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Re: Purchasing vehicles on grants Herbert B. Chermside 28 Jun 2004 14:44 EST

Consider leasing.

If the vehicle is used solely for a single project, or for several projects
explicitly defined as "closely related" (in most cases you need grants
officer confirmation for that), all expenses can be charged direct.  That
is what Jennifer has suggested.  I presume the vehicle is pretty much a
"special purpose" vehicle rather than something you could get on a mileage
basis from "motor pool".  If you buy it on a grant you have to consider how
to remove it from the grant when done -- how do you sell/dispose of it and
what value do you return to the account, etc.

However, a vehicle used for multiple user purposes can, and maybe should,
be treated as a "service center".  That way you develop a cost structure
that involves upkeep, expenses (maybe fuel is a direct user cost, but it
may be cheaper with a fleet fuel credit card and charge user on a mileage
basis with fuel included), and depreciation/replacement cost.  Years ago I
had a couple of vehicles too specialized to get from the state motor pool
as a departmentally run service center.  This sounds more like what you
have in mind.  But keep in mind the "indirect" costs of managing such a
service if you aren't a motor pool.

Sorry no really simple answer.  First question should always be, "Is this
vehicle too specialized to obtain the necessary use from some other
source?"  Even then, check out leasing rather than purchase and upkeep; you
pay for what you get and drop the lease and problems at the end of the
lease.  Leasing companies can develop reasonable plans for even pretty
special purpose vehicles.  Cost can be influenced by how long you need it
(what portion of its economic life) and by the market for resale or later
lease if it is a specialized vehicle.  Also, consider in structuring a
lease to consider what you will do if the primary vehicle becomes
inoperable (some idiot breaks an axle hot dogging through rough country
--  yes, it does happen!)

It is my personal opinion that outright purchase and maintenance for a
single grant is way too much trouble, and use for several grants may still
best be handled by leasing.  There are lots of people in the leasing
business, so there is some competition out there.  And you may pay a little
"service fee" for someone else to deal with many of the headaches, but it
is probably worth it.

Field biology use is generally satisfied by something like a Suburban (or
similar non-luxury SUV), a pickup, or a slightly larger truck.  And, even
if leased, you can usually arrange for installation of your own custom
fabricated racking for equipment in the interior (presuming you need
that!), if you work with the leasor regarding how to attach it.

Chuck

At 10:31 AM 6/28/2004, you wrote:
>If we purchase a vehicle with grant funds (for a field biology project
>involving lugging a log of gear to many sites), what vehicle
>operation/maintenance expenses can we also budget for as direct
>costs?     Is there some type of standard mileage rate that can be
>used?    I assume we can pay for gas and oil with grant funds ... what
>about repairs (eg punctured tire)?
>
>Thanks for the help.   I've just moved to a new office and all my
>reference materials are still in boxes!!
>
>Franci Farnsworth
>
>
>Frances Vinal Farnsworth
>Coordinator of Sponsored Research
>Library Room 223
>Middlebury College
>Middlebury, VT 05753
>
>Tel:  802-443-5889
>Fax:  802-443-2081
>Email:  xxxxxx@middlebury.edu
>Web:
><http://www.middlebury.edu/offices/grants/>http://www.middlebury.edu/offices/grants/
>
>
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Herbert B. Chermside, CRA
Special Asst. to VP-Research
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Voice:  804-827-6036
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e-mail xxxxxx@vcu.edu

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