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:
- X-ray machines
- Surgical instruments
- 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.