Appendix G - Disposition of Real Property, Equipment, and Supplies


Real Property

The Federal awarding agency or pass-through entity must require a non-Federal entity to submit reports at least annually on the status of real property in which the Federal Government retains an interest, unless the Federal interest extends 15 years or longer.  In those instances where the Federal interest attached is for a period of 15 years or more, the Federal awarding agency or pass-through entity, at its option, may require the non-Federal entity to report at various multi-year frequencies. 

Disposition of Real Property

When real property is no longer needed for the originally authorized purpose, the non-Federal entity must obtain disposition instructions from the Federal awarding agency or pass-through entity.  The instructions must provide for one of the following alternatives:  

  • Retain title after compensating the Federal awarding agency; 
  • Sell the property and compensate the Federal awarding agency; or 
  • Transfer title to the Federal awarding agency or to a third party designated/approved by the Federal awarding agency.


Equipment must be used by the non-Federal entity in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award, and the non-Federal entity must not encumber the property without prior approval of the awarding agency. During the time that equipment is used on the project or program for which it was acquired, the non-Federal entity must also make equipment available for use on other projects or programs currently or previously supported by the Federal government, provided that such use will not interfere with the work on the projects or program for which it was originally acquired.

Procedures for managing equipment (including replacement equipment) include maintaining property records, taking a physical inventory of the property and the results reconciled with the property records at least once every two years, developing a control system to ensure adequate safeguards to prevent loss, damage, or theft of the property, developing adequate maintenance procedures to keep the property in good condition and if the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. 

Disposition of Equipment 

When original or replacement equipment acquired under a Federal award is no longer needed for the original project or program or for other activities currently or previously supported by a Federal awarding agency, except otherwise provided in Federal statutes, regulations, or Federal awarding agency disposition instructions, the non-Federal entity must request disposition instructions from the Federal awarding agency if required by the terms and conditions of the Federal award. 

Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further responsibility to the Federal awarding agency.  The non-Federal entity may transfer title to the property to the Federal Government or to an eligible third party, provided that, in such cases, the non-Federal entity must be entitled to compensations for its attributable percentage of the current fair market value of the property. In cases where a non-Federal entity fails to take appropriate disposition actions, the Federal awarding agency may direct the non-Federal entity to take disposition actions.


Disposition of Supplies

Title to supplies will vest in the non-Federal entity upon acquisition.  If there is an inventory of unused supplies exceeding $5,000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other Federal award, the non-Federal entity must retain the supplies for use on other activities or sell them, but must, in either case, compensate the Federal government for its share. The amount of compensation must be computed in the same manner as for equipment.

As long as the Federal Government retains an interest in the supplies, the non-Federal entity must not use supplies acquired under a Federal award to provide services to other organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute.


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