625 Landfair Student Housing
Appeal Brief
Appeal Letter
Appeal Analysis
Citation: 625 Landfair Student Housing, University of California, Los Angeles (UCLA), FEMA-1203-DR-CA, P.A.I.D. #000-92040, DSR 02412.
Cross-
Reference: Subject: Water intrusion, El Ni?o Storms, emergency work, permanent work, contract cost and price, required cost analysis; FEMA Record: DSR #02412.
Summary: This case involves repairs that were made simultaneously to two adjacent buildings under the same contracts for construction and change orders to those contracts, but the appeal references only one of the two buildings, #625 Landfair. The subgrantee objects to the deletion of funding from the original draft DSR before it was approved because of a FEMA determination that some of the costs for a new pump, fan, retaining wall, etc. included in the total submitted for FEMA funding were actually for improvements that went beyond the repairs. The subgrantee has appealed this FEMA determination by claiming that the improvements were a necessary part of the repairs, and cheaper than temporary work to accomplish the same result. In addition, the subgrantee has claimed that the 10 times cost growth in change orders over the base contract was appropriate for emergency work. However, the DSRs for the building under appeal and the adjacent building are for Category E permanent work, and the DSRs have a very explicit limited scope of approved work, for which the $100,000 already approved funding seems reasonable. The subgrantee has provided little in the way of cost breakdowns or line item pre-construction estimates to document their claim.
Issues: (1) What is a reasonable cost for the work approved in the DSR? (2) Are the permanent changes repairs or improvements? (3) What is the subgrantee's responsibility to arrange for FEMA inspection and approval of additional damages and repair scope when such scope is vastly greater than that described in the DSR? (4) What is the subgrantee's responsibility to separate and clearly document the costs when work goes beyond repairs to pre-disaster condition?
Findings: FEMA has determined (1) that the scope of work as described in the DSR was a reasonable repair scope for which FEMA did approve adequate funding, and (2) that the costs requested by the subgrantee did cover ineligible improvements. (3) The subgrantee failed to request a re-inspection when the scope and costs expanded beyond that which was approved. In addition, the subgrantee has repeatedly failed to provide sufficient documentation or cost analyses as per 44 CFR 13.36(f)(4) to justify such high costs. The documentation provided, which included a thick package of progress reports, change orders, and invoices, was not organized, interpreted, or combined into an explanatory spreadsheet with sufficient information and detail for FEMA to consider altering the original finding.
Rationale: 44 CFR 206.223 (a) (1); 44 CFR 206.226; 44 CFR 13.36 (f) (4).
This appeal actually involves two adjacent buildings with separate DSRs, 625 Landfair Apartments (DSR 02412) and 641 Landfair Apartments (DSR 02410). The water runoff from the same hill affected both buildings. This appeal has been submitted for only one building, 625 Landfair, because the costs originally denied by FEMA were identified as related to work on or near that one structure. The original inspection date for this DSR was October 9, 1998. The first draft DSR was for an estimated $216,043 project to repair storm water damage to an apartment building. This dollar amount was taken directly from the subgrantee's submittal of costs.
The scope of work for 625 Landfair was (1) repair water damage to walls and floor of Unit 20, (2) replace and grade undercut soils, (3) replace sidewalk and damaged retaining wall, (4) repair damaged catch basin and drainage swale on west and south of building, (5) remove deposited soil, and (6) provide engineering services [for same]. On July 8, 1999, FEMA review staff at the DFO determined that the $216,043 costs in the DSR also included (1) unallowed administrative costs and (2) significant improvements to the building that were not identified in the original approved scope of work. All of these items were determined to be ineligible and deductions were made from the $216,043 on the draft DSR. When the DSR was formally approved on July 22, 1999, it was for $53,536, an amount derived from the original contractors bids and first round of markup and change orders. In light of the fact that the subgrantee had not requested an improved project, and had not provided a line-item estimate, FEMA determined from the records that were provided that the $53,536 was sufficient to cover the cost of that scope of work originally determined to be eligible at 625 Landfair.
THE DAMAGE:
The damage was caused by the excessive water runoff coming from the el Ni?o storms in the winter and spring of 1998. The water and mud infiltrated into the building between the sill and the foundation, coming to one apartment and also the crawl space. A build-up of soil above the sill plate also caused damage to the 625 Landfair. A sidewalk, a retaining wall, and a concrete swale were also undermined and damaged by the rainwater. At 641 Landfair, water penetrated into the garage area.
DSRs WRITTEN:
DSRs FOR BOTH 625 & 641 LANDFAIR
DSR # Papped Date CAT Scope Net Eligible
02412 7/22/99 E (625 Landfair) Repair storm related damage to walks, retaining wall, and building (UNDER APPEAL) $53,536
02410 E (641 Landfair) Repair storm related damage to concrete swale. (NOT UNDER APPEAL) $45,596
NET TOTAL FUNDING FOR CAT. E CONSTRUCTION WORK $99,132
FIRST APPEAL:
The subgrantee appealed the reduction in the DSR amount from $216,043 to $53,536. In the first appeal analysis, FEMA concluded that, as the storm-related repair progressed, additional pre-disaster damage was discovered and repaired, and ineligible improvements were made. These repairs and improvements were paid under change orders to the contract after the work was carried out. The following are quotes from the first appeal analysis:
(1) The preexisting damp condition at the foundation area was described in the February 20, 1998 geotechnical report as "subsurface water" seeping into the crawl space" although, it was unclear whether it is "through conduits eroded over the years or has a separate, independent source from further uphill." Thus, the permanent installation of the sump pump and the exhaust fan are determined to be ineligible permanent improvements to mitigate a preexisting condition.
(2) Change Order No. 7's reference to "deteriorated framing members found in southwest corner of building" is additional evidence of preexisting dampness resulting from subsurface water in the crawl space.
(3) In the same report, a trench drain was recommended to improve the site drainage by intercepting surface flows from uphill. The subgrantee has included in their submittal to FEMA for reimbursement the cost of a subsurface "French Drain" installed to intercept the subsurface water. This is an ineligible permanent improvement. According to the Petta invoice, dated March 9, 1998 in Change Order No. 3, a 24-inch high wall was "poured on top of the existing retaining wall". Thus the existing retaining wall was not replaced and the addition to its height is an ineligible improvement, rather than repaired to pre-disaster condition.
(4) Maintenance work to an adjacent building was incorporated into the contract for the eligible building. Although the University refers to "a typographical error", the repeated references to 641 Landfair clearly establish that both buildings were being rehabilitated under the same contract with inadequate notation to separately identify the work for the eligible building. 641 Landfair was covered by DSR 02410.
(5) All the invoices for Change Orders Nos. 7, 9, 10 and 11 have dates preceding the respective change order dates and thus, the work was completed prior to its authorization and in violation of the procurement section of Title 44 CFR 13.36. When change orders are done in this fashion, the work constitutes a form of cost plus a percentage of cost contract which are prohibited under Title 44 CFR 13.36 (f) (4).
(6) In addition, the items in Change Orders Nos. 10 and 11 have been determined to be for work that was not identified in the original scope of work and/or for maintenance and improvements and thus fails to meet the general work eligibility requirements, in accordance with Title 44 CFR 206.223 (a) (1).
Based on the above findings, the first appeal was denied.
SECOND APPEAL REQUEST
The subgrantee has again requested reinstatement of the $216,043, and repeated most of the same claims in the second appeal as in the first. The main issues of the second appeal boil down to five things. These are numbered and described as follows:
(1) The costs of the permanent sump pump and fan installation.
(2) The costs for Change Order #7, in which deteriorated framing members are described, which lead to its disallowance by FEMA during DSR review.
(3) The cost of a new permanent French drain, instead of a trench drain.
(4) The cost of adding to the height of the concrete retaining wall behind the building.
(5) The disallowance of ChangeOrders 7, 9, 10, and 11 because of evidence that they represent work done at "cost plus a percentage of cost" form of contract.
The subgrantee has defended the eligibility of the above expenditures by stating that (a) the work for (1), (3), and (4) were a necessary part of the repair work, and less expensive than temporary solutions would have been. The claim on (2) is that the damage was caused not by pre-disaster deterioration, but was disaster damage. The claim on (5) is that the change orders were scrutinized and negotiated with the same oversight as used for the initial contract, and such a procedure was necessary in an emergency. The appeal contained no spreadsheet or other record showing that actual costs of these specific items. The only cost reference is to the change orders that had been originally used to add up the cost of the entire job, none of which list in detail the work and costs embodied in each one except to say "scope of work was expanded due to further water intrusion."
DISCUSSION
In this case, the subgrantee has filed an appeal brief stating that FEMA had misunderstood the claim, and that the reviewers had not revisited the site. However, the appeal contains little to no information of the kin indisputably items that did not exist prior to the disaster, and thus are not in and of themselves items that had to be repaired or replaced from damage. On the claim that the costs were comparable to what would have been necessary to use a temporary sump and fan to dry out the crawl space, the validity of this claim cannot be determined from the appeal because no documentation to support this finding has been provided. In addition, the claim that FEMA has not provided any funding towards the cost of what would have been eligible temporary water removal is unsupportable because FEMA has paid a lump sum of $53,536 to cover a generalized scope of work which presumably includes the water removal as part of it. This sum was based on the data submitted by the subgrantee, with ineligible items deleted. This sum is more than double the original contract amount of $24,000 for the repair of the damage. Because FEMA's funding is based on a $53,536 total cost, it is impossible for the subgrantee to defend a claim that the costs of water removal from the crawl space have not been covered by the funds already provided. The FEMA funding of almost $100,000 ($53,536 plus the $45,596 provided for the adjacent building), seems more than adequate to cover the overall scope of work described in the two DSRs. The subgrantee has not provided a cost for this contested item in the appeal brief.
(2) The reference to the statement about the "deterioration of the framing members" in Change Order #7 was indeed used by FEMA as evidence that inspection showed pre-disaster damage. However, this was used together with the other more compelling evidence that the scope of the job had grown beyond the basic damage repair. This evidence, for example, includes the $328,513 actual total cost of the job for which the subgrantee is seeking reimbursement. FEMA has determined that such a cost, for the scope defined in the DSR, is unreasonable. As a result, the reviewers had to base their amended approved amount on the information that was available, which were the individual change orders. In reviewing this appeal, FEMA finds that the subgrantee failed to submit any evidence to counter that original finding because the subgrantee there is nothing provided which documents what each item of work did cost, nor is there any documentary material to support the contention that the "deterioration" was caused by the storm. Since none of the costs were adequately broken down, FEMA's disallowance of an entire change order in which ineligible items were listed is appropriate for the determination of eligible FEMA funding.
(3) The issue of the French drain is similar. The French drain indisputably did not exist prior to the disaster. A repaired or new trench drain would have been eligible. As to the claim that the cost of an eligible trench drain was not covered when the French drain was determined eligible, the answer is the same as for (2) above - FEMA has provided a reasonable sum for the work as described in the approved scope of the DSR. The subgrantee has failed to submit any evidence to prove the contrary. The subgrantee requested that FEMA consider the cost of the French drain as hazard mitigation. At this point, it is too late to consider the new French drain as mitigation. That request should have been made at the time the decision was made to build it. It is the subgrantee's responsibility to request such improvements be treated as mitigation by FEMA so eligibility may be determined at the time. It is not correct to submit them as equivalent to repairs, and then later, when they are rejected as such, submit them for mitigation funding.
(4) On the issue of the retaining wall addition, the response is the same as for the French drain.
(5) On the issue of Change Orders 7, 9, 10, and 11, none of these change orders describe the scope of work that FEMA is being asked to fund, nor has the appeal made any effort to provide supporting documentation that the scope of work paid for in these change orders was eligible work. In addition, these change orders, together with all others, raised the cost of the repairs from the original contract amount of $24,000 to $328,513 for both buildings. FEMA is justified in rejecting such cost growth when no request to FEMA for a reinspection was made prior to the undertaking of the additional work. FEMA has provided approximately $100,000 towards the repairs to these two properties. Based on the damage described in the DSRs, as stated above, that amount seems reasonable.
Once a determination is made that improvements have been carried out as part of the repairs, a separate accounting is necessary in order to properly identify the repairs from the improvements. In this case, the subgrantee disagrees with FEMA's determination that some of the work constitutes improvements, but such a position does not relieve the subgrantee of the responsibility to make an accounting of what each element of the work has cost, so that the FEMA review of the claim can properly evaluate the reasonableness and the eligibility of the costs involved. There is no evidence that this has been done. The change orders themselves are devoid of that information, and the job reports and invoices are inadequate for that purpose. In addition, it seems that the subgrantee expects FEMA to be responsible for sorting through the raw material of progress reports, invoices, and change order documents, without any prior annotation and culling by the subgrantee, or the submittal of explanatory spreadsheets defending the subgrantee's position.
In addition, the work involved two adjacent buildings under the same contract for construction. Only one of these buildings has been appealed, yet none of the appeals have included a detailed spreadsheet accounting for the cost of each element of work on each building. Since the damage to both buildings was the result of the same problem, with repairs done by the same contractor under a single contract that commingled all expenses for both properties, the claims for FEMA funding must be looked at together. All of the change orders, which are submitted as the principle justification for the claim, show both buildings as the subject of the work without any scope description or cost breakdown.
CONCLUSIONS
The burden is on the subgrantee to make the case, and to provide FEMA with documentation (including developed spreadsheets as necessary), to support the claim for each individual damaged element and work item. The assumption that issues such as these can be defended by simple explanations that the cost of the permanent work undertaken were less than for temporary work without specific estimates or bids to back this up leaves FEMA with no choice other than to deny the entire cost of change orders allocated to such improvements, rather than a specific portion of such costs.
When costs seem all out of proportion to the eligible scope as described in the DSR, it is the job of FEMA reviewers to modify the amount of the grant before the DSR is approved. It is the subgrantee's responsibility to provide the documentation to justify actual costs. It is not FEMA's responsibility to extract such information from a pile of invoices, job reports, and change orders. As is stated in 44 CFR 13.36(f)(4), "Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications.A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders.to determine the reasonableness of the proposed contract price." In this case, the project indisputably included improvements and the cost of the change orders vastly exceeded the original contract price for the work. Fh coMA has generously provided funding which can be defended as reasonable for the scope of work that was approved in the two DSRs for the two adjacent buildings. No further funding can be justified.
The appeal is denied.
Appeal Brief
| Disaster | FEMA-1203-DR |
| Applicant | University of California, Los Angeles (UCLA) |
| Appeal Type | Second |
| PA ID# | 000-92040 |
| PW ID# | 02412 |
| Date Signed | 2001-02-14T05:00:00 |
Cross-
Reference: Subject: Water intrusion, El Ni?o Storms, emergency work, permanent work, contract cost and price, required cost analysis; FEMA Record: DSR #02412.
Summary: This case involves repairs that were made simultaneously to two adjacent buildings under the same contracts for construction and change orders to those contracts, but the appeal references only one of the two buildings, #625 Landfair. The subgrantee objects to the deletion of funding from the original draft DSR before it was approved because of a FEMA determination that some of the costs for a new pump, fan, retaining wall, etc. included in the total submitted for FEMA funding were actually for improvements that went beyond the repairs. The subgrantee has appealed this FEMA determination by claiming that the improvements were a necessary part of the repairs, and cheaper than temporary work to accomplish the same result. In addition, the subgrantee has claimed that the 10 times cost growth in change orders over the base contract was appropriate for emergency work. However, the DSRs for the building under appeal and the adjacent building are for Category E permanent work, and the DSRs have a very explicit limited scope of approved work, for which the $100,000 already approved funding seems reasonable. The subgrantee has provided little in the way of cost breakdowns or line item pre-construction estimates to document their claim.
Issues: (1) What is a reasonable cost for the work approved in the DSR? (2) Are the permanent changes repairs or improvements? (3) What is the subgrantee's responsibility to arrange for FEMA inspection and approval of additional damages and repair scope when such scope is vastly greater than that described in the DSR? (4) What is the subgrantee's responsibility to separate and clearly document the costs when work goes beyond repairs to pre-disaster condition?
Findings: FEMA has determined (1) that the scope of work as described in the DSR was a reasonable repair scope for which FEMA did approve adequate funding, and (2) that the costs requested by the subgrantee did cover ineligible improvements. (3) The subgrantee failed to request a re-inspection when the scope and costs expanded beyond that which was approved. In addition, the subgrantee has repeatedly failed to provide sufficient documentation or cost analyses as per 44 CFR 13.36(f)(4) to justify such high costs. The documentation provided, which included a thick package of progress reports, change orders, and invoices, was not organized, interpreted, or combined into an explanatory spreadsheet with sufficient information and detail for FEMA to consider altering the original finding.
Rationale: 44 CFR 206.223 (a) (1); 44 CFR 206.226; 44 CFR 13.36 (f) (4).
Appeal Letter
February 14, 2001
Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
RE: University of California, Los Angeles (UCLA), P.A.I.D. #000-92040, 625 Landfair Student Housing, FEMA-1203-DR-CA, DSR #02412.
Dear Mr. Christian:
This letter is in response to your letter of August 11, 2000 forwarding the Second Appeal of Damage Survey Report (DSR) #02412 submitted by the University of California, Los Angeles to OES on June 12, 2000. The applicant has requested $162,507 to reimburse the cost of certain items that FEMA determined ineligible based on review prior to approving DSR #02412.
As explained in the enclosed analysis, FEMA has determined that the requested funding is in excess of that determined to be sufficient to repair the damage described in the DSR. The requested items are improvements, not repairs. Therefore I am denying the appeal.
Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Karen Armes
Acting Regional Director
FEMA, Region IX
Mr. D.A. Christian
Governor's Authorized Representative
Governor's Office of Emergency Services
Post Office Box 419023
Rancho Cordova, California 95741-9023
RE: University of California, Los Angeles (UCLA), P.A.I.D. #000-92040, 625 Landfair Student Housing, FEMA-1203-DR-CA, DSR #02412.
Dear Mr. Christian:
This letter is in response to your letter of August 11, 2000 forwarding the Second Appeal of Damage Survey Report (DSR) #02412 submitted by the University of California, Los Angeles to OES on June 12, 2000. The applicant has requested $162,507 to reimburse the cost of certain items that FEMA determined ineligible based on review prior to approving DSR #02412.
As explained in the enclosed analysis, FEMA has determined that the requested funding is in excess of that determined to be sufficient to repair the damage described in the DSR. The requested items are improvements, not repairs. Therefore I am denying the appeal.
Please inform the applicant of this determination. My decision constitutes the final decision on this matter as set forth in 44 CFR 206.206.
Sincerely,
/S/
Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate
Enclosure
cc: Karen Armes
Acting Regional Director
FEMA, Region IX
Appeal Analysis
BACKGROUND:This appeal actually involves two adjacent buildings with separate DSRs, 625 Landfair Apartments (DSR 02412) and 641 Landfair Apartments (DSR 02410). The water runoff from the same hill affected both buildings. This appeal has been submitted for only one building, 625 Landfair, because the costs originally denied by FEMA were identified as related to work on or near that one structure. The original inspection date for this DSR was October 9, 1998. The first draft DSR was for an estimated $216,043 project to repair storm water damage to an apartment building. This dollar amount was taken directly from the subgrantee's submittal of costs.
The scope of work for 625 Landfair was (1) repair water damage to walls and floor of Unit 20, (2) replace and grade undercut soils, (3) replace sidewalk and damaged retaining wall, (4) repair damaged catch basin and drainage swale on west and south of building, (5) remove deposited soil, and (6) provide engineering services [for same]. On July 8, 1999, FEMA review staff at the DFO determined that the $216,043 costs in the DSR also included (1) unallowed administrative costs and (2) significant improvements to the building that were not identified in the original approved scope of work. All of these items were determined to be ineligible and deductions were made from the $216,043 on the draft DSR. When the DSR was formally approved on July 22, 1999, it was for $53,536, an amount derived from the original contractors bids and first round of markup and change orders. In light of the fact that the subgrantee had not requested an improved project, and had not provided a line-item estimate, FEMA determined from the records that were provided that the $53,536 was sufficient to cover the cost of that scope of work originally determined to be eligible at 625 Landfair.
THE DAMAGE:
The damage was caused by the excessive water runoff coming from the el Ni?o storms in the winter and spring of 1998. The water and mud infiltrated into the building between the sill and the foundation, coming to one apartment and also the crawl space. A build-up of soil above the sill plate also caused damage to the 625 Landfair. A sidewalk, a retaining wall, and a concrete swale were also undermined and damaged by the rainwater. At 641 Landfair, water penetrated into the garage area.
DSRs WRITTEN:
DSRs FOR BOTH 625 & 641 LANDFAIR
DSR # Papped Date CAT Scope Net Eligible
02412 7/22/99 E (625 Landfair) Repair storm related damage to walks, retaining wall, and building (UNDER APPEAL) $53,536
02410 E (641 Landfair) Repair storm related damage to concrete swale. (NOT UNDER APPEAL) $45,596
NET TOTAL FUNDING FOR CAT. E CONSTRUCTION WORK $99,132
FIRST APPEAL:
The subgrantee appealed the reduction in the DSR amount from $216,043 to $53,536. In the first appeal analysis, FEMA concluded that, as the storm-related repair progressed, additional pre-disaster damage was discovered and repaired, and ineligible improvements were made. These repairs and improvements were paid under change orders to the contract after the work was carried out. The following are quotes from the first appeal analysis:
(1) The preexisting damp condition at the foundation area was described in the February 20, 1998 geotechnical report as "subsurface water" seeping into the crawl space" although, it was unclear whether it is "through conduits eroded over the years or has a separate, independent source from further uphill." Thus, the permanent installation of the sump pump and the exhaust fan are determined to be ineligible permanent improvements to mitigate a preexisting condition.
(2) Change Order No. 7's reference to "deteriorated framing members found in southwest corner of building" is additional evidence of preexisting dampness resulting from subsurface water in the crawl space.
(3) In the same report, a trench drain was recommended to improve the site drainage by intercepting surface flows from uphill. The subgrantee has included in their submittal to FEMA for reimbursement the cost of a subsurface "French Drain" installed to intercept the subsurface water. This is an ineligible permanent improvement. According to the Petta invoice, dated March 9, 1998 in Change Order No. 3, a 24-inch high wall was "poured on top of the existing retaining wall". Thus the existing retaining wall was not replaced and the addition to its height is an ineligible improvement, rather than repaired to pre-disaster condition.
(4) Maintenance work to an adjacent building was incorporated into the contract for the eligible building. Although the University refers to "a typographical error", the repeated references to 641 Landfair clearly establish that both buildings were being rehabilitated under the same contract with inadequate notation to separately identify the work for the eligible building. 641 Landfair was covered by DSR 02410.
(5) All the invoices for Change Orders Nos. 7, 9, 10 and 11 have dates preceding the respective change order dates and thus, the work was completed prior to its authorization and in violation of the procurement section of Title 44 CFR 13.36. When change orders are done in this fashion, the work constitutes a form of cost plus a percentage of cost contract which are prohibited under Title 44 CFR 13.36 (f) (4).
(6) In addition, the items in Change Orders Nos. 10 and 11 have been determined to be for work that was not identified in the original scope of work and/or for maintenance and improvements and thus fails to meet the general work eligibility requirements, in accordance with Title 44 CFR 206.223 (a) (1).
Based on the above findings, the first appeal was denied.
SECOND APPEAL REQUEST
The subgrantee has again requested reinstatement of the $216,043, and repeated most of the same claims in the second appeal as in the first. The main issues of the second appeal boil down to five things. These are numbered and described as follows:
(1) The costs of the permanent sump pump and fan installation.
(2) The costs for Change Order #7, in which deteriorated framing members are described, which lead to its disallowance by FEMA during DSR review.
(3) The cost of a new permanent French drain, instead of a trench drain.
(4) The cost of adding to the height of the concrete retaining wall behind the building.
(5) The disallowance of ChangeOrders 7, 9, 10, and 11 because of evidence that they represent work done at "cost plus a percentage of cost" form of contract.
The subgrantee has defended the eligibility of the above expenditures by stating that (a) the work for (1), (3), and (4) were a necessary part of the repair work, and less expensive than temporary solutions would have been. The claim on (2) is that the damage was caused not by pre-disaster deterioration, but was disaster damage. The claim on (5) is that the change orders were scrutinized and negotiated with the same oversight as used for the initial contract, and such a procedure was necessary in an emergency. The appeal contained no spreadsheet or other record showing that actual costs of these specific items. The only cost reference is to the change orders that had been originally used to add up the cost of the entire job, none of which list in detail the work and costs embodied in each one except to say "scope of work was expanded due to further water intrusion."
DISCUSSION
In this case, the subgrantee has filed an appeal brief stating that FEMA had misunderstood the claim, and that the reviewers had not revisited the site. However, the appeal contains little to no information of the kin indisputably items that did not exist prior to the disaster, and thus are not in and of themselves items that had to be repaired or replaced from damage. On the claim that the costs were comparable to what would have been necessary to use a temporary sump and fan to dry out the crawl space, the validity of this claim cannot be determined from the appeal because no documentation to support this finding has been provided. In addition, the claim that FEMA has not provided any funding towards the cost of what would have been eligible temporary water removal is unsupportable because FEMA has paid a lump sum of $53,536 to cover a generalized scope of work which presumably includes the water removal as part of it. This sum was based on the data submitted by the subgrantee, with ineligible items deleted. This sum is more than double the original contract amount of $24,000 for the repair of the damage. Because FEMA's funding is based on a $53,536 total cost, it is impossible for the subgrantee to defend a claim that the costs of water removal from the crawl space have not been covered by the funds already provided. The FEMA funding of almost $100,000 ($53,536 plus the $45,596 provided for the adjacent building), seems more than adequate to cover the overall scope of work described in the two DSRs. The subgrantee has not provided a cost for this contested item in the appeal brief.
(2) The reference to the statement about the "deterioration of the framing members" in Change Order #7 was indeed used by FEMA as evidence that inspection showed pre-disaster damage. However, this was used together with the other more compelling evidence that the scope of the job had grown beyond the basic damage repair. This evidence, for example, includes the $328,513 actual total cost of the job for which the subgrantee is seeking reimbursement. FEMA has determined that such a cost, for the scope defined in the DSR, is unreasonable. As a result, the reviewers had to base their amended approved amount on the information that was available, which were the individual change orders. In reviewing this appeal, FEMA finds that the subgrantee failed to submit any evidence to counter that original finding because the subgrantee there is nothing provided which documents what each item of work did cost, nor is there any documentary material to support the contention that the "deterioration" was caused by the storm. Since none of the costs were adequately broken down, FEMA's disallowance of an entire change order in which ineligible items were listed is appropriate for the determination of eligible FEMA funding.
(3) The issue of the French drain is similar. The French drain indisputably did not exist prior to the disaster. A repaired or new trench drain would have been eligible. As to the claim that the cost of an eligible trench drain was not covered when the French drain was determined eligible, the answer is the same as for (2) above - FEMA has provided a reasonable sum for the work as described in the approved scope of the DSR. The subgrantee has failed to submit any evidence to prove the contrary. The subgrantee requested that FEMA consider the cost of the French drain as hazard mitigation. At this point, it is too late to consider the new French drain as mitigation. That request should have been made at the time the decision was made to build it. It is the subgrantee's responsibility to request such improvements be treated as mitigation by FEMA so eligibility may be determined at the time. It is not correct to submit them as equivalent to repairs, and then later, when they are rejected as such, submit them for mitigation funding.
(4) On the issue of the retaining wall addition, the response is the same as for the French drain.
(5) On the issue of Change Orders 7, 9, 10, and 11, none of these change orders describe the scope of work that FEMA is being asked to fund, nor has the appeal made any effort to provide supporting documentation that the scope of work paid for in these change orders was eligible work. In addition, these change orders, together with all others, raised the cost of the repairs from the original contract amount of $24,000 to $328,513 for both buildings. FEMA is justified in rejecting such cost growth when no request to FEMA for a reinspection was made prior to the undertaking of the additional work. FEMA has provided approximately $100,000 towards the repairs to these two properties. Based on the damage described in the DSRs, as stated above, that amount seems reasonable.
Once a determination is made that improvements have been carried out as part of the repairs, a separate accounting is necessary in order to properly identify the repairs from the improvements. In this case, the subgrantee disagrees with FEMA's determination that some of the work constitutes improvements, but such a position does not relieve the subgrantee of the responsibility to make an accounting of what each element of the work has cost, so that the FEMA review of the claim can properly evaluate the reasonableness and the eligibility of the costs involved. There is no evidence that this has been done. The change orders themselves are devoid of that information, and the job reports and invoices are inadequate for that purpose. In addition, it seems that the subgrantee expects FEMA to be responsible for sorting through the raw material of progress reports, invoices, and change order documents, without any prior annotation and culling by the subgrantee, or the submittal of explanatory spreadsheets defending the subgrantee's position.
In addition, the work involved two adjacent buildings under the same contract for construction. Only one of these buildings has been appealed, yet none of the appeals have included a detailed spreadsheet accounting for the cost of each element of work on each building. Since the damage to both buildings was the result of the same problem, with repairs done by the same contractor under a single contract that commingled all expenses for both properties, the claims for FEMA funding must be looked at together. All of the change orders, which are submitted as the principle justification for the claim, show both buildings as the subject of the work without any scope description or cost breakdown.
CONCLUSIONS
The burden is on the subgrantee to make the case, and to provide FEMA with documentation (including developed spreadsheets as necessary), to support the claim for each individual damaged element and work item. The assumption that issues such as these can be defended by simple explanations that the cost of the permanent work undertaken were less than for temporary work without specific estimates or bids to back this up leaves FEMA with no choice other than to deny the entire cost of change orders allocated to such improvements, rather than a specific portion of such costs.
When costs seem all out of proportion to the eligible scope as described in the DSR, it is the job of FEMA reviewers to modify the amount of the grant before the DSR is approved. It is the subgrantee's responsibility to provide the documentation to justify actual costs. It is not FEMA's responsibility to extract such information from a pile of invoices, job reports, and change orders. As is stated in 44 CFR 13.36(f)(4), "Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications.A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders.to determine the reasonableness of the proposed contract price." In this case, the project indisputably included improvements and the cost of the change orders vastly exceeded the original contract price for the work. Fh coMA has generously provided funding which can be defended as reasonable for the scope of work that was approved in the two DSRs for the two adjacent buildings. No further funding can be justified.
The appeal is denied.
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