[Code of Federal Regulations]
[Title 20, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR435.34]

[Page 1119-1120]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
               CHAPTER III--SOCIAL SECURITY ADMINISTRATION
 
  PART 435_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS 
 
                    Subpart C_Post-Award Requirements
 
Sec. 435.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds 
will vest in the recipient, subject to conditions of this section.
    (b) The recipient may not use equipment acquired with Federal funds 
to provide services to non-Federal outside organizations for a fee that 
is less than private companies charge for equivalent services, unless 
specifically authorized by Federal statute, for as long as the Federal 
Government retains an interest in the equipment.
    (c) The recipient may use the equipment in the project or program 
for which it was acquired as long as needed, whether or not the project 
or program continues to be supported by Federal funds and may not 
encumber the property without approval of SSA. When no longer needed for 
the original project or program, the recipient must use the equipment in 
connection with its other federally-sponsored activities, in the 
following order of priority:
    (1) Activities sponsored by SSA, then
    (2) Activities sponsored by other Federal awarding agencies.
    (d) During the time that equipment is used on the project or program 
for which it was acquired, the recipient must make it available for use 
on other projects or programs if such other use will not interfere with 
the work on the project or program for which the equipment was 
originally acquired. First preference for such other use must be given 
to other projects or programs sponsored by SSA; second preference must 
be given to projects or programs sponsored by other Federal awarding 
agencies. If the equipment is owned by the Federal Government, use on 
other activities not sponsored by the Federal Government will be 
permissible if authorized by SSA. User charges will be treated as 
program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to the 
approval of SSA.
    (f) The recipient's property management standards for equipment 
acquired with Federal funds and federally-owned equipment must include 
all of the following:
    (1) Equipment records must be maintained accurately and must include 
the following information:
    (i) A description of the equipment.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number.
    (iii) Source of the equipment, including the award number.
    (iv) Whether title vests in the recipient or the Federal Government.
    (v) Acquisition date (or date received, if the equipment was 
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of 
Federal participation in the cost of the equipment (not applicable to 
equipment furnished by the Federal Government).
    (vii) Location and condition of the equipment and the date the 
information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates the Federal awarding agency for its share.
    (2) Equipment owned by the Federal Government must be identified to 
indicate Federal ownership.
    (3) A physical inventory of equipment must be taken and the results 
reconciled with the equipment records at

[[Page 1120]]

least once every two years. Any differences between quantities 
determined by the physical inspection and those shown in the accounting 
records must be investigated to determine the causes of the difference. 
The recipient must, in connection with the inventory, verify the 
existence, current utilization, and continued need for the equipment.
    (4) A control system must be in effect to insure adequate safeguards 
to prevent loss, damage, or theft of the equipment. Any loss, damage, or 
theft of equipment must be investigated and fully documented; if the 
equipment was owned by the Federal Government, the recipient must 
promptly notify SSA.
    (5) Adequate maintenance procedures must be implemented to keep the 
equipment in good condition.
    (6) Where the recipient is authorized or required to sell the 
equipment, proper sales procedures must be established which provide for 
competition to the extent practicable and result in the highest possible 
return.
    (g) When the recipient no longer needs the equipment, the equipment 
may be used for other activities in accordance with the following 
standards. For equipment with a current per unit fair market value of 
$5000 or more, the recipient may retain the equipment for other uses 
provided that compensation is made to SSA or its successor. The amount 
of compensation will be computed by applying the percentage of Federal 
participation in the cost of the original project or program to the 
current fair market value of the equipment. If the recipient has no need 
for the equipment, the recipient must request disposition instructions 
from SSA. SSA will determine whether the equipment can be used to meet 
the agency's requirements. If no requirement exists within that agency, 
the availability of the equipment will be reported to the General 
Services Administration by SSA to determine whether a requirement for 
the equipment exists in other Federal agencies. SSA will issue 
instructions to the recipient no later than 120 calendar days after the 
recipient's request and the following procedures will govern:
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the recipient's request, the recipient 
must sell the equipment and reimburse SSA an amount computed by applying 
to the sales proceeds the percentage of Federal participation in the 
cost of the original project or program. However, the recipient is 
permitted to deduct and retain from the Federal share $500 or ten 
percent of the proceeds, whichever is less, for the recipient's selling 
and handling expenses.
    (2) If the recipient is instructed to ship the equipment elsewhere, 
the recipient will be reimbursed by the Federal Government by an amount 
which is computed by applying the percentage of the recipient's 
participation in the cost of the original project or program to the 
current fair market value of the equipment, plus any reasonable shipping 
or interim storage costs incurred.
    (3) If the recipient is instructed to otherwise dispose of the 
equipment, SSA will reimburse the recipient for such costs incurred in 
its disposition.
    (4) SSA may reserve the right to transfer the title to the Federal 
Government or to a third party named by the Federal Government when such 
third party is otherwise eligible under existing statutes. Such a 
transfer will be subject to the following standards:
    (i) The equipment must be appropriately identified in the award or 
otherwise made known to the recipient in writing.
    (ii) SSA must issue disposition instructions within 120 calendar 
days after receipt of a final inventory. The final inventory must list 
all equipment acquired with grant funds and federally-owned equipment. 
If SSA fails to issue disposition instructions within the 120 calendar 
day period, the recipient must apply the standards of this section, as 
appropriate.
    (iii) When SSA exercises its right to take title, the equipment will 
be subject to the provisions for federally-owned equipment.