When the equipment acquired under the Federal award is no longer needed, the recipient must request disposition instructions, regardless of current fair market value, in accordance with 45 CFR 75.320(e)using the SF-428 and SF-428-C Disposition Request/Report form. Upon review of the information, the recipient may be required to compensate ACF for it's percentage of participation of the current market value or proceeds from the sale. The amount is calculated by multiplying the current fair market value or proceeds of sale by the percentage of participation in the cost of the original purchase.
The official starting point for tangible personal property disposition process, a prior approval, is for the recipientto submit a SF-428 and SF-428-C Disposition Request/Report form with supporting documentation to the assigned GMS for review and GMO decision. For more information, see Tangible Personal Property Reporting.
Equipment: The standard disposition options available under 45 CFR §75.320(e) are:
- Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation to the HHS awarding agency.
- Except as provided in §75.319(b), or if the HHS awarding agency fails to provide requested disposition instructions within 120 days, items of equipment with a current per-unit fair-market value in excess of $5,000 may be retained by the non-Federal entity or sold. The HHS awarding agency is entitled to an amount calculated by multiplying the current market value or proceeds from sale by the HHS awarding agency's percentage of participation in the cost of the original purchase. If the equipment is sold, the HHS awarding agency may permit the non-Federal entity to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses.
- The non-Federal entity may transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the non-Federal entity must be entitled to compensation for its attributable percentage of the current fair market value of the property.
Supplies: The standard disposition option available under 45 CFR §75.321 is:
If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal Government for its share. The amount of compensation must be computed in the same manner as for equipment. See §75.320(e)(2) for the calculation methodology.
As an expert in federal grant management and compliance, I bring a wealth of firsthand knowledge and experience in navigating the intricacies of regulations such as 45 CFR Part 75. My expertise is grounded in practical application, ensuring organizations adhere to the stringent requirements set forth by federal agencies.
In the context of the provided information regarding the disposition of equipment acquired under a Federal award, it is crucial to understand the key concepts and processes involved. Let's break down the essential components:
Disposition Request/Report Form:
The SF-428 and SF-428-C Disposition Request/Report form serves as the official document initiating the tangible personal property disposition process. Recipients must submit this form along with supporting documentation to the assigned Grants Management Specialist (GMS) for review and the Grants Management Officer (GMO) for a decision.
Tangible Personal Property Reporting:
This refers to the broader process involving the submission of disposition requests and supporting documentation. It establishes the official starting point for handling equipment and supplies that are no longer needed.
Equipment Disposition Options (45 CFR §75.320(e)):
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Equipment with Fair Market Value ≤ $5,000:
- Retention, sale, or disposal with no further obligation to the HHS awarding agency.
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Equipment with Fair Market Value > $5,000:
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Retention or sale if the HHS awarding agency fails to provide disposition instructions within 120 days.
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The HHS awarding agency is entitled to a percentage of participation in the cost of the original purchase, calculated based on the current market value or proceeds from the sale.
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If sold, the non-Federal entity may retain a portion (up to $500 or ten percent of proceeds, whichever is less) for selling and handling expenses.
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Transfer of title to the Federal Government or an eligible third party is possible, with compensation for the non-Federal entity based on its attributable percentage of the current fair market value.
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Supplies Disposition Option (45 CFR §75.321):
- Unused supplies exceeding $5,000 in total aggregate value must be retained for other activities or sold.
- The non-Federal entity must compensate the Federal Government for its share, with the amount computed in the same manner as for equipment (refer to §75.320(e)(2) for the calculation methodology).
In summary, the disposition process involves a meticulous calculation of fair market value, consideration of various options, and adherence to the specific regulations outlined in 45 CFR Part 75. This ensures accountability and compliance in the management of federal grant-funded equipment and supplies.
