Citation: FEMA-1888-DR-AZ, Timberland Acres Special Road District #1, Net Small Project Overrun, Project Worksheet (PW) 150
Reference: Net Small Project Overrun
Summary: During the period from January 18 through January 22, 2010, severe winter storms damaged 35 roads in the Timberland Acres subdivision of Navajo County (County). Roads located within Timberland Acres are maintained by the Applicant; however, the Applicant allowed the County to repair the disaster-damaged roads without soliciting bids from outside sources.
FEMA prepared two small project PWs to address Timberland Acres’ disaster-related road damage. PW 34 was prepared in the amount of $4,685 to cover the estimated cost for emergency road and ditch repairs. PW 150 was prepared to cover the estimated cost for permanent repairs to 9.77 miles of 20 foot-wide damaged gravel roads in the amount of $52,162, including the cost of one inch of gravel.
The Applicant submitted a Net Small Project Overrun (NSPO) in the amount of $130,000 for PW 150 to the Arizona Department of Emergency Management (ADEM). The Applicant claimed total project costs of $180,995, which included $86,507 in materials. The Applicant explained that the overrun was due to an inadequate estimate and steeper road grades requiring an average of two inches of gravel rather than the one inch of gravel originally approved. The State reviewed the final cost documentation and agreed with the Applicant that the original estimate was insufficient to adequately address the scope of work and recommended an NSPO in the amount of $144,155. On June 27, 2011, the State asked FEMA to review the project documentation to determine reasonable cost.
FEMA prepared an analysis using Applicant-provided data with the assumption that all damaged roads were 20-feet wide. FEMA concluded that project costs were underestimated and that the only the cost for one inch of gravel is eligible or $41,115 ($86,506.99 – cost of gravel ÷ 2.104 – inches of gravel). On December 2, 2011, the Regional Administrator partially approved an NSPO of $83,442.
The Applicant submitted its second appeal on January 26, 2012, requesting an NSPO for the denied amount from the first appeal, $45,392. The State supports FEMA’s original NSPO decision and does not recommend an increase in the approved project amount.
Issue: Has the Applicant provided documentation to support the additional funding request?
Rationale: 44 CFR § 206.205(a), Payment of claims, Small Projects; 44 CFR §206.204(e)(2) Project Performance, Cost Overruns; 44 CFR §13.36, Procurement