Sewer Lift Station Repairs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster1981-DR-ND
ApplicantCity of Minot
Appeal TypeSecond
PA ID#101-53380-00
PW ID#4744 and 4745
Date Signed2014-12-02T00:00:00

 

Conclusion: The contracted electrical repair work was necessary to restore the City of Minot’s (Applicant) lift stations and the bid costs were reasonable.  The cost increase related to the change in scope of work approved at first appeal is eligible; however, as these are small projects, the cost increase not associated with scope changes must be requested through small project netting.  The Applicant did not substantiate that claimed costs for engineering and design services were tied to the approved scope of work.  Further, heating and ventilation system upgrades performed at both lift stations were not required by a code or standard and are not eligible for funding.

Summary Paragraph

The Applicant’s Carney and Burdick Lift Stations were damaged during a 2011 flood event.  FEMA prepared PWs 4744 and 4745 for the permanent repairs to the damaged pumps and electrical and mechanical components at each lift station. The Applicant’s first appeals asserted that the funding approved was for emergency repair and did not include costs for permanent repairs or required code upgrades for certain mechanical components.  The Applicant also requested funding for engineering and design services for each lift station.  FEMA partially approved the appeal, providing additional estimated costs for permanent repairs and engineering and design services, but denied funding for upgrades to the mechanical components because they were not required by codes or standards.  The Applicant’s second appeal asserted that the plans provided to FEMA included a detailed description of the permanent electrical repairs and that the PWs did not encompass all of the necessary repair work.  The Applicant also asserted that FEMA underestimated project costs; the mechanical upgrades were required by code; and that its design engineer evenly divided actual costs for work performed for multiple facilities at each impacted ones.

Authorities Discussed

  • 44 C.F.R. § 206.204(e)(2).
  • 44 C.F.R. § 206.226(d).
  • PA Guide, at 40.

Headnotes

  • 44 C.F.R. § 206.204(e)(2) provides that the applicant may submit an appeal for additional funding for small projects within 60 days following the completion of all its small projects
  • 44 C.F.R. § 206.226(d) provides that codes and standards must apply to the type of repair required.  The standards referenced in the Applicant’s appeals provide recommendations for the safe design of wastewater treatment facilities, but neither standard requires upgrades to damaged components of a ventilation system.
  • The PA Guide states that costs must be directly tied to the performance of eligible work
    • The Applicant failed to demonstrate its claimed costs for engineering and design services were directly tied to the approved scope of work. 
  • The contracted electrical repair work was necessary to restore the lift stations and the bid costs were reasonable.
    • A technical specialist reviewed the documented damage descriptions and repair work detailed in the bid documents and determined the electrical work described in the plans and specifications was necessary to repair the lift stations and the bid costs for that work were reasonable.


 

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Appeal Letter

 

December 2, 2014

Major General David Sprynczynatyk
Director
North Dakota Department of Emergency Services
PO Box 5511
Bismarck, North Dakota 58506-5511

Re:  Second Appeal – City of Minot, PA ID 101-53380-00, Sewer Lift Station Repairs, FEMA-1981-DR-ND, Project Worksheets (PW) 4744 and 4745

Dear General Sprynczynatyk:

This is in response to letters from your office dated February 11, 2013, transmitting the referenced City of Minot (Applicant) second appeals.  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of a portion of the funding requested for repairs to the Carney and Burdick Lift Stations, $95,734.78 and $63,750.84, respectively.

As explained in the enclosed analysis, cost increases for small projects must be addressed through a net small project overrun. As such, the additional cost for such repairs in PWs 4744 and 4745, including the explosion proof lights, should be addressed in a request for a net small project overrun.  However, I have determined that the bid cost for an additional $23,443.00 for the electrical repairs for PW 4744, associated with changes of scope approved at first appeal is reasonable.

With regard to the Applicant’s request for the actual costs for engineering and design services for each lift station, the amount claimed may be reasonable based on the eligible work performed.  However, because the Applicant did not demonstrate that the costs claimed are directly related to the repair of the specific lift stations, FEMA applied the cost curves for above-average complexity projects, to estimate additional costs of $10,475.00 for PW 4744 and $3,661.00 for PW 4745. 

Lastly, the heating and ventilation system upgrades performed at both lift stations were not required by a formally adopted code or standard.  Consequently, these costs are not eligible.

Accordingly, I am partially granting the two appeals for PW 4744 and 4745 in the amount of $37,579.00. By copy of this letter, I am requesting the Regional Administrator take appropriate action to implement this determination.

Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 CFR § 206.206, Appeals.

Sincerely,

/s/

William W. Roche
Director
Recovery Directorate

Enclosure

cc:  Sharon Loper
       Acting Regional Administrator
       FEMA Region VIII

Appeal Analysis

Background

During the flooding event that occurred from February 14 to July 20, 2011, numerous sanitary sewer and storm water lift stations owned and operated by the City of Minot (Applicant) were inundated and damaged.  This analysis collectively addresses the appeals related to Project Worksheets (PWs) 4744 and 4745 that were prepared for repairs to the Carney and Burdick Lift Stations, respectively. 

Carney Lift Station

The Carney Lift Station is comprised of a wet and dry well and a one-story well house.  The flooding filled the 25.5-foot deep wet and dry wells and inundated the well house to a depth of six feet.  The flooding damaged two pumps in the dry well, two electric motors in the motor house, ventilation fans in the wet and dry wells, and associated electrical and mechanical equipment.  FEMA prepared PW 4744 for $11,730.91 for the permanent repairs to the damaged pumps and electrical and mechanical components.

Burdick Lift Station

The Burdick Lift Station is also comprised of a wet and dry well and a one-story well house.  The flooding inundated the well house to a depth of two feet and damaged ventilation fans in the wet and dry wells, two motor starters for the sewage pumps, and associated electrical and mechanical equipment.  The sewage pumps in the dry well were not submerged or damaged.   FEMA prepared PW 4745 for $17,812.11 for the permanent repairs to the damaged electrical and mechanical components.

First Appeal

Carney Lift Station- PW 4744

The Applicant submitted a first appeal of PW 4744 on May 21, 2012, asserting the funding approved did not include costs for all required permanent repairs. The Applicant requested approval of an additional $121,262.78, including $47,696.00 for repairs to the electrical system, $33,400.02 for upgrades to the heating and ventilation systems, $18,253.96 for engineering and design, and $21,912.80 for cost adjustments to account for the bid cost of the approved scope of work.

On October 31, 2012, the FEMA Region VIII Regional Administrator (RA) partially approved the appeal providing an additional $25,446.00 for permanent repairs to the electrical system and engineering and design services.  The RA first requested additional information regarding the Applicant’s bid process, the bids received, and a detailed description of the permanent repairs.  The Applicant did not provide all of the requested information.  FEMA reviewed the available documentation and determined that PW 4744 did not include all of the eligible electrical scope of work items.  The RA approved $19,801.00 for the additional eligible scope of work items based on a cost estimate FEMA developed using RS Means.  Further, FEMA used its Engineering and Design Services of Average Complexity graph[1] to estimate $4,490.00 for engineering and design services because the Applicant’s requested amount was based on a percentage of its overall engineering and design costs for all damaged lift station repairs. 

The RA denied most of the Applicant’s request for additional funding to repair heating and ventilation systems.  While the RA approved $655.00 for the repair of damaged controls, the remaining requested funding associated with upgrades to the heating and ventilation system that the Applicant asserted was required by code was denied.  The RA determined that the extent of the repair of disaster damage did not trigger the referenced code and standard requirements and consequently the work associated with the upgrades was not eligible for funding.  The RA also found that the work associated with upgrading the facility from electric to gas heat was ineligible because it was not required by code.

Lastly, the RA denied the additional funding requested to adjust approved costs in accordance with bid costs.  The RA found that because PW 4744 is a small project, cost adjustments should be handled through a request for a net small project overrun.

Burdick Lift Station- PW 4745

The Applicant submitted a first appeal of PW 4745 on July 2, 2012, stating that the funding approved did not include the cost of all required permanent repairs. The Applicant requested approval of an additional $74,819.84, including $50,706.02 for upgrades to the heating and ventilation systems, $18,253.96 for engineering and design, and $5,859.86 for cost adjustments to account for the bid cost of the approved scope of work.

On October 31, 2012, the RA partially approved the appeal providing an additional $10,484.00 for permanent repairs to the ventilation system and engineering and design services.  As it did for the PW 4744 appeal issues, the RA first requested additional information regarding the Applicant’s bid process, the bids received, and a detailed description of the permanent repairs.  Similarly, when the Applicant did not provide all of the requested information, FEMA reviewed the available documentation and determined PW 4745 did not include all of the eligible scope of work items.  To remedy such, the RA approved $6,581.00 for the additional eligible scope of work items based on a cost estimate FEMA developed using RS Means.  Further,  FEMA applied its policy based Engineering and Design Services of Average Complexity graph[2] to estimate $3,903.00 for engineering and design services because the Applicant’s requested amount was based on a percentage of its overall engineering and design costs for all damaged lift station repairs.

The RA denied the majority of the Applicant’s request for additional funding for repair to the heating and ventilation systems but approved $1,310.00 for the repair of damaged controls.  The remaining funding requested was associated with upgrades to the heating and ventilation system that the Applicant asserted was required by code.  Like it did for PW 4744, the RA determined that the extent of the repair of disaster damage did not trigger the referenced code and standard requirements and the work associated with the upgrades therefore was not eligible for funding.  Similarly, the RA determined that work associated with upgrading the facility from electric to gas heat was not required by code and consequently not eligible for funding. 

Finally, the RA denied the additional funding requested to adjust approved costs in accordance with bid costs.  Like PW 4744, the RA found that PW 4745 is a small project and consequently cost adjustments should be handled through a request for a net small project overrun.

Second Appeal

Carney Lift Station- PW 4744

On December 18, 2012, the Applicant submitted a second appeal of the scope of work and funding provided in PW 4744, arguing for $95,734.78 in additional funding based on bid costs for electrical (including explosion proof lights) and mechanical repairs and code upgrades and the actual cost for engineering and design services.  The Applicant asserts that the plans and specifications provided to FEMA included a detailed description of the necessary permanent repairs and that the scope of work of PW 4744 did not encompass all of the repair work nor code mandated upgrades required to restore the lift station.  Further, the Applicant, maintaining it procured the contract for the work properly and competitively, asserts that FEMA’s approach of using RS Means to develop the cost of the repairs FEMA approved in PW 4744 underestimated the project costs.  The Applicant maintains it competitively bid the lump sum contract for the electrical and mechanical work based on items detailed on the plans and specifications and therefore the eligible cost should be based on the bid cost for the detailed work.  While the contracts are lump sum contracts for both the electrical work and the mechanical work at multiple lift stations, the Applicant provided a breakdown of the bid cost by site.

Regarding the code upgrades, the Applicant asserts that the heating and ventilation fans and motors damaged by the flood did not provide enough air flow to meet National Fire Protection Association 820 (NFPA 820), Standard for Fire Protection in Wastewater Treatment and Collection Facilities, and the Ten States Standards (Ten States), Recommended Standards for Wastewater Facilities.  In addition, the Applicant states that the existing ductwork was not large enough to distribute sufficient air flow generated by the larger fans.  The Applicant replaced the entire system to ventilate the lift station and the Applicant argues the upgrades were triggered by NFPA 820 and Ten States ventilation standards.  The Applicant also installed a new makeup air unit (MAU) to provide sufficient airflow and connected the new MAU to gas heating and asserts in its appeal that a “connection to gas service is more cost effective than attempting to heat the increased influent air flow by ceiling-mounted electric heaters.”

With respect to engineering and design services, the Applicant objects to FEMA’s application of Curve B (average complexity) rather than Curve A (above average complexity) to the Engineering and Design Services graph in its Public Assistance Guide to estimate costs because FEMA’s policy describes pumping stations within Curve A activities.[3]  Further, the Applicant asserts the cost curves do not include expenses for bidding services and shop drawing reviews, which are services its design engineer performed.  Finally, the Applicant explains that its approach of using one engineering and design firm for all of its damaged lift stations was less expensive than procuring engineering and design services for each lift station and that its design engineer divided costs for activities performed that impacted multiple facilities evenly against each impacted facility.

Burdick Lift Station- PW 4745

The Applicant submitted its second appeal of the scope of work and funding provided in PW 4745 on December 27, 2012.   Through it, the Applicant is requesting $63,750.84 in additional funding based on bid costs for explosion proof lights (no additional electrical work included in appeal), mechanical repairs and code upgrades and the actual costs for engineering and design services.  The Applicant asserts that the plans and specifications provided to FEMA included detailed descriptions of the permanent repairs and that the scope of work of PW 4745 did not encompass all of the necessary repair work and code mandated upgrades.  Further, the Applicant, maintaining it procured the contract for the work properly and competitively, argues that FEMA’s approach of using RS Means to develop the cost of the repairs that FEMA approved in PW 4745 underestimated the project costs.  The Applicant asserts it competitively bid the lump sum contract for the electrical (including replacement of explosion proof lights) and mechanical work based on work detailed on the plans and specifications and therefore the eligible cost should be based on the bid cost for the detailed work.  While the contracts are lump sum contracts for both the electrical work and the mechanical work at multiple lift stations, the Applicant provided a breakdown of the bid cost by site.  Regarding the code upgrades and engineering and designs services, the Applicant reiterates the position advanced in its appeal for PW 4744. 

Discussion

Electrical Repairs

Pursuant to Title 44 Code of Federal Regulation (C.F.R.) § 206.206(d), FEMA submitted the appeal documentation for PWs 4744 and 4745 to a specialist with expertise in electrical components of lift stations for technical review.  Based upon information received through that process as well as review of all materials included with the appeal process, FEMA finds that the electrical work detailed in the plans and specifications was necessary to repair the lift stations. Regarding PW 4744, at first appeal the Applicant requested $26,693.00 for an omitted control panel and safety disconnect.  FEMA approved the additional scope of work, calculating the cost as $3,250.00 using RS Means. Upon review, FEMA finds the bid costs to be reasonable, and as such the remaining $23,443.00 is eligible.  

As to the electrical repairs covered in PW 4745 (Burdick Lift Station), the Applicant’s appeal addresses only the replacement of the explosion proof lights, not all electrical repairs.  FEMA has approved $5,484.00 for the demolition and replacement of four explosion proof lights, while the Applicant states that the bid cost for the lights is $14,081.00.  The Applicant provided a spreadsheet which includes the bid cost of the lights as a line item, but provided no source documentation for that entry.  As this item is requested as a cost increase and not a change in scope of work, the Applicant should include this increase in a request for a net small project overrun, however, sufficient documentation supporting the actual cost of the explosion proof lights would need to be provided. 

HVAC Upgrades

Section 406(e)(1) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act authorizes FEMA to reimburse an eligible applicant for the “cost of repairing, restoring, reconstructing, or replacing a public facility or private nonprofit facility on the basis of the design of such facility as it existed immediately prior to the major disaster and in conformity with current applicable codes, specifications, and standards.” [4]  However, for costs related to repair or replacement standards that change the predisaster construction of a facility to be eligible, the standards must:

(1) Apply to the type of repair or restoration required[ ] (Standards may be different for new construction and repair work)[;] (2) Be appropriate to the predisaster use of the facility; (3) (i) Be found reasonable, in writing, and formally adopted and implemented by the State or local government on or before the disaster declaration date or be a legal Federal requirement applicable to the type of restoration…. (4) Apply uniformly to all similar types of facilities within the jurisdiction of [the] owner of the facility; and (5) For any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect.[5]

The Applicant asserts that NFPA 820 and the Ten States ventilation standards “are triggers requiring upgrades to the fans, motors, and ductwork,” and new makeup air units (MAU) were also required to provide sufficient airflow as required by the standards.  The Applicant’s consultant prepared a Technical Memorandum titled Lift Station – Required HVAC Code Compliance Upgrades (March 7, 2012) which states that both Carney and Burdick Lift Stations “had mechanical HVAC systems submerged,” and “must have the required repairs brought up to current HVAC code.”  The memo states that the ventilation systems in both lift stations should be replaced to comply with ventilation rates recommended in NFPA 820, because the fans, motors, and the ductwork are not large enough to handle the current ventilation standards.  While such recommendations may be sound and prudent, they do not equate to legally enforceable or enforced codes or standards for purposes of eligibility for Public Assistance grants.[6]   

Moreover, codes and standards must apply to the type of repair required.[7]  Both NFPA 820 and the Ten States standards provide recommendations for the safe design of wastewater treatment facilities.  However, neither the NFPA 820 nor the Ten States standards require upgrades to damaged components of a ventilation system to meet the safety requirements set forth in the standards.  Engineering design firms are obligated to follow safety standards such as those set forth in NFPA 820 and Ten States when designing wastewater treatment facilities; however, neither NFPA 820 nor Ten States standards apply to the repair of damaged ventilation system components.  In the first appeal response, the FEMA Region VIII Regional Administrator stated that the damaged fans and motors were repairable and the ductwork was not damaged.  Further, there is no documentation to support that the MAUs in either lift station were damaged and required replacement.  The Applicant does not contest these facts in its appeal, but only asserts that the components were undersized and had to be replaced to meet current NFPA 820 and Ten States requirements.

It is the Applicant’s responsibility to provide documented justification supporting its position.[8] The Applicant did not provide documentation demonstrating that upgrades of the damaged ventilation systems at the Carney and Burdick Lift Stations were required by a formally adopted code or standard.  Therefore, the costs associated with those upgrades are not eligible for funding.  Further, the work associated with the connection of the new MAUs to gas heating was not required as the result of the disaster and is not eligible for funding. [9]

Engineering and Design Services    

The Applicant requests $18,253.96 for engineering and design services for each lift station based on its total actual costs divided amongst all facilities addressed in its contract for engineering and design services.  The PA Guide provides that “costs that can be directly tied to the performance of eligible work are eligible.”[10]  The Applicant has not substantiated that the amount requested is directly related to the repair of the specific lift stations.  At first appeal, FEMA calculated the engineering and design services using the PA Guide Curve B for projects of average complexity.[11]  The Applicant has correctly stated that pumping stations should be calculated with Curve A for projects of above-average complexity.[12]  The engineering and design cost for PW 4745 is increased by $3,661.00 for a total of $7,564.00; and for PW 4744 by $10,475.00 for a total of $15,465.00.

Conclusion

The Applicant followed competitive procurement procedures for the repair of the Carney and Burdick Lift Stations and demonstrated that the contracted electrical repair work was necessary to restore both lift stations.  The cost increase related to the change in scope of work approved at first appeal is eligible in the amount of $23,443.00 for PW 4744.  However, as mentioned in the first appeal response, since both projects are small projects, the cost increase not associated with scope changes, including the explosion proof lights, must be requested through a small project netting. [13]  Regarding the ventilation system upgrades performed at both lift stations, the standards referenced in the Applicant’s appeals do not apply to the repair of the damaged ventilation system components nor has the Applicant sufficiently demonstrated that the state of North Dakota or the City of Minot has formally adopted the standards.  Therefore, all work associated with the ventilation system upgrades is not eligible.  Finally, while the amount claimed by the Applicant for engineering and design services at each lift station may be reasonable, the Applicant did not demonstrate that the costs are directly related to the repair of each specific lift station.  As such, FEMA recalculated these costs applying appropriate cost curves for an additional amount of $3,661.00 for PW 4745 and $10,475.00 for PW 4744.


[1] See Public Assistance Guide, FEMA 322, at 60 (June 2007) [hereinafter PA Guide].

[2] Id.

[3] PA Guide, supra note 1 at 57-60.

[4] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

[5] 44 C.F.R. § 206.226(d).

[6] During the review of the Applicant’s second appeal documentation, FEMA requested additional information from the Grantee to confirm if either the State of North Dakota or City of Minot formally adopted NFPA 820 or Ten States as state or local codes in accordance with 44 CFR §206.226(d)(3).  The Grantee forwarded a response from the Applicant’s design engineer that indicated that the state of North Dakota had formally adopted Ten States, but did not confirm the assertion.  Regarding NFPA 820, in the request for additional information, FEMA specifically requested “information and supporting documentation regarding the authority having jurisdiction for enforcing NFPA 820 in the City of Minot and information and supporting documentation regarding any evaluations/assessments performed by that authority addressing the condition of the ventilation systems at the Burdick and Carney Sanitary Lift Stations post event.”  The response was silent on the matter.  In an attempt to validate if the NFPA 820 or Ten States Standards had been formally adopted, FEMA’s Professional Engineer searched State, local and the City Engineer’s web sites, and found no formal adoption of them.

[7] 44 C.F.R. § 206.226(d)(1).

[8] 44 C.F.R § 206.206(a).

[9] See 44 C.F.R. § 206.223(a)(1).

[10] PA Guide, at 40.

[11] PA Guide, at 60.

[12] PA Guide, at 58.

[13] PA Guide, at 109.  (“[I]f the applicant incurs costs significantly greater than the total amount approved for all small projects, the applicant may appeal for additional funding.”) (emphasis in original).

 

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