Costing Policy & Analysis

Research Administration

University of California

Memo

Operating Guidance

No. 95-10

October 4, 1995

Subject: Definition of Equipment in Contract and Grant Proposals--Interim Guidance

Federal regulations currently allow applicant organizations to define "equipment" to include non-expendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, "lower limits" may be established by the applicant organization. "Lower limits" mean that the applicant organization may choose to establish a lower dollar threshold and/or a longer useful life.

The University currently defines "equipment" to include non-expendable personal property having a useful life of more than two years and an acquisition cost of $500 or more per unit. A review is under way at the Office of the President to consider changing these thresholds, but until that review is completed the current University definition of "equipment" should be used for the purpose of completing contract and grant proposals for federal support.

The guidance given above will result in the same practice that has been followed for over twenty years, and so few if any operating changes should be made at the present time. An exception is the case where an agency has prepared preprinted budget forms that stipulate equipment line items having the $5,000 threshold. In these cases the Contract and Grant Office should make it clear to the sponsoring agency, for example by a pen and ink change on the form, that the University is using the $500 threshold.

For example, the National Science Foundation's latest Grant Proposal Guide (NSF 95-27) contains the following line item on form 1030, Summary Proposal Budget:

D. EQUIPMENT (LIST ITEM AND DOLLAR AMOUNT FOR EACH ITEM EXCEEDING $5,000.)

This should be altered to look like the following:

D. EQUIPMENT (LIST ITEM AND DOLLAR AMOUNT FOR EACH ITEM EXCEEDING [strike $5,000 and pencil in:] $500.)

Refer: Bill Sellers, (510) 987-9847, william.sellers@ucop.edu

Subject Index: 15

Organization Index: U-115

David F. Mears, Director, Research Administration Office

cc: David Barnard; Equipment Managers