What’s Essential

Purchases of capital equipment are subject to sponsor regulations as well as the terms and conditions of the award. Some awards do not allow the purchase of particular types of equipment, such as general-purpose equipment, while other awards limit the purchase to specific items. Requirements associated with the purchase of minor equipment are similar to those for materials and services. The category of equipment determines whether F&A costs are assessed.


Key Definitions

  • Equipment: Non-expendable, tangible property that stands alone, is complete in itself, does not lose its identity, and has a useful life of more than one year.
  • Capital Equipment: Items with an acquisition cost of $5,000 or more (F&A is not applied).
  • Minor Equipment: Items with an acquisition cost of less than $5,000 (F&A is applied).
  • Fabricated Equipment: A new piece of equipment fabricated by a department, lab, or center for use in the performance of its research contract or grant usually within an MIT facility. A fabricated item will be capitalized if
    • the cost of the material making up the fabrication is $5,000 or greater;
    • the useful life of the equipment is more than one year;
    • the equipment is MIT owned or government funded; and
    • the equipment is identifiable as a discrete item by the Property Office.

Why It's Important

Equipment that is purchased on a sponsored project must be necessary for the performance of the project and be consistent with federal regulations, the requirements of the sponsor, and the terms and conditions of the award to which the equipment will be charged. It is important to review the sponsor policy and the terms and conditions of the award before using approved equipment purchase funds for other purposes. Sponsor policies and award terms vary in the flexibility that the PI has in re-budgeting award funds among various cost categories. All capital equipment is tagged by the MIT Property Office as part of a system to track and control government property in accordance with the provisions of federal acquisition regulations.

How to Comply

This checklist will help you to manage the purchase and disposal of project-related equipment.


  1. Submit a purchase order for the purchase of equipment with a value of $5000 or more.
  2. Complete a Selection of Source form for equipment exceeding $10,000. This form requires that you submit multiple vendor bids, the basis for source selection, the determination of reasonable price, and other specifics.
  3. Check with your local administrator to determine the sponsor guidelines or dollar limits for equipment purchases on your research grant before making purchases.


  1. Deactivate equipment that is obsolete, inoperable, or no longer necessary to maintain on the property record.
  2. Deactivate equipment only with the coordination and approval of the Property Office. Once a red deactivated label has been placed on the equipment, you may dispose of it.
  3. Dispose of equipment in the most cost-effective way with the guidance of the Environmental Health and Safety Office and with the help of the Department of Facilities.
  4. Check with your local administrator for sponsor guidelines on the ownership and title of the equipment in question.