Physical inventories are required annually.

3. Inventories

An annual inventory of all U.S. Government-owned equipment will be performed in conjunction with the annual inventory of University-owned equipment. A combined listing of both University- and U.S. Government-owned equipment will be sent to each Dean, Chairman, or Department Head detailing all equipment assigned to their department. It is the responsibility of the departments to conduct the annual inventory, certify, and sign that the inventory was performed and that any discrepancies found during the inventory were reported. For U.S. Government-owned equipment certification, a sample of departments will be selected annually and a spot check will be performed by the Office of Accounting to ensure the accuracy of the inventory and to identify property not in use. The property manager will review description model/serial number, manufacturer, condition, federal tags and location information and require the departments to make updates for any items noted in error. The property manager will request disposition instructions for all DOD, NIH, and NASA via the Administrative Contracting Officer for equipment identified to be no longer in use or needed.

Departments should notify the property manager to request disposition for all federal property when identified as no longer needed and not wait until the award expires.

Any significant adjustment to the U.S. Government-owned inventory will not be made without approval from the Office of Naval Research Regional Office (ONRRO) or cognizant Property Administrator.

Office of Naval Research

a. Condition Codes

During each inventory conducted, Project Directors should reevaluate the condition of each item. Unless the sponsoring agency directs otherwise, the standard condition codes and definitions are listed in the next section.

b. Supply Condition Codes (DFARS 45.606-5)

A	New, used, repaired, or reconditioned property; serviceable and issuable to all customers without limitations or restrictions; includes material with remaining shelf life of more than six months.
B	New, used, repaired, or reconditioned property; serviceable and issuable or for its intended purpose but restricted from issue to specific units, activities, or geographical areas because of its limited usefulness or short service-life expectancy; includes material and remaining shelf life of three to six months.
F	Economically repairable property which requires repair, overhaul or reconditioning; includes repairable items which are radioactively contaminated.
H	Property which has been determined to be unserviceable and does not meet the repair criteria.
S	Scrap. Material that has no value except for its basic material content.
X	Salvage. Property has some value in excess of its basic material content, but repair or rehabilitation to use for the originally intended purpose is clearly impractical. Repair for any use would exceed 65% of the original acquisition cost.

c. Disposal Condition Codes (FAR 45.606-5 (D) (4))

1	Unused-good. Unused property that is usable without repairs and identical or interchangeable with new items from normal supply sources.
2	Unused-fair. Unused property that is usable without repairs, but is deteriorated or damaged to the extent that utility is somewhat impaired.
3	Unused-poor. Unused property that is usable without repairs, but is considerable deteriorated or damaged. Enough utility remains to classify the property better than salvage.
4	Used-good. Used property that is usable without repairs and most of its useful life remains.
5	Used-fair. Used property that is usable without repairs, but is somewhat worn or deteriorated and may soon require repairs
6	Used-poor. Used property that may be used without repairs, but is considerably worn or deteriorated to the degree that remaining utility is limited or major repairs will soon be required.
7	Repairs required-good. Required repairs are minor and should not exceed 15% of original acquisition cost.
8	Repairs required-fair. Required repairs are considerable and are estimated to range from 16% to 40% of original acquisition cost.
9	Repairs required-poor. Required repairs are major because property is badly damaged, worn, or deteriorated, and are estimated to range from 41% to 65% of original acquisition cost.
S	Scrap. Material that has no value except for its basic material content.
X	Salvage. Property has some value in excess of its basic material content, but repair or rehabilitation to use for the originally intended purpose is clearly impractical. Repair for any use would exceed 65% of the original acquisition cost.

d. Acceptable Combination Codes

A	New; Used; Repaired - Material (With more than 6 months remaining shelf-life)	A1 - A6
B	New; Used; Repaired - Material (With 3 to 6 months more remaining shelf-life)	B1 - B6
F	Economically Reparable (Includes items radioactively contaminated)	F7 - F9
H	Determined to be Unserviceable	HX
S	No Value Except Basic Material Content	SS

4. Reports

Various Government agencies require periodic inventory reports of Government-owned equipment or updated cost information. These reports are normally prepared and submitted by the Federal Equipment Administrator, Office of Accounting. They are based on data from the property records and information provided by the departments. Additionally, the Federal Equipment Administrator, Office of Accounting updates associated records in the accounting system to track Office of Naval Research administered accounts.

Following are some of the more common reports UT Austin must provide to U.S. Government agencies:

• Department of Defense (DOD) Property in the Custody of Contractors (DD Form 1662). The 1662 Report is prepared annually for the period ending September 30th. Report is due no later than October 31. Negative reports are not required.
• NASA Property in the Custody of Contractors (NASA Form 1018). The 1018 Report is prepared annually for period ending September 30th. Report is due no later than October 15. Negative 1018 forms are required for all contracts. Negative reports for grants will be submitted in letter format. The original and three copies of the 1018 form go to the appropriate Deputy Chief Financial Officer for the NASA Center. One copy will also be sent to the ONRRO.
• Department of Energy (DOE) Semi-annual Summary Report of DOE Plant and Capital Equipment (Form 4300.3). Report is submitted semi-annually as of the end of February and August.
• Property reports as required by OMB A-110, Section 33.32(a).
• Reports are provided to the administering agency upon request. Reports can include inventory number, description, model/serial number, manufacturer, condition, location, funding source, acquiring contact/grant number, accountable contract/grant number, acquisition date, acquisition cost, ownership information, total number of items, and total acquisition cost.
• Property reports are provided upon request, and upon award closeout per agency contract/grant reporting requirements.

U.S. Government Inventory Forms
Office of Accounting
Office of Naval Research
OMB A-110 – Uniform Administrative Requirements for Grants and Contracts

D. Records of Scrap and Salvage

1. Scope

This part prescribes the procedures for keeping records of scrap and salvage derived from Government contracts or grants.

2. Records of Scrap

The Project Director shall maintain records to show, at a minimum, the following information:

• Contract/grant number and account number from which the item was purchased
• Material content
• Quantity on hand
• Unit of measure
• Posting reference and date of transaction
• Disposition

In most contracts and grants, there is no scrap involved; however, the Project Director should make at least a quarterly check to ensure none has developed during the course of the project.

3. Records of Salvage

The Project Director shall maintain records to show, at a minimum, the following information:

• Contract/grant number and account number from which the item was purchased
• Description of item to include, where available, the serial number, model number, government tag number, name of manufacturer, and year of manufacture
• Quantity on hand
• Posting references and date of transaction
• Disposition

The Project Director shall make at least a quarterly check to determine if there are property items that should be reported as being in a salvage condition.

E. Records of Materials and Supplies Consumption

1. Scope

This part prescribes procedures on the use of supplies and expendable property purchased with funds from contracts or grants, and the need for keeping records of such purchases.

2. General

There are no general requirements from Government agencies for reports of supplies used; however, occasionally there have been individual requests for providing such information. Accordingly, it is considered to be good business to establish minimum requirements at UT Austin. The Project Director must maintain records of supplies purchased and used with contract or grant funds, as such information cannot be practically compiled by the Office of Accounting.

3. Usage

The internal operating procedures of the department or center should ensure that supplies acquired with Federal funds are not used to support UT Austin research and development activities. Conversely, supplies purchased with UT Austin funds should not be used on U.S. Government research and development activities.

4. Records

At a minimum, the Project Director shall establish and maintain records on supplies to show:

• Contract and grant number
• Purchase order number and date
• Cost of purchase
• General description and quantity of supplies
• Name of company from which purchased

These records will be retained for at least six months following the termination of the contract or grant.

F. Maintenance Records

A maintenance record system will reflect the nature and cost of repair and replacement of component parts of metalworking machines and motor vehicles per the Defense Supply Agency Manual 4215.1 (DSAM 4215.1), and the Defense Industrial Plant Equipment Center (DIPEC) guidelines. Maintenance records will be kept on file in appropriate shops, showing the nature of remedial repairs, the parts replaced, and their cost. Any deficiencies found during routine inspections shall be brought to the attention of the Contracting Officer.

Defense Logistics Agency Manual 4215.1 (DLAM 4215.1)*

* NOTE: Best viewed with Adobe Acrobat Reader 6.0 or later. Earlier versions may result in incomplete rendering of information. A free update of Adobe Acrobat Reader may be obtained from Adobe.

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