Citation:         FEMA-1822-DR-MO, City of New Madrid, Ineligible Contract - Debris Removal, Subgrant Application (PW) 440

Cross-

Reference:     Ineligible Contract; Debris Removal

Summary:       Between January 26 and January 28, 2009, a severe  winter storm deposited ice throughout the City of New Madrid (Applicant).  The weight of the ice broke trees, tree limbs, damaged transmission lines and power poles creating city-wide power outages and widespread debris.  The Applicant solicited bids by telephone from several contractors for debris removal work and awarded a unit price contract to M&M Tree Service (M&M).  Subsequently, the Applicant solicited additional bids over the telephone, awarding contracts to Scott’s Lawn Service and Turf Max Lawn Care.  FEMA prepared PW 440 for $365,517 (Scott’s Lawn Service for $99,630, Turf Max Lawn Care for $96,382, and M&M for $169,505).  FEMA notified the Applicant that M&M’s invoiced costs were not eligible as the services were billed on a time-and-materials basis rather than on a cubic yard basis as the contract specified.  FEMA requested from the Applicant documentation detailing the scope of work and quantity of debris M&M removed.  The Applicant provided a copy of its unit cost contract with M&M and an Applicant-prepared debris removal analysis that documented 20,064 cubic yards of debris removed by M&M.  Based on that data, FEMA calculated eligible M&M debris removal costs at $65,208 and obligated PW 440 for a total of $261,220 on September 1, 2009.

In a September 29, 2009, first appeal, the Applicant requested that FEMA reinstate M&M’s costs in the amount of $103,792.  The Applicant stated that the $103,792 represented services incurred for other emergency work performed by four M&M crews.  The Regional Administrator denied the first appeal stating that the Applicant did not fully comply with Federal procurement regulations at Title 44 Code of Federal Regulations (44 CFR) §13.36, Procurement, when it contracted with M&M for debris removal services.  The State forwarded the Applicant’s July 21, 2011, second appeal to FEMA on July 23, 2011.  The Applicant reiterates its position from the first appeal and requests that FEMA reinstate debris removal costs in the amount of $103,792.

 Issues:           1. Did the Applicant follow Federal procurement guidelines to ensure that contractors perform in accordance with terms of their contract?

2. Did the Applicant provide sufficient documentation to support its claim for reimbursement?

Findings:         1. No.

                        2. No.

Rationale:       CFR §13.36(b)(2) and 44 CFR §13.36(b)(9), Procurement, Procurement Standards