PA ID# 087-99087-00; St. Bernard's Parish
PW ID# Project Worksheets 2050, 3078, 3113, and 3657; Debris Removal-Reasonable Costs
FEMA-1603-DR-LA, St. Bernard Parish, Debris Removal, PWs 2050, 3078, 3112, and 3657
Following Hurricane Katrina, St. Bernard Parish (Applicant) entered into a non-competitive, sole-source debris removal contract. In late October 2005, the Applicant solicited cometitive proposals and awarded the contract to the same contractor in January 2006. FEMA prepared four PWs to fund the eligible debris removal work performed underh the two contracts. Prior to obligating the PWs, FEMa determined that some of the unit costs contained in the contracts were excessive and unreasonable. FEMA reduced the eligible costs associated with recovering Freon, managing Temporary Debris Storage and Reduction Sites, and removing white goods, hazardous limbs, and cars and boats.
In the first appeal, the Applicant asserted that it acted prudently under the circumstances prevailing at the time it procured both contracts; therefore, it complied with OMB Circular A-87 to establish reasonable costs. The Applicant contended that FEMA ignored debris removal prices in surrounding parishes, historical debris removal costs, and prices paid by the U.S. Army Corps of Engineers. The FEMA Regional Administrator's response acknowledged that the PWs did not clearly state the rationale behind the reduced costs and adjusted the reimbursement rates based on the maximum prices FEMA had obligated for eligible work in Louisiana. FEMA's first appeal determination increased the eligible unit price of white goods, Freon recovery, and TDSRS management, but decreased the eligible unit price for hazardous limbs and car and boat removal. The Appliclant's second appeal reiterates the arguments of the first appeal and provides additional documentation to support its claim that its contract costs
1. Did the Applicant act prudently when it procured both contracts?
2. Has the Applicant established that all of its costs associated with the initial sole source non-competitive contract are reasonable?
3. Has the Applicant established the competitive contract costs are reasonable?