[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: 20CFR437.32]

[Page 1167-1168]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
               CHAPTER III--SOCIAL SECURITY ADMINISTRATION
 
PART 437_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE 
AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents
 
                    Subpart C_Post-Award Requirements
 
Sec. 437.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to equipment acquired under a grant or subgrant will 
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment 
acquired under a grant by the State in accordance with State laws and 
procedures. Other grantees and subgrantees must follow paragraphs (c) 
through (e) of this section.
    (c) Use. (1) Equipment must be used by the grantee or subgrantee in 
the program or project for which it was acquired as long as needed, 
whether or not the project or program continues to be supported by 
Federal funds. When no longer needed for the original program or 
project, the equipment may be used in other activities currently or 
previously supported by a Federal agency.
    (2) The grantee or subgrantee must also make equipment available for 
use on other projects or programs currently or previously supported by 
the Federal Government, providing such use will not interfere with the 
work on the projects or program for which it was originally acquired. 
First preference for other use shall be given to other programs or 
projects supported by SSA. User fees should be considered if 
appropriate.
    (3) Notwithstanding the encouragement in Sec. 437.25(a) to earn 
program income, the grantee or subgrantee may not use equipment acquired 
with grant funds to provide services for a fee to compete unfairly with 
private companies that provide equivalent services, unless specifically 
permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee 
may use the equipment to be replaced as a trade-in or sell the property 
and use the proceeds to offset the cost of the replacement property, 
subject to the approval of SSA.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
with grant funds, until disposition takes place

[[Page 1168]]

must meet the following minimum requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of property, who holds title, the acquisition date, and cost of 
the property, percentage of Federal participation in the cost of the 
property, the location, use and condition of the property, and any 
ultimate disposition data including the date of disposal and sale price 
of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft will be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell 
the property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a grant or subgrant is no longer needed for the original project 
or program or for other activities currently or previously supported by 
SSA or for other projects or programs currently or previously supported 
by the Federal government, disposition of the equipment will be made as 
follows:
    (1) Items of equipment with a current per-unit fair market value of 
less than $5,000 may be retained, sold or otherwise disposed of with no 
further obligation to SSA.
    (2) Items of equipment with a current per unit fair market value in 
excess of $5,000 may be retained or sold and SSA has a right to an 
amount calculated by multiplying the current market value or proceeds 
from sale by SSA's share of the equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate 
disposition actions, SSA may direct the grantee or subgrantee to take 
excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is 
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance 
with SSA rules and procedures, and submit an annual inventory listing.
    (3) When the equipment is no longer needed, the grantee or 
subgrantee will request disposition instructions from SSA.
    (g) Right to transfer title. SSA may reserve the right to transfer 
title to the Federal Government or a third party named by SSA when such 
a third party is otherwise eligible under existing statutes. Such 
transfers are subject to the following standards:
    (1) The property must be identified in the grant or otherwise made 
known to the grantee in writing.
    (2) SSA will issue disposition instruction within 120 calendar days 
after the end of the Federal support of the project for which it was 
acquired. If SSA fails to issue disposition instructions within the 120 
calendar-day period the grantee must follow paragraph (e) of this 
section.
    (3) When title to equipment is transferred, the grantee will be paid 
an amount calculated by applying the percentage of participation in the 
purchase to the current fair market value of the property.