Time Extension - Temporary Facility, Improved Project

Appeal Brief

Appeal Letter

Appeal Analysis

Background

On June 1, 2011, a tornado damaged Brookings Elementary School (Facility), a facility owned and operated by the City of Springfield (Applicant).  As a result, the Applicant determined that the Facility was unsafe and unusable and elected to build a new Facility at a different location.  FEMA approved the improved project.  Meanwhile, the Applicant relocated the school to a temporary facility.  On January 4, 2012, FEMA prepared Project Worksheet (PW) 118, approving $2,915,459.49 in funding for leased modular educational buildings at the temporary facility.  PW 161 was prepared for the approved scope of work to repair the Facility back to pre-disaster condition, excluding any roof repair, and PW 110 was prepared as a separate PW to include the roof repair. 

FEMA amended PW 118 on June 6, 2012, approving an additional $3,087,540.86 in funding for the temporary facility, which had an original project completion deadline of December 15, 2011.  Due to the complexity of the project, the time needed to secure additional funding from the Massachusetts School Board Authority, and additional repairs to the Facility’s roof not previously included in PW 110, the Applicant requested a project extension for PW 118 on August 14, 2012.  The request anticipated a final completion date of September 30, 2015; additional costs for roof repairs were associated with this request.  In its transmission of the request, the Massachusetts Emergency Management Agency (Grantee) approved the time extension to June 15, 2012, and requested that FEMA grant a time extension until September 30, 2015.  FEMA partially granted a time extension to September 30, 2013, aligning this date with a previously approved time extension for the repair of the Dryden Elementary School (Dryden), another school damaged by the same tornado.  FEMA reasoned that Dryden was a reasonable comparison because the damage to Dryden was greater than the Facility at issue, based on the estimated repair costs.  FEMA thus approved an additional $429,000.00 in funding and amended the PW for this amount. 

On August 29, 2013, the Applicant submitted another request for time extension, asking that the lease at the temporary facility be extended an additional 18 months to May 30, 2015, and requesting an additional six months to perform approved work under PW 118.  The Grantee forwarded the request to FEMA on October 11, 2013, stating that the Applicant requested, and the Grantee approved, a time extension to May 30, 2015, for completion of the improved Facility (PW 161).  The Grantee reasoned that, since the children would need to be housed at the temporary facility until completion of the improved Facility, an extension to May 30, 2015, at the temporary facility was appropriate.  The Grantee requested $660,000.00 in additional funding associated with this time extension. 

In a response dated December 17, 2013, FEMA granted the request in part, approving a time extension request to February 15, 2014.  FEMA based the time extension on the amount of time necessary to restore the Facility to predisaster condition, pursuant to Disaster Assistance Policy (DAP) 9523.3, Provision of Temporary Relocation Facilities.[1]  Two things were considered in arriving at this date: (1) the Grantee’s recent approval of the period of performance time extension in PW 110—roof repair—to February 15, 2014, and (2) a comparison with Dryden’s period of performance—November 30, 2013.[2]  Based on Dryden’s period of performance and the extension for roof repair, FEMA determined that February 15, 2014, was the reasonable estimate.  This increased eligible costs by $165,000.00.  FEMA denied extending the period of performance to May 30, 2015, because this date incorporated elective improvements, contrary to DAP 9523.3.

The following table summarizes the time extension requests by the Applicant and the dates granted by FEMA:

First Appeal

On January 20, 2014, the Applicant submitted its first appeal letter to the Grantee.  The Applicant agreed with FEMA’s interpretation of DAP 9523.3, but disputed FEMA’s finding that the time extension was associated with the entire improved project, arguing that FEMA made a determination without the full benefit of documents related to the improved project scope of work.  The Applicant explained that there was a direct and parallel link between the repair and improved scopes of work, such that eligible repair work included in the improved project would be performed, billed, and accounted for, through the life of the improved project.  As a result, the Applicant requested that FEMA approve a time extension for the funding of the temporary facility through May 30, 2015, when the Applicant expected to complete the approved scope of repair work, as part of the improved project. 

The Applicant also disputed FEMA’s methodology of basing the estimated completion date for eligible repairs on the repair completion date for Dryden.  According to the Applicant, FEMA considered Dryden’s higher funding amount obligated as a basis to conclude that Dryden was more heavily damaged.  As such, FEMA determined that the repairs to the Facility could have been completed in the same amount of time.  The Applicant argued that the estimated Facility repair cost would have been much higher had it included all direct and triggered applicable codes and standards, which FEMA denied.  As such, based on the differences between damage and repairs at the two elementary schools, the Applicant proposed a scientific method to estimate the repair completion time.  Using a Project Evaluation and Review Technique (PERT) Expected Time formula, the Applicant calculated 47 months as the reasonable estimate.  The Applicant argued that 47 months from the disaster declaration—June 1, 2011—was April 30, 2015; therefore, it was reasonable to accept a 48-month timeline through May 30, 2015, for the approval of temporary facility funding.  The Grantee transmitted the first appeal to FEMA Region I on March 4, 2014, supporting the Applicant’s appeal. 

The Acting Region I Regional Administrator (RA) denied the first appeal on the basis that funding for the temporary facility was only eligible during the time estimated as necessary to complete the approved scope of repair work, affirming February 15, 2014, as a reasonable date by which repairs would have been completed.  The RA explained that PERT is a useful estimation tool where historical and comparable projects are absent.  However, the RA found Dryden a reasonable comparison and a better estimate for the period of performance than PERT.   

Second Appeal

On second appeal, dated June 16, 2014, the Applicant appeals FEMA’s denial to apply the PERT formula, arguing that the Facility and Dryden are different, such that using Dryden as a basis to estimate the period of performance is incorrect.  To illustrate the differences, the Applicant first compares the scopes of work between the two schools.  The Applicant asserts that FEMA did not incorporate applicable codes and standards in evaluating the scope of work to repair the Facility.  Had the Applicant chosen to repair rather than rebuild the Facility, FEMA would have required the Applicant to adhere to applicable codes and standards, resulting in a higher repair cost of approximately $13,000,000.00.  As a result, the Applicant reasons that the duration of the repairs would have been much longer such that temporary facility funding would be eligible for the duration of the entire project.

The Applicant then highlights the differences in project scope, type, cost, and complexity between Dryden’s and the Facility’s damages.  To demonstrate, the Applicant provided a table showing the differences in structure, area affected by the tornado, construction type, estimated repair costs, and the percentage of damage eligible for FEMA assistance.  The table particularly shows estimated repair costs for Dryden and the Facility as $4,200,000.00 and $12,994,000.00 (inclusive of all codes and standards upgrades costs requested by the Applicant), respectively.  The Applicant states that differences in scope, type, and complexity between the two schools render a comparative analysis between them unsuitable. 

The Grantee transmitted the second appeal on July 14, 2014.  The Grantee supports the second appeal.

Discussion

The RA correctly based the period of performance for the temporary facility on the estimated time necessary to repair a comparable facility damaged by the same disaster and the Applicant has not justified why the repair scope of work would require a time extension equal to the amount of time it takes to build an entire new Facility.  Section 403 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 authorizes FEMA to provide assistance essential to meet immediate threats to life and property following a major disaster.[3]  Work and services to save lives and protect property include funding for provision of temporary facilities for schools.[4]  Temporary facilities are considered emergency protective measures.[5] 

Regulation outlines project completion deadlines from the disaster declaration date and applies to all projects approved under State disaster assistance grants.[6]  The period of time for which temporary facility assistance may be provided is usually six months, however, this time may be adjusted depending on the time required to complete repairs of the permanent facility.[7]  The Grantee may extend the deadlines for emergency work an additional six months where extenuating circumstances or unusual project requirements beyond the control of the subgrantee exist.[8]   Requests for time extensions beyond the Grantee’s authority are submitted, by the Grantee, to the Regional Administrator.[9]  Consistent with this requirement, the Grantee may recommend that FEMA grant a time extension based on documentation showing: (1) circumstances beyond the Applicant’s control that prevented completion of the reconstruction project within the initial time limit, (2) status of the permanent restorative work, and (3) revised timeline for project completion.[10]  FEMA may not grant extensions without this documentation.[11]  With the proper documentation, FEMA may grant extensions for the projected duration of the construction work, based upon industry standards (e.g., from R.S. Means or equivalent source), and a revision should be made to the initial scope of work that funded the temporary facility.[12]

Where an Applicant elects to incorporate improvements into the repair of disaster damages or to expand the pre-disaster capacity of a damaged facility, a temporary facility is eligible only during the time estimated as necessary to perform the approved scope of repair or replacement work.[13]  Funding of a temporary facility is not based on the total amount of time necessary to complete the improved project.[14]

The Applicant disputes FEMA’s basis for estimating the temporary facility period of performance, which was based on the time it took to complete reconstruction of Dryden.  The Applicant, instead, alleges that PERT is a better method of estimation, pointing out differences between the two schools that make a comparative analysis improper.  PERT is a preferred tool used to estimate completion time for difficult or unusual projects when prior experience with similar projects is not available.  While FEMA agrees that the PERT formula is an accepted industry practice, the Applicant has not provided sufficient documentation for its inputs, which calculated the most likely construction schedule for the unimproved scope of work as 47 months.  The inputs—fastest construction time, slowest construction time, and most likely construction time—all of which require a reasonable approach to estimating the construction duration, are based on the time required to complete an improved project scope of work (i.e., construction of an entirely new facility), not an unimproved project (repairs) as stated in the PW.  The Applicant has not justified the optimistic, pessimistic, and estimated values to demonstrate that the time period required to complete an entirely new facility was the same duration as the time required to repair the facility.  As such, FEMA will not rely on the estimate provided by the PERT formula, but instead, consistent with policy, uses a comparable school to estimate the period of performance for repair work. 

Although FEMA policy does not specify a preferred methodology, a very good estimate of construction time and costs is possible using data from existing repairs and construction of schools in the area.  Here, not only was the damage at Dryden similar to the damage at the Facility, the costs were comparable and the schools are located within the same area.  Consequently, there was no error in relying on a comparable school.

Even if it accepted FEMA’s methodology, the Applicant claims that, had FEMA approved codes and standards upgrades, the estimated costs would total about $13,000,000.00 and, based on these costs, the period of performance to repair the Facility would be closer to May 30, 2015.  FEMA, however, already denied the codes and standards in a separate PW.  Therefore, FEMA will not incorporate denied codes and standards upgrades in the period of performance estimate.

In addition, the unimproved scope includes roof repairs and non-structural elements, without major structural repairs.  FEMA notes that construction of a new Facility requires a significantly longer period of performance as it involves excavation and structural components, such as a foundation.  Absent these major structural repairs, FEMA finds no basis on which to conclude the repair scope of work would take the same amount of time it takes to construct a brand new Facility. 

Conclusion

FEMA Region I correctly denied the time extension for Brookings Elementary School’s temporary facility.  Though PERT is an acceptable method to estimate the period of performance, the Applicant did not adequately substantiate its input variables.  Moreover, FEMA appropriately based the period of performance on Dryden, a comparable facility within the same industry without incorporating codes and standards upgrades that were denied and not a part of this second appeal.  As such, the Applicant’s second appeal associated with PW 118 for $495,000.00 for additional temporary facility funding is denied.