Used Equipment Market Thriving In Tough Economic Times

A SAMPLING OF SCIENTIFIC BUYERS' GUIDES Published buyers' guides offer comprehensive listings of manufacturers and suppliers of products under various headings, according to Mary Ann Zimmerman, a buyer for the University of Maryland, College Park. Many include used equipment headings, useful for locating dealers. The guides are also helpful in keeping up to date on scientific equipment companies that move, merge, change names, or drop and add products to their lines. American Biotechnology Laboratory Buyers' Guide • International Scientific Communications 30 Controls Dr., P.O. Box 870 Shelton, Conn. 06484 (203) 926-9300 Fax: (203) 926-9310 American Chemical Society Biotech Buyers" Guide • American Chemical Society 1155 16th St., N.W. Washington, D.C. 20036 (202) 872-4363 Fax: (202) 872-6067 American Laboratory Buyers" Guide • International Scientific Communications 30 Controls Dr., P.O. Box 870 Shelton, Conn. 06484 (203) 926-9300 Fax: (203) 926-9310 Physics Today Buyers" Guide • American Institute of Physics MASS Division 500 Sunnyside Blvd. Woodbury, N.Y. 11797 (516) 576-2277 Fax: (516) 349-7669 (Attn.: John DiCaro) R&D Magazine's Product Source • Cahners Publishing Co. 44 Cook St. Denver, Colo. 80206 (303) 388-4511 Fax: (303) 398-7691 Scientific Computing and Automation Directory • Elsevier Communications 301 Gibraltar Dr. Box 650 Morris Plains, N.J. 07950 (201) 292-5100 Fax: (201) 898-9281 Laboratory downsizings and closures are bringing more scientific devices than ever before to an already vigorous used equipment marketplace, say researchers, managers, and dealers. At the same time, tighter lab budgets are spurring the demand for that equipment. As a result, scientists of all stripes—from metallurgists to microbiologists—are saving tens of thousands of dollars by outfitting their laboratories with used equipment. Researchers in government, industry, and academia are taking advantage of the new availability of high-quality, less-than-new scientific instruments. Most of the equipment comes from government giveaways, corporate donations, liquidation auctions of downsized or failed laboratories, used equipment vendors, “swap” sections and classified ads in professional publications, and word-of-mouth sources. “I have a pumping system that runs a low-temperature refrigerator that would have cost me $70,000 [to build],” says Sean Washburn, a professor of physics at the University of North Carolina, Chapel Hill. Instead, the system came to him at no cost from IBM's T.J. Watson Research Center, Yorktown Heights, N.Y., through the company's Technical Gifts Program. The program arranges for donations of surplus scientific equipment from IBM's laboratories, usually to university researchers with informal links to the IBM research community. “I also have semiconductor characterization electronics equipment that would have cost more than $20,000,” he says. There are two keys to finding reliable used instruments at low—or, sometimes, no—cost, say equipment suppliers and scientists. The first is to develop a broad network of contacts to help locate equipment. This network can be formal, like getting your name on the mailing lists for announcements of government giveaway events, but it can also be decidedly informal. “Talk to the repairmen, the guys from the major instrumentation companies, like Hewlett-Packard and Perkin-Elmer,” suggests Ted Berk, a metallurgist and vice president of W.B. Coleman Testing Laboratory Corp., Riverside, N.J., an independent metals testing lab. “They're a link to other laboratories. Ask them, 'Do you know anybody who's selling one, or wants to get rid of one, or is having trouble with theirs?' Fred Singleton, an associate professor of microbiology and acting director of the University of Maryland's Center of Marine Biotechnology in Baltimore, explains how his network works for him. “A friend of a friend of a friend calls and says, 'This company is going out of business; can you be there tomorrow?' “he says. “You go in and negotiate. We recently picked up some instruments that way at incredibly low prices—maybe 10 percent of the original purchase price—and they're in excellent condition.” The other key to successful acquisition of used equipment is to have the scientist who will actually rely on the instrument assess the item firsthand, to guard against acquiring a lemon. Dealers often offer a 30-day warranty on used equipment as partial protection, but the donation programs run by government and industry come without such guarantees. And, while the equipment may be free, potentially high transportation, storage, and repair costs make it just as important to “buy” wisely from these sources. “With used government property, inspection is vital,” says Vince Evans, chief of utilization and donation in the Washington, D.C., area for the General Services Administration (GSA). Evans screened and prepared for release more than $23 million worth of surplus NIH equipment in Bethesda, Md., in June. “Bring scientists with you,” he says, directing his comments to the purchasing agents and buyers he often deals with. “They know what they want. They know if a piece is missing. Singleton agrees, saying, “It helps to go yourself. The last thing you want to do is get a big clunker instrument that's beyond repair, occupying very valuable space.” Berk sums up some of the economic forces behind the secondhand equipment market—and how bad news for one player can be good news for another. “If I could afford it, I wouldn't buy anything used,” he says. “Unfortunately, I can't afford everything brand new—one piece of equipment can cost $300,000—so I have to look at the used market. Fortunately, there's a lot available—with companies going out of business and major corporations closing laboratories.” NIH's 'Garage Sale' Mary Ann Zimmerman, a buyer for the University of Maryland, College Park, took a number of scientists, including Singleton, from her institution to the NIH warehouse giveaway in June, which she calls a “super garage sale for scientists.” She considers the surplus scientific equipment from NIH's laboratories and researchers as among the most up-to-date used equipment available anywhere. “You just never know what they're going to have,” she says. “They're not a dependable source [like the used equipment dealers]. But we've gotten centrifuges, incubators, and benchtop equipment from baths to ovens. We were pleasantly surprised, too, at how much was in good shape.” GSA's Evans, who organized the weeklong giveaway, points out that the millions of dollars' worth of surplus biomedical research equipment available from NIH's laboratories and researchers is only a part of what GSA and the government at large redistributes each year. “The first nine months of this [fiscal] year,” he says, “GSA screened close to $8 billion worth of material, nationwide.” Evans says many government agencies have internal giveaway systems to redistribute equipment before it comes to GSA, so that, say, an instrument no longer needed in one NASA lab will first be offered to other labs within NASA. This is true at the Department of Defense and the Department of Energy, both with large research infrastructures, as well as at other agencies. Evans urges that, because of this priority arrangement whereby surplus equipment is first offered within an agency, researchers should work through their sponsoring agency to get best access to such equipment. If no one picks up an item within an agency, it moves to GSA, says Evans. GSA has 11 regional offices around the country to screen the material. To be able to take advantage of the GSA giveaway programs, you must either work for the government directly or be a federal grant or contract holder—but this includes many researchers. Equipment transferring within an agency usually moves without the involvement of money, but equipment transferring from one agency to project grantees of another, through GSA, may require the receiving agency to pay the federal treasury 25 percent of the value of the equipment, according to Evans. With scientific equipment, this can still be a substantial amount of money, even when the savings over the cost of a new purchase is great, and so such transfers are rarely done—as there are usually other ways to obtain the equipment. Perhaps the best way to circumvent such rules, Evans notes, is to take advantage of a special statute that allows holders of National Science Foundation grants to gain ownership, for their institutions, of equipment from agencies throughout the government at no cost. According to James D. Wilkins, property administrator for NSF, “We're the only agency that has authority to transfer title for excess scientific equipment. We can only transfer it to active NSF awardees, and then it's transferred to the awardee institutions, usually colleges and universities.” “That's unusual,” says Evans. “Only NSF project grantees can get their equipment free. Many universities have hundreds of grants from the NSF. If you have an NSF grant, it's one of the greatest ways in the world to pick up government property for use in research programs.” Building Relationships Researchers moving back and forth between industry and academia during their careers form a kind of bridge between the two, across which top-quality used scientific equipment often moves. “It's an informal network,” says UNC' s Washburn, who used to work for IBM and recently received valuable equipment from the company, “but it's a very widely recognized one.” “It promotes relationships with departments in the universities,” says Scott Moore, coordinator of the IBM Technical Gifts Program. “We have an interest, broadly, in furthering education [with these gifts], but also in getting access to students for recruiting purposes.” Susan Schiffler is staff assistant to the director of laboratory operations at IBM's T.J. Watson Research Center. She has been closely involved with the IBM donations program. “This kind of relationship is very common and very beneficial,” she says. “Flow-backs benefit both the education side and the industry side.” In the late 1980s, Bert Schwartz, now a consultant but then a microelectronics researcher at AT&T Bell Laboratories, Murray Hill, N.J., went to Rutgers University “on loan” as a visiting professor—meaning that AT&T paid his salary. He decided to help the university build a semiconductor fabrication facility. “I figured AT&T could be a good corporate citizen,” he says, “and, if I could help Rutgers generate good students, it would be a source of people for AT&T.” He also knew that, because of downsizing in some areas at AT&T and upgrading in others, the necessary equipment was likely to be available. “I was able to liberate, steal, acquire, accumulate—call it what you wish—enough equipment from AT&T to set up a total fabrication line at Rutgers,” he says. “I got permission to ship it all to Rutgers, in a number of large semis.” Included in the haul was a nearly new ion implanter. Renzo DiCarlo, manager of materials management at AT&T and responsible for donations, says that more than $1 million worth of material went to Rutgers in the deal. “Some scientists are leaving the labs to go back to full-time teaching,” DiCarlo adds, “because of the downsizing we've been going through and the projects we've chosen not to continue. If they are still working on the research projects they were working on here, in most cases we donate the equipment for them to continue their research.” Reliability Vs. Cost Dealers in used scientific equipment tend to be a more dependable source, in terms of both availability and equipment condition, than either the government giveaway or industry donation programs, say both dealers and buyers. This reliability is a marketing point for them, and complete remanufacturing of instruments and 30-day warranties are the norm. Predictably, the costs are higher than with the “freebie” programs, but the savings over buying new can still be substantial. “We try to sell the equipment at half its acquisition cost [as a new purchase],” says Robert Anderson, president of Buck Scientific Inc., East Norwalk, Conn. “We succeed because we specialize in two areas, the atomic absorption area and infrared spectrophotometer area. We don't buy and sell, we remanufacture. And we do only the Perkin-Elmer [Corp., Norwalk, Conn.] line.” Michael Johns, vice president of Harold Johns Co. Inc., Madison, Wis., describes his business similarly. “We acquire for stock and then service and test it ourselves,” he says. “Or we send it to the manufacturer for reconditioning, for them to give it their blessing. Then there's a 30-day return privilege. But we're pretty certain when it leaves here that it will do what we say it will.” Ralph Greenberg is president of National Equipment Sales and Leasing Inc., Easton, Mass., one of the larger dealers in used equipment. “We're dealing with blood analyzers, centrifuges, gas and liquid chromatography equipment, all types of spectrophotometers, and microscopes,” he says, “just anything that you could use in a laboratory other than a consumable item.” The Cutting Edge? Many involved in the used scientific equipment market say that, while a great deal of money can be saved by buying used, something is lost. “It tends to institutionalize the universities' being behind everyone else, having to use equipment industry no longer finds efficient,” says Robert Park, a professor of physics at the University of Maryland, College Park. He says that this is more an issue for the large research universities, the ones doing cutting-edge work, than for smaller, four-year institutions, which can focus on the educational value of the equipment. “And sometimes it may only mean a company is changing directions,” when it gets rid of a piece of equipment, he says. “All of us have taken equipment donated to us by, say, Bell Labs.” Others claim there is little rhyme or reason to why a particular item becomes available used; people often get rid of perfectly good equipment, they say. “Ph.D.' s and managers of laboratories are funny people,” says National's Greenberg. “A manager comes in, starts a new lab in Oklahoma. You know what he says? 'I want this brand-new gas chromatograph out of here. I want to work with Hitachi, I don't like Perkin-Elmer.' And the clinical market is worse than the research market.” Whether a particular item is state-of-the-art or not doesn't strike GSA's Evans as particularly important. “A certain purchase might not be a piece of research equipment,” he says. “But it might save you the money to buy that piece of research equipment. And, especially now with the military cutbacks, it's an ideal time to be out there tromping the bushes, and seeing what you can get.”

Used Equipment Market Thriving In Tough Economic Times

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