Citation:         FEMA-1609-DR-FL; City of Boca Raton, Debris Removal City-WideProject Worksheet (PW) 870

Cross

Reference:     Debris Removal

Summary:       DHS’ Office of Inspector General’s audit determined that the Applicant modified its May 2004 contract in September 2004 and again in October 2005, following Hurricane Wilma, without conducting a cost analysis to demonstrate cost reasonableness.  The Applicant contended that it performed a cost analysis using historical debris volume data.  While the modifications to the Applicant’s contract increased the price from $12.50 per cubic yard (CY) to $28 per CY, it should be noted that the new rate reflected an expanded scope of work which included removal, transport and disposal costs, as well as hazardous stump, tree and limb removal.

The Grantee cites the City of Deerfield Beach, a neighboring jurisdiction, which it states paid a contractor $29.95 per CY to remove, transport and dispose of 378,636 CY of vegetative debris following Hurricane Wilma.  However, time and equipment (T&E) contract costs were incorrectly included in that calculation.  The actual rate paid by the City of Deerfield Beach was $15.00 per CY to pick-up and haul debris, and $7.95 per CY for disposal, resulting in a total rate of $22.95 per CY to remove and dispose of 378,636 CY of debris.  The Applicant’s original contract had a rate of $19.35 per CY to pick-up, haul, process and dispose of debris.  The Applicant’s original contract rate is similar to that of its neighboring jurisdiction for comparable work.

The Applicant has referenced the modification as a “cradle to grave” rate for debris removal.  FEMA typically refers to “cradle to grave” contracts or rates as encompassing the various steps in the debris removal process, to include pick-up, hauling, processing (reduction), and disposal of debris.  The Applicant’s contract modification also included additional work for hazardous stumps, trees and limbs in what the Applicant referred to as a “blended” rate.  Such as “blended” CY rate is problematic for several reasons.  The higher CY rate was applied to less complex and lower cost work of picking-up and hauling debris from rights of ways. Additionally, because of the “blended” rate, hazardous tree and limb work was not tracked separately and it is not possible to verify the eligibility of this work.  Based on the information provided in the second appeal, the higher rate of $28 per cubic yard under the Applicant’s modified contract is not substantiated as being reasonable. 

Issue:             Is the contract cost of $28 per CY reasonable?

Finding:          No.

Rationale:      44 CFR §13.36(f)(1), Contract cost and price.