When a subrecipient buys equipment with funds from a subaward, title vests directly in the subrecipient itself — not in the prime (pass-through) recipient, and not in the federal government. This surprises a lot of research offices, because the prime recipient is the one accountable to the sponsor for the whole award, including how the subrecipient spends its share. But 2 CFR 200.313(a), the Uniform Guidance equipment section, is explicit: title to equipment acquired under a federal award "will vest upon acquisition in the recipient or subrecipient subject to the conditions of this section." The subrecipient is the owner of record. What the prime recipient and the federal government retain instead is a continuing federal interest — a set of use, recordkeeping, and disposition conditions that ride along with the equipment for as long as it has value, regardless of who legally holds title to it.
This page covers what that arrangement actually means in practice: what title-but-conditional-ownership looks like day to day, what the subrecipient has to track, what the prime recipient has to monitor, and what happens to the equipment at subaward closeout. It’s a narrower, subaward-specific companion to the site’s existing guides on property management system requirements under 2 CFR 200.313 and subrecipient monitoring under 2 CFR 200.332 — read this one for the equipment-title question specifically, and those two for the fuller property-system and monitoring-obligation pictures.
Title Vests in the Subrecipient, Not the Prime Recipient
2 CFR 200.1 defines a subrecipient as a non-federal entity that receives a subaward from a pass-through entity (the prime recipient) to carry out part of a federal award — as distinct from a contractor or vendor providing goods/services on a procurement basis (see Subrecipient vs. Contractor vs. Vendor for that distinction, which matters here too: 200.313’s title-vesting rule applies to subrecipients, not to contractors, whose equipment purchases are typically just a cost item on an invoice with no separate title-tracking obligation).
Because a subrecipient is itself a non-federal entity carrying out part of a federal award, 200.313(a)’s vesting language applies to it exactly as it applies to the prime: when the subrecipient buys equipment with subaward funds, that equipment belongs to the subrecipient’s own asset inventory from the moment of acquisition. The prime recipient does not take an ownership interest in equipment its subrecipients buy, even though the prime is the one who received the original federal award and flowed the funds downstream.
What both parties do share is exposure to the same conditions 200.313 attaches to that title. The subrecipient must:
- Use the equipment for the authorized purposes of the project as long as it’s needed, whether or not the project continues to be supported by federal funds;
- Not encumber the equipment (as collateral, for example) or dispose of it without approval, while it’s still needed and has a federal interest attached;
- Maintain equipment records meeting the same content requirements as a prime recipient’s records — description, serial/ID number, funding source (including the federal award ID number), who holds title, acquisition date and cost, federal-participation percentage, location, condition, and disposition data;
- Take a physical inventory at least once every two years and reconcile it against records;
- Maintain an adequate maintenance/control system and use a sale procedure that maximizes return if the equipment is ever sold.
These are the same 200.313(d) recordkeeping elements covered in more depth on the site’s property management system requirements guide — the difference here is who is legally obligated to keep them: the subrecipient, for its own equipment, on its own books.
Why the Prime Recipient Still Cares (and Still Has to Monitor)
Title sitting with the subrecipient doesn’t mean the prime recipient can look away. Under 2 CFR 200.332, the pass-through entity is responsible for monitoring subrecipient activities to provide reasonable assurance that the subaward is used for authorized purposes, in compliance with the subaward’s terms, and with performance goals achieved — and equipment purchased with subaward funds is squarely inside that scope. In practice that means the prime’s subaward agreement should:
- Flow down the applicable equipment terms from 2 CFR 200.313 (and, if the prime’s own award requires it, any sponsor-specific equipment clauses) into the subaward document itself, since the subrecipient’s obligations run to the prime, not directly to the federal agency;
- Require the subrecipient to report equipment purchases above a stated dollar threshold, so the prime can track what equipment exists under its award without maintaining a duplicate inventory system for property it doesn’t hold title to;
- Specify that equipment disposition at the end of the subaward period follows the same 200.313 rules the subrecipient would apply as if it were a prime recipient, coordinated through the prime rather than directly with the federal agency; and
- Address what happens to the equipment if the subaward ends early or isn’t renewed — a common gap in subaward agreements that skip equipment terms entirely because the subaward budget’s equipment line item was small.
This is the same underlying obligation covered on the site’s subrecipient monitoring checklist guide and subrecipient risk assessment guide — a subrecipient with weak property-management controls (no equipment inventory system, no capitalization policy, no history of managing federal equipment) is a risk factor worth identifying before an award goes out, not after equipment purchases have already happened with no tracking behind them.
Disposition: What Happens to the Equipment When the Subaward Ends
Equipment doesn’t automatically revert to the prime recipient or the federal government when a subaward closes out. The same fair-market-value thresholds in 2 CFR 200.313(e) that apply to a prime recipient’s own equipment apply to a subrecipient’s equipment too:
- Equipment with a current per-unit fair market value of $10,000 or less may be retained, sold, or otherwise disposed of by the subrecipient with no further obligation to the federal government (this threshold was raised from $5,000, effective for awards issued on or after October 1, 2024).
- Equipment above $10,000 FMV requires disposition instructions, and the subrecipient generally requests those instructions through the prime recipient rather than directly from the federal agency, since the subaward — not the prime award — is the subrecipient’s governing document. If no instructions are provided within 120 days of a disposition request, the subrecipient may sell or retain the equipment, but the federal government retains a right to compensation based on its percentage share of the original acquisition cost.
Because the request routes through the prime, a subaward agreement that never addresses equipment disposition leaves both parties guessing at closeout about who is supposed to initiate that request and on what timeline — worth fixing in the subaward document itself rather than discovering the gap when the subaward is already ending.
A Practical Checklist for Research Offices
For a prime recipient’s sponsored-programs or grants-compliance office managing subawards with equipment budget lines:
- Confirm the subaward agreement explicitly flows down 2 CFR 200.313 equipment terms, including the title-vests-in-subrecipient language, rather than staying silent on equipment and assuming the base Uniform Guidance language covers it by default.
- Set a reporting threshold in the subaward (a common practice, not a fixed regulatory number) above which the subrecipient must notify the prime of equipment purchases, so the prime’s own award-level equipment awareness doesn’t depend entirely on the subrecipient’s federal financial reports.
- Include equipment disposition instructions — or at minimum, a clear statement of process — in the subaward, specifically covering early termination and non-renewal, not just normal end-of-period closeout.
- Factor subrecipient property-management maturity into subrecipient risk assessment before award, particularly for subrecipients receiving a first-time award or a first-time equipment budget line.
- Don’t confuse this with government-furnished property: if the federal agency itself purchases and furnishes equipment directly to a subrecipient (rather than the subrecipient buying it with subaward funds), title stays with the federal government under 2 CFR 200.312, a materially different property regime from the 200.313 title-vests-in-recipient-or-subrecipient rule this page covers.
Frequently Asked Questions
Does the prime recipient ever hold title to equipment a subrecipient buys?
No. Under 2 CFR 200.313(a), title vests directly in whichever entity — recipient or subrecipient — actually acquires the equipment with award funds. The prime recipient doesn’t take an ownership interest in equipment purchased by its subrecipients; it retains a monitoring obligation under 2 CFR 200.332, not a property interest.
Does the subrecipient need its own equipment management system, separate from the prime’s?
Yes. Because title and the associated recordkeeping obligations sit with the subrecipient, the subrecipient needs its own equipment records, inventory process, and control system meeting 2 CFR 200.313(d)’s requirements — it can’t rely on the prime recipient’s property system to satisfy that obligation on its behalf.
What if the subaward agreement doesn’t mention equipment at all?
The Uniform Guidance requirements still apply as a matter of law, but a subaward silent on equipment terms leaves practical questions — reporting thresholds, disposition process, what happens at early termination — unanswered until a problem forces the issue. Best practice is to address equipment explicitly in the subaward document whenever the budget includes an equipment line, even a modest one.
Is this the same as government-furnished property (GFP/GFE)?
No. Government-furnished property under 2 CFR 200.312 covers equipment the federal government itself owns and furnishes directly to a recipient or subrecipient — title stays with the federal government throughout. This page covers the opposite and far more common scenario: equipment the subrecipient purchases itself with subaward funds, where title vests in the subrecipient subject to federal-interest conditions. See the site’s government-furnished property guide for that separate regime.
For the broader property-system requirements that apply whether the equipment belongs to a prime recipient or a subrecipient, see Property Management System Requirements for Federally-Funded Equipment (2 CFR 200.313). For the subrecipient-monitoring obligations that make equipment oversight the prime’s responsibility despite not holding title, see the Subrecipient Monitoring Checklist and Subrecipient Risk Assessment guides. For how a subrecipient differs from a contractor in the first place — which determines whether 200.313’s title-vesting language applies at all — see Subrecipient vs. Contractor vs. Vendor and Prime Recipient vs. Subrecipient.
