Research Policy Analysis and Coordination
Chapter 15-200: Title and Ownership of Property
Title to or ownership of all University property is vested in The Regents of the University of California. In this Chapter, phrases such as "title vesting in the University" and "title vesting in The Regents" are used interchangeably.
The Board of Regents is responsible for all property to which The Regents holds title. Custodial responsibility for other property rests with The Board of Regents to the extent that it has explicitly agreed to accept responsibility for such property. By authority provided in Section 100.4(a) of the Standing Orders of The Regents of the University of California, the President of the University has assigned to the Chief Financial Officer general responsibility for the care andcustody of property belonging to The Regents. The Chief Financial Officer has assigned responsibility for the management and control of inventorial equipment to the Executive Director — Procurement Services.
15-210 Sponsor Requirements
Under federal contracts, title to equipment acquired by the University using contract funds and costing $5,000 or more usually remains with the Government unless the contract states otherwise; when the acquisition cost is less than $5,000, title usually vests in the University. As stated in both FAR 52.245-1, Alternate II, Government Property, title to property (and other tangible personal property) purchased with funds available for research and having an acquisition cost of less than $5,000 shall vest in the Contractor upon acquisition or as soon thereafter as feasible; provided, that the Contractor obtained the Contracting Officer's approval before each acquisition.
The University may request that title to Government-owned equipment be transferred to the University. The decision to exercise this option should be made on a case-by-case basis.
When title vests in the Government, the University acts as custodian of the equipment. The University also acts as custodian of the equipment when the equipment is furnished by the Government and the Government retains title.
Under federal grants, the University normally gains title to equipment acquired with grant funds upon acquisition. (See 2 CFR 215.30 through 215.37 (formerly OMB Circular No. A-110), Property Standards and 15-F01 below.) Although the Government may specifically reserve the right to transfer title either to itself or to a third party, in practice, this seldom happens.
Under State of California awards, the State normally retains title, but upon request, allows the University to use the equipment after the expiration of the award.
Under non-federal awards, title to and disposition of any equipment purchased with sponsor funds should be specified in the award terms. The preferred option is for the University to take title to the equipment upon acquisition.
University procedures for the care, maintenance, records, physical inventory, and control of inventorial equipment as outlined in BUS-29 are designed to comply with virtually all sponsor requirements regardless of whether or not the sponsor retains title (see 15-F01).
15-220 Cost Implications
In reviewing proposals and awards that involve the acquisition of equipment, Contract and Grant Officers should take into account concomitant direct costs for the University that may be allocable to the sponsor. In addition to any acquisition costs, shipping, sales taxes (see Chapter 7, Section 7-221),maintenance and repair costs (see Chapter 7, Section 7-209), registration and licensing costs (e.g., for vehicles--see Business and Finance Bulletin BUS-8, Acquisition and Disposition of University Vehicles), storage costs (see BUS-29 Section III.F. ), insurance (see Chapter 7, Section 7-207 of this Manual and Section 15-221, below), and disposition costs (see BUS-29 Section XI. and BUS-38, Disposition of Excess Property and Transfer of University-Owned Property) may be allocable to the sponsor.
15-221 Risk of Loss/Damage to Sponsor Property
Agreeing to act as custodian for sponsor-owned property may require the University to assume responsibility for loss or damage to the property. This contractual obligation is covered automatically under the University's General and Automobile Liability Self-Insurance Program (Business and Finance Bulletin BUS-81) for campuses and medical centers. The University's insurance program does not apply to the Lawrence Berkeley National Laboratory. Losses or damage must be reported within 24 hours to the campus police and Risk Management Department.
If the terms of an extramural award require that the University have and maintain specialized insurance coverage, then Contract and Grant Officers should consult with local Risk Managers to determine whether the required coverage is already available. If the risk is not covered by the University's existingself-insurance or insurance programs, three options are available: (1) the property should not be accepted; (2) the department or unit responsible for administering the award should identify a fund source that would cover any liability; or (3) the campus Risk Management Department may be asked to determine if insurance can be purchased. The insurance cost would be a cost charged to the extramural award.
15-230 Approvals Needed
Campuses should have procedures in place to ensure that all required approvals are obtained before acquiring, modifying, renovating, and/or disposing of property using extramural funds. If research involves the modification of a piece of equipment and title to that equipment rests with the University, such modification is subject only to University approval. However, when title rests with the fund-granting source, prior approval by the source is usually required.
15-240 Fabricated Equipment
For a variety of reasons, the University often must create property that is not available elsewhere. Fabricated property items are created either for use by the sponsor or for use by the University. Standard items that are altered or customized to make them usable on a sponsored project do not qualify as fabricated property.
Fabricated items regardless of cost that are either created for transfer to a non-University entity or are expected to have a useful life of less than one year do not meet the University's definition of inventorial equipment and should not be treated as such. The components, labor and all other costs of fabrication are included in the indirect cost rate base and are assessed applicable indirect costs. Indirect cost calculations on fabricated items that meet the University's definition of inventorial equipment are described in Chapter 2-526 of this Manual.
Additional information concerning fabricated equipment is found in BUS-29; Accounting ManualChapter P-415-32, Plant Accounting: Inventorial Equipment--Fabricated Items; and Chapter 7,Section 7-205 of this Manual.