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Second Appeal Brief
PA ID# 000-UJ7K3-00; Bluebonnet Electric Cooperative
PW ID# 500, 602, 603, 748, and 789; Restoration of Power
Conclusion: The Applicant violated federal procurement regulations by using its existing time and equipment contracts that contained no cost ceilings or not-to-exceed clauses for the restoration work. Reflective of such, FEMA’s approach of reducing the eligible funding based on the average cost-per-pole calculation computed from eight other electrical cooperatives that performed work during DR-4029-TX was appropriate.
During the August 30, 2011 to December 31, 2011 incident period, wildfires burned, damaged, or destroyed significant portions of the Applicant’s electrical distribution system. The Applicant used force account and contract labor to replace poles, transformers, meters, and electrical wire. Contrary to procurement requirements, the Applicant utilized an existing time and equipment contract without cost ceilings. Exercising its discretion to develop remedies for the Applicant’s non-compliance with procurement requirements, rather than deobligating all of the projects, FEMA determined reasonable costs by using an average cost for similar work conducted by eight other electrical cooperatives during the same wildfire. FEMA then deobligated funding from each of the five PWs that are the subject of this appeal, totaling $612,462.93. In its first appeal, the Applicant requested FEMA fund repairs based on actual, incurred costs and maintained that the higher rate of reimbursement was justified by the emergency nature of the work, hazardous work conditions, and its commitment to the community. The Regional Administrator (RA) reviewed FEMA’s cost analysis and the analysis provided by the Applicant. The RA concluded that the Applicant did not follow proper procurement procedures, specifically in regards to the time and equipment contracts, and denied the first appeal. In the Applicant’s second appeal, the Applicant reiterates its first appeal arguments and did not submit any new documentation.
- 44 C.F.R. §13.36
- 44 C.F.R. §13.43
- PA Guide, at 40-42, 51-53, 104
- 44 C.F.R. §13.36(b)(1) provides that contracts and procurements must comply with federal, state, and local procurement standards. Section 13.36(b)(10) provides that time and material type contracts may be used only after a determination that no other contract is suitable and the contract includes a ceiling price that the contractor exceeds at its own risk. Finally, §13.36(c) and §13.36(d) provide that a contract should be competitively bid.
- 44 C.F.R. §13.43 provides remedies for noncompliance, including withholding of cash payments, disallowing or denying all or part of the activity, suspending or partially suspending or terminating the award, withholding of future awards, or other legal remedies.
- PA Guide, at 51-53, reiterates that “Contracts must be of reasonable cost, generally must be competitively bid, and must comply with Federal, State, and local procurement standards.” It also states that FEMA may separately evaluate and reimburse costs it finds fair and reasonable.