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Second Appeal Brief
PA ID# 097-U4T46-00; Joplin Schools
PW ID# (PW) 1980 ; Improved Project – Procurement – Direct Administrative Costs – Insurance
Conclusion: The Applicant failed to seek additional funding in a timely manner, and to justify its request for increased costs. Its DAC procurement did not comply with federal standards, and the Regional Administrator exercised appropriate discretion in awarding costs capped at $155 per hour and denying travel costs and costs incurred when no contract was in place. The $1 million in insurance proceeds were properly allocated to PW 1980. There was an inadvertent mistake in PW 1980 Version 3, which caused the total insurance allocation to not match the RA’s determination.
On May 22, 2011, a tornado damaged Joplin High School and Franklin Technical Center, which qualified for replacement. In 2012, FEMA approved an improved project to build a combined school, and prepared PW 1980 to capture the improved project. In 2014, the Applicant requested an increase to the funding cap for additional work and higher costs not reflected in the Cost Estimating Format (CEF). FEMA denied the request as untimely. The Applicant renewed its request at project closeout in 2016, and FEMA again denied the request as untimely. The Applicant also sought DAC at closeout. FEMA found that the Applicant’s procurement of its DAC contracts did not meet federal standards, but awarded reasonable costs at a maximum rate of $155 per hour, while denying travel costs and costs incurred while there was no contract in place. FEMA also allocated an additional $1 million in insurance proceeds to PW 1980. The Applicant appealed, reiterating its prior arguments and adding that the insurance proceeds should have been allocated to a different PW. The Regional Administrator (RA) denied the appeal, finding the Applicant’s request was untimely and the cost increases were unsupported. The RA found the awarded DAC was reasonable absent justification warranting a higher funding. Finally, the RA found that the insurance proceeds were properly allocated to PW 1980. The first appeal decision was implemented in PW 1980 Version 3. The Applicant submitted a second appeal, additionally asserting that an error in PW 1980 Version 3 resulted in a lower obligation than the RA determined.
Authorities and Second Appeals
- Stafford Act § 312(a), 324.
- 2 C.F.R. pt. 225, app. A § (C)(2); 44 C.F.R. §§ 13.30, 13.36, 13.43, 206.201-206.203, 206.206, 206.250(c).
- DAP 9529.9, at 2-5.
- PA Guide, at 51-52, 79, 96, 110-111, 139-140.
- L.A. 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 increased costs and 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.
- 44 C.F.R. § 13.43 allows award of reasonable costs to address procurement noncompliance.
- 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
- Stafford Act § 312(a) requires an award be reduced by the amount of insurance receipts.
- The $1 million in insurance proceeds were for Law and Ordinance, and available for any project with code driven upgrades, including PW 1980.