Direct Costs: Equipment

The University defines equipment as an article of tangible personal property that is non-expendable, stand alone, has a normal useful life of one year or more, and has an acquisition cost of $5,000 or more.

motherboard iconSpecial purpose equipment, such as specialized medical or research equipment which can be specifically identified with the project objectives, and is necessary to complete a research project, is generally an allowable direct cost. However, prior approval of the awarding agency may be required if special purpose equipment was not specified in the award budget. General purpose equipment, such as office equipment and furnishings, reproduction and printing equipment, and information technology equipment and systems, is usually not allowed as a direct cost because typically it is captured under indirect costs (Facilities and Administration also referred to as F&A).

Equipment is excluded from the Modified Total Direct Cost (MTDC) and is exempt from indirect costs.

If a piece of equipment is used on more than one project, the cost of the equipment should be allocated to each project based on the benefits received, such as hours used for each project. Documentation supporting a reasonable allocation or distribution of costs must be maintained by departments.

Fabrication of Equipment

A fabrication is a piece of equipment, as defined above, which has been physically constructed by University activity and is expected to be used by the University upon completion. It is not a product resulting from a simple assembly or connecting of various parts, and it is not a deliverable. The costs of components used in the fabrication process and the costs of purchased services directly related to the fabrication of equipment are exempt from indirect costs. However, the salaries, wages and benefits costs associated with equipment fabrication, the costs of equipment maintenance agreements and equipment repair are not exempt and will be assessed F&A. As with equipment in general, the title to fabricated equipment vests in UCI unless otherwise stated in the award.

Management and Disposition of Equipment

University and contracting/granting agencies' regulations require campus departments to conduct periodic physical inventories of assigned equipment and to verify and update departmental equipment records.

The disposition of equipment after an award ends may be defined in the award itself. If no guidance is provided in the award, the title to the equipment vests in UCI, per the Uniform Guidance §200.313.

Capital Expenditures

Capital expenditures for improvement to land, buildings, or equipment may be allowable as direct costs if they are budgeted or otherwise approved in writing by the Federal agency. Allowable capital expenditures include costs for installing equipment, such as the temporary removal and replacement of wall sections to place equipment in its permanent location, or the costs of connecting utility lines, replacing finishes and furnishings, and installing any accessory devices required for the equipment's proper and safe utilization. Routine maintenance for buildings and equipment are usually captured under indirect costs.

Additional Resources

UCI Administrative Policies and Procedures: