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Disposition of Equipment and Supplies

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1603-DR
ApplicantLouisiana Department of Wildlife & Fisheries (Applicant)
Appeal TypeSecond
PA ID#000-UK9YJ-00
PW ID#Project Worksheet 2137
Date Signed2008-06-23T04:00:00

Citation:

FEMA-1603-DR-LA, Louisiana Department of Wildlife & Fisheries (Applicant)

Cross-reference:

Disposal of Equipment and Supplies

Summary:

In response to Hurricane Katrina, the Applicant purchased 250 rifles, 750 ammunition magazines and five laptop computers. The Applicant considered these materials necessary for an effective response and for the safety of its employees during search and rescue efforts following the disaster. PW 2137 was prepared for $291,097 for these materials. Anticipated salvage value of $145,549 was deducted from the eligible costs pursuant to 44 Code of Federal Regulations (CFR) §13.33(b).

The Applicant submitted its first appeal on March 28, 2006. The State argued that the rifles, ammunition magazines, and laptop computers were equipment and that 44 CFR §13.32(b) dictates that equipment is to be disposed of in accordance with state law. FEMA determined that the items were supplies, not equipment, based on the definition of those terms in 44 CFR §13.3. FEMA further determined that Recovery Policy 9525.12, Disposition of Equipment, Supplies, and Salvaged Materials, required the Applicant to compensate FEMA for the fair market residual value of used and unused supplies with an aggregate value exceeding $5,000, when they are no longer needed for disaster work. The Regional Administrator denied the appeal in a letter dated June 5, 2007.

In its second appeal, July 12, 2007, the Applicant again requested that FEMA remove the deduction for salvage value thereby increasing the value of PW 2137 to $291,097. The appeal centers on these arguments:
1. The Applicant is a component of the state government, and therefore, is permitted by 44 CFR §13.3 to establish its own definition of equipment.
2. Pursuant to 44 CFR §13.32, the Applicant can dispose of equipment in accordance with state law, and it can retain, without any obligation for repayment, items of equipment with a fair market value of less than $5,000.
3.
4. The items in dispute are needed for, and are being used in support of other federally-funded programs.
5.

Issues:

Are the items in dispute being used in support of other federally-funded programs?

Findings:

Yes.

Rationale:

44 CFR §§13.32(c)(1) and 13.33(b).

Appeal Letter

June 23, 2008

Colonel Thomas Kirkpatrick (Ret.)
State Coordinating Officer
Governor’s Office of Homeland Security and
Emergency Preparedness (GOHSEP)
415 North 15th Street
Baton Rouge, LA 70802

Re: Second Appeal–Louisiana Department of Wildlife and Fisheries, PA ID 000-UK9YJ-00,
Disposition of Equipment and Supplies, FEMA-1603-DR-LA,
Project Worksheet (PW) 2137

Dear Colonel Kirkpatrick:

This is in response to your letter dated October 31, 2007, which transmitted the referenced second appeal on behalf of the Louisiana Department of Wildlife and Fisheries (Applicant). The Applicant is appealing the Federal Emergency Management Agency’s (FEMA) deduction of salvage value from PW 2137 for the purchase of rifles, ammunition magazines, and laptop computers.

In response to Hurricane Katrina, the Applicant purchased 250 rifles, 750 ammunition magazines and five laptop computers. The Applicant considered these materials necessary for an effective response and for safety of its employees during search and rescue efforts following the disaster. FEMA prepared PW 2137 for $291,097 for these materials. FEMA deducted salvage value of $145,549 from the eligible costs pursuant to 44 Code of Federal Regulations (CFR) §13.33(b).
The Applicant submitted its first appeal on March 28, 2006. In its analysis, the State argued that the rifles, ammunition magazines, and laptop computers were equipment and that 44 CFR §13.32(b) dictates that equipment is to be disposed of in accordance with state law. FEMA determined that the items were supplies, not equipment, based on the definition of those terms in 44 CFR §13.3. FEMA further determined that Recovery Policy 9525.12, Disposition of Equipment, Supplies, and Salvaged Materials, required the Applicant to compensate FEMA for the fair market residual value of used and unused supplies with an aggregate value exceeding $5,000, when they are no longer needed for disaster work. The Regional Administrator denied the appeal in a letter dated June 5, 2007.
In the second appeal, the Applicant argues that 44 CFR §13.3 permits a Grantee to establish its own definition of equipment, provided that the definition is sufficiently broad to encompass all items that would be classified as equipment under the definition stated in that regulation. The Applicant contends that it is a division of the State and may establish its own definition of
equipment. It contends further that a definition of equipment is established in Louisiana Administrative Code Title 34 §307A.

The items that are the subject of this appeal are no longer needed for disaster work. However,
44 CFR §§13.32(c)(1) and 13.33(b) provide that equipment and supplies purchased under a Federal grant may be used in other activities currently or previously supported by a Federal agency when they are no longer needed for the original grant. The Applicant has provided an affidavit that the equipment is being used in support of the federally-funded joint enforcement program with the National Marine Fisheries Service for Law Enforcement and the Boating Safety Program funded by the United States Coast Guard.

Based on the review of all information submitted with the appeal, I have determined that the Applicant uses the materials to support its partnership with the National Marine Fisheries Service and the United States Coast Guard. This is an appropriate use of the equipment. Therefore, I am granting this appeal. By copy of this decision, I am asking the Regional Administrator to re-obligate the anticipated salvage value in the amount of $145,549 to PW 2137.

Please inform the Applicant of my decision. My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.

Sincerely,
/s/
Carlos J. Castillo
Assistant Administrator
Disaster Assistance Directorate

cc: William Peterson
Regional Administrator
FEMA Region VI