Debris Removal

January 31, 2011

David Halstead

Governor’s Authorized Representative

Division of Emergency Management

2555 Shumard Oak Boulevard

Tallahassee, Florida 32399-2100

Re:  Second Appeal–City of Pensacola, PA ID 033-55925-00, Debris Removal, FEMA-1551-DR-FL, Project Worksheet (PW) 365

Dear Mr. Halstead:

This letter is in response to the letter from your office dated March 16, 2010, which transmitted the referenced second appeal on behalf of City of Pensacola (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of debris removal costs on PW 365 in the amount of $1,012,389.

Background

As a result of Hurricane Ivan, September 16, 2004, the City of Pensacola (Applicant) incurred costs for the removal of vegetative debris from sixty-four (64) public parks.  On October 4, 2004, the Applicant entered into a non-competitively bid Time and Materials (T&M) contract with Asplundh Environmental Services, Inc. (AES) to remove debris from the parks.  The contractor completed the work November 13, 2004, and submitted invoices totaling $1,369,436 for time and materials expended on the project.  FEMA determined that the Applicant’s costs, $35.53 per cubic yard (CY) were unreasonable and calculated a unit price based on local market prices during this period.  Based on that unit price, $9.26 per CY, FEMA prepared PW 365 for debris removal from 64 public parks in the amount of $357,047.

On June 30, 2005, the Applicant submitted a first appeal requesting that FEMA reimburse the full invoice cost of $1,369,436.  The Applicant asserted that FEMA’s methodology for calculating reasonable cost was flawed as the unit price did not account for the scope of work in the PW.  The Regional Administrator denied the appeal on February 26, 2006, stating that the Applicant had not sufficiently documented an immediate threat to public safety from debris in public parks; the procurement was not competitively bid as required by 44 Code of Federal Regulations (CFR) §13.36; the Applicant’s use of a Time and Materials (T&M) contract exceeded FEMA guidance for the use of such contracts; and the Applicant could not substantiate its claim that $35.53 per CY represented a reasonable unit cost for this project.

Second Appeal

The Applicant submitted its second appeal on March 25, 2010, repeating its assertion that FEMA’s calculation of a reasonable unit price was flawed and that $35.53 per CY was a reasonable unit price based on local conditions at the time.  Further, the Applicant cites a FEMA second appeal for another applicant’s project that was approved at $72.00 per CY.  The Applicant did not submit any additional information with the appeal. 

Discussion

The Applicant acknowledges that it awarded a T&M contract for the removal of debris to the right-of-way (ROW) from 64 city parks.  FEMA policy strongly discourages the use of T&M contracts except in emergency situations immediately after a disaster when a clear scope of work cannot be developed.  T&M contracts should always include a “not to exceed” clause in terms of hours worked or dollar thresholds.  FEMA policy encourages applicants to have competitive procurements ready when these thresholds are met.  In addition, FEMA typically limits funding for T&M contracts to the first 70 hours of work, which provides applicants an opportunity to obtain competitively bid unit price contracts.

Additionally, the Applicant did not compete this contract as required by 44 CFR §13.36.  Response and Recovery Directorate Policy 9580.4, Fact Sheet: Debris Operations - Clarification: Emergency Contracting vs. Emergency Work, dated January 19, 2001, does acknowledge emergency situations in which threats to public safety may warrant the award of a non-competitively bid contract, including moving debris off of roads to permit emergency vehicle access.  The Applicant awarded a non-competitively bid contract to clear debris from public parks, which FEMA determined did not create an immediate threat to public life, health, and safety warranting non-competitive procurement.

The Applicant cited a FEMA second appeal decision for another local applicant.  However, there are significant differences in the two cases.  The other local applicant was a school district faced with an immediate requirement to clear public school grounds of disaster-related debris.  Despite the clear threat to public health and safety, this applicant conducted a competitive procurement and awarded a contract on the basis of the lowest bid.

The Applicant stated that FEMA’s calculation of a reasonable unit price was flawed and that $35.53 per CY was a reasonable unit price based on local conditions at the time.  FEMA’s calculation utilizing 2005 RS Means Heavy Construction data, included equipment rental rates, equipment operator labor rates, diesel fuel, rates for moving the debris to the ROW, and equipment mobilization cost and resulted in a cost of $5.77/ CY.  The rate used to calculate debris removal costs on PW 365 was increased to $9.26/CY to reflect contractor costs for similar work in the area at that time.

Finally, the Applicant asserts that more than 38,000 CY of debris were collected, but produced no documentation to substantiate that figure.  Typically, debris removal operations are validated through the use of load tickets and debris monitors.  In this instance, no load tickets were

produced nor did the Applicant provide evidence that the contract was monitored in any way by either its own force account labor or through contract monitors.

Conclusion

I have reviewed the information submitted with the appeal and have determined that the Regional Administrator’s decision in the first appeal is consistent with Public Assistance regulations and policy.  Accordingly, I am denying the second appeal.

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

Sincerely,

/s/

Deborah Ingram

Acting Assistant Administrator

Recovery Directorate

cc:   Major Phillip May

       Regional Administrator

       FEMA Region IV