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Second Appeal Summary
PA ID# 037-91032-00; Los Angeles County Courts
DSR ID# DSR 60596; Van Nuys Superior Court Building
FEMA-1008-DR-CA, Los Angeles County Courts, Van Nuys Superior Court Building, Damage Survey Report (DSR) 60596
Project Management Costs
Following the Northridge earthquake on January 17, 1994, Los Angeles County Courts (Applicant) accepted a Public Assistance Grant Acceleration Program (GAP) offer for $7,170,394 to repair its courthouse. Final eligible costs were funded on Large Project Closeout DSR 60596 for $9,204,245. On June 29, 2007, the Applicant appealed FEMAs closeout decision to treat $197,108 in costs for Architecture and Engineering (A&E) construction administration services as project management costs. The Applicant argued that FEMA mischaracterized the expenses as project management soft costs when instead the costs were directly related to construction design and engineering services (hard costs). Re-characterization of the costs would result in a $228,645 GAP cost overrun ($197,108 in hard costs plus $31,537, the 16 percent allowance for project management soft costs) that could be offset by underruns from another GAP project. To support its appeal, the Applicant submitted excerpts from the Instructional Guide for Cost Estimating Format (CEF),
excerpts from the A&E Services Agreement, a bid advertisement invoice, a copy of the Project Completion and Certification Report, and copies of the Project Closeout Reports. FEMA denied the first appeal on January 29, 2008, because, consistent with the GAP guidelines and the documentation submitted, the costs associated with construction administration services is a project management (soft) cost and not a hard cost. On March 27, 2008, the Applicant filed its second appeal. The Applicant maintained that the $197,108 in costs should not be categorized as project management soft costs, but treated as hard costs associated with the actual design and engineering of the project. Support documents included a breakdown of A&E service fees and excerpts from the A&E Services Agreement with the Applicant.
Is the $197,108 in construction administration services a hard cost and, therefore the $228,645 is eligible for offset with GAP underrun funds?
44 Code of Federal Regulations §206.206 (a); Instructional Guide for Cost Estimating Format (CEF)