of equipment with a current per-unit fair market value in excess of $5$10,000 (per-unit) may be retained or sold by the non-Federal entity or sold. The Federal awarding recipient or subrecipient. However, the Federal agency is entitled to an amount calculated by multiplying the current market value or proceeds from sale by percentage of the Federal awarding agency's percentage of participation in the cost of the original purchasecontribution towards the original purchase by the current market value or proceeds from the sale. If the equipment is sold, the Federal awarding agency or pass-through entity may permit the non-Federal entity to deduct and retain recipient or subrecipient to retain, from the Federal share $500 or ten percent , $1,000 of the proceeds , whichever is less, for its to cover expenses associated with the selling and handling expensesof the equipment.

(3) The non-Federal entity recipient or subrecipient may transfer title to the property to the Federal Government or to an eligible third party provided that , in such cases, the non-Federal entity the recipient or subrecipient must be entitled to compensation for its attributable percentage of the current fair market value of the property.

(4) In cases where a non-Federal entity recipient or subrecipient fails to take appropriate disposition actions, the Federal awarding agency or pass-through entity may direct the non-Federal entity recipient or subrecipient to take disposition actions.

(f) Equipment retention. When included in the terms and conditions of the Federal award, the Federal agency may permit the recipient to retain equipment, or authorize a pass-through entity to permit the subrecipient to retain equipment, with no further obligation to the Federal Government unless prohibited by Federal statute or regulation.