Fabricated Equipment Policy

EFFECTIVE DATE: March 15, 2012 |LAST UPDATED: November 19, 2013 | Policy Section: sponsored-research

Responsible Executives

Carolyn Ainslie, vice president for finance and treasurer

Jeffrey Friedland, director, ORPA

Responsible Offices

Purchasing Department

Office of Research & Project Administration (ORPA)

Contacts

Jason Knoch, executive director of financial services and strategic initiatives, jknoch@princeton.edu or (609) 258-9181

Jeffrey Friedland, jfried@princeton.edu or (609) 258-3090

I. Policy StatementBACK TO TOP

The University must ensure that all property purchased with sponsored project or program award funding are proposed, accounted for, and reported in a manner consistent with the requirements of the sponsor and the University. Additionally, the federal government requires that adequate records and control procedures are established to provide a consistent and effective method of control. Accurate maintenance of property records is essential to safeguard assets, ensure financial accountability, support adequate insurance coverage, and promote efficient use of property already on hand.

The fabrication process is a method by which property is acquired by the University. This Fabricated Equipment Policy is intended to provide information on the following:

  • Definition of fabricated equipment
  • Fabricated equipment requirements:
    • Requests
    • Approvals
    • Fabricated Equipment Project Grant
    • Modifications
    • Closeouts
  • Roles and responsibilities of the various university departments and offices with respect to fabricated equipment
     

II. Who is Affected by this PolicyBACK TO TOP

This policy applies to all new federally funded sponsored projects or programs as of the effective date of this policy, including federal prime subawards received by the University through another entity. It should be understood by Principal Investigators (PIs), Grant Managers, Department Managers, Department Chairs, Deans, Dean for Research, Sponsored Research Accounting (SRA), Purchasing Department, and the Office of Research and Project Administration (ORPA).

III. Definitions

Allowable Fabrication Costs - Costs of materials and non salary services, such as shop charges, vendor labor, shipping, installation, and operating software, that directly make up a fabricated equipment item

Capital Equipment - An article of nonexpendable, tangible property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit

Coeus - University grants management database for administering proposals and awards

Fabricated Equipment Project Grant - Lower-level Coeus Project Grant used solely to accumulate fabricated equipment expenditures

Fabricated Equipment - A unique, identifiable, and discrete item which cannot be acquired off-the-shelf, has a useful life of more than one year, and is made of material and components which cumulatively cost $5,000 or more

Facilities and Administrative (F&A) Costs - Costs that are incurred for common or joint objectives and, therefore, cannot be specifically identified with a particular sponsored project, an instructional activity, or any other institutional activity. F&A costs are synonymous with indirect costs.

Project Grant (P/G) - Unique seven-digit number recognized by Coeus and PeopleSoft Financial System and used to record financial activity in an award or a sub-portion of an award

Unallowable Fabrication Costs - Salaries, University personnel labor, documentation, repair, maintenance, administrative support equipment, capital equipment that is not internal or integrated into the fabrication, enhancements to other equipment, or any other unrelated cost of the fabricated equipment item

Useful Life - An estimate of the average number of years a fabricated equipment item is considered usable before its value is fully depreciated; fabricated equipment item cannot be disassembled prior to end of useful life
 

IV. PolicyBACK TO TOP

Fabricated equipment constitutes equipment that cannot be acquired “off the shelf” but must be fabricated from individual components. This policy applies to those unique circumstances in which the actual piece of equipment is otherwise unavailable and may not be used for adding individual components to an existing item of stand-alone equipment, such as upgrades to computers or other existing equipment.

The new fabricated equipment item must be fabricated by a University department, institute, or center for use in the performance of a sponsored project or program. The item will be capitalized if the cost of the components making up the fabrication is $5,000 or greater, the useful life of the item is more than one year, the item is University-owned, and the item is identifiable as a discrete item. A computing network system in which the components are not physically attached or identifiable as a discrete item should be considered capital equipment rather than a fabricated equipment item, as long as it meets the $5000 or greater criteria.

Requests for the expenditure of a fabricated equipment item on any sponsored project or program award must be submitted to ORPA prior to the assembly and capitalization of the item, regardless as to whether the fabricated equipment item was included in the original proposal budget.

The University owns the property title to all fabricated equipment, unless specifically stated otherwise in the applicable sponsored award terms and conditions. PIs and departments cannot authorize University-owned equipment to be transferred, delivered, or sold without prior approval from both the Purchasing Department and ORPA.

V. Procedures BACK TO TOP

This section outlines the University procedures necessary to comply with the requirements of the sponsor and the University.

Requests

The PI or department must submit to ORPA a Fabricated Equipment Request Form for the expenditure of a fabricated equipment item on any sponsored project or program award prior to the assembly and capitalization of the item, regardless as to whether the fabricated equipment item was included in the original proposal budget. The request must include the following details that support the fabrication:

1. Project grant number
2. Principal Investigator name
3. Fabricated equipment item name
4. A description of the fabricated equipment item to be constructed
5. Estimated completion date (on or before the sponsor award completion date)
6. Estimated useful life of the fabricated equipment item when complete
7. Total budget estimate of allowable fabrication costs
8. Location of the fabrication process
9. Location of the completed fabricated equipment item

Approvals

ORPA will review the information included in the Fabricated Equipment Request Form for sponsor award compliance and adherence to this policy. If prior approval from the sponsor is required, ORPA will coordinate the request for sponsor approval with the PI and department.

Fabricated Equipment Project Grant

Once the fabricated equipment item is confirmed as an allowable cost in accordance with the sponsor award, ORPA will establish a separate Fabricated Equipment Project Grant for the fabricated equipment item. The Fabricated Equipment Project Grant will consist of the following information:

Modifications

Modifications may not be used for adding individual components to an existing item of stand-alone equipment, such as upgrades to computers or other existing equipment.  All modifications to the original fabricated equipment item request must be initiated by the PI or department and submitted to ORPA for review and approval. The Fabricated Equipment Request Form must be submitted to ORPA and can be used for the following modification requests:

Rebudgeting
If additional costs beyond the approved budget are needed during fabrication, a revised budget should be submitted to ORPA for approval; otherwise, these costs will not be acceptable as part of the fabricated equipment item and cannot be applied to the Coeus Fabricated Equipment Project Grant.

Scope Change
Requests for changes in scope of the fabrication that significantly modify the fabrication description or purpose require additional justification and must be submitted to ORPA for approval.

Extension of Time
Requests for an extension of time for the fabrication must be submitted to ORPA for approval. Fabrications that extend beyond estimated completion dates with no significant progress or sufficient justification will be disallowed. The new completion date must be on or before the sponsor award completion date.

Reduction of Time
If the fabrication is completed sooner than expected, the PI or department must notify ORPA and Purchasing to begin the closeout process.

Closeouts
The PI and department are accountable for its own fabricated equipment item(s), including maintaining appropriate financial records and tracking the location and status of equipment item(s). After the fabrication equipment item has been completed and the Coeus Fabricated Equipment Project Grant is expired, the PI and department must coordinate the closeout process with ORPA and the Purchasing Department.

Fabrication Completion
The completed fabricated equipment item must be discrete and taggable. Upon completion, the PI and department must complete the first section of the Fabricated Equipment Completion Verification Form and submit the form to the Purchasing Department. The Purchasing Department will provide a bar coded asset tag to the Department and PI. A completed copy of the Fabricated Equipment Completion Verification Form will be forward to ORPA.

Cost Analysis
All costs incurred on the Coeus Fabricated Equipment Project Grant must be considered allowable fabrication costs. All unallowable fabrication costs will be removed from the Coeus Fabricated Equipment Project Grant.
 

VI. Forms BACK TO TOP

VII. Contact Roles and Responsibilities BACK TO TOP

PI & DEPARTMENT ADMINISTRATOR Submits Fabricated Equipment Request Form to ORPA, coordinates sponsor approval request as required, submits Fabricated Equipment Completion Verification Form to Purchasing, tags fabricated equipment item, reviews expenditures for allowability, notifies ORPA and Purchasing of equipment transfers in accordance to Capital Equipment Policy
ORPA Approves fabricated equipment item expenditure, coordinates sponsor approval request as required, establishes COEUS Fabricated Equipment Project Grant
SRA Reviews expenditures for allowability
PURCHASING Provides asset tag to Dept/PI and completed Fabricated Equipment Completion Verification Form to ORPA

VIII. Update Log BACK TO TOP

8/6/12

Added clarification that modifications may not be used for existing stand-alone equipment.

3/15/12

Original policy released


 

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