Equipment Fabrication

Original memo regarding F&A application to E.F. dated March 7, 2001

The waiver of F & A on component parts for equipment fabricated in campus shops is extended to equipment fabricated in campus labs as well. This action allows for the consistent treatment of equipment fabrication costs and supports graduate student training in research fields requiring construction of state-of-the-art equipment. 

Background

Our F & A Rate Agreement exempts purchases of equipment, but not specifically component parts required for equipment the University fabricates for use on sponsored projects. Most component parts in and of themselves do not fall within the dollar definition of equipment and, therefore, are subject to F & A. For over 25 years, the campus has waived overhead applied to equipment fabricated, constructed, and/or assembled under work orders in department shops. This exemption did not apply to components of equipment fabricated in department labs. With the increase of the equipment definition to $5,000 in July 1998, those researchers who need to fabricate equipment on-campus, but outside of the established shops, felt this policy was not equitable. A committee met in 2000 and recommended a revision to the current waiver policy at that time.

Implementation

Effective March 1, 2001:

  • Proposal budgets including equipment fabrication would exempt those items that meet the conditions of the policy;
  • Separate accounts be established for new awards based on proposals already submitted which include equipment fabrication as a budget line item;
  • Current awards with equipment fabrication line items are to start using the 4348 (Components for Constructed Equip) or 4349 (Federal - Components for Constructed Equip) code within the existing account number.

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