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Second Appeal Summary
PA ID# 000-92003; North Carolina Department of Transportation
DSR ID# 31569,36858; Contractor overtime labor and travel expenses
Citation: FEMA-1134-DR-NC, North Carolina Department of Transportation, DSRs 31569 and 36858
Cross Reference: Statutory Administrative Costs
Summary: In response to Hurricane Fran, the North Carolina Department of Transportation (NCDOT) aided the North Carolina Division of Emergency Management (NCDEM, State) in administering the FEMA Public Assistance Program. However, due to its inability to provide a sufficient number of engineers, the NCDOT contracted with the engineering firm of Post, Buckley, Schuh and Jernigan, Inc. (PBS&J) to prepare damage survey reports, final inspection reports, project applications, final audits, and related field inspections. FEMA prepared two DSRs (DSR 31569 and 36858) to fund only straight time labor of PBS&J (total eligible funding $1,059,195), omitting overtime labor and travel expenses ($810,712). The determination was based on the premise that PBS&J was acting on behalf of the Grantee, such that overtime labor and expenses would be covered under the State's administrative allowance. The State submitted a first appeal of FEMA's denial of funding for overtime and travel expenses in a letter dated February 6, 1998, asserting that the administrative allowance provides only for services performed by State employees, and not independent contractors. The Regional Director denied the first appeal. The first appeal response concluded that the overtime and travel costs of services performed by PBS&J are covered in the statutory administrative costs. The State's second appeal responded to comments made by the Regional Director in the first appeal response, but did not provide any new information. As in the first appeal, the primary argument raised by the State is that the personnel hired through PBS&J are not State employees within the meaning of the Stafford Act and the applicable regulations, and therefore, all costs by PBS&J are reasonable, allowable costs.
Issues: 1) Are the contractor costs for overtime and expenses, incurred while performing duties of the State, eligible for funding?
Findings: 1) No. The contractor was performing the duties of the State, and overtime and travel should be paid from the statutory administrative allowance received by the State.
Rationale: 44 CFR 206.228(a)(2)(i)