Conclusion: Joplin Schools (Applicant) failed to seek funding for additional damage in a timely manner, and failed to justify its request for adjustments to the Cost Estimating Format (CEF). The Applicant did not properly procure its administrative services contracts, and the Acting Regional Administrator exercised appropriate discretion in awarding Direct Administrative Costs (DAC) capped at $155 per hour, and denying travel costs or costs incurred when no contract was in place.
On May 22, 2011, a tornado damaged two of the Applicant’s schools. FEMA prepared PWs 575 and 449 to address damage to the exterior grounds. In 2012, FEMA approved an improved project to combine two schools, included PW 449 into PW 575, capped the project at estimated costs, and obligated funding. In 2014, the Applicant requested a change in the scope of work (SOW) to increase the improved project funding cap by $1,652,033.28, claiming additional damage and seeking a revision to the CEF. FEMA denied the SOW change request as untimely. The Applicant renewed its request at project closeout in 2016, also seeking DAC. FEMA again denied the SOW change request as untimely. FEMA found that the Applicant’s DAC contracts were not properly procured, but awarded costs capped at a maximum rate of $155 per hour, while denying travel costs and costs incurred when there was no contract in place. The Applicant appealed, reiterating its prior arguments. The Acting Regional Administrator denied the appeal, finding that the Applicant’s SOW change request was untimely and the requested CEF changes were unsupported. Regarding DAC, it determined that the $155 hourly cap was reasonable absent justification warranting a higher rate, so additional DAC funding was ineligible. The Applicant submitted a second appeal arguing that it could seek a revision in the SOW at any point before closeout. With respect to DAC, the Applicant argues its contracts were properly procured, its actual costs were reasonable, and the travel costs were reasonably apportioned.
Authorities and Second Appeals
- Stafford Act § 324.
- 2 C.F.R. pt. 225, app. A § (C)(2).
- 44 C.F.R. §§ 13.30, 13.36, 13.43, 206.201-202.203, 206.206.
- DAP 9529.9, at 2-5.
- PA Guide, at 51-52, 79, 96, 110-111, 139-140.
- PA Policy Digest, at 71.
- Los Angeles Dep’t of Water and Power, FEMA-1577-DR-CA, at 2.
- City of Cedar Rapids, FEMA-1763-DR-IA, at 7, 11.
- Columbus Reg’l Hosp., FEMA-1766-DR-IN, at 7-8.
- City of Nome, FEMA-4050-DR-AK, at 5-6.
- Vill. of Waterford, FEMA-4020-DR-NY, at 4.
- The PA Guide requires applicants to submit damage within 60 days of the kickoff meeting, submit new damage as soon as possible, and obtain approval when the need for additional funding or a revision in scope is anticipated.
- The Applicant did not identify the damage until more than a year after the PW was obligated, and did not obtain approval when it anticipated the need for additional funds.
- Under 44 C.F.R. § 206.206, the burden is on the Applicant to substantiate its appeal with documented justification.
- The Applicant failed to justify its request for adjustments to the CEF factors.
- 44 C.F.R. § 13.36 requires full and open competition unless public exigency or emergency makes competition infeasible.
- The Applicant did not demonstrate that any public exigency or emergency made noncompetitive procurement necessary.
- Following a procurement noncompliance, 44 C.F.R. § 13.43 authorizes FEMA to award reasonable costs as an enforcement action.
- Awarding hourly costs capped at $155 per hour, but disallowing, travel costs and costs incurred when no contract was in place, was an appropriate exercise of discretion.