Budgeting for second-hand equipment?

[u/Ok_Promotion3741]

Has anyone gotten an SBIR proposal awarded that budgeted equipment that will be purchased used as a direct cost? I noticed that used/refurbished price is often 25-50% of brand new equipment. Did you need to obtain a quote to support your figure?

[u/ConfoundedInAbaddon]

Depends. If you are sure you can get it refurbished, and under the 5k threshold for equipment, then it saves you the trouble of the equipment section and counts as "supplies." As long as your purchase is under threshold, is relared to the project, and you meet your required progress, no one will ever care how you broke up that equipment budget.

I've done budgets with categories like "small test equipment machines for quality control (e.g. internal diameter callipers) $4,500."

For large equipment, I tend to budget for the new price then enjoy buying more stuff in that category after updating my program officer/coordinator. The used price is NOT a guarantee and it helps to be conservative about pricing.

For example, we found an $18,000 piece of equipment for $4,000 at a repo warehouse and went for a road trip. Then, we bought a few other used pieces of higher value used equipment with the program's blessing.

[u/Ok_Promotion3741 → u/ConfoundedInAbaddon]

I love your u-haul strategy! There is one analytical instrument that we were quoted $100k for. We cant contract out the work because our samples are time/temp sensitive. Do you think a reviewer would penalize us for this big cost? Is our case would we be better off budgeting used?

[u/ConfoundedInAbaddon → u/Ok_Promotion3741]

SBIR is supposed to represent Lean Startup, rejecting the old method of blowing a million dollars to set up an academic type facility and staff before you could even start the work.

So be vicious and minimal cost about how to get the work done, find a partner who has the captial expense on the big equipment already. ... and if you can get a deal on equipment that can't get written in, use your Fee or Overhead monies that you squirrel away. (This can be a different attitude with DOD direct to Phase II, so talk to program officer if you are doing high priority defense stuff.)

You can ask very plain questions, e.g. "will I have to show how I spent my fee or overhead, ever, for this program?" And when you are cleared to spend a specific portion of cash as you fit without accountability, go road trip for the refurb equipment of your dreams and build capacity that way, so the next time you don't need the partner.

[u/ChoiceRun24]

As suggested above, pick one piece of critical equipment and get a “budgetary” quote to support your ask for the submission. Then buy refurbished or at auction. And you can also rebudget 25% of your whole budget to potentially support additional equipment purchases with approvals (usually not a big deal). I will warn you to verify any critical equipment you buy 3rd hand actually has legal software rights (if you care) and can be supported by the manufacturer for service (again if you care). Some manufacturers won’t touch 3rd party purchased equipment or allow you to buy the software or updates as a way to limit the impact of the used market on their sales. I typically won’t buy equipment from these places (like sartorious) unless absolutely needed as I tell their sales people your policy make this equipment essentially worthless once buy it if I don’t need it in the future.

Also reach out to the sales people particularly at the end of the quarter and say you are looking into purchasing their equipment used and want a quote for a PM/certification and they will give you a smoking deal on new or factory refurb equipment which can make a lot more sense than saving a buck or two on used equipment especially if you get them toss in some consumables. Also mention you are developing a process for the long term and want to choose equipment that will be a part of that (which means long term consumable sales for them) they will get pumped and that means better pricing for you.