All equipment, including fabricated equipment, must be necessary for the performance of the project, must be an allowable expense, must be allocable to the project, and the timing of purchase/fabrication must be consistent with the project’s period of performance.

If equipment fabrication at CSU is anticipated, a cost estimate of the completed equipment should be developed based on required labor and materials or components. Allowable equipment fabrication costs should be aggregated in a single line item under ‘Equipment’ in the sponsor’s budget and should be justified accordingly.

In KR PD, there is a specific object code for equipment fabrication in the budget tool called, Equipment-Fabrication – MTDC exempt. Use of this code ensures that aggregated costs do not incur indirect costs.

Equipment Fabrication: Cost Considerations

Personnel Costs

• services needed to directly assemble equipment
• salaries and benefits of technicians performing the actual fabrication or programming development

Non-Personnel Costs

• materials and supplies needed to fabricate equipment
• software needed for equipment fabrication development or implementation
• other costs that can be specifically identified as directly related to the fabrication

Indirect Costs

If the cost of the labor and components is more than $5,000, these costs should be excluded from Modified Total Direct Costs and thus excluded from the F&A calculation.

Unallowable Equipment Fabrication Costs

• salaries of principal investigators (project managers and other managers)
• salaries of administrative personnel
• labor related to research and design
• travel expenses
• facilities rental
• capital equipment (stand-alone items over $5,000 that do not lose their identify through incorporation into a more complex unit)*
• indirect costs
• other costs that cannot be specifically identify as directly related to the equipment fabrication

*Equipment fabrication components that meet the definition of capital equipment should be budgeted separately under ‘Equipment’ and not included with the Equipment fabrication costs.

Information sourced from:

Colorado State University Financial Procedure Instructions FPI 4-7 http://busfin.colostate.edu/Forms/FRP/Capital_CP/FPI_4-7_Work_In_Process_Equipment_Fab.pdf#zoom=100

Colorado State University Financial Procedure Instructions FPI 4-11  http://busfin.colostate.edu/Forms/FRP/Capital_CP/FPI_4-11_Software_and_Internally_Developed_Software.pdf#zoom=100

Colorado State University Financial Procedure Instructions FPI 4-12  http://busfin.colostate.edu/Forms/FRP/Capital_CP/FPI_4-12_Intangible_Assets.pdf#zoom=100