PROPERTY PROCEDURES MANUAL. A Guide for Control of Sponsor Property Research Property Department Georgia Institute of Technology

PROPERTY PROCEDURES MANUAL A Guide for Control of Sponsor Property Research Property Department Georgia Institute of Technology Revised May 15, 2007

TABLE OF CONTENTS INTRODUCTION.................................................................................................. 1 CHAPTER 1 PROPERTY MANAGEMENT......................................................................... 2 A. Classification and Type 3 B. Types of Property and Capitalization 3 C. Management System for Sponsor Property 3 CHAPTER 2 ACQUISITION....................................................................................... 4 A. Screening 5 B. Exempt Property 5 C. Acquisition by Purchase 6 D. Fabrication 6 E. Incoming Transfers 7 F. Government-Furnished Property 7 G. Loan/Bailment 8 H. As Is GFE 8 CHAPTER 3 RECEIVING.......................................................................................... 9 CHAPTER 4 RECORDS.......................................................................................... 11 A. Sensitive Property 12 CHAPTER 5 REPORTS.......................................................................................... 13 CHAPTER 6 PHYSICAL INVENTORIES........................................................................... 14 A. Periodic Inventories 14 B. Final Inventory 14 CHAPTER 7 MOVEMENT....................................................................................... 15 CHAPTER 8 SUBCONTRACTOR CONTROL...................................................................... 16 CHAPTER 9 CONSUMPTION, UTILIZATION, MAINTENANCE AND STORAGE.................................... 17 CHAPTER 10 DISPOSITION..................................................................................... 19 CHAPTER 11 AUDITS........................................................................................... 21 CHAPTER 12 TAGGING......................................................................................... 22 APPENDIX A A GLOSSARY OF TERMS...........................................................................23 APPENDIX B GOVERNMENT CONDITION CODES............................................................... 25 APPENDIX C FORMS........................................................................................... 27 A. Government Forms DD Form 250 27 DD Form 1149 28 DD Form 1428 29 DD Form 1662 29 NASA Form 1018 29 B. Research Property Forms RP Form 1 - Fabrication 29 RP Form 4 Shipping Document 29 RP Form 5 Equipment Movement 29 RP Form 6 - Closeouts 29 RP Form 7 Sub Closeouts 30

INTRODUCTION This manual sets forth basic requirements for the management administration of sponsor-owned property, as outlined in Parts 45 and 52 of the Federal Acquisition Regulation (FAR) and (OMB) Circulars A-21 and A-110. This manual does not replace the sponsor s property directives, nor does it replace contract provisions. In case of a conflict with the procedures outlined in this manual, the contract terms and conditions should take precedence and then specific sponsor property directives. 1

CHAPTER 1 PROPERTY MANAGEMENT The office of Research Property Department s purpose is to meet lab needs, reduce redundancy and property loss, and keep an accurate record of the sponsor s equipment. The PD/PI is responsible for maintaining the property in a safe and protected environment. The Research Property Department is responsible for all property related questions, audits, inventories and maintaining the database. The equipment received at Georgia Tech is either contractor acquired or sponsor furnished. Properly received equipment is unpacked and inspected to insure that the proper equipment has been sent and is in good condition (See Chapter 3 Receiving). Incoming equipment should be promptly tagged and recorded in the Research Property Department (RPD) database as soon as possible (See Chapter 5 Identification). When equipment is moved for longer than thirty (30) days, the new location must be recorded in the RPD database (See Chapter 7 Movement). It is critical that all movements are documented, because all equipment is physically inventoried periodically usually in January (See Chapter 6 Physical Inventory). A continuous task in property management is assessing what equipment is excess and taking steps to reutilize or dispose of that property (See Chapter 10 Disposition). Sponsor furnished equipment has its own guidelines for handling in accordance with specific sponsor regulations. Equipment is acquired by: Purchase through Procurement Title transfer Loan Agreement Fabrication Sponsor furnished Government Furnished Property (GFP) under $1,000 is entered into the database, and if practical to do so, tagged. Property over $1,000 is always tagged and entered into the database. Fabricated property that costs more than $1,000 is also tagged and entered into the database (See Chapter 2 Acquisition). Management by Georgia Tech of sponsor-owned property creates an environment requiring a mutual understanding of each party s concerns and responsibilities. The sponsor requires the contractor to establish and maintain an approved system for managing its property. Research Property, on behalf of Georgia Institute of Technology, has implemented a system to track property. This system has the capability to track the types of property. The types of Government property are: 1. Agency Peculiar Property As used in DoD, means military property and includes end items and integral components of military weapons systems, along with the related peculiar support equipment which is not readily available as a commercial item. 2. Equipment Means a tangible asset that is functionally complete for its intended purpose, durable, nonexpendable, and needed for the performance of a contract. Equipment is not intended for sale, and does not ordinarily lose its identity or become a component part of another article when put into use. 3. Material Property that may be incorporated into or attached to a deliverable end item or that may be consumed or expended in performing a contract. 4. Special Tooling Jigs, molds, dies, patterns and 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 2

modification or alterations their use is limited to the development or production of particular supplies or parts thereof or to the performance of particular services. Contractors are required to have a system to control, use, preserve, protect, repair and maintain all Government Property in its possession. A. Classification and Type Proper classification of property is essential for management purposes. Each type of property has different requirements for record keeping, reporting, and physical controls. The decisions, rules, and procedures related to title, retention, and disposition of property vary according to its classification. If you have questions regarding classification of property, contact the Research Property office at 404-407-6537. B. Types of Property and Capitalization Capitalized Property is usually categorized as plant equipment. Plant Equipment (PE) is subcategorized into Industrial Plant Equipment (IPE) and Other Plant Equipment (OPE). C. Property Representatives One of the objectives of the property department is to have a designated Property Coordinators (PC) in each research lab. 1. The responsibility of a PC is to report new property to the Research Property Department as soon as it is received 2. Report all movements of the property 3. Report property that is no longer needed for the project 4. Conduct inventories 5. All Property Coordinators are issued permission to look at all property in their labs only. The PC will have permission to enter data in the hold queue. The RPD will approve or disapprove the information before it is made a part of the permanent record Equipment furnished to the contractor can only be used for its intended purpose. Contractors cannot modify, cannibalize or make alterations to government property unless the contract specifically identifies the modification, alteration or improvement. 3

CHAPTER 2 ACQUISITION Acquisition cost of equipment includes: Net invoice price, PLUS Cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired Other charges such as cost of installation, transportation taxes, duty or protective in-transit insurance shall be included or excluded from the unit acquisition cost in accordance with the recipient s regular accounting practices Extended warranty cost is not allowed for government property Almost all purchases, federally funded purchases in particular, are subject to prior screening for existing duplicate property. If sponsor funds are used to purchase property there are other pre-purchase considerations such as authorization to purchase. When using sponsor funds to make a purchase the purchase must successfully meet the tests listed below. Allocability A cost principle required by the federal government for use at institutions of higher education. Under the Cost Principles of OMB Circular A-21, costs are allocable to a particular function, project, sponsored agreement, etc. Allowability A cost principle required by the federal government for use at institutions of higher education. Under the Cost Principles of OMB Circular A-21, costs are allowable if they are reasonable costs, allocable to the sponsored agreement, given consistent treatment by the accounting system, and conform to all other requirements in the cost principles and the sponsored agreement. There are many different methods by which Georgia Tech Applied Research Corporation comes into possession of sponsor property. It is important to distinguish whether the source of the property is internal or external. Internal sources include fabrication and issue from the Institute s own property sources. External sources consist of purchase or requisition from sponsor sources. The contractor may acquire property as a direct charge to the contract only when authorized in the contract or by the Contracting Officer. The acquisition of property by purchase is a function of the Purchasing Department. However, when it is acquired directly, by requisition, from the sponsor s property inventories it becomes a function shared by the project director/ principal investigator and by the Research Property Department (RPD). RPD is available to assist in the requisition process. If you have any questions call 404-407-6537. If property is furnished, it is referred to as Sponsor-Furnished (SF) or Government-Furnished Property (GFP). GFP may also include or refer to Government-Furnished Material (GFM). When furnished as materials, the property should be identified as such and recorded as GFM. If suitable items are found, but the purchaser chooses to continue with the purchase rather than transfer, and the item being purchased is sponsor funded, prior approval to purchase must be obtained by the purchaser. If prior approval to purchase is not obtained, the sponsor has the right to refuse payment of the item and the purchaser could be responsible for all costs associated with procurement and installation of the item. 4

A. Screening Screening and approval to purchase are separate processes and both are pre-purchase requirements. Screening is the process of assuring, either prior to purchase or concurrently to purchase, that the same or equivalent piece of equipment is not excess or otherwise available for use. Each sponsor may have different screening requirements. The internal screening function is done in the Office of Sponsored Programs if purchases are anticipated at that stage. It should be done in the lab before a purchase request is sent to Purchasing. The Material Requisition has a section regarding screening. This section must be filled in before the MR goes to Purchasing. If assistance is needed in the screening process, RPD will assist for sponsor owned equipment. Capital assets will assist with Georgia Tech Inventory. Internal screening is the process by which Georgia Tech determines whether an identical or similar item as that planned for purchase is available for use within the department. If an item is sponsor or government-funded or furnished, external screening may also be required. For items costing $25,000 to $49,000 it is necessary to perform a screening within the department. Items costing $50,000 or more necessitate a screening at the campus level. Screening is encouraged, but not required, for equipment under $25,000. After the screening procedure is completed the appropriate area on the purchase request should be checked to indicate compliance with this policy. Screening is required by the institute and by most sponsors. If you fail to screen prior to purchase of a sponsor funded item of equipment the sponsor may disallow the purchase at a later date. The department would then be responsible for payment. B. Exempt Property Exempt Property is tangible personal property acquired in whole or in part with Federal funds, where the Federal awarding agency has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C.6306), for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research. 5

C. Acquisition by Purchase After OSP has published the budgets for equipment, the purchasers should use the following object codes: 71448 All deliverable items or items that may be expended or consumed (Ref. FAR 45.301 Definitions. Material ) (Chapter 1, Paragraph 7) 84336 Deliverable equipment items. It must cost at least $1,000 and have a useful life expectancy or more than two years. If it costs less or does not have a useful life of more than two years it is M&S, object code 71448 84330 Capital equipment where title vests with the sponsor. Even though the item will be delivered to the sponsor at a future date upon closing the contract, the item remains equipment (84330) 84320 Capital equipment where the title vests with the State (the Institution) 84321 Computer equipment where title vests with the State (the Institution) D. Fabrication Many fabrications with component parts over $1,000 will include many small dollar items. The cost of these small dollar items is rolled into the main component cost. Examples of these are nuts, bolts, nails, wiring, etc. that go into the cost of the project, but whose costs are difficult to identify to one specific component. The main item cost will be comprised of the main item, itself, plus all the material costs not reflected in the property record. A fabrication is something assembled in house by GTRI. It is a one-of-a-kind creation, created by assembling a number of components to produce a new item of equipment. It is not acquired from an outside vendor or sponsor. Most fabrications are sponsor funded. Fabrications must have an acquisition cost of $1,000 or more and have a twoyear useful life. When a fabrication is assembled, the Research Property Department must be furnished a listing of the pertinent data. (See Form RP 1) After receipt of the information the fabrication is added to the property record. The source field will show fabrication on the property record and an identification number will be assigned. Contact the Research Property Department at 404-407-6537 for further instructions or more information. Although property clauses in a contract may result in an exception, property purchases are classified as both Materials and Supplies (M&S) or as equipment. 1. Federal regulations stipulate that all hardware deliverables purchased are M&S regardless of cost. At this institution, however, there is a category designated equipment incorporated into a deliverable. 2. Items that are not deliverables are not automatically classified as equipment. To be classified as equipment, the item must: Cost $1,000 or more, Have a useful life expectancy of more than two years, A stand-alone item. 3. Any items that do not meet the above qualifications are M&S and will bear overhead. 4. Software is not property. 6

E. Incoming Transfers Incoming transfers are also discussed in Chapter 10 Disposition. Transfers must have Sponsor approvals Organizational Authority Title Determine the value for record purposes F. Government-Furnished Property (GFP)(GFE) Sponsor Furnished (SF) Government-Furnished Property (GFP) consists of government-owned property, which is provided directly from the government to Georgia Tech or its subcontractors. Government-owned property transferred from one agreement to another by government direction is also GFP. Government Furnished Material (GFM) consists of property that is furnished to Georgia Tech by the government and for which the government retains title. The material may be incorporated into or attached to an end item to be delivered under a contract or otherwise consumed or expended in the performance of an agreement. GFP and GFM are normally provided to Georgia Tech in support of a fabrication or a Hardware Deliverable and used within a sponsored project. Because title vests with the sponsor, Georgia Tech must record the following required information: Description and national stock number (NSN) if furnished by the government Quantity received, fabricated, issued, and on hand Unit price Contract number Condition code Date received Location Disposition If it becomes necessary to transfer, loan, or ship GFP one of the following documents must be used: DD form 1149. Shipping and Receiving (See Appendix E at the end of this chapter) DD form 1348-1. This form is used for equipment newly acquired by the government (See Appendix E at the end of this chapter) Bill of Lading provided by the shipping company RP-4, Georgia Tech s shipping form (See Appendix E ) Letter of transfer of accountability Modification to the contract 7

G. Loan/Bailment Agreement When property is acquired by Loan Agreement and property records are established all agreements must be signed by an authorized person. The Office of Sponsored Programs (4-4820) can furnish this information. The agreement should include a description of the property, the purpose of the bailment, use, authorization for modifications to be made to the property, date of the bailment, the destination to which the property is to be delivered or returned, maintenance requirements and any other necessary previsions. H. As Is GFE After As is equipment is received and accepted the contractor has the responsibility for repairs. The government does not accept liability if the as is equipment does not work. All repairs are at the contractor s expense and ownership remains with the government. The contractor is given the opportunity to inspect as is prior to the property being provided. 8

CHAPTER 3 RECEIVING Receiving is the first step in establishing physical accountability for property. The process ensures that the correct equipment is received and is in good working order. If you have questions, please direct them to Receiving at 404-657-2394. Check each shipment: Was the shipment delivered to the correct destination? Check for external damage. Is it suitable for the intended use? Are all necessary documents attached? Does the shipment match the Purchase Order? Is the quantity correct? Are all components included? Were any items received that were not ordered? DD Form 1149 is the documentation that should accompany shipments of property for Department of Defense and other Government agencies. A copy of all documentation furnishing property accountable to a contract must be furnished to the RPD office. If documentation does not accompany the shipment the PI/PD should make every effort to obtain sufficient documentation. Information from this document is used to create the official property record. Research Property should be alerted that equipment has arrived, even when the appropriate paperwork is not yet available. In many instances the dollar amount is not included in the documentation bringing in GFE. A unit price for GFE must be obtained as part of the Property Record. This information is used to comply with the annual property reporting requirement set forth in the Federal Acquisition Regulation, and this Property Procedures Manual. If equipment is received without a unit cost the following procedures will be used in an effort to obtain the unit cost. RPD will contact the sender or provider of the equipment for the unit cost; If RPD is unable to reach and/or receive information from the provider; then RPD will contact the Project Director or Principal Investigator for the information. If PD/PI does not have the needed information; RPD, with the PD/PI concurrence, will use the cost of a like item of equipment in current inventory or in coordination with the GIT Purchasing Department; The following are common problems encountered at receipt: Damaged goods You may want to refuse the shipment and have the shipper return to the vendor for replacement. If the item is received and damage is discovered later, coordinate efforts with the originator and procurement. Discrepancies with a vendor or sponsor as to what was shipped: If a discrepancy does occur, coordinate efforts with the purchaser and end user. 9

Georgia Tech becomes accountable for sponsor owned property upon receipt. Receiving procedures are described below. Contractor Acquired Property (CAP) (Refer to Procurement Procedures) Research Property should be notified of all capital equipment acquired. Material and Supplies does not require an identification number. However, Research Property does keep a record of all M&S over $1,000. If questions arise as to which object code to use, please call Research Property at 404-407-6537. Government Furnished Property (GFP) The PI/PD should inspect the property for correct shipment and for any damage. All discrepancies should be noted in writing and before accepting the delivery. If the equipment has been damaged, destroyed or is unacceptable, notify Research Property. Research Property must receive documentation. A RPD shipping document, Government Bill of Lading (GBL), DD Form 1149, DD Form 250 or DD Form 1348. These documents must be signed and a copy sent to Research Property Department for recording and distribution. If adequate government identification is supplied, Research Property will not affix an additional decal. The government number will be used. The equipment must be inspected upon receipt. The Research Property Department will be notified upon receipt of a paid invoice. The property will be entered into the database within 60 days after receipt of a copy of the paid invoice. The web site for furnishing property information is: https://webwise.gtri.gatech.edu/rpd/ 10

CHAPTER 4 RECORDS Research Property keeps records of all sponsor-owned capital equipment. Supporting documents are used for reconciliation and audit purposes. The property record includes the following information: Acquisition document (if the property is Contractor Acquired then a paid invoice; if it is sponsor furnished, a shipping document or other paperwork) Identification number assigned by RPD, unless the equipment is sponsor-furnished and already has a control number or is M&S Description and NSN, if furnished Model number Serial number Condition code Date received (posting reference and date of transaction) Property source Unit cost Location Disposition The timeframe for obtaining this information is immediately upon receipt. Once received, all paperwork should be forwarded to RPD. These documents are kept with each project for audit purposes. The record for all sponsor-owned property is kept in the RPD office. RPD will establish and maintain control of all sponsor property provided under the contract including property in the possession of the subcontractor. (See Chapter 8) These records of property established and maintained under the terms of the contract are the sponsor s official property records. RPD maintains individual records for each contract and for each unit of equipment. The source field identifies the classification of equipment. Records are maintained and kept up to date so that at any time the status of the property can be ascertained. Fabrications from sponsor owned materials must be reported to RPD as soon as fabricated. When contracts provide for the contractor to retain completed products for further research under other contracts the property becomes government-furnished property upon acceptance on the new contract. This type is usually hardware deliverable. 11

A. Sensitive Property Records for sensitive items are identified by a distinguishing code and marked with a marking which makes the item easily recognizable. The following is a list of sensitive property which is handled in accordance with the procedures in DD4161-2, DOD Manual for the Performance of Contract Property Administration: Ammunition Explosives Hazardous wastes Radioactive material Pilferable items All property records are kept for at least four years from date of completion of contract. 12

CHAPTER 5 REPORTS RPD provides: Ad hoc reports for departmental/lab use Inventory adjustment reports Year-end reports Title transfer Loss, Damage and Destruction reports, when necessary Any and all reports as needed. Required Property Reports Report Title Purpose Due Physical Inventory Physical Inventory Report Contract/Agreement OMB, FAR GT Requirements Periodically, Contract Completion, unless waived by GovernmentProperty Administrator, or as often as needed DOE Form 4300.3 Semi-Annual Summary Report of DOE-Owned and Capital Equipment Financial Report Feb 28 and Aug 31 to be reported no later than 45 days after report period or upon contract completion NASA Form 1018 NASA Property in custody of Contractors Contract Requirement Sep 30 or upon contract completion DD Form 1662 DOD Property in Custody of Contractors Financial Report Quantity Sep 30 or upon contract completion RPD-6 Certification of Proper Use and Disposition of Sponsor Property Financial Property Certification for Government Contracts, Grants and Agreements End of Project DD Form 1342 Industrial Plant Equipment Property Report As required by DLAM 4215.1 DD Form 250 Material Inspection and Receiving Report Hardware Deliverables As requested, upon delivery 13

CHAPTER 6 PHYSICAL INVENTORIES A physical inventory consists of sighting, tagging or marking, describing, recording, reporting and reconciling the property with the property record. An additional purpose of physical inventory is to verify the existence and location of sponsor-owned property not yet recorded in the property database. A. Periodic Inventories RPD conducts an annual inventory of all sponsor-owned equipment. This inventory is usually conducted at the beginning of each year, or as frequently as is necessary. An inventory is done at least every two years. All inventory results will be submitted to the Manager of RPD, along with a signed Certification stating that all items on the inventory are required for continual contract support. Any items not required for continued contract performance will be reported for disposition. The results of the inventory and any discrepancies will be reported to the Government Property Administrator, if requested. B. Final Inventory The final inventory is conducted at the end of the contract, unless waived by the Property Administrator. RPD asks for verification of all entries and requests recommendations for disposition of excess equipment. The PI/PD will require all subcontractors to perform a physical inventory for disposal purposes. (See Chapter 6) 14

CHAPTER 7 MOVEMENT Movement is the physical relocation of property from one area to another. When the permanent location changes the property office must be notified so that the property records can be updated with the new location. This is necessary so that we are able to find the item when needed, maintain accountability, and to comply with FAR regulation concerning the capability to locate an item within a reasonable amount of time. Movement of property must have proper authority and must be documented. Various types of documentation are used as authority for moving property and for recording the movement. Some examples of move documents are: DD Form 1149, receiving documents, internal documents, RP4, DD Form 250. The move document must be posted to the property record and retained in the file as audit documentation. When equipment is used off campus the use of the equipment must benefit the sponsored project for which the property was acquired. How this movement is documented will be determined by the length of time the equipment will be off campus. If the equipment will be gone less than thirty days notify the property office and sign the equipment out on a sign-out sheet. A sign-out sheet is a document used to track short-term moves of equipment. A sheet of paper on which equipment is signed in or out can serve as a sign-out sheet as can an e-mail notification or the web site. If the equipment will be off campus longer than thirty days, the property office requires notification by e-mail stating what is moving, the new location (building and room number), and approximate date the equipment will be returned. Contact Research Property at 404-407-6537 for instructions. 15

CHAPTER 8 SUBCONTRACTOR CONTROL A subcontractor is any supplier, distributor, vendor or firm that furnishes supplies or services to or for a prime contractor. The prime contractor is directly responsible for government property at subcontractor location. The contractor requires the subcontractor to adequately care for and maintain the property and assure that it is used only as authorized by the contract. Contractual terms and conditions flow down to the appropriate contract terms and conditions subcontractor, when required. RPD sends a Property Survey form to subcontractors to ascertain the status of their approved property control system. After receiving a copy of each control system results, a file is kept in the RPD office for at least two years or is updated to reflect the current status. At the end of a project, Research Property Department will forward a Final Property Inventory Report (Form RP 7) to the subcontractor. This form requests a list of property items acquired or accountable under the subcontract as well as the subcontractor s recommendation for final disposition. Upon receipt of the completed RP 7 from the Subcontractor, RPD will proceed with the appropriate property disposition. The closing form also requires a signature certifying that no items of property were acquired under the subcontract if that is the case. 16

CHAPTER 9 CONSUMPTION, UTILIZATION, MAINTENANCE AND STORAGE A. Consumption Consumption is the process of incorporating material into an end item or otherwise using it up in the performance of the contract. A contractor is relieved of responsibility for government property where there is reasonable and proper consumption of property in the performance of the contract. The reasonable consumption process consists of the following: Issuance of material in reasonable and proper quantities for the work being done. Actual usage, incorporation, or expenditure of material into a higher assembly end item or through testing. Other consumable items required for the contract not attached to or incorporated into the end item. Unreasonable consumption and potential contract liability occurs when the allowances provided by the contract are exceeded. When a bill of materials has been developed for a project of production planning, consumption in excess of quantities prescribed by the bill of material, given a reasonable amount for attrition, may be questioned. B. Utilization Many sponsored projects have specific restrictions on how a piece of property may be used. Government-owned property, for instance, is restricted to use on the project for which it was provided. Any other utilization must be properly authorized in advance. Any time property is no longer required or suitable for its intended use it must be reported to RPD for disposition. At the beginning of each calendar year RPD will send a property record of all equipment to all PI/PD s. Any property that is not needed for use on sponsored projects should be reported to Research Property for reutilization or disposal. A letter is sent to ACO to request all recommendations for disposition. C. Maintenance Maintenance is the process of providing the care necessary to facilitate high quality production and the useful life of property. The PI/PD is responsible for the care, maintenance and use of the sponsor equipment in his or her possession from the time of receipt until properly relieved of the responsibility. Moving government property to storage does not relieve the PI/PD of these responsibilities. The maintenance program should be consistent with the terms of the contract. Preventive maintenance should be performed on a regular basis to prevent and correct minor defects. Plant equipment should be inspected periodically to facilitate detection of needed repairs Vendors may outline general maintenance requirements for equipment purchased with sponsored funds, Government instructions and/or furnished manuals or publications Special tooling and special test equipment maintenance requirements are determined at the time of design Agency peculiar property maintenance requirements are usually covered by technical orders in the contract 17

D. Storage Storage is the accumulation of Materials and Supplies or Equipment in designated areas. The storage usually occurs at Georgia Tech while waiting for disposition instructions from the sponsor. As soon as equipment is determined to be in excess Research Property should be alerted in order to begin the disposal process. Because disposition varies, Research Property should be contacted for recommendations. Considerations for equipment storage are: Protection from potential loss, damage, or destruction Prevention of unauthorized use Assured availability of property If equipment has been stored for a considerable amount of time and there are no future plans for usage of the equipment, this may be a sign of excess equipment. The storage of hazardous materials is controlled by Federal, State, County and/or Municipal regulations, or by Federal association. Examples of regulatory agencies and the materials concerned are: Radioactive Materials Explosives Hazardous Materials Classified Materials Nuclear Regulatory Commission Department of Transportation Department of Transportation Environmental Protection Agency Department of Transportation Department of Defense Department of Energy 18

CHAPTER 10 DISPOSITION At the end of a completed agreement, termination or excess to needs of accountability, all sponsor owned equipment must be disposed. The source of funding determines how equipment can be disposed. Sponsor funded purchases and GFP have specific disposal restrictions. Excess equipment that is no longer needed in support of the research should be reported at this time. Excess equipment is property no longer needed in support of a sponsored research project. The condition of the asset should be determined at this point. A list of condition codes can be found in Appendix B. The second step is to research disposition restrictions. At this point, contact Research Property Department for instructions. Do not dispose of sponsored equipment without checking with Research Property for instructions. If disposal occurs contact Research Property with the following information: Verification that the equipment is gone Circumstances surrounding the disposal Date of occurrence Documented condition of the equipment Actual disposal method (scrapped, surplused, returned to sponsor, etc.) Disposal Method Assigned when: Disposition Scrap Cannibalization Stolen Return to Manufacturer Return to Sponsor Transfer The item is broken or beyond repair with no reasonable value other than the recovery value of the basic materials. The vendor no longer supports the item. The item does not function properly and will be used for replacement parts or spare parts. Has been determined that the item was stolen and a police report has been filed. Will be returned to the manufacturer for credit. Hardware Deliverable or sponsor has requested the item to be returned. Transferred to another contract. Provide new contract number. Contact RPD for instruction. Contact RPD for instruction. Contact RPD for instruction. Contact PAD or G&C accounting. Contact RPD for instruction. Complete a DD Form 250 for Hardware Deliverables. Contact RPD for instruction. The Office of Sponsored Programs sends termination advice after the final report has been accepted. OSP sends a termination notice to RPD to begin closing procedures. Within 10 business days, RPD notifies the PD/PI to do a final inventory and advice recommendations for final disposition. RPD will contact the sponsor agency or their designee with a copy of the property record and the agreed upon recommendation for final disposition. 19

The Government has the right to abandon its property. This method could be the most cost-effective method. A request for abandonment includes a Form 1428 (See Appendix D - Forms for instructions) listing the items individually. The items of equipment must have a condition code that indicates the equipment is unusable and beyond repair, or the cost of care and handling is greater than the probable sale price. In some instances, property will transfer by direction of Public Law 102-245, Section 303. Contact RPD for instructions. (i) Research Equipment The Director of a laboratory, or the head of any Federal Agency of department, may give research equipment that is excess to the needs of the laboratory, agency, or department to an educational institution or nonprofit organization for the conduct of technical and scientific education and research activities. Title of ownership shall transfer with a gift under this section. Transfer to another contract requires permission from the CO. The following information is required: (1) Authority to transfer from owing contract to gaining contract (2) Authority must be from Contracting Officer Incidents of loss, damage or destruction of sponsor-owned equipment must be reported to the sponsoring agency. For this reason, damaged or destroyed sponsor-owned equipment must be reported to RPD upon discovery. Verbal or written notification must be made within two working days of the discovery. A formal letter from Research Property to the sponsor notifying them of the loss, damage or destruction (LDD) of equipment will be sent as soon as the facts are known (45.504) and must contain the following information: Date of the incident, if known Description of the equipment involved Details of the incident, must include a campus police report for stolen equipment Effort expended to locate the equipment Value of equipment involved Contract number Acquisition cost If a piece of equipment has been stolen, a campus police report must be filed. A copy of the report must be sent to Research Property (MC 0804, FAX 404-407-6106) as soon as the report has been filed. RPD will file a report with the sponsor and request instructions. 20

CHAPER 11 AUDITS Georgia Tech has an Internal Audit department. Internal Audit has the right to conduct random audits to ensure system-wide database integrity and confirm that detailed transactions are recorded in an accurate and timely manner. At least once a year RPD conducts an internal audit to assess our property management system effectiveness for tracking government owned equipment. The government conducts broad, procedural and system audits on a consistent basis. The purpose is to determine whether the policies and procedures, which reflect government and Georgia Tech requirements, are documented and followed. External audits examine many areas, including, but not limited to: Purchase Approval Screening Procurement Receiving and Identification RPD Records, Accuracy, and Timeliness Disposal of Excess Property Subcontract Management Physical Inventory Results of Audit Satisfactory Passed Unsatisfactory You did not pass, but you get another chance in whatever timeframe is agreed upon Withdrawn or system disapproval Liability shifts to University The results of a satisfactory property audit means that new proposals and ongoing research can continue uninterrupted. Sponsors want assurance that research dollars for equipment are used for the purpose for which they are acquired, that property is properly tracked and managed. If deficiencies are discovered Georgia Tech is notified and a schedule for corrective action is set. Audit findings and recommendations may affect business practices and require changes in policies and procedures. 21

CHAPTER 12 TAGGING One of the most important tasks for Research Property Department is identifying newly acquired sponsor funded or furnished equipment with an identification number, and recording the information about the equipment into the official property record system. The RPD s record is the official property record to track compliance with required financial reports to the sponsor, inventory, movement, utilization, status and disposition of equipment. The identifying decals assigned to sponsor owned equipment verify that the equipment is sponsor equipment. It is a federal regulation that visual identification of ownership be possible for Federal Government owned items. If title to government property is transferred to Georgia Tech the decal is replaced with a state identifying barcode. A decal from Research Property Department will be placed in an easily accessible location when possible. All sponsor owned equipment must be tagged. An exception may be made when a sponsor specifically requests that a decal not be affixed to the equipment. Another possible exception occurs when the probability that a decal would interfere with the function of the equipment, or if the item is too small to tag. When an item of equipment is not tagged, an identification number is assigned and the record will show N/T, indicating that the equipment is not taggable. When a system is purchased the main end item will have the identification number. The components will have the main number with a dash and suffix number. An example of this method is as follows: ID# Description Cost ($) 00001 Panasonic Camera 5,000 00001-1 Video Cassette Recorder 1,500 00001-2 Video Monitor 1,200 A system that works as a unit and the numerous components are all combined as a single unit and only one tag is used. If a system works as a unit and the numerous components are not all assembled into a unit where one decal is applicable, RPD will use the component method of tagging. Government furnished property previously tagged as Government property will not be re-tagged. Research Property will use the Government s identification number. If GFP does not have identification number, Research Property will assign one. 22

APPENDIX A A GLOSSARY OF TERMS Abandonment To give title to property to a contractor rather than move the property. Accessory Item An item that facilitates or enhances the operation of plant equipment but which is not essential for its operation. Auxiliary Item An item without which the basic unit of plant equipment cannot operate. Bailment A delivery of government property to a contractor for a specified purpose normally related to a prime contract. Bailed property is usually returned to the government when no longer required by the contractor. Bill of Lading, Government A government document used to procure freight and cargo transportation and related services from commercial carriers for the movement of property at government expense. Contract An agreement between two or more competent parties to do or not to do something not prohibited, by law for legal consideration involving both an offer and an acceptance. Capital Equipment Personal property items other than material having a unit acquisitions cost of $1,000 or more and an anticipated service life in excess of two years, regardless of type of funding Contractor-Acquired Material Material that is acquired for the Government by the contractor. Title is vested by the provisions contained in FAR 52.245-2 or 52.245-5. Contractor-Acquired Property (45.101) Property acquired or otherwise provided by the contractor for performing a contract and to which the government has title. Deliverable Hardware Deliverable. Materials and supplies and/or equipment, as required by the terms of the contract to be delivered to the Government. Demilitarization Rendering a product unusable for, and not restorable for, and not restorable to, the purpose for which it was designed or is customarily used. Donations Property may be donated only after it has been determined to be surplus, following appropriate utilization screening. The donation of surplus property to an authorized donee is subordinate to any need for property by a Federal agency. Equipment Tangible non-expendable personal property, including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. Equipment General Purpose (A-21) Use not limited only to research, scientific or other technical activities. Excess Property Property no longer required in the performance of the contract for which it was acquired. Fabricate To assemble or create an item from parts and/or components into a new piece of property. Government-Furnished Material Material owned by the Government and furnished to a contractor for utilization for specific contract purposes. Title to all material furnished by the Government will remain with the Government. 23

Government-Furnished Property Property in the possession of, or acquired directly by, the Government and subsequently made available to the contractor. Hardware Physical components or apparatus including major items of equipment. Hazardous Materials Any used or unused personal property, including scrap and waste that is ignitable, corrosive, reactive, or toxic because of its quantity, concentration, or physical, chemical or infectious characteristics. The property can be in a solid, liquid or gaseous state and may cause or significantly contribute to an increase in mortality or serious illness, or pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, disposed of, or otherwise managed. Inventory The sighting, tagging or marking, describing, recording and reporting of property concerned and reconciliation of the property record with the report. Maintenance To keep property in its existing condition, and preserve it from failure or decline, except for fair wear and tear. Material Property that may be incorporated into or attached to a deliverable end item or that may be consumed or expended in performing a contract. It includes assemblies, components, parts, raw and processed materials, and small tools and supplies that may be consumed in normal use in performing a contract. NSN National Stock Number. A thirteen-digit catalog code consisting of a four-digit federal supply class code and a nine-digit national item identification number. Property Administrator An authorized representative of the contracting officer assigned to administer the contract requirements and obligations relative to Government property. If an authorized representative has not been designated as the property administrator, the contracting officer assumes the role. Property System Survey (PSS) An evaluation of a contractor s management and control of Government property by Government representatives, usually the sponsor s property administrator. The survey will also include a determination as to whether the contractor is effectively complying with the contract, FAR, DFARS, and other applicable Government Regulations. Salvage Property that, because of its worn, damaged, deteriorated, or incomplete condition or specialized nature, has no reasonable prospect of sale or use as serviceable property without major repairs, but has some value in excess of its scrap value. Scrap Personal property that has no value except for its basic material content. Weapons such as carbines, grenade launchers, rocket launchers, machine guns, handguns, rifles, shotguns and ammunition. Explosives including demolition material; e.g., detonators, charges, blasting caps, firing devices, fuses, primers, timers, grenades, mines (hand placed), and explosive waste developed from the manufacture of the foregoing. Hazardous material. Any used or unused personal property, including scrap and waste, that is ignitable, corrosive, reactive, or toxic because of its quantity, concentration, or physical, chemical, or infectious characteristics. The property can be in a solid, liquid or gaseous state and may cause or significantly contribute to an increase in mortality or serious illness, or pose a substantial present or potential hazard when improperly treated, stored, transported, disposed of, or otherwise managed. 24

APPENDIX B GOVERNMENT CONDITION CODE DISPOSAL FAR DFARS A1 A2 A3 A4 B4 B5 B6 Code 1, Unused-good. Unused property that is usable without repairs and identical or interchangeable with new items from normal supply sources. Code 2, Unused-fair. Unused property that is usable without repairs, but is deteriorated or damaged to the extent that utility is somewhat impaired. Code 3, Unused-poor. Unused property that is usable without repairs, but is considerably deteriorated or damaged. Enough utility remains to classify the property better than salvage. Code 4, Used-good. Used property that is usable without repairs and most of its useful life remains. Code 4, Used-good. Used property that is usable without repairs and most of its useful life remains. Code 5, Used-fair. Used property that is usable without repairs, but is somewhat worn or deteriorated and may soon require repairs. Code 6, Used-poor. Used property that may be used without repairs, but is considerable worn or deteriorated to the degree that remaining utility is limited or major repairs will soon be required. A New, used, repaired, or reconditioned property; serviceable and issuable to all customers without limitations or restrictions; includes material with remaining shelf life of more than six months. B new, used, repaired, or reconditioned property; serviceable and issuable or for its intended purpose but restricted from issue to specific units, activities or geographical areas because of its limited usefulness or short service-life expectancy; includes material and remaining shelf life of three to six months. 25