Have looked and looked to find a use or repair of some items recovered from pirates, or even repairing them where possible (ie tripped circuit boards) I can not find anything related to this process… Hopefully someone can point in the right dirtection that I might explore this endeavour …
Salvaged stuff is used to build rigs
And rigs are built from blueprints with the salvage as components.
iirc the orangeish salvage is used for T1 rigs and the blueish for the T2 variants.
Steve Ronuken has developed a set of tools that provides info about raw materials used in EVE manufacturing processes. This one will tell you which rigs your salvaged items can be used to build.
Faction salvage is used in the faction module BPC’s too