3.7 Agreement Management
- 1. Overview
- 2. Key Policy Statements
- 3. Agreement Lifecycle and Property
- 4. Accountability and Stewardship
- 5. Property Plan
- 6. Terms and Conditions
- 7. Identification of Equipment within the Agreement
- 8. Title and Associated Impact
- 9. Equipment Fabrications
- 10. Subaward Management
- 11. Property Reports
- 12. Closeouts
- 13. Audits
Grants, contracts, and other types of agreements are awarded to Stanford University to support research, instruction, clinical trials and other endeavors. The sponsorship and funding for these awards comes from many entities including Federal and State agencies, commercial contractors, foundations, peer institutions, and others; both foreign and domestic.
The specific terms and conditions within each award determine the financial, stewardship, and administrative requirements for property management. Compliance with these requirements has a direct impact on audit results, minimizes risk to Stanford and our Sponsors, and helps ensure ongoing approved status of our property management processes and systems.
2. Key Policy Statements
Property management activities are performed in accordance with the terms and conditions of the award; if contradictions arise between University policies, procedures, and the award – the terms of the award shall supersede.
PMO serves as the subject matter expert regarding property management policies, procedures, and administrative processes.
Contractually-required property management reports are prepared and submitted by PMO to the Sponsor(s) or designated cognizant officer.
3. Agreement Lifecycle and Property
The Notice of Award (NOA) provided by the Office of Sponsored Research (OSR) informs the Property Management Office (PMO) of the receipt of an award. The Principal Investigator (PI) and PMO, among others, should carefully review all details of the award, such as budget, any unilateral changes the agency made, terms and conditions, reporting requirements, equipment budget, fabrication costs, hardware deliverables, sponsor furnished property, and period of performance. This is the most opportune time to get clarification on questionable issues from the sponsor, or get needed changes into the award.
OMB Circular A-110 defines Funding Period as, “the period of time when federal funding is available for obligation by the recipient.” This period of performance, is the time allocated to complete the project work and get reimbursed for directly related expenses. Equipment purchases are allowed, per the terms of the award, throughout the period of performance; however, acquisitions within the last 90 days of the project require written justification on how the specific acquisition will benefit the project. The justification, if not on the requisition, must be provided to PMO. See also OMB A-81, Uniform Guidance, Section 200.39-Period of Performance, for additional clarification.
Key property management processes that occur throughout the life of the award include the following; others may apply based on the terms of the agreement.
- Receiving and Identification
- Physical Inventory
- Subcontractor Control
- Utilization and Maintenance
- Disposition and/or Relief of Accountability
- Award Closeout
4. Accountability and Stewardship
Established standards such as the OMB Circulars, OMB A-81 Uniform Guidance, the FAR, GAAP, internal policies and guidelines and Stanford’s Government Property Plan provide rules, regulations and guiding principles that effect accountability, stewardship, and liability.
Stanford University is responsible for ensuring appropriate stewardship of Sponsor owned or funded property per the terms and conditions of each agreement. Each award lays out the groundwork for how it is to be administered; should any conflict in requirement arise, the terms within the agreement will supersede.
5. Property Plan
Federal contracts require that Stanford and its subcontractors have a Property Plan. The purpose of the Plan is to ensure that the institution has implemented effective processes, policies and guidelines, which are measurable and that enable the control, preservation, protection and maintenance of government property. Detailed information on the requirement can be found within the Federal Acquisition Regulations, FAR 52.245(f)(1) (f) Contractor plans and systems. Within the Plan, Stanford may adopt industry leading practices and best business practices when controlling property, whether it belongs to Stanford or is sponsor owned.
6. Terms and Conditions
It is critical to read and understand the agreement in its entirety to determine which terms and conditions are relevant to property acquisition and management throughout the life of the award. The scope of work provides an overview of what the project entails and how the property is going to be used or whether it will be delivered to the sponsor.
For contracts, the Contract Deliverables Requirements List (CDRL) should identify items that are considered deliverables to the sponsor under the contract, including hardware, services, and reports. This section should also contain a delivery schedule including specifics as to how delivery and acceptance are to be handled for each deliverable item. Liability during shipping is an important issue. To minimize risk, it is critical to determine whether shipment is FOB origin or destination prior to the shipment occurring.
7. Identification of Equipment within the Agreement
Equipment needs are initially defined within the proposal for a grant or contract and are subsequently defined within the award. There are three primary sources for equipment used in support of a sponsored project. The most frequent at Stanford is to purchase equipment with sponsor funds; this is known as contractor acquired property (CAP). Other sources include the use of existing property or stating the need for sponsor (e.g. government) furnished property.
Funding for CAP is normally budgeted either in detail (contracts) or in summary. Grants may have re-budgeting authority to acquire equipment, so long as it’s within scope of work. For federal contracts where equipment was not in the original budget, prior authorization and internal/external screening is required before purchase.
Fabrications are normally identified as separate line items in the agreement budget. On grants, fabrications are usually Special Test Equipment (STE) and are generally not a final deliverable. Contracts may have fabrication deliverables that require shipments to the sponsor, or the sponsor’s designee.
If a sub-award is contemplated, a sub-award plan must be part of the negotiated agreement. The sub-award plan identifies the scope of work, period of performance and the terms and conditions the subcontractor must follow. Stanford University, as the upper tier contractor, is responsible for management and control of property at the subcontractor site.
8. Title and Associated Impact
Confirmation of equipment ownership (aka Title) at the time of acquisition is critical. Ownership will determine if a purchase transaction is taxable. It is also the key to identifying management and reporting requirements throughout the life of the award - including the closeout process – and subsequently defining disposal options.
Title to equipment provided by the Sponsor (e.g. government furnished property or GFP) remains with the Sponsor throughout the award period. At the time of disposition, a transfer of title to Stanford may be requested. Title transfers are requested by PMO with the appropriate Sponsor representative; if granted, records are adjusted accordingly. Title to equipment purchased by Stanford with Sponsor funds is based on the terms of conditions of the funding award.
Additional details regarding title and taxability can be found in the Acquisition chapter.
9. Equipment Fabrications
Fabrications are complex, not commercially available items, configured and built by Stanford University personnel. Federal sponsoring agencies often refer to these as Special Test Equipment (STE) or Special Tooling (ST).
Equipment fabrications may be Stanford or Sponsor funded. They have specific requirements for acquisition, accounting, tracking, capitalization, and reporting processes.
Refer to the Fabrications chapter of this manual for definitions, policy, financial and administrative guidance on equipment fabrications.
10. Subaward Management
PMO reviews sub-awards issued by Stanford to ensure proper flow-down of property management regulations and policies. Appropriate flow down of requirements ensures compliance with the terms of the award and facilitates timely reporting and closeout.
Providing property to subcontractors is frequently done on large contracts. Property furnished to the subcontractor directly from the sponsor is accountable under the subcontract and is required to be identified in both the prime contract and subcontract. The movement of property provided by Stanford to the subcontractor is documented using a DD Form 1149.
Oversight of property requirements is performed by the PMO. For large, complex projects, or those where the subcontractor’s policies and procedures are proprietary, PMO may request oversight assistance from the Office of Naval Research (ONR) or the Government Property Administrator. This delegation request us usually limited to oversight of records, reports, and disposal of property.
11. Property Reports
Depending on the type of award and specific terms, various property reports may be required throughout life of an award as well as at the time of closeout. PMO is responsible for the preparation and submittal of all property reports to Sponsors.
Most common property reports include the following
- Annual property reports are typically required for federal contracts. All federal-owned property accountable under the contract, as of the end of September, is reported to the sponsor by October 12th. If a federal grant has government owned equipment, the same requirement as above apply to the grant.
- Physical Inventory reports are required at the conclusion of each scheduled inventory cycle as well as at the time of award closeout for federal contracts. Inventory reports may be required on grants. Information reported includes a rollup of subcontractor information.
- Loss, Damage, Destruction and Theft (LDDT) reports are a requirement for incidents associated with federally-owned property. PMO prepares LDDT reports which include a comprehensive accounting of the event and a corrective action plan provided by the department or PI that was responsible for the property.
- Termination of an award will prompt PMO to report all accountable property currently on hand to the sponsor, including property at subcontractor sites. PMO will send a Termination Property Report to the sponsor within 60 days after notice of termination, or within 60 days of the resolution of outstanding commitments.
Final Property Reports and Certificates of Closure are discussed in the Closeouts section below.
Closeout activities for agreements typically begin 30-60 days before the end of period of performance. On large, complex awards, it may begin substantially earlier and require substantial interaction between PMO, the Principal Investigator (PI) and Research Administrator, the Department Property Administrator (DPA), our Office of Sponsored Research (OSR), and the Sponsor.
The closeout process ensures that contractual requirements have been met and any remaining property, accountable to a specific agreement, is properly disposed. PMO will obtain disposition instructions from Sponsors as needed. Closeout of any open sub-awards associated with a grant or contract must also occur during this period.
PMO is responsible for the final reconciliation and preparation of sponsor reports or certificates of completion. Reconciliation of purchased equipment as well as sponsor-furnished equipment is completed per the terms of the agreement. A physical verification of government-owned property will occur at the time of closeout.
Property related transactions associated with sponsored projects are subject to audit. The PMO serves as primary liaison with auditors, both internal and external. Audit findings resulting in the need for corrective actions are coordinated by PMO.