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FEMA Begins Next Phase Of Inventory Reduction Of Excess Temporary Housing Units

1. What is FEMA's disposal plan for temporary housing units?

FEMA's Logistics Management Directorate has developed an inventory reduction plan to dispose of excess temporary housing units (manufactured homes and travel trailers) located at FEMA staging sites throughout the United States. FEMA will work with the U.S. General Services Administration (GSA) to make excess inventory available through the GSA disposal process.

The first phase of the inventory reduction plan focused on "scrap" units, or those that have no value above the basic material content. Since October, 2008, FEMA has disposed of approximately 1,150 scrap units that were posted on www.gsaauctions.gov for interested individuals to purchase.

Beginning in early May, 2009, FEMA will start the next phase of its inventory reduction plan to include units designated as "repairable," or units which are unusable in their current condition but can be made usable by recipients if some level of repairs are completed. The extent of needed repairs can vary widely. These units range from like-new to significantly damaged. Some common necessary repairs may include but are not limited to: water intrusion damage, missing and non-operable components and/or storm, usage and road structural damage. Those interested in acquiring or purchasing are urged to assess unit condition, prior to the transfer, donation or sale. FEMA has identified approximately 14,000 "repairable" manufactured housing units (also known as mobile homes) in its inventory. Additionally, FEMA has identified approximately 104,000 travel trailers in its inventory that qualify as repairable.

Funds from the sales of units will be returned to the U.S. Treasury or, potentially for some sales, they could be reinvested in future purchase of new temporary housing units.

2. How does the disposal process through GSA work?

The General Services Administration (GSA) serves as the Federal government's disposal agent to make excess property available to federal, state and local government entities, and when authorized, to the public. In accordance with the Federal Management Regulations (FMR), 44 CFR 102 (Personal Property), FEMA will report units to GSA to make them available first to other Federal Agencies through GSA screening.

3. What is the difference between "scrap" and "repairable" units?

Scrap units were inspected and designated as scrap based upon a variety of criteria. In accordance with federal regulations, scrap housing units are those determined to have no value except for their basic material content. Examples of units that should be identified as scrap are those that have incurred significant fire damage; and/or major structural damage that may have been caused by severe weather events, road accidents, long-term storage and/or handling mishaps.

Repairable units are unusable for FEMA's needs in their current condition but can be made usable by recipients if some level of repair is completed. The extent of needed repairs can vary widely. These units range from like-new to significantly damaged. Some common necessary repairs may include but are not limited to: water intrusion damage, missing and non-operable components and/or storm, usage and road structural damage. Those interested in acquiring or purchasing are urged to assess unit condition, prior to the transfer, donation or sale.

4. If units are "repairable," why is FEMA transferring and auctioning them, and not repairing them?

It would not be cost-effective for FEMA to invest in the repair of these units for reuse during future disasters. FEMA takes its responsibility for being stewards of taxpayer money very seriously.

These types of units have a limited life-span, even under ideal conditions. Many of these units are more than three years old, have been stored and been uninhabited for most of that time, have wear and tear from being moved on several occasions, and have been exposed to year-round, outdoor weather conditions.

Purchasers of the units at auction are urged to carefully evaluate the suitability of the units for any intended use. All repairable units available for sale require some degree of repair. Units range from like-new to significantly damaged. Some common necessary repairs that may be encountered include, but are not limited to: water intrusion damage; missing and non-operable components; and storm, usage and road structural damage. Those considering acquiring units are strongly encouraged to inspect them during designated sales inspection periods. The purchasing entity assumes all costs of transportation, costs to make them roadworthy and all legal responsibility for the units at the time of purchase. Units are sold as described in the sales offering with no evaluation of condition.

5. Why does FEMA not just contract with a recycler to dispose of the excess temporary housing units?

FEMA has conducted an extensive cost-benefit evaluation of potential inventory reduction options. It would not be cost-effective for FEMA to contract with a recycler to reduce the inventory.

Contracting with recyclers imposes additional costs on the agency that cannot be recouped. Additionally, recycling of units that are considered to have value beyond their material content is restricted by the Federal Management Regulation.

6. What does GSA require from the purchaser?

The purchasing entity assumes all costs of transportation, costs to make units roadworthy and all legal responsibility for the units at the time of purchase. Units are sold as described in the sales offering with no evaluation of condition.

Purchasers will be required to sign a Buyer's Certificate acknowledging that a purchased travel trailer is not to be used as housing and will not be re-sold as housing. In addition, FEMA will place a clearly-visible decal "Not to be used for housing" on the door or window of each travel trailer. This disclaimer does not apply to manufactured housing (also known as mobile homes) which is regulated by the Department of Housing and Urban Development.

7. Will the units designated for disposal have formaldehyde?

Formaldehyde is present in the construction materials of travel trailers and manufactured housing. Formaldehyde may be released from component parts, furniture, or carpet over time in units due to a variety of environmental circumstances. This is precisely why FEMA has exercised extreme caution and incorporated appropriate warnings and notifications through this process. If FEMA has tested the unit, FEMA will provide the results of the test to the individual/entity receiving it.

The following environmental guidance will be provided to recipients and should be transferred as critical reference documentation to subsequent recipients for the life of the unit:

8. Why does FEMA have so many units?

In response to the unprecedented hurricane season of 2005, FEMA purchased a number of temporary housing units to support tens of thousands of disaster victims. Most of these units were deployed and occupied by eligible disaster assistance applicants. Of the more than 140,000 households placed in FEMA-provided temporary housing units in response to Hurricanes Katrina and Rita, only about 3 percent, or 4,700 households remain in units. As units have returned from the field, FEMA has had to address the challenging issue of how to dispose of this large and growing inventory of primarily non-mission capable units. It has always been FEMA's goal to reduce the number of temporary housing units in our inventory.

FEMA had been disposing of excess inventory, until July 2007, when sales were suspended. As of May, 2009, there are approximately 120,000 temporary housing units stored in 15 FEMA storage and staging areas that will be designated for disposition as scrap or repairable, depending upon their condition.

9. Why did FEMA suspend the sale of temporary housing units?

On July 24, 2007, FEMA suspended the reporting of excess of temporary housing units to the U.S. General Services Administration (GSA) while reviewing a number of policies associated with disaster housing because of potential health concerns associated with formaldehyde in temporary housing units. On July 31, 2007, FEMA reinstated the use of manufactured homes for direct housing missions as well as manufactured home sales through GSA.

Additionally, in compliance with a November 2007 federal court order (In re:  Federal Emergency Management Agency (FEMA) Trailer Formaldehyde Products Liability Litigation) FEMA was required to keep all of its temporary housing units for review and possible testing by the plaintiffs and defendants. Thus, FEMA temporarily suspended the donation and disposal of temporary housing units and only authorized the sale of manufactured homes to current occupants of those homes and the donation of certain manufactured homes to Indian tribes. In September, 2008, the Court Order expired. In October 2008, FEMA initiated sales of scrap units, as they became available. From October through the present, FEMA has been working with GSA and other partners to improve the procedures related to inventory reduction including enhancement of the Buyer's Certification.

10. How many temporary housing units were disposed of prior to the suspension?

Prior to July, 2007, FEMA was reducing inventory by approximately 1,000 units/month through transfers, donations, and sales through GSA approved programs.

10,839 travel trailers were sold through GSA between July 24, 2006 and July 23, 2007 for a total of $75,142,364.57. The average price was $6,936. 1,232 manufactured homes were sold through GSA between July 24, 2006 and July 23, 2007. The average price was $11,479.

11. What type of accountability is there on the initial buyer that they will appropriately inform later recipients about the possible issues related these units?

Purchasers will be required to sign a Buyer's Certificate acknowledging that a purchased travel trailer is not to be used as housing and will not be re-sold as housing.

In addition, FEMA will place a clearly-visible decal "Not to be used for housing" on the door window of each travel trailer. This disclaimer does not apply to manufactured homes which are regulated by the U.S. Department of Housing and Urban Development.

The following environmental guidance will be provided to initial purchasers and should be transferred as critical reference material to subsequent purchasers for the life of the unit:

  1. Indoor Air Quality and Health in FEMA Temporary Housing
  2. What You Should Know About Formaldehyde in Mobile Homes
  3. Formaldehyde Exposure in Homes: A Reference for State Officials to Use in Decision-Making

12. How quickly will FEMA be able to transfer or sell the excess units?

With a timely disposition of units, FEMA expects that the inventory reduction plan and staging site closures will take approximately 3 years. Factors contributing to the process include inspecting and preparing the unit for transfer or sale, working with the GSA to auction appropriate units, ongoing interest by purchasers and coordinating pick up of sold units. FEMA will be maintaining a baseline inventory of 4,000 units that will be maintained by FEMA to provided adequate short-term housing options to those impacted by disasters.

13. How much will FEMA save as a result of reducing its inventory and closing most of its storage sites?

Once FEMA is able to dispose of the excess units, FEMA will maintain three staging sites to support future temporary housing needs. Reducing the size of the inventory will significantly reduce the annual cost (approximately $133 million annually) that FEMA is incurring to store the current inventory of approximately 120,000 excess manufactured homes and travel trailers. This includes savings on land leases, maintenance and testing of units, maintenance of sites, and salaries. However, failure to dispose of these excess units will require FEMA to acquire additional storage space, as deactivated units continue to come back from previous disasters. As the current storage space fills up, FEMA will be forced to acquire more space and absorb increased costs of land, leases, security and personnel costs.

Addendum of International Issues

1. Do these units pose a danger to health or safety if they appear in foreign counties?

As standards in different countries vary, any potential buyers need to check with their country to determine appropriate usage.

However, FEMA has been very clear as to how the units are to be used once purchased. For repairable travel trailer units, all purchasers will be required to sign a buyer's certificate acknowledging that the purchase is not to be used as housing and will not be re-sold as housing. Travel trailers are recreational vehicles which are not manufactured to federal housing standards. In addition, FEMA will place a clearly-visible decal "Not to be used for housing" on the door window of each travel trailer.

For scrap sales, there are a number of safeguards in place making purchasers aware that units are being sold as scrap and not for habitation. The word "Scrap" is prominently marked on all sales documentation provided to purchasers of FEMA provided scrap units through the GSA Auctions®. There are also several prominent notices to potential buyers on the GSA web site, as well as a required buyer's certification stating that the units will not be used for housing. Purchasers also certify that subsequent buyers will be provided the same health notification pamphlets and documents as the original purchaser. Additionally, since December 2008, FEMA has spray-painted "Scrap" on the outside of the units.

Specifically with respect to scrap manufactured homes, in February 2009, FEMA began removing HUD certification labels from all scrap manufactured homes offered for auctioning through GSA. In the future, FEMA will continue to remove these labels from all scrap manufactured homes that are transferred to GSA.

2. What are GSA and FEMA doing in response to the likelihood that purchasers may seek to transport and use these units in other countries? Is international transport of these units allowable by law?

International transport is allowable, subject to all applicable laws and regulations. When making a purchase through GSA Auctions®, all buyers, whether domestic or international, are required to acknowledge upon registration that they have read and understand the GSA's binding terms and conditions. These include requirements to comply with all applicable laws and regulations:

Requirements to Comply with Applicable Laws & Regulations. It is the purchaser's responsibility to ascertain and comply with all applicable Federal, State, local, multi-jurisdictional and export laws, ordinances, and regulations pertaining to the registration, licensing, handling, possession, transportation, transfer, export, processing, manufacture, sale, use or disposal of the property listed in the Invitation. Purchasers or users of this property are not excused from any violation of such laws or regulations either because the United States is a party to this sale or has had any interest in the property at any time.

3. Can foreign governments contact GSA to purchase units? Can private companies and/or citizens from other countries participate in the online GSA auction process?

Yes. Both foreign governments and private companies/citizens from other countries can participate in the auction process, except for those in certain countries specified by the Federal government. The U.S. Department of State maintains information on country policies and embargoes at:

www.pmddtc.state.gov/embargoed_countries/index.html, and the U.S. Department of the Treasury maintains information on country and organizational sanctions at: www.treas.gov/offices/enforcement/ofac/programs.

All purchasers are required to comply with applicable laws and regulations, as noted above.

4. Are there some countries or organizations banned by U.S. or international law or trade agreements from having these units because they are excess federal government property?

No. U.S. regulations on exports do not have specific prohibitions covering the purchase of prior government property. However, these units are covered by all existing export laws and regulations. This may include prohibitions on sales or exports to certain countries or organizations.

Last Modified: Friday, 01-May-2009 18:40:32 EDT