alert - warning

This page has not been translated into Español. Visit the Español page for resources in that language.

Design Engineering Costs

Appeal Brief Appeal Letter

Appeal Brief

DesastreFEMA-1008-DR
ApplicantCity of Santa Monica
Appeal TypeSecond
PA ID#037-70000
PW ID#99927
Date Signed1999-01-04T05:00:00
Citation: FEMA-1008-DR-CA; City of Santa Monica PA ID 037-70000; DSR 99927.

Cross Reference: Northridge Earthquake; Design Engineering Costs.

Summary: DSR 99927 was written for $2,126 to repair the damage that the laundry and restroom building of a homeless shelter in Santa Monica sustained. On review, the engineering and design services cost of $103 was deducted from the DSR because the complexity of the eligible repairs did not warrant such services. The bulk of the repair was patch and paint of drywall, replacing a water heater and the strapping of two water heaters. An attached Hazard Mitigation Proposal (HMP) was also denied because the work described did not relate to the eligible damages. The applicant submitted a first appeal of the deduction and of the denial of the HMP. The Disaster Recovery Manager denied the appeal for the same reasons. The applicant has now submitted a second appeal in which it argued that all construction projects are eligible for engineering design costs and that the actual cost of the repairs was much higher. The applicant claims further that many large and small construction projects received engineering design costs.

Issue: Is the City eligible to receive design engineering costs on the patch and paint repairs to the laundry and restroom building at the homeless shelter in Santa Monica?

Findings: No. Eligibility of engineering design costs on repair work depends on the scope of work and the complexity, and the specific need for these services. Patch and paint repair work does not justify engineering design services. HMPs are only authorized if the work is related to the eligible damage sustained by the facility.

Rationale: Pursuant to 44 CFR 206.228(a)(2)(ii), a 3% allowance for basic construction inspection services was included in the DSR, and 44 CFR 206.228(a)(3)(ii) does not permit any other administrative costs.

Appeal Letter

January 4, 1999

Mr. Gilbert Najera
Governor's Authorized Representative
Governor's Office of Emergency Services
74 North Pasadena Avenue, North Annex, Second Floor
Pasadena, California 91103

Dear Mr. Najera:

This is in response to your February 20, 1998, letter to the Federal Emergency Management Agency (FEMA) forwarding the City of Santa Monica's October 30, 1997, second appeal of Damage Survey Report (DSR) 99927. The City is appealing the deletion of engineering design services costs of $103 from DSR 99927 and the denial of a Hazard Mitigation Proposal (HMP) for $634. The City's homeless shelter at 505 Olympic Boulevard in Santa Monica sustained damage to its laundry and restroom facilities from the Northridge earthquake (FEMA-1008-DR-CA) and FEMA wrote the original DSR for $2,126 to repair the damages. However, on review, FEMA deleted the engineering and design services costs of $103 because the complexity of the repair work described did not require the services. The HMP was denied because it did not relate to any damaged elements.

I have reviewed the information submitted with the second appeal, as well as our response to your first appeal (copy enclosed). I concluded that the Regional Director's decision on the first appeal is consistent with program statute and regulations. Therefore, the subject DSR is not eligible for inclusion of engineering and design services.

Although the engineering and design services are not eligible costs, FEMA funded construction inspection services at 3-percent of the damage repair estimate. Based on a review of the documentation provided, Track-It Monitoring System, Inc. (Track-It) was contracted to provide the construction inspection services for many of the subgrantee's damaged facilities. In addition to these services, Track-It was contracted to prepare bid packages and advertise and solicit bids from construction contractors. Although, these activities are not included in FEMA's description of eligible construction inspection services, they are reasonable project management services. Thereby, if these additional activities resulted in a cost overrun above the total funding provided for all small projects, the subgrantee may have been eligible for additional funding through the small project netting process. If there was a cost overrun, the subgrantee should have submitted an appeal to FEMA for the overrun following completion of all small projects. However, the subgrantee did not submit an appeal by the deadline of May 17, 1998, and, therefore, FEMA must assume that Track-It's contract cost was covered by the construction inspection allowance and the overall cost savings on all small projects.

Therefore, I am denying the appeal. Please inform the subgrantee of my determination. In accordance with the appeal procedure governing appeal decisions made on or after May 8, 1998, my decision constitutes the final decision on this matter. The current appeal procedure was published as a final rule in the Federal Register on April 8, 1998. It amends 44 CFR 206.206.

Sincerely,

/S/

Lacy E. Suiter
Executive Associate Director
Response and Recovery Directorate

Enclosure

cc: Christina Lopez
Federal Coordinating Officer
FEMA-1008-DR-CA