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Second Appeal Letter
PA ID# 045-78200-00; City of Waveland
PW ID# PW 10808; Debris Removal
August 13, 2009
Thomas M. Womack
Governors Authorized Representative
Mississippi Emergency Management Agency
Post Office Box 5644
Pearl, MS 39208-5644
Re: Second AppealCity of Waveland, PA ID 045-78200-00, Debris Removal
FEMA-1604-DR-MS, Project Worksheet (PW) 10808
Dear Mr. Womack:
This letter is in response to your letter dated January 26, 2009, which transmitted the referenced second appeal on behalf of the City of Waveland (Applicant). The Applicant is appealing the Department of Homeland Securitys Federal Emergency Management Agencys (FEMA) deduction of debris removal contract costs determined to be unreasonable.
The Applicant used a sealed bid procedure to select TCB, Inc. for debris removal services from January 6, 2007, to August 28, 2007, to remove debris south of the CSX railroad tracks following the completion of a U.S. Army Corps of Engineers debris removal mission assignment. Upon review of the bid section process, FEMA determined that the Applicant used an irregular method in its evaluation of the bids and did not select the lowest bidder as required by 44 CFR §13.36(d)(2)(ii)(D). This method entailed comparing the sum of seven debris category unit priceswhich included different units of measurewithout consideration of estimated quantities and associated costs. FEMA determined that the contract unit prices were unreasonable and reduced the eligible unit prices in PW 10808 for each debris category to the lowest unit price received through the bid process. This amounted to a reduction of $1,118,717.74 associated with reducing unit prices for construction and demolition (C&D) and vegetative debris, white goods, and concrete from $22.50 per cubic yard (CY) to $13.83 per CY, and potential asbestos containing material (ACM) from $36.00 to $13.84 per CY.
The Mississippi Emergency Management Agency (MEMA) transmitted the Applicants first appeal of PW 10808 to FEMA on April 15, 2008. The Applicant asserted that it utilized its standard procurement processes and awarded the contract to the lowest bidder. It also asserted that it considered other factors relevant to the performance of the contract upon determining the lowest bidder, including: record of past performance; ability to mobilize; contractor integrity; and financial resources. In a letter dated July 28, 2008, the Regional Administrator partially approved the appeal, allowing higher unit prices associated with potential ACM and white goods, stating that higher unit prices were warranted. However, the Regional Administrator denied the request to reimburse all contract unit prices stating that the Applicant used an
irregular method to determine reasonable costs resulting in excessive costs.
The Applicant transmitted information related to its second appeal on October 10, 2008. MEMA transmitted additional information supporting the appeal to FEMA on January 26, 2009. The Applicant asserts that its competitive procurement procedures were in accordance with FEMA policy and resulted in reasonable contract prices. The Applicant provides an affidavit from the Purchasing Agent responsible for the contract procurement stating that Applicant utilized its standard bid evaluation methodology for procuring goods or services involving multiple bid items. The Applicant also asserts that anticipated debris quantities were unknown at the time of contracting. The Applicant states that TCB, Inc. was the lowest bidder and its record of past performance, ability to mobilize, integrity, and financial resources were factors in determining that it was the lowest responsive and responsible bidder, as required by 44 CFR §13.36(d)(ii)(D). The Applicant claims that the amount in dispute under the second appeal is $1,211,210.38.
44 CFR §13.36(b), Procurement standards
, states, subgrantees will use their own procurement procedures which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section. The Applicant has demonstrated that it followed its standard bid evaluation process in the absence of complete debris quantity estimates to determine the lowest bidder, meeting the requirements of 44 CFR §13.36(d)(ii)(D). Furthermore, the Applicant has demonstrated that its competitively bid contract complies with Federal, State, and local procurement regulations and has established reasonable unit prices.
Based on the review of all information submitted with the appeal, I am approving the Applicants appeal. I am approving the following unit prices for eligible work: $22.50 per CY for C&D and vegetative debris, white goods, and concrete; $36.00 per CY for potential ACM; $35.00 per CY for ACM; $150.00 per stump measuring 24 to 48 inches; $230.00 per stump measuring over 48 inches; and $33.00 per CY for electronic waste. The final eligible funding amount for eligible work will be determined at project closeout. By copy of this letter, I request that the Regional Administrator take appropriate action to implement this decision.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals
Elizabeth A. Zimmerman
Disaster Assistance Directorate
cc: Major P. May
FEMA Region IV