Appendix D to Part 1130 - Terms and Conditions for PROP Article IV, “Use and Disposition of Equipment and Supplies”
2:1.2.8.6.14.6.64.6.38 : Appendix D
Appendix D to Part 1130 - Terms and Conditions for PROP Article IV,
“Use and Disposition of Equipment and Supplies”
As specified in §§ 1130.405 through 1130.425, a DoD Component's
general terms and conditions must use the following wording for
PROP Article IV.
PROP Article IV. Use and Disposition of Equipment and Supplies.
(December 2014)
Section A. Property subject to this article. This article
specifies requirements for use and disposition of equipment and
supplies. If a provision of PROP Article I identifies any type of
equipment or supplies as exempt property, requirements of this
Article apply to that exempt property only to the extent specified
in that provision of PROP Article I or an award-specific term or
condition. The types of non-exempt property to which this article
applies are:
1. Supplies that you acquire either by purchase or by donation
as cost sharing or matching under this award; and
2. Equipment for which title is vested conditionally in you.
That includes equipment with a conditional title resulting from
your having, either under this award or under a previous award from
which you transferred accountability for the equipment to this
award:
a. Directly charged as project costs, in whole or in part, the
acquisition (by purchase, construction or fabrication, or
development) of equipment;
b. Donated the equipment to the project or program by counting
the value of the remaining life of the property recorded in your
accounting records or the fair market value toward any cost sharing
or matching requirements under the award, rather than charging
depreciation (see PROP Article I, Section D); or
c. Directly charged as project costs improvements to the
equipment that meet the criteria given in paragraph E.1 of PROP
Article I.
Section B. Requirements for a State's use and disposition of
equipment. You:
1. Must use the equipment for the authorized purposes of the
project or program during the period of performance, or until the
property is no longer needed for those purposes.
2. May not encumber the property without the prior written
approval of the award administration office.
3. Must use and dispose of the equipment in accordance with your
State laws and procedures.
Section C. Use of equipment by an institution of higher
education, nonprofit organization, local government, or Indian
tribe. You:
1. Must use the equipment for the authorized purposes of the
project or program under this award until the equipment is no
longer needed for those purposes, whether or not the project or
program continues to be supported by this award.
2. May not encumber the equipment without the prior written
approval of the award administration office.
3. During the time that the equipment is used for the project or
program under this award:
a. You must make the equipment available for use on other
projects or programs but only if that use will not interfere with
the equipment's use as needed for the project or program supported
by this award.
i. First preference must be given to other projects or programs
supported or previously supported by DoD Components
ii. Second preference to projects or programs supported or
previously supported by other Federal agencies.
iii. Third preference is for other projects or programs not
supported by the Federal Government. You should charge user fees
for use of the equipment in those cases, if it is at all
practicable.
b. You may use the equipment, if you need to acquire replacement
equipment, as a trade-in or sell it (using sales procedures
designed to ensure the highest possible return) and use the
proceeds from the sale to offset the cost of the replacement
equipment.
4. When the equipment is no longer needed for the project or
program under this award, you may defer final disposition of the
equipment and continue to use it on other federally sponsored
projects or programs. You must give first priority to other
projects or programs supported by DoD Components.
5. Notwithstanding the encouragement in FMS Article VII to earn
program income, you may not use equipment in which there currently
is a Federal interest - whether you acquired it under this award or
are otherwise accountable for it under this award - to provide
services for a fee that is less than private companies charge for
equivalent services.
Section D. Disposition of equipment by an institution of
higher education, nonprofit organization, local government, or
Indian tribe. You must request disposition instructions from
the award administration office when either original or replacement
equipment acquired under this award with a current fair market
value that exceeds $5,000 is no longer needed for the original
project or program or for other federally sponsored activities as
described in paragraph C.4 of this article. For each item of
equipment with a current fair market value of $5,000 or less, you
may retain, sell, or otherwise dispose of the item with no further
obligation to the Federal Government.
1. We may issue disposition instructions that:
a. Allow you to retain or sell any item of equipment after
compensating us for the Federal interest in the property, which is
to be computed as specified in the definition of “Federal
interest;” or
b. Require you to transfer title to the equipment to a Federal
agency or a third party, in which case you are entitled to
compensation from us for the non-Federal interest in the equipment,
plus any reasonable shipping or interim storage costs incurred.
2. If we fail to provide disposition instructions for any item
of equipment within 120 calendar days of receiving your request,
you may retain or sell the equipment, but you must compensate us
for the amount of the Federal interest in the equipment.
3. If you sell the equipment:
a. You must use sales procedures designed to ensure the highest
possible return; and
b. You may deduct and retain for selling and handling expenses
either $500 or ten percent of the proceeds, whichever is less.
Section E. Use and disposition of supplies acquired under
this award.
1. Use. As long as we retain a Federal interest in
supplies acquired under this award either by purchase or by
donation as cost sharing or matching, you may not use the supplies
to provide services to other organizations for a fee that is less
than private companies charge for equivalent services,
notwithstanding the encouragement in FMS Article VII to earn
program income.
2. Disposition. If you have a residual inventory of
unused supplies with aggregate value exceeding $5,000 at the end of
the period of performance under this award, and the supplies are
not needed for any other Federal award, you must retain the
supplies or sell them but must in either case compensate us for the
amount of the Federal interest in the supplies. You may deduct and
retain for selling and handling expenses either $500 or ten percent
of the proceeds, whichever is less.