[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 32CFR32.34]



[Page 163-165]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 32_ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH 

INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT 

ORGANIZATIONS--Table of Contents

 

                    Subpart C_Post-Award Requirements

 

Sec.  32.34  Equipment.



    (a) Title to equipment acquired by a recipient with Federal funds 

shall vest in the recipient, subject to conditions of this section.

    (b) The recipient shall 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 shall 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 shall not 

encumber the property without approval of the DoD Component that made 

the award. When no longer needed for the original project or program, 

the recipient shall use the equipment in connection with its other 

federally-sponsored activities, in the following order of priority:

    (1) First, activities sponsored by the DoD Component that funded the 

original project.

    (2) Second, activities sponsored by other DoD Components.

    (3) Then, activities sponsored by other Federal agencies.

    (d) During the time that equipment is used on the project or program 

for which it was acquired, the recipient shall 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 shall be given 

to other projects or programs sponsored by the DoD Component that 

financed the equipment; second preference shall be given to projects or 

programs sponsored by other DoD Components; and third preference shall 

be given to projects or programs sponsored by other Federal agencies. If 

the property is owned by the Federal Government, use on other activities 

not sponsored by the Federal Government shall be permissible if 

authorized by the DoD Component that financed the property. User charges 

shall 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 the DoD Component that financed the equipment.

    (f) The recipient's property management standards for equipment 

acquired with Federal funds and federally-owned property shall include 

all of the following:

    (1) Records for equipment and federally-owned property shall be 

maintained accurately and shall include the following information:

    (i) A description of the equipment or federally-owned property.

    (ii) Manufacturer's serial number, model number, Federal stock 

number, national stock number, or other identification number.

    (iii) Source of the equipment or federally-owned property, including 

the award number.

    (iv) Whether title vests in the recipient or the Federal Government.

    (v) Acquisition date (or date received, if the property 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 

property furnished by the Federal Government).

    (vii) Location and condition of the equipment or federally-owned 

property and the date the information was reported.

    (viii) Unit acquisition cost.

    (ix) Ultimate disposition data, including date of disposal and sales 

price



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or the method used to determine current fair market value where a 

recipient compensates the DoD Component that made the award for its 

share.

    (2) Property owned by the Federal Government shall be identified to 

indicate Federal ownership.

    (3) A physical inventory of equipment and federally-owned property 

shall be taken and the results reconciled with the equipment records at 

least once every two years. Any differences between quantities 

determined by the physical inspection and those shown in the accounting 

records shall be investigated to determine the causes of the difference. 

The recipient shall, in connection with the inventory, verify the 

existence, current utilization, and continued need for the equipment or 

federally-owned property.

    (4) A control system shall be in effect to insure adequate 

safeguards to prevent loss, damage, or theft of the equipment or 

federally-owned property. Any loss, damage, or theft of equipment or 

federally-owned property shall be investigated and fully documented; if 

the property was owned by the Federal Government, the recipient shall 

promptly notify the DoD Component.

    (5) Adequate maintenance procedures shall be implemented to keep the 

equipment or federally-owned property in good condition.

    (6) Where the recipient is authorized or required to sell the 

equipment, proper sales procedures shall 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.

    (1) For equipment with a current per unit fair market value of 

$5,000 or more, the recipient may retain the equipment for other uses 

provided that compensation is made to the DoD Component that originally 

made the award or its successor. The amount of compensation shall 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.

    (2) If the recipient has no need for the equipment, the recipient 

shall request disposition instructions from the DoD Component. The DoD 

Component shall issue instructions to the recipient no later than 120 

calendar days after the recipient's request and the following procedures 

shall govern:

    (i) The grants officer, in consultation with the program manager, 

shall judge whether the age and nature of the equipment warrant a 

screening procedure to determine whether the equipment is useful to a 

DoD Component or other Federal agency. If a screening procedure is 

warranted:

    (A) The DoD Component shall determine whether the equipment can be 

used to meet DoD requirements.

    (B) If no DoD requirement exists, the availability of the equipment 

shall be reported to the General Services Administration by the DoD 

Component to determine whether a requirement for the equipment exists in 

other Federal agencies.

    (ii) If so instructed or if disposition instructions are not issued 

within 120 calendar days after the recipient's request, the recipient 

shall sell the equipment and reimburse the DoD Component that made the 

award 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 shall be 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.

    (iii) If the recipient is instructed to ship the equipment 

elsewhere, the recipient shall 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.

    (iv) If the recipient is instructed to otherwise dispose of the 

equipment, the recipient shall be reimbursed by the DoD Component that 

made the award for such costs incurred in its disposition.



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    (h) The DoD Component 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 transfer shall be subject to the following standards.

    (1) The equipment shall be appropriately identified in the award or 

otherwise made known to the recipient in writing. For exempt property, 

in accordance with Sec.  32.33(b)(3), note that this identification must 

occur by the time of award, or title to the property vests in the 

recipient without further obligation to the Government.

    (2) The DoD Component shall issue disposition instructions within 

120 calendar days after receipt of a final inventory. The final 

inventory shall list all equipment acquired with award funds and 

federally-owned property. If the DoD Component fails to issue 

disposition instructions for equipment within the 120 calendar day 

period, the recipient shall apply the standards of paragraph (g) of this 

section.

    (3) When the DoD Component exercises its right to take title, the 

equipment shall be subject to the provisions for federally-owned 

property.