For institutions of higher education...under a federal grant title to
equipment should pass to the grantee.  Funds for the purchase of
equipment under the $5,000 federal limit should pass without any terms
or provisions.  For items that exceed the federal limit of $5,000,
usually requires an approval from the agency (normally done in the
budget justification in the proposal stages) and a title to equipment
provision included in the agreement that specifies that title to
equipment purchased with federal funds shall pass to the grantee.
Charges relating to the use of the equipment should not be charged to
another federal grant.  However, government-furnished equipment is
government property before it is passed to the grantee and therefore
remains government property unless title is released and passed to the
grantee.  Under some circumstances, the federal government may wish to
retain title to specialized equipment or even retain some control over
the use of the equipment.  This is usually negotiated prior to signing
the agreement.  This is supposed to have been the policy adopted by all
federal agencies in order to meet the insurance requirements for
educational institutions.

Best examples of  special circumstances:
Example 1....Microscopes ($2,000)...title passes automatically, no
clause needed.
Example 2....Acoustical Sensors ($6,500)...agency approval & title to
grantee provision
Example 3....US Government vehicle ($25,000)...government-furnished
property, vehicle liability insurance carried by the institution during
the project, title transfers from federal to grantee with federal rights
to inspect property for determination of disposition (allows the agency
to inspect equipment and decide whether they will retain title or pass
full title to the grantee.)

Suzette S. Mauney wrote:

> I have a quick question regarding title to equipment in a
> Federal Grant. The clause is written as follows:
> Status of Equipment Purchased with Contract Funds:
> Title to the equipment purchased with funds under this
> Agreement shall be retained by the Division.  The
> disposition of title to the equipment upon completion of the
> Agreement Shall be determined by the Division. (The agency
> is DHHS.) I questioned whether or not we should give up the
> title and also questioned the maintenance and repair. Is it
> true, that DHHS would get the title since they are a federal
> agency? My attorney advised me to ask for the title and now
> I am getting a conflicting answer from a faculty. The
> faculty said that in all federal grants they, meaning
> the agency, keep the title. Obviously, I am new at
> negotiating contracts and would appreciate any insight.
> Thanks, Suzette
> You can respond to me at xxxxxx@appstate.edu.
>
> ----------------------
> Suzette S. Mauney
> Appalachian State University
> Assistant Director, Sponsored Programs
> (704)262-2694*fax(704)262-2709
> xxxxxx@appstate.edu