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Frequently Asked Questions
Equipment Under NIH Grants
Initial Posting: December 1, 2010
Last Revised: December 1, 2010

  A. FAQs on Equipment Under NIH Grants

  1. What is the definition of equipment?
  2. Does equipment purchased under a grant belong to the Program Director/Principal Investigator (PD/PI)?
  3. Can NIH require the transfer of equipment from the grantee to another party?
  4. Does the grantee organization have an obligation to the government for equipment after a grant has ended?
  5. When is NIH prior approval required to purchase equipment?
  6. Is NIH prior approval required to purchase equipment in the final six months of the project period?
  7. What happens to equipment when the PD/PI moves to another organization?
  8. What equipment may be charged as an Alteration and Renovation (A&R) expense?
  9. Under Conference Grants (R13 or U13), may grant funds be used for the rental of equipment?
  10. May grantees use equipment acquired with NIH funds to provide services to non-federal organizations?
  11. Is depreciation or use charges on equipment an allowable cost on a grant?
  12. Are costs of insuring equipment purchased with project funds an allowable expense?
  13. What should a grantee do if a piece of equipment is lost, damaged, or stolen?
  14. How may equipment be used after the end of a grant?
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  A. FAQs on Equipment Under NIH Grants

  1. What is the definition of equipment?

    The definition for equipment, as stated in 45 CFR Parts 74 and 92, is an article of tangible nonexpendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. However, consistent with recipient organizational policy, lower limits may be established. (45 CFR Part 74.2 and 74.34 and NIHGPS)

  2. Does equipment purchased under a grant belong to the Program Director/Principal Investigator (PD/PI)?
    NIH research grants are made to an organization on behalf of the PD/PI. Title to equipment acquired with NIH funds vests in the organization receiving financial assistance directly from an NIH awarding Institute/Center to carry out a project or program, subject to certain restrictions described at 45 CFR Part 74.34 (see next question).
  3. Can NIH require the transfer of equipment from the grantee to another party?

    Yes, NIH has the right to require equipment (including title) purchased with grant funds to be transferred to the Federal Government or to an eligible third party named by the NIH awarding Institute/Center, under the conditions specified in 45 CFR Part 74.34(h). Although it is seldom necessary to do so, this right may be invoked in cases where a grant is transferring to a new organization and the equipment purchased with grant funds is needed to continue the research at the new grantee organization. (45 CFR Part 74.34; NIHGPS,8.1.2.7)

  4. Does the grantee organization have an obligation to the government for equipment after a grant has ended?
    Non-profit institutions of higher education and nonprofit organizations whose primary purpose is the conduct of scientific research (hereinafter referred to as exempt grantees) hold title and are exempted from further obligation to the Federal Government for equipment acquired under a NIH grant for support of basic or applied scientific research (except for the NIH right to require transfer as described in 45 CFR Part 74.34(h). Nonexempt grantees (hospitals, for-profit organizations, and non-profit organizations whose primary purpose is other than scientific research) hold title and must follow the requirements described in 45 CFR Part 74.34 and the NIHGPS 8.3.3.
  5. When is NIH prior approval required to purchase equipment?

    Prior approval for the purchase of equipment is required if it will represent a change of scope for the project (see NIHGPS 8.1.2.5). Two potential change of scope indicators that apply are: 1) significant rebudgeting; and, 2) purchase of a unit of equipment exceeding $25,000. The grantee organization should  consult with the grants management office for a decision as to whether a particular equipment purchase is change of scope action requiring prior approval.  if it represents a change in scope.

  6. Is NIH prior approval required to purchase equipment in the final six months of the project period?

    No.  However all charges to a grant project, particularly in the final months of the project period, must be allowable and allocable as a direct cost to the grant, and be reasonable and necessary for the conduct of grant activities. Equipment may not be purchased simply to use an unobligated balance remaining at the end of the project.

  7. What happens to equipment when the PD/PI moves to another organization?

    The grantee organization is the legal entity to which a grant is awarded. When the PD/PI moves to another organization, the following options apply (1) The grantee organization may request continuation of the project under the direction of an alternate PD/PI. If the alternate PD/PI is approved by NIH, the grant will continue and thus title to the equipment purchased under the grant will remain with the original grantee organization.


    (2) The organization may relinquish its interests and rights in the grant to the PD/PI's new organization. If the new organization is approved by NIH to continue the grant activity, then the grant will be awarded and any equipment purchased with grant funds and still needed for the grant project would be expected to transfer to the new grantee organization, which would assume title. If the original grantee does not voluntarily agree to relinquish equipment with the grant, HHS may require transfer of the equipment as specified in 45 CFR Part 74.34(h).

    (3) If an alternate PD/PI is not accepted by the NIH (or no alternate is nominated), and the original grantee refuses to relinquish its rights in the grant to the new organization (or if the new organization is not accepted by NIH to continue the research), then the grant will be terminated. Title to equipment will remain with the original grantee organization, subject to disposition or use as described in 45 CFR Part 74.34. The PD/PI's new organization may submit a new application through the regular NIH peer review process to request support for the research.


    The transfer of a grant to a foreign organization or between foreign organizations requires the additional approval of the National Advisory Council/Board of the awarding NIH IC.

  8. What equipment may be charged as an Alteration and Renovation (A&R) expense?

    Fixed equipment, such as casework, a fume hood, a large autoclave, or biological safety cabinet, is an allowable A&R charge. Furnishings and movable equipment are not allowable as A&R costs. Additional information on alteration and renovation costs can be found in the NIHGPS 7.9.1.

  9. Under Conference Grants (R13 or U13), may grant funds be used for the rental of equipment?

    Grant funds may be used for the rental of necessary equipment under a conference grant. Funds may not be used for the purchase of equipment. (See NIHGPS 14.10)

  10. May grantees use equipment acquired with NIH funds to provide services to non-federal organizations?
    Yes. However, nonexempt grantees are specifically prohibited from doing so for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for so long as the Federal Government retains an interest in the equipment. For both exempt and nonexempt grantees, user charges will accrue as program income and must be reported on the Federal Financial Report (SF 425). (45 CFR Part 74.34(b)(1) and 74.24)
  11. Is depreciation or use charges on equipment an allowable cost on a grant?

    Depreciation or use charges on equipment are an allowable cost, but not normally allocable as a direct cost to a grant. Such charges are usually included in the organization's indirect cost base for determination of its indirect cost rate. Depreciation or use charges on equipment acquired under a federally supported project are unallowable. (see NIHGPS 7.3)

  12. Are costs of insuring equipment purchased with project funds an allowable expense?

    Normally these costs are included in the organization's indirect cost base, but may be allocable as a direct cost if this manner of charging is the normal organizational policy, consistently applied regardless of the source of funds. (see NIHGPS 7.9.1)

  13. What should a grantee do if a piece of equipment is lost, damaged, or stolen?
    The grantee is responsible for maintaining an internal control system to insure adequate safeguards to prevent loss, damage, or theft of equipment purchased with NIH grant funds. If such a system does not exist or is lacking in any way, the grantee must implement any necessary corrective actions.

    For non-exempt grantees, if damage, loss, or theft occurs despite the fact that the recipient has the required control system in place, there will be no obligation to NIH for the equipment, unless the recipient receives compensation for the damage, loss, or theft from insurance or some other source. If the grantee is compensated for the damage, loss, or theft, but does not replace the equipment for use on the grant, the rules regarding sale of equipment apply (45 CFR Part 74.34(g)).

  14. How may equipment be used after the end of a grant?
    Exempt grantees hold title and are exempted from further obligation to the Federal Government for equipment acquired under a NIH grant for support of basic or applied scientific research, except for the HHS right to require transfer as described in 45 CFR Part 74.34(h).

    Nonexempt grantees hold title and shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds, and shall not encumber the property without approval of the HHS awarding agency. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally sponsored activities, if any, in the following order of priority:


    (1) Program, projects or activities sponsored by the HHS awarding agency; (2) Program projects or activities sponsored by other HHS awarding agencies; (3) Program, projects or activities sponsored by other Federal agencies.


    If the grantee no longer needs the equipment for the above purposes, the grantee may retain the equipment for other uses, provided that compensation is made to the original HHS awarding agency or its successor. If the recipient has no further need for the equipment, it shall request disposition instructions from the HHS awarding agency. See 45 CFR Part 74.34(g) for additional information.

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This page last updated on December 1, 2010
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