NSPO

Appeal Brief Appeal Letter

Appeal Brief

DisasterFEMA-1046-DR
ApplicantMidpeninsula Regional Open Space District
Appeal TypeSecond
PA ID#085-91006
PW ID#20267,20268,20276, 16761
Date Signed1999-10-12T04:00:00
Citation: FEMA-1046-DR-CA, P.A. 085-91006, Midpeninsula Regional Open Space District, DSRs 20267, 20268 and 20276/16761, Net Small Project Overrun

Cross-reference: Engineering and design services, improved projects

Summary: Winter storms in 1995 caused embankment and roadway slipouts in the Midpeninsula Regional Open Space District (District). The District submitted a Net Small Project Overrun (NSPO) request for five projects with significant cost overruns on December 17, 1997. The District requested $291,864. On June 15, 1998, FEMA determined that the five DSRs were improved projects; thus, the cost overruns were not eligible. The District submitted its first appeal for three of the five DSRs on August 12, 1998. It asked for $170,799 and claimed that the work performed restored the predisaster function of the facilities, the most cost-effective and feasible methods were used, and local rates increased the cost of projects. On December 15, 1998, FEMA determined that $68,244 in additional costs related to DSRs 20267 and 20268 were eligible. However, only 15 percent of the total costs were granted for engineering services (the District claimed much higher actual costs). For DSRs 20276/16761, FEMA stated that the project went well beyond the approved scope of work. However, an additional $1,641 was granted for previously unaccounted for eligible items. The District submitted its second appeal on February 25, 1999, and provided additional information on May 10, 1999. Nevertheless, it provided no new justification to support its position. It asked for a total of $21,584 in additional funds for DSRs 20267 and 20268, and $5,308 for DSRs 20276/16761.

Issues: 1) Are engineering costs of 55.7 and 29.75 percent of the total project costs reasonable for DSRs 20267 and 20268? 2) May actual costs for the approved portion of DSRs 20276/16761 be granted?

Findings: 1) No. 2) No, the District made repairs that varied significantly from the approved scope of work.

Rationale: 44 CFR 13.22, 44 CFR 206.203(d)(1)

Appeal Letter

October 12, 1999

Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023

Re: Second Appeal - Midpeninsula Regional Open Space District, Net Small Project Overrun, FEMA-1046-DR-CA, DSRs 20267, 20268 and 20276/16761

Dear Mr. Christian:

This is in response to the referenced second appeal forwarded by your office on April 30, 1999, and additional information sent on May 24, 1999. Winter storms in 1995 caused embankment and roadway slipouts in the Midpeninsula Regional Open Space District (District). Small project Damage Survey Reports (DSRs) were prepared to fund repairs. Following completion of all small projects, on November 5, 1997, the District submitted a Net Small Project Overrun (NSPO) request for five projects with significant cost overruns. The District requested $291,864.

On June 15, 1998, the Federal Emergency Management Agency (FEMA) closed out the applicant and responded to the NSPO request. FEMA determined that the five DSRs were improved projects; thus, the cost overruns were not eligible for reimbursement. The District submitted its first appeal for three of the five DSRs on August 12, 1998. It claimed that the work performed restored the predisaster function of the facilities, the most cost-effective and feasible methods were used, and local rates increased the cost of projects. The District asked in its first appeal for a NSPO of $170,799.

In its first appeal response, dated December 15, 1998, FEMA determined that $68,244 in additional construction costs related to DSRs 20267 and 20268 were eligible. Although the District should have obtained prior approval, the work performed was cost-effective and more feasible than the originally approved work. However, only 15 percent of the total costs were granted for engineering services (the District claimed much higher actual costs). For DSRs 20276/16761, FEMA decided that the project went well beyond the approved scope of work. However, an additional $1,641 was granted for previously unaccounted for eligible items.

The District submitted its second appeal on February 25, 1999, and provided additional clarification on May 10, 1999. For DSRs 20267 and 20268, the District claimed that engineering requirements are more stringent in the bay area and it needed to hire a consultant. It also stated that it is not unusual locally to have projects with engineering fees that equal 50 percent of construction costs and it used competitive bidding to try to keep costs down. The District asked for a total of $21,584 in additional funds for DSRs 20267 and 20268.

The District's second appeal does not provide new information or documented justification for its position. For DSRs 20267 and 20268, it asks for engineering costs that total 55.7 and 29.75 percent of the total cost of each project, respectively. The Disaster Recovery Manager previously determined that 15 percent of the total cost should be adequate for such projects. The District provided no convincing argument to justify such high engineering fees.

Regarding DSRs 20276/16761, the District conceded that the project was significantly improved when compared to the originally approved DSR. The District, therefore, asked for additional project costs related to just the approved portion of the project. FEMA had approved $11,603 and the District claimed actual costs of $16,911 for this portion of the project. The District asked for the $5,308 difference.

DSRs 20276/16761 provide costs for repairing the approved 50 ft  25 ft  40 ft slipout of Bach Driveway. The scope of work approved in these DSRs included an 11 ft-high, 70-ft long gabion wall and backfill. In addition to changing the design of the wall, the District also claimed costs for items such as fertilizing and traffic control and engineering costs of 39 percent. These items were not approved in the original scope of work, and the actual costs cannot be compared to the work originally approved in DSRs 20276/16761. Therefore, it is considered an improved project and additional funds cannot be provided for DSRs 20276/16761.

In summary, FEMA public assistance guidance states that actual costs for basic engineering services must be reasonable. For each of these DSRs, the engineering costs are not reasonable and no satisfactory evidence has been provided to justify the high costs claimed by the District. In terms of DSRs 20276/16761, the District completed a project that varied significantly from the approved scope of work. 44 CFR 206.203(d)(1) states that improved projects must be approved by the Grantee and federal funding "will be limited to the Federal share of the approved estimate of eligible costs." For these reasons, the appeal is denied.

Please inform the District of my determination. In accordance with 44 CFR 206.206, my determination constitutes the final decision on this matter. The current procedure was published as a final rule in the Federal Register on April 8, 1998, and governs appeal decisions made on or after May 8, 1998. It amends 44 CFR 206.206.

Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

cc: Richard A. Buck
Disaster Recovery Manager
Region IX, Disaster Closeout Center
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