Some research projects include the design, development, and building of equipment that is not commercially available. Equipment that cannot be purchased “off the shelf,” and is built by the research team, is called “fabricated equipment.” Fabricated equipment is a new piece of equipment or model* constructed for use in the performance of a scope of work within the confines of CSU’s facilities.

Fabricated equipment is not something that can be configured at a store or simply assembled by the organization. For example, the purchase of a CPU, monitor, and keyboard to be assembled into a working unit is not considered equipment fabrication.

Fabricated equipment must meet the same definition as major or capital equipment. Capital equipment is defined as an article of non-expendable, tangible property which:

• stands alone
• is complete in itself
• does not lose its identity
• has a useful life of more than one year
• has an acquisition cost that equals or exceeds the institution’s current definition of equipment**
• is movable and not affixed to a building or structure
• is used within the confines of CSU facilities***

For example, an investigator may need to build a radio telescope that is not commercially available to use as a research tool. As long as the final product meets the requirements listed above, it may be categorized as ‘equipment.’ A radio telescope that does not meet the useful life or cost acquisition threshold should be categorized as a supply item. A radio telescope that is built into a larger, permanent radio observatory is considered part of the renovation and should not be categorized as equipment.

Some fabricated costs are exempt from F&A when costs meet capital criteria and are not considered deliverables. If costs do not meet capitalization criteria or are for a deliverable, they will be moved to an appropriate expense object code and are subject to F&A.

*Models are similar to equipment but may be consumed during testing.

**In the case of fabricated equipment on a sponsored account (5-3), the final piece of equipment must have an acquisition cost that equals or exceeds the definition of equipment included on the current approved negotiated indirect cost rate agreement (NICRA).

***Fabricated equipment delivered to sponsors or sponsor-directed third parties before it has been used in place at CSU for at least one year will not be considered capital equipment. In this case, the item should be coded as ‘Deliverables’ and should incur F&A. Some exclusions apply (e.g. equipment that is installed in a facility to which CSU faculty/staff will have access to the instrument for research
purposes).

Resources

 Colorado State University Financial Procedure Instructions FPI 4-7

Blog post by Tricia Callahan, Senior Research Education and Information Officer, Office of Sponsored Programs – updated 6/10/2025