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Second Appeal Letter
PA ID# 011-UIZNS-00; Sunshine Water Control District
PW ID# 3806; Removal of Vegetative Debris from Canal
May 31, 2012
Bryan W. Koon
Florida Division of Emergency Management
2555 Shumard Oak Boulevard
Tallahassee, Florida 32399-2100
Re: Second Appeal-Sunshine Water Control District, PA ID 011-UIZNS-00, Removal of Vegetative Debris from Canal, FEMA-1545-DR-FL Project Worksheet (PW) 3806
Dear Mr. Koon:
This letter is in response to letters from your office dated October 20, 2011, and November 23, 2011, which transmitted the referenced second appeal and supplemental documentation on behalf of Sunshine Water Control District (Applicant). The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $295,985 in funding for contracted debris removal expenses.
Hurricane Frances uprooted and blew trees into the water canal system maintained by the Applicant. The Applicant initiated three time and materials contracts to remove approximately 707 trees, which were estimated to be 1,966 cubic yards of reduced debris. FEMA prepared PW 3806 in the amount of $295,985 for the contracted debris removal services; however, during final reconciliation, FEMA denied all claimed costs. FEMA determined that the Applicant did not submit sufficient documentation to support the claimed costs. Specifically, the Applicant was not able to provide truck certificates, load tickets, and weight tickets for the dumpsters or final disposal for the debris. In addition, further review of closeout documentation revealed that the costs were reimbursable under the Natural Resources Conservation Service’s (NRCS) Emergency Watershed Protection Program (EWP). In a letter dated February 9, 2005, NRCS determined that the Applicant had performed the eligible work prior to the execution of a project agreement with NRCS. Due to this procedural oversight, NRCS denied funding, and determined the completed work ineligible for reimbursement.
In a December 10, 2010, first appeal letter, the Applicant stated that they entered into the time and materials contracts to remove debris that posed an immediate threat to the public as well as to expedite the debris removal process before the additional, forecasted hurricanes impacted the area. The Applicant also asserted that debris disposal documentation was not requested during the PW preparation process, and some of these records could not be produced due to the amount of time that passed between the debris disposal and the request for additional documentation. With the appeal letter, the Applicant provided dump tickets for one of the vendors contracted to provide debris removal service.
The Regional Administrator denied the first appeal on April 7, 2011, stating that adequate documentation had not been submitted to demonstrate that a time and materials contract was the only suitable contract type to provide debris removal services. As defined in Title 44 of the Code of Federal Regulations (44 CFR), §13.36(b)(10), Procurement, Procurement standards, time and materials contracts can be used only when a determination is made that no other contract type is suitable, and the contract must include a ceiling price that the contractor exceeds at its own risk. The Applicant did not provided evidence to demonstrate that no other contract type was suitable, nor was any documentation provided to demonstrate that the contracts included a ceiling price. In addition, FEMA was unable to determine if the costs incurred by the Applicant were reasonable. Pursuant to 44 CFR §13.36(f)(1), Procurement, Contract cost and price, the Applicant must perform a cost and price analysis in connection with every procurement action including contract modifications. Finally, FEMA determined that the Applicant’s claimed costs were reimbursable under the specific authority of the NCRS’s EWP and were, therefore, ineligible for assistance from FEMA.
The Applicant submitted its second appeal in a letter dated June 21, 2011, reiterating its position from the first appeal. The Applicant’s letter directly addresses the points raised in the denial of the first appeal. First, regarding the lack of documentation supporting the decision to use a time and materials contract, the Applicant argues that threat of subsequent storms demonstrates the rationale for using this type of contract vehicle to respond to a public emergency. The Applicant asserts that FEMA rules do not require Applicants to create such documentation. As additional support for the appropriateness of the time and materials contract and the reasonableness of the associated costs, the Applicant submitted an affidavit from its field supervisor. The affidavit states that debris had to be removed from the canals as soon as possible because the potential for flooding from subsequent storms represented an imminent threat to life and property. The affidavit also addresses the requirement for contract ceilings, by stating that contractors were made aware that there was a ceiling price on the contracts. The Applicant further claims that the PW Report prepared by the Florida Department of Emergency Management (Grantee) provides a price analysis and that the price comparison utilized by the Applicant at the time of the event was appropriate, given the emergency situation it faced at the time. Finally, regarding the determination that the work was eligible under the authority of the NRCS, the Applicant argues that FEMA is the lead federal agency during a declared disaster, and that FEMA has specific authority over post-disaster debris removal. The Applicant contends that it is impossible for jurisdictions to enter into agreements with NRCS prior to initiating debris removal work, and that FEMA should grant the Applicant an exception under 44 CFR §13.6(c), Additions and exceptions.
On November 23, 2011, the Grantee submitted additional documentation to support the appeal. This documentation includes excerpts from two closeout PWs, where the FEMA accepted alternative documentation from applicants to determine the eligibility of debris removal.
While FEMA understands that the Applicant needed to expedite debris removal activities to prevent threats to life and property, pursuant to 44 CFR §13.36(b)(10), Procurement, procurement standards, Applicants can initiate time and materials contract only when no other contract is suitable, and if the contract includes a ceiling price that the contractor exceeds at its own risk. The Applicant submitted no compelling evidence to prove that a lump sum, unit price, or cost-plus-fixed-fee contract was not suitable. In addition, the Applicant presented no compelling evidence to support the claim that contracts contained a ceiling, and the affidavit submitted by the Applicant provides no substantive evidence to prove that the contracts held such a clause. Pursuant to 44 CFR §13.36(f)(1), Procurement, Contract cost and price, the Applicant must perform a cost and price analysis in connection with every procurement action including contract modifications. The Applicant provided no documentation that demonstrates that a cost and price analysis was performed prior to receiving bids or proposals. Finally, the Applicant’s request for Public Assistance funding came only after the denial of eligibility by the responsible federal agency, NRCS. FEMA does not provide disaster assistance funding when another Federal agency has specific authority to fund the disaster recovery work. Therefore, the requested debris removal costs are not eligible for funding under FEMA’s Public Assistance Program.
I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy. Accordingly, I am denying the second appeal.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals
cc: Major P. May
FEMA Region IV