Ineligible Costs – Debris Removal

August 22, 2013

Tim Diemler
Acting Director
State of Missouri Emergency Management Agency
2302 Militia Drive
P.O. Box 116
Jefferson City, Missouri 65102

Re:  Second Appeal–Village of Riverview, PA ID 189-62192-00, Ineligible Costs – Debris Removal, FEMA-1980-DR-MO, Project Worksheet (PW) 793

Dear Mr. Diemler:

This letter is in response to a letter from your office dated December 17, 2012, which transmitted the referenced second appeal on behalf of the Village of Riverview (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding for debris removal costs totaling $37,947.

Background

Between April 19, and June 9, 2011, severe storms and tornadoes stripped limbs from trunks and uprooted trees throughout the Village of Riverview.  To complete the emergency work, the Village of Riverview (Applicant) contracted with Saint Louis County (Contractor) to remove the vegetative debris from city streets and rights-of-way.  The contract specified a unit price for eligible ground vegetative debris at $18.66 per cubic yard (CY), which included debris pickup, hauling, grinding, and disposal of ground material.  The contract also specified that the Contractor would submit to the Applicant a weekly report of debris volume, weight removed, and payment estimates.

On August 23, 2011, FEMA prepared PW 793 for $37,947 based on the Contractor’s June 28, 2011, invoice for removal of 2,033.66 CY of debris at a unit cost of $18.66 per CY.  To support the eligibility of the debris removed, the Applicant provided daily logs documenting debris removal from public rights-of way; however, the documentation did not include load tickets or monitoring records necessary to verify the amount of debris removed, or the quantity of chipped debris claimed by the Contractor.  Using the daily logs, FEMA reduced the claimed quantity of debris by 10 percent because it is not reasonable to assume that every load was filled to the capacity of the truck.  FEMA also reduced the volume by 75 percent to convert the estimated quantity of loose vegetative debris to chipped debris as detailed in the Public Assistance Debris Management Guide, FEMA-325.  On December 7, 2011, FEMA approved a total of 573.75 CY of debris at $18.66 per CY and obligated PW 793 for $10,706.

First Appeal

On April 4, 2012, the Applicant submitted a first appeal, which was transmitted by the Missouri State Emergency Management Agency (Grantee) to FEMA on April 12, 2012.  In a subsequent letter from the Applicant dated July 27, 2012, the Applicant characterized FEMA’s calculation of 4:1 ratio of loose debris to mulch as unfair and requested reimbursement of the full invoiced amount of $37,947.  The Applicant stated that it used force account labor as debris monitors, and that in the absence of debris quantity documentation, FEMA should accept the debris monitors’ figures as accurate and reasonable.  The documentation submitted with the first appeal included copies of County Daily Haul Tickets, a copy of the Contract For Storm-Related Debris Removal, and a copy of an Errors and Omissions Report from the Contractor.

With a letter dated August 17, 2012, the FEMA Region VII Regional Administrator denied the first appeal.  The Regional Administrator explained that the Applicant did not provide documentation that demonstrated the actual amount of debris removed by the Contractor, nor did the Applicant ensure that the Contractor complied with the contract terms to submit weekly reports of the actual amount of debris removed as required by Title 44 of the Code of Federal Regulations (44 CFR) §13.36(b), Procurement, Procurement Standards.  The Regional Administrator further explained that the award of $10,706 represented funding for the estimated cost of eligible work.  However, as the Applicant’s documentation did not substantiate the Contractor’s claimed total volume, FEMA was unable to verify the actual quantity of debris removed.  As a result, FEMA de-obligated $10,706 from PW 793 on September 4, 2012.

Second Appeal

The Applicant filed a second appeal on November 19, 2012, in which it conceded that it was unable to provide the detailed documentation that FEMA requested.  Despite the concession, the Applicant maintained that the $37,947 in incurred debris removal costs were eligible for reimbursement because the emergency work was necessary to restore the community.  In a December 10, 2012, letter supplementing the second appeal, the Applicant reiterated its objection to FEMA’s use of the 75% reduction factor as an arbitrary and unreasonable standard to adjust the volume of debris.  The Applicant asserted that without proof demonstrating that the trucks were not loaded to capacity, FEMA should consider the Contractor’s debris monitors’ recorded observations to be both reasonable and accurate.  The Applicant provided no new documentation with the second appeal.

Discussion

Applicants who seek reimbursement under FEMA’s Public Assistance Program must comply with the federal procurement requirements contained in 44 CFR §13.36, Procurement.  In accordance with 44 CFR §13.36(b)(2), Procurement, Procurement Standards, “… subgrantees will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts…”  Further, pursuant to 44 CFR §13.36(b)(9), Procurement, Procurement Standards, “subgrantees will maintain records sufficient to detail the significant history of the procurement…and the basis for the contract price.”

The Applicant’s Contract For Storm-Related Debris Removal specifies that the Contractor will submit to the Applicant a weekly report of debris volume, weight removed, and payment estimates.  A review of the documentation submitted in support of the Applicant’s appeals found that the Applicant did not provide sufficient documentation of the debris removal operation to validate the quantity of vegetative debris removed or the quantity of chipped debris claimed by the Contractor.  In the absence of documentation to quantify the actual amount of debris the Applicant’s Contractor removed, FEMA cannot calculate eligible costs for debris removal services nor compare the costs or quantities with other projects from surrounding jurisdictions.

Conclusion

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.

Sincerely,

/s/

Deborah Ingram
Assistant Administrator
Recovery Directorate

cc:   Beth Freeman
       Regional Administrator
       FEMA Region VII