Property Standards

2 CFR Part 200: 200.310 – 200.316

Jason Guilbeault, Senior Consultant

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Property Standards 200.310

• Maintain equivalent insurance to that which is maintained for the awardees own real property and equipment.

• Federally-owned property need not be insured unless required by the terms and conditions of the Federal award.

2

Real Property 200.311

Definition: 200.85 -

Real property

means land, including land improvements, structures and appurtenances thereto, but excludes moveable machinery and equipment.

a) Title to property acquired or improved vests upon acquisition with awardee.

b) Real property will be used for the authorized purpose as long as needed, during that time the property should not be disposed of or encumbered.

c) When property is no longer needed for the originally authorized purpose the awardee must obtain disposition instructions from the awarding agency.

3

Property Disposition Options 200.311 (c)

3 Alternatives for Disposition Instructions:

1. Retain Title After compensating the awarding agency. 2. Sell the Property and compensate the awarding agency.

3. Transfer title to the awarding agency or to a third party designated or approved by the awarding agency, with compensation being provided for the awardee’s participation in the acquisition.

4

Federally-Owned and Exempt Property 200.312

•

Federally-Owned Property:

• Title to federally-owned property remains vested with the government. • Grantees must submit an annual inventory of federally owned property in their custody. • Upon completion of the award or when the property is no longer needed, grantees must report the property to the awarding agency for further Federal agency use.

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Federally-Owned and Exempt Property 200.312

•

Exempt Property:

• Federally owned property acquired under a Federal award, that explicitly indicates title vests with the awardee without further obligation or under conditions the agency consider appropriate. • Agencies may exercise this option when statutory authority exists. •

Absent statutory authority and award terms, title to exempt federally-owned property acquired under the awards remains with the Federal government

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Equipment 200.313

Definition:

Tangible personal property (including IT systems) having a useful life of more than 1 year and a per-unit acquisition cost equal or exceeding the organization’s capitalization threshold or $5,000.

Title:

Title vests upon acquisition with the awardee. Unless statutory

and

agency authorization exists for vesting title without further obligation to the Federal government, the title vests conditionally with the awardee.

**

Conditional Title is a new term. This concept has always been effective, just not explicitly named in A-110.

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Equipment and Conditional Vesting 200.313(a)

Title must vest in the non-Federal entity subject to the following conditions: 1. Use the equipment for the authorized purpose until funding for the project ceases, or until it is no longer needed for the project (regardless of continued federal funding for the project). 2. Not encumber the property without approval of the awarding agency 3. Use and dispose of the property in accordance with (b), (c), and (e) of this section – Note: (b) is only applicable to states 8

Equipment Use 200.313(c)

1. When no longer needed for the original purpose, it may be used for other activities in the following priority: i.

ii.

Activities under a Federal award from the Federal awarding agency which funded the original program or project Activities under other Federal awards from other Federal awarding agencies 2. During the time the equipment is being used on the project,

the non-Federal entity must also make it available for use on other projects/programs currently or previously supported by the Federal government, provided the

– –

work will not interfere with the work of the project.

Must follow order of priorities from above (i and ii) Use for non-federally-funded programs/projects also permissible, however user fees should be considered if appropriate 9

Equipment Use 200.313(c)

3. In spite of the encouragement to earn program income, the non-Federal entity must not use equipment acquired with the Federal award to provide services 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 4. When acquiring replacement equipment, the non-Federal entity 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 10

Equipment and Management Requirements 200.313(d)

• Procedures for managing equipment paid for in whole or part under a federal award must meet the following requirements: 1. Property records must be maintained that include: • • • • • • Description of the property Serial number or other ID number Source of funding for the property, including FAIN Who holds title Acquisition Date and cost of property **Percentage of Fed participation in project costs for the Fed award under which the property was acquired • • • Location **Use and condition Disposition data 11

Equipment and Management Requirements 200.313(d)

**New Language and requirements added for property records: – Percentage of Federal participation in the project costs for the Federal award under which the property was acquired • This includes having the information from which one can calculate the % of Federal participation in the cost of the equipment – Use and condition • Just referring to an indicator in the property records that the specific piece of equipment is active and linked with the appropriate Federal award (same as A-110) • May be useful to note the condition codes on SF1428 (FAR), a required form for contracts (not grants) 12

Equipment and Management Requirements 200.313(d)

2. Take a physical inventory of the property once every two years 3. Have a control system to ensure safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated 4. Maintenance procedures to keep property in good condition 5. If authorized or required to sell, sale procedures to ensure the highest possible return 13

Equipment Disposition 200.313(e)

When equipment, other than federally-owned or exempt, is no longer needed for the original project or other activities currently or previously supported by a federal agency, if required by the terms of the award, the awardee must request disposition instructions from the awarding agency.

• Disposition will be made as follows, in accordance with awarding agency disposition instructions: 14

Equipment Disposition 200.313(e)

1. Items with a current per unit fair market value of $5,000 or less may be retained, sold, or disposed of with no further obligation to the Federal awarding agency.

2. If the agency fails to provide disposition instructions within 120 days, items of equipment with a current fair market value greater than $5,000 may be retained or sold. The agency is entitled to its percentage of participation on the sale.

3. Transfer title to the Federal government or to an eligible third party, reimbursing the awardee for its percentage of participation.

4. If non-Federal entity fails to take appropriate disposition actions, the Federal awarding agency may direct the awardee to take disposition actions.

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Supplies 200.314

Definition:

tangible personal property other than equipment. A computing device is a supply if the acquisition cost is less than the capitalization threshold, regardless of its useful life.

Title:

Title vests with the awardee on acquisition.

Residual Supplies:

A residual inventory exceeding $5,000 at the end of the award that is not needed for any other Federal award, the awardee must retain the supplies for use or sell them, but must in either case compensate the Federal government for its share (using a percentage of participation basis).

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Intangible Property 200.315

Definition:

property having no physical existence, such as trademarks, copyrights, patents, patent applications, and property such as loans, notes, or other debt instruments, lease agreements, stock and other instruments of property ownership (whether tangible of intangible).

Title:

Title to intangible property acquired under a Federal awards vests upon acquisition with the non-Federal entity.

Use and Disposition:

The non-Federal entity must use the property for the originally-authorized purpose and must not encumber the property without approval of the awarding agency. When no longer needed, disposition should follow the guidance for equipment.

Copyright and License:

The awardee may copyright any work that is subject copyright and was developed, or which was acquired, under a Federal award. The awarding agency reserves a royalty-free, nonexclusive and irrevocable right to reproduce, publish or otherwise use the work for Federal purposes and authorize others to do.

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Intangible Property and 37 CFR Part 401 Rights to Inventions Made by Nonprofit Organizations and Small Business Under Government Awards, Contracts and Cooperative Agreements.

The government has the right to: – Obtain, reproduce, publish or otherwise use data produced under a Federal award.

– Authorize others to receive, reproduce, publish, or otherwise use data for Federal purposes.

Freedom of Information Act

– Awardees can be required to, within a reasonable time, make the research data available to the public

if

the data developed under a Federal award was used by the Government in an agency action that has the force and effect of law.

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Property Trust Relationship 200.316

Property acquired or improved with a Federal award must be held in trust by the non-Federal entity as trustee for the beneficiaries of the project or program for which it was acquired.

The awarding agency may require the awardee to record liens or notice of record to indicate that personal or real property has be acquired or improved with Federal funds and that use and disposition instructions apply.

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For Federal Contracts:

• Title 48 CFR Federal Acquisition Regulations (FAR) Chapter 1 Part 45 prescribes standards for Government Property in contracts • FAR Clause 52.245 in a contract means you have to abide by regulations in FAR Part 45 – Same idea, but different terminology and some different requirements 20

Federal Acquisition Regulations

• Key term:

“Government property”

means all property owned or leased by the Government. Government property includes both Government-furnished property and contractor-acquired property. Government property includes material, equipment, special tooling, special test equipment, and real property. Government property does not include intellectual property and software.

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Federal Acquisition Regulations

• Key regulations:

• Upon project completion, fill out Standard Form 1428 – Inventory Disposal Schedule, which lists all remaining inventory of equipment and supplies. Contractor may place a bid to purchase excess inventory, but federal agency may also abandon the inventory (no purchase necessary) • Title to Government furnished and contractor acquired property remains with the Government.

• For fixed price contracts, the contractor can retain title to contractor acquired property, unless the property is part of a deliverable 22

Federal Acquisition Regulations

• Condition codes from SF-1428 23

Federal Acquisition Regulations

• Useful links:

• FAR Property Standards

https://acquisition.gov/far/current/html/FARTOCP45.html

• FAR Clause 52.245

https://acquisition.gov/far/current/html/52_245.html#wp1149752 24