Change in Scope of Work – Improved Project – Codes and Standards

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4241
ApplicantColumbia
Appeal TypeSecond
PA ID#079-16000-00
PW ID#PW 873
Date Signed2020-09-16T16:00:00

Summary Paragraph

Severe storms and flooding impacted the City of Columbia (Applicant), which damaged a water line feeding the Metro Wastewater Treatment Plant and created a scour hole at Metro Lane. FEMA awarded Project Worksheet (PW) 873 at an estimated $59,530.00 to replace the damaged segment of the pipe and fill the scour hole.  On March 15, 2018, the South Carolina Emergency Management Division (Grantee) forwarded a letter from the Applicant requesting a change in scope of work (SOW) for additional repairs due to newly discovered damage for a total of $382,900.00 (later amended to $161,620.00).  The Applicant also proposed relocating the water line to a safer area.  FEMA denied the Applicant’s request for a change in SOW finding that it was able to accurately assess the damage at the time of the site inspection.  The Applicant appealed FEMA’s determination and amended the cost estimate and scope included in its initial SOW change request based on a report done by its architecture and engineering firm It also argued that a local code required the installation of additional fire hydrants and valves.  FEMA denied the Applicant’s appeal finding the Applicant did not notify the Grantee or FEMA of the need for a change in SOW in a timely manner or demonstrate that the change was necessary to repair the water line back to its predisaster condition.  The Applicant also did not provide documentation to support the claimed code and standard upgrades.  The Applicant filed a second appeal with similar arguments. 

Authorities and Second Appeals

  • Stafford Act § 406(e)(l).
  • 44 C.F.R. §§ 13.30(d)(1); 206.226(d).
  • PA Guide, at 139-140.
  • DAP 9527.4, at 3.
  • Tenn. Dep’t of Fin. and Admin., FEMA-1745-DR-TN, at 7.
  • Essex Cty., FEMA-4020-DR-NY, at 5-6.

Headnotes

  • When a change in scope or a need for additional funding is discovered, the applicant should notify the grantee as soon as possible.  When an Applicant makes improvements or changes to a project’s SOW, it must obtain prior approval from FEMA before commencing work.
    • The Applicant made improvements to the Metro Lane water line by relocating the water line to a new location without seeking prior approval from FEMA.
  • Costs associated with work that changes the predisaster construction design of a facility may be eligible for PA funding if work is done to comply with codes or standards.  The code or standard must apply to the type of repair or restoration required.
    • The Applicant has not demonstrated that the installation of additional fire hydrants or valves was required by an eligible code or standard.

Conclusion

The Applicant made improvements to the Metro Lane water line by relocating the water line to a new location without prior approval from FEMA.  As a result, FEMA was not provided the opportunity to conduct required EHP reviews prior to project construction and completion.  In addition, the Applicant has not demonstrated that the installation of additional fire hydrants or valves was required by an eligible code or standard.  Accordingly, this appeal is denied.

Appeal Letter

Mr. Kim Stenson                   

Director                                                                      

South Carolina Emergency Management Division               

2779 Fish Hatchery Road                                          

West Columbia, South Carolina 29172

 

Re:       Second Appeal – Columbia, PA: ID 079-16000-00, FEMA-4241-DR-SC,

            Project Worksheet (PW) 873 – Change in Scope of Work – Improved Project –  

            Codes and Standards  

 

Dear Mr. Stenson:

This is in response to a letter from your office dated November 22, 2019, which transmitted the referenced second appeal on behalf of City of Columbia (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of funding in the amount of $161,620.00 for additional costs associated with the repair of a water line and scour hole at Metro Lane.  

As explained in the enclosed analysis, the Applicant made improvements to the Metro Lane water line by relocating the water line to a new location without prior approval from FEMA.  As a result, FEMA was not provided the opportunity to conduct required environmental and historical preservation reviews prior to project construction and completion.  In addition, the Applicant has not demonstrated that the installation of additional fire hydrants or valves was required by an eligible code or standard.  Therefore, this appeal is denied.

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

 

                                                                     Sincerely,

 

                                                                             /S/

 

                                                                     Traci L. Brasher

                                                                      Acting Director

                                                                     Public Assistance Division

 

Enclosure

cc:  Gracia Szczech

Regional Administrator

FEMA Region IV

Appeal Analysis

Background

In October 2015, severe storms and flooding impacted the City of Columbia (Applicant) in South Carolina, which damaged a water line feeding the Metro Wastewater Treatment Plant and created a scour hole.  FEMA awarded Project Worksheet (PW) 873 on July 18, 2016, in part, to replace the damaged segment of the pipe and fill the scour hole at the Metro Lane site.  FEMA estimated repairs at the Metro Lane site to be $59,530.00.  The Applicant hired an architecture and engineering (A&E) firm to assess damage, recommend repairs, and provide a cost estimate for the project.  It then used the estimates from the A&E firm’s report to support a request for a change in scope of work (SOW).

On March 15, 2018, the South Carolina Emergency Management Division (Grantee) forwarded a letter from the Applicant requesting to expand the SOW with additional repairs due to newly discovered (hidden) damages for a total cost of $382,900.00.  The Applicant asserted it discovered the additional damage during the course of completing previously approved work.  It stated it could not access the site at the time FEMA approved the original estimate because of flooding, so it had to estimate from a distance rather than a close examination to obtain accurate measurements.  The Applicant proposed revising the SOW to include costs for engineering analysis and design, special testing, construction and demolition debris removal, a temporary gravel access road, and additional materials.  The Applicant also stated that a local design standard required upgrades to install additional valves and fire hydrants.  The Applicant also proposed relocating the water line to a safer area for a total of $555,400.00.

FEMA denied the Applicant’s SOW change request, finding that it was apparent in the photographs taken during the original site inspection that the damage at the Metro Lane site was visible to obtain measurements and prepare an accurate damage description and SOW.  FEMA stated the Applicant had not provided documentation to prove otherwise.  FEMA also informed the Applicant that relocation of the water line would be considered an improved project and would require FEMA’s approval prior to commencing construction.

 

First Appeal

The Applicant appealed FEMA’s decision on June 1, 2018, requesting $161,620.00[1] in costs associated with changes to the SOW for the Metro Lane repairs.  This request included costs for A&E design and support, demolition debris removal, gravel and fill material, a new pipe, and two fire hydrants that the Applicant claimed were required by its local design standard.  The Applicant adjusted the estimate and scope included in its initial SOW change request based on a survey and report done by its A&E firm after FEMA’s denial of that request.  The Applicant explained that the A&E firm identified installation of hydrants to comply with current local codes and standards needed to repair and sanitize the pipe.  The Grantee forwarded the Applicant’s appeal on July 19, 2018.

On March 11, 2019, FEMA issued a request for information (RFI) seeking:

  • an explanation of why the Applicant delayed any additional inspections of the site until two years after the disaster;
  • the monetary figures in dispute, specifically, the engineer’s estimate, including a narrative indicating the items that differ from the approved SOW and how the item related to the declared event;
  • documentation that the additional claimed costs relate to work required to bring the site back to its predisaster condition, as well as information demonstrating the predisaster condition of the area;
  • explanation of how the items listed in the SOW change request are necessary to repair the damage;
  • documentation that the claimed codes and standards requiring the installation of the fire hydrants are eligible, specifically the publication date of the engineering regulation code document, to demonstrate that it was in effect at the time of the disaster; and
  • an explanation of the need for the additional two fire hydrants.

The Applicant’s response stated that the delay was partially due to the duration of time necessary to perform the investigation, engineering assessment and data gathering.  It further stated its interpretation of federal regulation does not preclude changes to the SOW as long as the project is in compliance and ongoing within the performance period.  The Applicant explained that the engineering data, coupled with the explanation previously provided in the SOW change request, illustrated damaged areas and the additional costs needed to return the site to its predisaster condition.  The Applicant stated that it had no additional documentation to demonstrate that the water line was working, however, its engineers stated there was no interruption prior to the disaster.

The Applicant next explained that the new information survey data collected by its A&E firm provided a much higher level of measurement accuracy and identified issues and scours caused by the flood waters.  Regarding whether the installation of valves and fire hydrants were required by codes or standards, the Applicant provided the City of Columbia Engineering Regulations Water Distribution System Design Standards, which required pressure testing and disinfecting the new water supply.  The Applicant explained hydrants are the most economical method to introduce and remove the disinfectant solution required by law for repaired or new water lines.

FEMA denied the appeal on September 19, 2019, finding the Applicant did not notify the Grantee or FEMA of the need to change the SOW in a timely manner or provide documentation demonstrating that the change in scope was necessary to repair the site back to predisaster condition.  FEMA noted the Applicant waited nearly two years after the incident to submit a request for a change in the SOW.  The Applicant claimed the site was inaccessible, but FEMA found photographs showing that close inspection of the site occurred prior to project obligation.  FEMA also determined the Applicant did not provide documentation to support the claimed code and standard upgrades.  Specifically, FEMA noted the Applicant could not explain how the local code it cited to install the fire hydrants was triggered by the work required to restore the damage caused by the disaster.

 

 

Second Appeal

The Applicant filed a second appeal via letter dated October 16, 2019 referencing its first appeal letter and attachments in support of the second appeal.  The Grantee forwarded the second appeal on November 22, 2019.

In response to the Applicant’s second appeal, FEMA issued an RFI to verifying whether the Applicant completed the work either to repair or relocate the water line.  FEMA also requested more specific details describing the plans to repair the water line, a dated copy of the document containing the design standard cited by the Applicant, an explanation of how the standard relates to the requested repairs, and confirmation of whether the Applicant would like to request an improved project.

In response, the Applicant explained that it decided to relocate the water line to the path along Metro Lane because it allowed for better accessibility, maintenance, and an easier construction route.  The Applicant explained relocation of the water line to higher elevation moved it out of the flood prone area where the scour areas were located to mitigate against future damage.  The Applicant provided detailed information supporting its decision to relocate the water line and information confirming that the work has been completed. 

 

Discussion

 

Change in Scope of Work

During the performance of work on a project, an applicant may discover hidden damage, additional work that is necessary to properly complete the project, or that certain costs are higher than those used to make the original estimate for the PW.[2]  When a change in scope or a need for additional funding is discovered, the applicant should notify the State as soon as possible.[3]  The request should contain justification for the eligibility of the additional work or costs and the timing of the request should be such that the damaged element can be inspected before it is covered up or repaired.[4]  Generally, when an Applicant makes improvements or changes a project’s SOW without obtaining prior approval or allowing FEMA the opportunity to complete required EHP reviews, those changes are ineligible for PA funding.[5] 

In support of its SOW change request, the Applicant provided reports from its A&E firm which indicated that the areas of damage were more extensive than originally estimated and required a much larger SOW to accomplish the repair.  Based on those reports, the Applicant provided a list of additional costs to bring the site back to predisaster condition.  FEMA denied the Applicant’s request for additional costs related to a change in SOW on April 6, 2018.  In that denial letter, FEMA clearly informed the Applicant that relocation of the water line would be considered an improved project and would require FEMA’s approval prior to commencing construction. Recently, the Applicant provided detailed information on second appeal supporting its decision to relocate the water line and confirmed that the work has been completed.  The Applicant did not provide any information that demonstrated FEMA approved the improved project to relocate the water line or that relocation of the waterline was within the scope of the originally approved project.  The Applicant completed work to relocate the water line before obtaining approval from FEMA; therefore, FEMA was not provided the opportunity to conduct inspections or EHP reviews.  As a result, the requested costs associated with the change in SOW are not eligible.

 

Codes and Standards

Costs associated with work that changes the predisaster construction design of a facility may be eligible for PA funding if work is done to comply with codes or standards.[6]  The code or standard must: (1) apply to the type of repair or restoration required (standards may be different

for new construction and repair work); (2) be appropriate to the predisaster use of the facility;

(3) be found reasonable, in writing, and formally adopted and implemented by the State or local

government on or before the disaster declaration date, or be a legal Federal requirement applicable to the type of restoration; (4) apply uniformly to all similar types of facilities within

the jurisdiction of the owner of the facility; and (5) for any standard in effect at the time of a disaster, it must have been enforced during the time it was in effect.[7]  All five criteria must be met in order to be eligible for PA funding.[8]

The Applicant provided the City of Columbia Engineering Regulations, Water Distribution System Design Standards that required pressure testing and disinfecting the new water supply, and therefore, according to the Applicant, required it to install two fire hydrants to aid in the testing and disinfecting.  The code language highlighted by the Applicant reads, “valve spacing shall not exceed 1,000 feet in any case,” and “fire hydrants shall be located at each intersection and hydrants shall be spaced no greater than 1,000 feet.”[9]  Under the original SOW which FEMA approved to repair a portion of the water line and fill scour holes, it is not clear the installation of new fire hydrants are required for that particular section of the water line.  In a document entitled Metro Lane Water Line Technical Memorandum provided in response to the RFI, it states,

[p]ipe repair not only includes the waterline at the washout areas, but also any other location where the waterline may have been damaged.  Without having completed the pipeline assessment, it is unclear how many joints may have failed due to the 2015 flooding. . . . Per [Applicant] codes and standards, a hydrant and associated valves must be included every 1,000 feet.[10]  

The Applicant has not demonstrated whether the portion of water line in need of repair as a result of the disaster is the portion that required the installation of additional fire hydrants or valves.  As a result, the Applicant has not demonstrated that the cited design standards apply to the type of repair or restoration required.

 

Conclusion

The Applicant made improvements to the Metro Lane water line by relocating the water line to a new location without prior approval from FEMA.  As a result, FEMA was not provided the opportunity to conduct required environmental reviews prior to project construction and completion.  In addition, the Applicant has not demonstrated that the installation of additional fire hydrants or valves was required by an eligible code or standard.  Accordingly, this appeal is denied.

[1] The Applicant amended its requested dollar amount to $161,620.00 on first appeal and rescinded its request for relocation.

[2] Public Assistance Guide, FEMA 322, at 139 (June 2007) [hereinafter PA Guide].  

[3] Id., at 140.

[4] Id.

[5] Id., at 128, 139-140; see also FEMA Second Appeal Analysis, Essex Cty., FEMA-4020-DR-NY, at 5-6 (Aug. 18, 2016) (finding that where the applicant had constructed a new bridge, in a new location, without prior approval from FEMA, and no proper environmental compliance review was done, it was appropriate to deny funding); FEMA Second Appeal Analysis, Tenn. Dep’t of Fin. & Admin., FEMA-1745-DR-TN, at 7 (May 10, 2018) (finding that where the applicant did not obtain FEMA’s prior approval and did not allow FEMA the opportunity to consult with the appropriate parties regarding EHP compliance before performing changes in the scope of work, all associated costs were ineligible). 

[6] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act, as amended, § 406(e)(1), 42 U.S.C. § 5172(e)(1) (2012); Title 44 of the Code of Federal Regulations § 206.226(d) (2015).

[7] Id.

[8] Disaster Assistance Policy (DAP) 9527.4, Construction Codes and Standards, at 3 (Feb. 5, 2008).

[9] Water Distrib. Sys. Design Standards, City of Columbia Eng’g Regulations Manual, pt. 2, para. 2.2, at 2-2 (undated).

[10] Metro Lane Water Line Technical Memorandum, Prepared for City of Columbia, Black & Veatch Corporation, at 12-13 (Jan. 30, 2018).

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