Guideline Date: April 2015     Revision: 1     Last Review: August 2017

Why is general-purpose equipment treated as an indirect cost?

Acquisition costs and other capital expenditures for general-purpose equipment are generally treated as indirect costs because general-purpose equipment cannot be easily linked to a particular cost objective.

Examples of equipment considered as indirect costs:

  • General office equipment and furnishings
  • Modular offices
  • Telephone networks
  • Information technology equipment and services
  • Reproduction and printing equipment
  • Motor vehicles
  • Air conditioning equipment

When may equipment be charged as a direct cost?

Special-purpose equipment necessary for the performance of the research that can be identified specifically with a sponsored project may be charged as a direct cost.

Examples of special purpose equipment that may be charged as a direct expense:

  • Microscopes
  • X-ray machines
  • Surgical instruments
  • Spectrometers
  • High-end server/data storage devices for a particular project

If you plan to charge specialized equipment as a direct cost:

  • If the expense is anticipated, include it in the budget and budget justification at the proposal stage.
  • Define how the specialized equipment is to be used and why it is essential to the success of the sponsored project.
  • Limit the purchase to equipment with capabilities that meet the needs of the project (i.e., avoid purchasing high-end equipment that exceeds project needs).
  • Conform to all specific restrictions and approval requirements outlined in the terms and conditions of the award.
  • The equipment must be purchased early in the award and not in the last six months of the project.