Under 44 C.F.R. § 13.36, all procurement transactions using federal funds must be conducted in a manner providing for full and open competition and must avoid situations considered to be restrictive of competition. FEMA has broad discretion under 44 C.F.R. § 13.36(c)(1) in determining whether a procurement practice is restrictive of competition. Per 44 C.F.R § 13.43(a), when an applicant violates any of the federal procurement requirements, FEMA may take a number of remedial actions, such as disallowing all or part of the cost associated with the noncompliance activity. FEMA properly determined that the Applicant’s procurement of an appraisal reviewer to review his son’s work failed to satisfy full and open competition requirements and appropriately exercised its discretion under 44 C.F.R. § 13.43(a) to deobligate the appraisal review costs as a remedy for the Applicant’s noncompliance with federal procurement requirements. According to the PA Guide (1999), generally, costs that can be directly tied to the performance of eligible work are eligible. Appraisals conducted before decisions were made not to purchase easement properties were necessary work, thus appraisal costs associated with unpurchased easements are eligible. Stafford Act § 705(c) prohibits FEMA from deobligating previously awarded funding if the payment was authorized by an approved agreement specifying the costs, the costs were reasonable, and the purpose of the grant was accomplished. The Applicant did not comply with post-award terms and conditions, including federal procurement requirements. Section 705(c) does not prohibit FEMA from deobligating funding for appraisal reviews.

The Applicant’s procurement of the father to review the son’s work created an organizational conflict of interest. Accordingly, the Appraisal review costs were deobligated and Section 705(c) does not prohibit this deobligation. Appraisals conducted before decisions were made to not purchase easement properties informed the decision making process and were necessary work. Thus, $53,250.00 in appraisal costs for unpurchased easements are eligible for reimbursement.

Stafford Act § 705(c). 44 C.F.R §§ 13.36, 13.43. PA Guide, at 33 (1999). Community Action Program Committee, Inc., FEMA-1551-DR-FL, at 5. City of Vero Beach, FEMA-1545/1561-DR-FL, at 6.