Citation:         FEMA-1822-DR-MO, Kennett Board of Public Works, Reconductoring Design Services, Project Worksheet (PW) 622

Cross-

Reference:     Reasonable Cost

Summary:       In January 2009, severe winter storms in the State of Missouri caused ice encumbered limbs and trees to damage sections of the Applicant’s electrical distribution system.  Based on the recommendation of one of the 23 mutual aid cities that assisted the Applicant in the aftermath of the disaster, the Applicant entered in to a time and material contract on March 2, 2009, with Olsson Associates (Contractor) to assess and document the damage within the system’s 100 miles of transmission lines.  FEMA prepared PW 622 on July 1, 2009, for the permanent repair of nearly 56 miles of the damaged electrical distribution system.  FEMA informed the Applicant that the requested Contractor’s invoiced costs of $77,659.51, which included travel costs, were not reasonable and obligated the PW for $5,468,664 on October 19, 2009.  The Applicant submitted the first appeal with additional information regarding the services provided by the Contractor, and maintained that services provided included establishing a scope of work and work plan for repairs to the electrical distribution system.  The Regional Administrator denied the appeal, stating that due to the lack of documentation FEMA could not make a determination whether the work completed by the Contractor was eligible.  In the second appeal, the Applicant asserted that the Contractor was not only assessing and documenting damage but developing a work plan for restoration of the system.  The Applicant also submitted a cost analysis showing the cost benefits of the Contractor’s travel expenses.

Issues:            1. Are engineering costs incurred for assessment and repair design of the Applicant’s facility an eligible cost under the Public Assistance program?

                        2. Are the invoiced costs reasonable relative to the work completed?

Findings:         1. Yes.

2. Yes.

Rationale:       Office of Management and Budget Circulars A-21, A-87, Attachment A.C.2 and A-122; FEMA 322, Public Assistance Guide, 2007