Good Afternoon , I have a question,

 

In accordance with 2 CFR, Part 220 ( OMB Circular A21), Equipment is defined as follows: “an article of nonexpendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the institution for financial statement purposes, or $5,000.”  And as you know, equipment does not incur F&A.

 

We have a Delivery Order contract with the Army and FAR Clause 52.245.1 used in the Delivery Order contract reads as follows: "Equipment means a tangible asset that is functionally complete for its intended purpose, durable, nonexpendable, and needed for the performance of the 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."  Note, the Army did not insert, Alternate II which value equipment at $5,000 or greater.

 

My question is, based on the above FAR Clause, if we purchase an item as defined by FAR Clause 52.245.1 with a dollar value of $500, under this contract, can we charge F&A to the $500, or will it be treated like equipment as defined in 2 CFR, Part 220  and not incur F&A regardless of the dollar value?. 

 

Thank you all in advance for your assistance with this matter.

 

 

Gloria Greene, MA, CRA

Director

UAHuntsville, Office of Sponsored Programs

301 Sparkman Drive, VBRH E26

Huntsville, AL  35899

Voice: (256) 824-2657

Fax: (256) 824-6677

 

"The person who knows 'how' will always have a job. The person who knows 'why' will always be his boss."   -- Diane Ravitch