Equipment Replacement

Citation:        FEMA-1766-DR-IN, Columbus Regional Hospital, Equipment Replacement, Multiple Project Worksheets (PWs)

Cross
Reference:       Equipment Replacement
 
          
Summary:          Medical equipment owned by Columbus Regional Hospital (Applicant) was damaged beyond repair as a result of the declared flooding event.  The Applicant replaced several damaged items with new equipment and requested reimbursement for a total cost of $3,700,171.  FEMA prepared nine (9) Project Worksheets (PWs) to provide funding, in the amount of $2,484,081, for the eligible cost for replacement of the damaged items.  The PWs reflected the value of destroyed equipment based on a fair market value for units of similar age and capacity.  In its appeal, the Applicant claimed that the Stafford Act allows for replacement of equipment with new comparable items, not used or refurbished items.  The Applicant based its claim on the assertion that Title 44 Code of Federal Regulations (44 CFR) §206.226(h) uses the term “comparable items” with no mention of used equipment, depreciation schedules, actual cash value, or refurbished equipment.  The Applicant asserted that refurbished equipment could not safely and reliably be used in a health care facility, and would not have been reasonably available to timely and adequately meet the Applicant’s needs.  The Applicant based its claim on the assumption that new equipment could be purchased and installed faster than refurbished equipment.  The Applicant also claimed that the PWs do not provide funding for the full cost of quoted refurbished equipment.  The Applicant requested full reimbursement for the cost of replacement with new equipment.

Issues:          1) Does FEMA provide funding for new replacement equipment if comparable used equipment is available within a reasonable time and distance?

                      2) Did the Applicant demonstrate that used equipment was not available within a reasonable time and distance?

                     3) Did the Applicant identify eligible cost for used equipment that was not funded on the approved PWs?

Findings:        1) No.

                       2) No.

                       3) No.

Rationale:         44 Code of Federal Regulations (44 CFR) §206.226(h); Public Assistance Guide (FEMA 322), Chapter 2; Policy Digest (FEMA 321), pages 83-85.