Government equipment procedures

Upon acceptance of federal agreements the University becomes directly responsible for and accountable for all government property in accordance with the provisions of these agreements. The requirements for property control in these agreements vary among different government agencies. The following procedures supplement the University’s general property management procedures and are intended to satisfy the basic requirements of the various agencies in one consistent guide.

The principal investigator named in the federal agreement is responsible for the care, control and custody of the government property. Administrative responsibility for the management of government property is jointly handled by Property Management in Accounting Services and the Sponsored Program Services (SPS).

Definitions of terms used frequently with Government Property

Government Property Administrator — an authorized representative of the Government assigned to administer the contractual requirements and obligations relating to Government Property.

Government Property — all property owned by or leased to the government or acquired by the government under the terms of the federal agreement. It includes both government furnished property and contractor acquired property as defined below:

Government — furnished property means property in the possession of or directly acquired by the government and subsequently made available to Purdue.

Contractor — acquired property means property acquired or otherwise provided by Purdue for performing a Federal agreement and to which the Government has title.

Government Material — property that may be incorporated into or attached to a deliverable end item or that may be consumed or expended in performing a Federal Agreement. It includes assemblies, components, parts, raw and processed materials, and small tools and supplies that may be consumed in normal uses in performing a federal Agreement.

Facilities — property used for production, maintenance, research, development, or testing. It includes plant equipment and real property. It does not include material, special test equipment, special tooling, or agency-peculiar property.

Special Tooling — jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, all components of these items, and replacement of these items, which are of such a specialized nature that without substantial modification or alteration their use is limited to the development or production of particular supplies or parts thereof or to the performance of particular services. It does not include material, special test equipment, facilities (except foundations and similar improvements necessary for installing special tooling), general or special machine tools, or similar capital items.

Special Test Equipment — either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in performing a contract. It consists of items or assemblies of equipment, including standard or general purpose items or components, that are interconnected and interdependent so as to become a new functional entity for special testing purposes. It does not include material, special tooling, facilities (except foundations and similar improvements necessary for installing special test equipment), and plant equipment items used for general plant testing purposes.

Other Plant Equipment (OPE) –plant equipment regardless of dollar value, used in or in conjunction with the manufacture of components or end items relative to maintenance, supply, processing, assembly or research and development operations.  OPE excludes equipment categorized as IPE.

Industrial Plant Equipment (IPE) — plant equipment with an acquisition cost of $15,000 or more used for cutting, abrading, grinding, shaping, forming, joining, heating, treating, or otherwise altering the physical properties of materials, components or end items entailed in manufacturing, maintenance, supply, processing, assembly, or research and development operations.

Acquisition of Government Property — Assumption of Responsibility — Purdue shall be responsible for all government property in its possession or control in accordance with the terms of the federal agreement, including property provided under such federal agreement which may be in the possession or control of a subcontractor. Government property may be furnished or acquired as follows:

Furnished by Federal Agencies or Other Contractors — government property may be shipped to Purdue from government installations or other government contractors. Purdue shall become responsible for such property upon delivery of the property into its custody or control. The government property administrator shall furnish Purdue the necessary documents to accurately reflect the transaction.

Direct Purchase by Purdue Using Federal Funds — Direct purchases by Purdue from a federal agreement where the government has stated that it will retain title to the purchased items.

Discrepancies Incident to Shipment

1. Government Furnished Property — When overages, shortages, or damages are discovered upon receipt of government furnished property, Purdue shall provide a statement of the condition and the apparent causes in accordance with procedures approved by the government property administrator. When the quantity or description of property received by Purdue differs from the quantity or description denoted as shipped on the government transfer documents, only that quantity; or property, actually received will be recorded on the official records of Purdue.
2. Contractor Acquired Property — Purdue shall take all actions necessary in adjustment of shortages, overages, or damages in shipment of contractor acquired property from a vendor or supplier except in those instances wherein the shipment has been moved via a government bill of lading and carrier liability is indicated. In the latter event, Purdue shall report the instance in accordance with paragraph 1 above.

Recording of Government Property

1. Upon receipt of government furnished property the academic department shall promptly notify the appropriate account manager in Sponsored Program Services who administers the project receiving the property. Copies of any transfer/shipping documents received with the property should be forwarded to the account manager at the same time. The account manager will then verify that the government furnished property is authorized for use on the project that received the property. Once this has been done the account manager will forward the information on to property accounting, so they may record the government furnished property on the official University property records.
2. Contract acquired property will be recorded on the official University property records in the same manner described in the general property management procedures of Section A.

Tagging of Government Property — Equipment titled to the government will be tagged with an additional label identifying it as “Property of U.S. Government”.

Relief from Responsibilities — Purdue will be relieved from property control responsibility for government property for the following conditions, unless otherwise provided for in the federal agreement;

1. Consumption of property in the performance of the federal agreement — To the extent that the government property administrator shall determine that property has been consumed or expended for proper purposes and in reasonable amounts in the performance of the federal agreement.
2. Shipment of government property from Purdue — When government property is shipped from Purdue (except when shipment is to a subcontractor or other location of Purdue) pursuant to the contracting officer or the government property administrator instructions.
3. Determination by the contracting officer — For government property which is lost, damaged, destroyed, or consumed in excess of that normally anticipated in a manufacturing, processing or research operation, and for which the contracting officer has determined the extent of liability, if any, of Purdue; provided that:
   1. such determination is furnished to Purdue in writing.
   2. the government has been reimbursed where required by determination.
   3. proper disposition of property rendered unserviceable by damage has been accomplished.
   4. and appropriate cross-reference is recorded on the determination as to the shipping documents or other documents evidencing disposal.
4. Transfer of Title Purdue shall be relieved of responsibilities when title to property has been transferred to Purdue and thereby ceases to be “government property”.

Screening Prior to Purchase — U. S. Department of Defense (DOD) and National Aeronautics and Space Administration (NASA) contracts require that equipment of certain types and at special thresholds be screened through government surplus prior to purchase under their contracts.

1. Under DOD contracts the DD Form 1419 must be completed by Purdue and submitted to the administrative contracting officer prior to purchases of industrial plant equipment costing $15,000 or more.
2. Under NASA contracts the DD Form 1419 is required for all purchase in excess of $1,000 for screening through their equipment visibility system.

Annual Reporting to DOD and NASA — Agency regulations require that Government Owned Property in Purdue’s possession be reported annually.  The reports are prepared by the appropriate account manager in Sponsored Program Services.

DOD — For DOD contracts the DD From 1662 (DOD Property in the Custody of Contractors) must be filed.  DOD grants do not have a specific form.  The report covers the year ended 30 September and must be submitted to the cognizant ONR regional office by 31 October of the year being reported.  Negative reports are not required unless a positive balance was reported the previous year.

NASA — For NASA contracts the NASA Form 1018 must be filed.  NASA grants do not have a specific form.  The report covers the year ended 30 September and must be submitted to NASA directly with copies to the cognizant ONR regional office by 15 October of the year being reported.  Negative reports are not required unless a positive balance was reported the previous year.

Termination or Completion Inventories — Upon expiration of the federal agreement the appropriate account manager in Sponsored Program Services will request a property listing of all the equipment purchased or furnished on the federal agreement. The account manager will then reconcile the equipment listing to the total dollar amount of equipment reported on the financial status report for that federal agreement adjusting for any government furnished equipment.

Once the reconciliation has been completed, the account manager will coordinate the Completion of a Verification of Need Form (SPS Form 15) through the departmental Business office of the principal investigator for any government owned equipment on the inventory list. Upon receipt of the SPS Form 15, the account manager will submit the final property inventory to the proper agency with the appropriate request (title transfer, disposition instruction, etc.) relating to the property’s future status.

Maintenance and Care — It is the responsibility of the principal investigator to protect Government property against loss, damage, and use other than that authorized under his/her federal agreement. He/She ensures that the property is maintained and repaired by qualified personnel or returns it to the manufacturer for repair as the situation may require. He/She is also responsible for assuring the full availability and usefulness of the property to the project by permitting only qualified project personnel to use it and by suitably housing and protecting it from any deteriorating influences.