Financial Services and Operations

Chapter 3: Acquisition and Receiving

Fabrications

Equipment that is constructed and developed by combining discrete components/and or materials into one identifiable unit, with an acquisition cost of $5,000 or more and the estimated useful life of at least one year, is added to the University's inventory. Fabrications are a unique individual piece of equipment, or scientific instrument, which is not commercially available. An equipment fabrication does not constitute simply connecting components into a system.

Equipment costing $5,000 or more not permanently integrated into the fabrication, should be purchased and tagged separately as capital equipment. It is not considered part of the fabrication.

Internal labor cannot be included in the capitalized cost. Labor may be included in the cost of direct salary to external sponsors when allowable in the agreement.

Purchasing card transactions must be reallocated along with each receipt or invoice. Purchasing card transactions on fabrications have strict requirements and are subject to additional audit scrutiny.

Department travel and other departmental operating expenses associated with the fabrication will NOT be recorded as costs.

Capital fabrications must meet ALL of the following criteria:

  1. The item has unique specifications and is described in the research proposal or award. Details are specified in an engineering drawing. When design changes occur, the engineering drawing should be subsequently updated.
  2. The total cost for acquired materials, supplies, and components must be $5,000 or greater. All items acquired for fabrication must be permanently integrated into the equipment.
  3. The completed fabrication has an estimated useful life of one (1) year or more. 
  4. When completed, the item will not be affixed permanently to a building or structure.
  5. The fabrication results in a unique, stand-alone, tangible item capable of specific identification and continuous control through tagging and periodic physical inventory. Components should be designed to remain at one position in the fabrication; they are not to be removed and replaced throughout the useful life of fabrication.
  6. It must be completed in ample time to directly benefit the funding project and used for its intended purpose.

There are two categories of fabricated equipment:

  • Non-Capital Fabricated Equipment: Equipment fabricated for sale or for delivery to an external entity per the sponsor's instructions. The University does not retain title to this equipment nor will it be available for future University use.

  • Non-Capital Fabricated Equipment may be delivered to the sponsor's location or another research organization that will further the sponsor's research purposes and will be subject to overhead charges. Separate expenses for constructing non-capital fabricated equipment will be coded E6** (supplies) or E2** (services).

  • Capital Fabricated Equipment: Capital equipment, $5,000 or greater, which is constructed for use on a contract or grant, and will remain in the possession of the University.  Capital Fabricated Equipment is assigned a University equipment tag number and added to the department equipment inventory list.
  1. Prior to any spending or purchase requisition submission, the Principal Investigator completes a Fabricated Equipment Form with the following information:
    1. A complete description of the equipment.
    2. The equipment’s intended location.
    3. The custodial department.
    4. The account index.
    5. The anticipated completion date.
    6. An estimated total cost of the finished item.
  2. Forward the completed purchase requisition and fabricated equipment form to the Financial Services and Operations Department. NOTE: Upon receipt of the form, Financial Services and Operations will assign an equipment tag number for the fabrication.
  3. The tag number must accompany future acquisitions.

Upon completion of the project, the PI certifies a detailed inventory report from Financial Services and Operations of acquired components and verifies the usage of each item. When the equipment is substantially complete, a property tag is issued for the fabricated equipment.

Disposition of unused supplies are reported as required by Uniform Guidance and FAR part 45.