Severe storms and tornados on June 1, 2011 damaged the Applicant’s Cathedral High School/St. Michael’s Academy Middle School (Facility). The Applicant contracted a security provider to monitor and patrol the Facility following the disaster. Initially, the Applicant contracted several guards per shift. Following the construction of a chain link fence to surround the Facility, security was reduced to three guards per shift. FEMA subsequently determined that only one guard per shift was necessary following construction of the fence, and also found that the Applicant failed to properly procure the security services, reducing funding accordingly. The Applicant appealed and argued the amount of security it procured was proper, both during the time FEMA found eligible and later when FEMA disallowed security costs, and claimed the rates charged were reasonable. The Applicant also contended its project management company’s (Witt) DAC travel expenses were eligible, and FEMA’s reduction of Witt’s fees procured under HGAC-Buy procurement was improper. The FEMA Region I Regional Administrator (RA) denied the appeal, determining that while the Applicant’s costs for security at the Facility were eligible prior to construction of the chain link fence, only three security guards during that time were eligible. Furthermore, the RA found all security costs after the construction of the fence were ineligible. In addition, the RA reduced DAC provided by Witt due to noncompliance with federal procurement regulations when procuring the services, as well as denying travel expenses claimed as DAC, but found not to be directly associated with this specific project. On second appeal, the Applicant reiterates its prior arguments, and claims the RA made a new determination in violation of FEMA policy regarding his finding pertaining to the amount of security he found eligible on first appeal.
Authorities and Second Appeals
- Stafford Act §§ 324(a), 403.
- 44 C.F.R. §§ 206.32, 206.201(b), 206.223; 2 C.F.R. §§ 215.43-46, 215.61-62, Pt. 230, App. A.
- PA Guide, at 40-41, 51-52; PA Policy Digest, at 99.
- DAP 9525.9, at 2-5; DAP 9525.9 Guidance Memo, at 2-3.
- Appeals Manual, Version 4, at 13-15.
- FEMA Second Appeal Analyses: Miami-Dade County, FEMA-1345-DR-FL, at 2; Town of Bennington, FEMA-4022-DR-VT, at 8; Louisiana State University Health Care Services Division Medical Center of Louisiana at New Orleans, FEMA-1603-DR-LA, at 3-4; City of Nome, FEMA-4050-DR-AK, at 5.
- The Appeals Manual states that on first appeal, if FEMA identifies a new eligibility issue, it must issue a Request for Information (RFI) and in it, must inform the applicant that a new eligibility issue was identified, frame the new issue and inform the applicant that it has 60 days from receipt to respond.
- FEMA issued an RFI, informed the Applicant that new eligibility issues were identified, framed the new issues and provided the Applicant time to respond. It was a harmless error that the RFI only provided the Applicant with 30 days to respond, as the Applicant filed its response within that timeframe, stating it believed the administrative record was complete and had nothing further to add.
- The Stafford Act and 44 C.F.R. authorize FEMA to provide funding for emergency work to meet immediate threats, but only for the minimal level of effort necessary to address the threat, and for a PNP only to protect its facility and contents.
- The constructed fence provided security to the Facility and therefore additional security was not required.
- Per 2 C.F.R. § 215.43, a PNP must conduct procurement in a manner that allows for full and open competition. If an applicant does not comply with those requirements, FEMA may award reasonable costs.
- The Applicant’s procurement of Witt did not comply with 2 C.F.R. pt. 215 and FEMA properly awarded reasonable costs as an enforcement remedy.
- FEMA policy allows for DAC that can be tracked, charged, and accounted for directly to a specific project.
- Witt’s travel expenses were not directly tied to this project and therefore are not eligible DAC.
The RA’s finding that the Applicant’s costs for security after construction of the fence are ineligible, and only three guards were necessary prior to construction was appropriate. In addition, the Applicant did not properly procure Witt’s services and FEMA correctly took an enforcement action and determined reasonable costs. Last, the travel expenses claimed by Witt are not eligible DAC.