Updated: February 17, 2005
16.5.2 ACQUISITION OF EQUIPMENT
A. Authority to Purchase Government Property
Prior to the purchase of equipment, the Project Director
will screen available equipment to ascertain whether existing equipment
will meet the requirements.
The authority to purchase equipment is determined by the
contract or grant. Project Directors and departmental purchasing personnel
must be sufficiently familiar with the provisions of the contract or
grant to ensure that purchases are not made until approval is obtained
from the sponsoring Government agency.
An accountant from Contract and Grant Services monitors each
Federal contract and grant account. One of each accountant's specific
duties is to ensure that approval has been obtained from the Government
agency prior to the purchase of equipment.
Contract and Grant Services
B. Pricing
1. Contractor-Acquired Property
The unit price for contractor-acquired items is the basic cost, less
any discount, plus installation charges, building modifications, and
the appropriate shipping charges.
2. Government-Furnished Property
Normally, the unit price of Government-furnished property is provided
on the document covering the shipment of the property to UT Austin.
However, if the unit price is not stated on the document, it shall
be brought to the attention of Contract and Grant Services, where action
will be taken to obtain this information. Shipping and installation
costs are not normally considered a part of the unit price.
Contract and Grant Services
C. Discrepancies Incident to Shipping
1. Government-Furnished Property
When overages, shortages, or damages are discovered upon receipt
of Government-furnished property, the Project Director shall provide
a written report to Contract and Grant Services within ten days. This
report must contain sufficient facts and pertinent data to enable
the Contract and Grant Services to comply with the required reporting procedures
of the sponsoring Government agency.
Contract and Grant Services
2. Contractor-Acquired Property
The Project Director is responsible to take all actions necessary
in the adjustment of shortage, overages, or damages in shipment of
contractor-acquired property in accordance with local purchasing procedures
and sound business practices. This action must be taken in conjunction
with UT Austin's Central Receiving facility and as prescribed by
their procedures.
Central Receiving
D. Fabricated Equipment
1. Scope
This part prescribes the procedures for administratively controlling
and assigning costs for equipment that is fabricated or constructed
by the research department.
2. General
Generally, equipment acquired by UT Austin to support research
under a Government contract or grant is comprised of easily identifiable,
stand-alone items. The equipment items are assigned an inventory number,
tagged (if feasible) with a metal label, and have an invoiced unit
cost that is charged to an equipment subaccount. However, the nature
of the project or research under some contracts or, in others, the
non-availability of suitable equipment to perform the research, requires
that equipment be fabricated by the department assigned the contract.
In these cases, and particularly if more than one item is built, identifying
the cost of the equipment becomes complex. Nevertheless, equipment
costs must be derived.
3. Reasoning
The intent herein is not to constrain or impede research efforts,
but to ensure that expenditures are properly allocated in keeping
with good accounting practices and in a manner that will withstand
the scrutiny of the awarding agencies. It is recognized that Project
Directors need flexibility in managing their research grants and contracts.
Contract and Grant Services will assist and support the Project Directors
in that regard.
Contract and Grant Services
4. Subaccounts
To consolidate the various expenditures involved in
fabricating items of equipment, Contract and Grant Services has established
fabrication subaccounts for use in each agreement affected. The Project
Director must advise the UT Austin accountant of the particular
contract or grant involved if an item of equipment is going to be
fabricated so they can jointly agree on the appropriate subaccount
number. It is then incumbent upon the Project Director to maintain
a record system that will reflect the significant costs directly
related to the construction of the fabricated item. If more than one
piece is to be produced, (for example, a production run of identical
items), the total cost of the operation may be divided by the number
of items produced to obtain a unit cost.
Contract and Grant Services
5. Cost of Materials
Costs of materials and supplies used in fabricating
equipment shall be assigned to the fabrication subaccount, to the
extent to which they can be identified by the department or center.
The costs of contract labor directly related to fabrication shall
also be assigned, but not the cost of in-house (UT Austin) labor.
Those cumulative costs, as determined by the Project Director, regardless
of object class code, will become the cost of record for the fabricated
equipment item. When a fabrication subaccount has been established
for a particular contract, other subaccounts should not be used to
purchase materials, parts, etc. for the fabricated equipment, as to
do so would conceal costs properly chargeable to the fabrication.
Further, if different equipment items are going to be fabricated,
the Project Director must keep the costs for each segregated and properly
allocated. To facilitate this segregation, a limited number of different
subaccounts can be established for the costs of the different fabricated
items. If, however, the different items being fabricated will work
as an integral unit or system when finished, the same subaccount number
may be used. The Project Director shall determine this; however, the
accountant for the contract must be kept apprised. If the Project
Director uses one subaccount for different fabricated items, a ledger
detail should be maintained by the department or center staff to show
how the expenditures were allocated. It is not possible for Contract and Grant Services to maintain this detail.
Contract and Grant Services
6. Transfer of Cost
Departments/centers frequently maintain bench stocks
of commonly used components and replacement parts. Because these items
are purchased in quantity, they are more economical than special ordering
similar items. Consequently, researchers will use them in the interests
of expediency and economy. Costs of these items should be determined
and transferred by Inter-departmental Transfer Voucher (IDT) from
a departmental revolving account to the fabrication subaccount. In
some cases, the use of these materials and supplies may be minimal;
therefore, it may be difficult or not feasible to ascertain their
cost. When such costs are insignificant or cannot be determined, they
will not be transferred to the fabrication subaccount. The Project
Director shall determine this. The basic policy, however, is to identify
and properly assign the costs of all materials and supplies used in
the fabricated product.
Inter-Departmental Transfer (IDT) Voucher User Guides
E. Identification
1. Scope
This part establishes requirements and procedures for tagging U.S.
Government-owned equipment in possession of UT Austin.
2. Items to be Tagged
To facilitate inventory control and enhance security, all equipment
items, whether University- or U.S. Government-owned will have inventory
tags attached. All U.S. Government-owned property will be tagged in
accordance with provisions of this part.
3. Tagging Procedures
The Office of Accounting Inventory Services will tag the University- and U.S. Government-owned equipment within 10 working days upon receipt of equipment. Equipment that is contractor-acquired and determined to belong to the U.S. Government will be tagged using the University of Texas at Austin bar-coded property tag. A separate Property of U.S. Government tag will be placed on each piece of equipment. This information will then be entered into the inventory records as U.S. Government-owned property. U.S. Government-furnished equipment will be tagged in the same manner and entered into the inventory system as U.S. Government property. If the equipment cannot be tagged because of size, configuration, use, etc., the number may be etched or painted on the item. If this is not practical, a number will be assigned to the item and then entered into the inventory system as U.S. Government property. The record will contain a notation that the number is assigned and not on the item.
Inventory Services
4. Fabricated Equipment
When the equipment item has reached an identifiable stage of construction
(or is complete), as determined by the Project Director, it will be
tagged upon notice from the Project Director. After notification,
the Office of Accounting Inventory Services will tag the equipment
within 10 working days. The sponsoring agency may have provided an
inventory tag and number; if not, a UT Austin tag and number will
be assigned. If tagging is not possible or feasible, the department/center
shall keep the inventory tag on file along with the other property
records for the project. Normally, major fabricated equipment items
or diagnostics will be assigned one inventory number; fabricated subsystems
that become integral parts of existing items, as well as modifications
to existing ones, will be included under the single inventory number
for the specific item.
Inventory Services
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