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Force Account Labor & Equipment Costs, Project Documentation and Closeout

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster4337
ApplicantCape Coral
Appeal TypeSecond
PA ID#071-10275-00
PW ID#PW 6819
Date Signed2021-07-07T16:00:00

Summary Paragraph

From September 4 to October 18, 2017, Hurricane Irma impacted Cape Coral, Florida (Applicant).  The disaster created an immediate threat to the health and safety of the public and threatened improved property.  The Applicant declared a local state of emergency and used force account labor, equipment, materials, and contracted services to implement various emergency protective measures.  FEMA created Project Worksheet (PW) 6819 to document the associated work, and subsequently issued a determination memorandum denying some force account labor and equipment costs.  FEMA determined that the Applicant’s claims for employee hourly pay exceeded the rates allowed in its own pay policies, and found that the Applicant claimed costs for equipment that was used for work unrelated to the disaster or that was not properly documented.  The Applicant appealed, asserting that FEMA’s determinations for Police Department employees were in error and additional hourly labor costs were eligible.  It also stated that its force account equipment claim mistakenly reflected the wrong data.  The FEMA Region IV Regional Administrator denied the appeal.  FEMA determined that the Applicant had not provided information demonstrating the eligibility of the increased hourly rates for force account labor and had not provided documentation supporting the force account equipment costs it claimed.  On second appeal, the Applicant again states additional labor and equipment costs are eligible, and requests a time extension to calculate eligible force account labor costs.

Authorities and Second Appeals

  • Stafford Act § 403(a)
  • 44 C.F.R. §§ 206.225(a), 206.228(a)(2)(iii).
  • PAPPG, at 19, 23-24, 26, 28.
  • Grand Strand Water & Sewer, FEMA-4286-DR-SC, at 3.

Headnotes

  • When an applicant’s permanent employees perform Emergency Work, only overtime labor is eligible for reimbursement through the PA grant program.  FEMA generally determines the eligibility of overtime costs based on the applicant’s predisaster written labor policy.
    • The Applicant has not provided information that enables FEMA to confirm the number of overtime hours it claims, or that demonstrates the eligibility of additional hourly rates for force account labor under its predisaster pay policy.
  • FEMA is authorized to provide PA funding for the use of applicant-owned equipment (force account equipment), for eligible Emergency Work, based on hourly rates.  When an applicant leases equipment, FEMA provides PA funding based on the terms of the lease.
    • The Applicant has not provided information to substantiate eligibility of the force account equipment costs at issue.

Conclusion

The Applicant has not demonstrated its force account labor or equipment costs are eligible.  Therefore, this appeal is denied.

Appeal Letter

Kevin Guthrie

Director

Florida Division of Emergency Management

2555 Shumard Oak Blvd.

Tallahassee, Florida 32399-2100

 

Re:  Second Appeal – Cape Coral, PA ID: 071-10275-00, FEMA-4337-DR-FL, Project Worksheet (PW) 6819 – Force Account Labor & Equipment Costs, Project Documentation and Closeout

 

Dear Mr. Guthrie:

This is in response to a letter from your office dated April 7, 2021, which transmitted the referenced second appeal on behalf of Cape Coral (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s denial of funding for force account labor and equipment costs.  

As explained in the enclosed analysis, I have determined that the Applicant has not demonstrated its force account labor or equipment costs are eligible.  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/

                                                                     Ana Montero

                                                                     Division Director

                                                                     Public Assistance Division

 

Enclosure

cc:  Gracia Szczech  

Regional Administrator

FEMA Region IV

Appeal Analysis

Background

From September 4 to October 18, 2017, strong winds, heavy rainfall, and flooding from Hurricane Irma impacted Cape Coral, Florida (Applicant).[1]  The disaster created an immediate threat to the health and safety of the public and threatened improved property.  The Applicant declared a local state of emergency from September 5-12, 2017, and used force account labor, equipment, materials, and contracted services to implement various emergency protective measures in response to the disaster.

FEMA created Project Worksheet (PW) 6819 to document work and costs for the Applicant’s emergency protective measures.  FEMA recorded the Applicant’s claims for reimbursement of: (1) force account labor costs, for several city departments or agencies, totaling $3,247,883.00; (2) force account equipment costs totaling $109,795.72; (3) materials costs totaling $68,344.53; and (4) contract costs totaling $54,859.99.

FEMA subsequently issued a Determination Memorandum disallowing $1,200,721.59 in claimed costs for force account labor and equipment.  FEMA determined that the Applicant submitted claims for hourly pay that exceeded the rates allowed in its own published pay policies.  Additionally, FEMA found that the Applicant claimed hours for equipment that was used for work unrelated to the disaster, or which was not properly documented.  FEMA disallowed associated costs totaling $1,188,799.38 for force account labor and $11,922.21 for force account equipment.  The Applicant received notice of FEMA’s determination on September 23, 2019.

 

First Appeal

The Applicant submitted a first appeal dated November 20, 2019.  The Applicant acknowledged FEMA’s determinations pertaining to “multiple city departments,” and agreed the associated force account labor costs were ineligible.  However, it disputed FEMA’s determinations for force account labor costs associated with employees working in the Emergency Operations Center and in the Police Department during the local emergency declaration.  The Applicant stated these employees were unable to leave their place of work during the emergency and were in “standby” or “rest” status when not on duty.  Further, it asserted that “all hours [were] compensable during the emergency declaration,” and that it “maintain[ed] its position that all hours claimed [were] reimbursable by FEMA.”[2]  Regarding force account equipment costs, the Applicant stated that Police Department personnel used mileage data instead of hours when submitting the claim.  It attached a corrected Force Account Equipment Record (FAE Record) to the appeal.  In a transmittal letter dated January 17, 2019, the Florida Division of Emergency Management (Grantee) expressed support for the appeal.

On June 12, 2020, FEMA issued a Request for Information (RFI) to the Applicant.  Among other items, FEMA requested clarification of the labor hours and hourly rates allowed in the Applicant’s pay policy as compared to those hours and rates claimed on appeal, the dollar amount requested for the Police Department, and confirmation of the force account equipment costs being claimed.  The Applicant did not respond to the RFI.[3] 

On December 17, 2020, the FEMA Region IV Regional Administrator denied the appeal.[4]  FEMA determined that the Applicant had not provided information demonstrating that pay for its employees was eligible at the increased hourly rates it claimed.  Similarly, FEMA found that the Applicant had not provided documentation supporting the costs it claimed in the FAE Record.

 

Second Appeal

The Applicant submitted a second appeal dated February 19, 2021, requesting FEMA approve Public Assistance (PA) funding for the force account labor and equipment costs requested on first appeal.  Regarding its force account labor claim, the Applicant asserts that FEMA denied funding for Police Department employees’ unscheduled hours at twice the regular hourly pay rate, as well as overtime hours at a half-time pay rate.  In comparison, it states that FEMA approved funding for Fire Department employees’ unscheduled hours at twice the regular hourly rate.  The Applicant states that it discovered a discrepancy totaling more than $883,000.00 in FEMA’s force account labor calculations for the Police and Fire Departments, and requests a time extension to prepare a new calculation of eligible labor costs for Police Department employees.  Finally, regarding its force account equipment claim, the Applicant reiterates its first appeal arguments and submits the updated record it provided previously with the first appeal.  In a transmittal letter dated April 7, 2021, the Grantee expresses support for the appeal.

 

Discussion

Force Account Labor Costs

FEMA is authorized to provide PA funding for emergency protective measures necessary to save lives, to protect public health and safety, and to protect improved property.[5]  FEMA categorizes emergency protective measures as Emergency Work.[6]  When an applicant’s permanent employees perform Emergency Work, only overtime labor is eligible for reimbursement through the PA grant program.[7]  FEMA generally determines the eligibility of overtime, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy.[8]

On second appeal, the Applicant asserts that FEMA denied eligible force account labor costs for Police Department employees’ unscheduled hours, at double-time and overtime (half-time) rates.  In support, it provides an emergency pay policy, as well as work logs and shift schedules for its Police Department employees.  Documentation transmitted with the second appeal also includes a spreadsheet and a Force Account Labor Record (FAL Record) reflecting the Applicant’s claim.

Neither the Applicant’s statements in its appeal letter nor the supporting information it provides demonstrate the eligibility of these force account labor costs.  In its second appeal, the Applicant appears to consider both straight-time and overtime hours as “unscheduled” time under certain circumstances.[9]  However, it does not specify how its own pay policy distinguishes straight-time from overtime hours, whether scheduled or not, during an emergency.[10]  As stated above, FEMA is only authorized to provide PA funding for overtime hours for the work at issue.  Thus, the discussion of “unscheduled” time in the second appeal is immaterial.  In order to determine eligibility – irrespective of the hourly pay rate applied – the Applicant must first provide FEMA with the number of overtime hours it is claiming.

To that end, a spreadsheet submitted with the appeal reflects a total of 37,388.59 hours of claimed overtime for Police Department employees, of which 22,408.84 hours were “validated by FEMA.”[11]  However, the Force Account Labor Record (FAL Record) submitted with the second appeal does not comport with either figure, recording 37,549.76 labor hours total, of which just 12,573.75 hours were overtime.  Supporting documentation provided with the appeal, such as Police Department work logs and shift schedules are not collated or summarized in a manner that might explain the Applicant’s justifications or otherwise enable FEMA to determine eligibility by comparing aggregate data with what is found in the FAL Record.[12] 

The Applicant’s general statements on the eligibility of its claim provide no specific clarification or explanation of the discrepancy.  FEMA is unable to confirm the amount of the claimed overtime, nor apply an hourly pay rate to it.  Regarding hourly pay rates, here FEMA notes that the FAL Record reflects the Applicant’s itemization of the hours each employee worked, by pay rate, and in some cases reflects a claim for double-time, half-time, and matching payments for the same hours.[13]  The emergency pay policy provided with the appeal appears to require all hours worked during a local emergency declaration be paid at the same double-time rate.[14]  Nothing in the policy, however, provides for the application of any additional rate or combination of rates, and the Applicant has not explained its justification for the additional pay rates reflected in the FAL Record with any reference to its predisaster pay policies.

Therefore, FEMA finds that the Applicant has not provided necessary information to explain its claim for force account labor.  Consequently, FEMA is unable to verify the overtime hours the Applicant asserts are eligible, and cannot substantiate the claimed hourly rates in the FAL Record.[15]

 

Force Account Equipment Costs

FEMA is authorized to provide PA funding for the use of applicant-owned equipment (force account equipment) based on hourly rates.[16]  When an applicant leases equipment, FEMA provides PA funding based on the terms of the lease.[17]

Regarding the equipment claim, FEMA denied the costs at issue in the initial eligibility determination because the Applicant either: (1) claimed expenses for work unrelated to the disaster, or (2) did not provide documentation for rental vehicles establishing the terms of the rental contract or costs.  On first appeal, the RA made a similar determination.

On second appeal, the Applicant states only that its employees entered mileage data instead of hours into the FAE Record.  It again submits a revised FAE Record, which it claims reflects corrected data.  However, the Applicant has not provided additional or clarifying information in response to either of the determinations at issue or the RFI issued on first appeal, i.e., information that: (1) demonstrates the work at issue was related to the disaster, or (2) details the terms of the rental contract or costs for the vehicles in question.  Therefore, FEMA is unable to substantiate the Applicant’s eligibility claim.

 

Conclusion

The Applicant has not demonstrated its force account labor or equipment costs are eligible.  Therefore, this appeal is denied.

 

[1] The President issued a major disaster declaration on September 10, 2017.

[2] Letter from Dir. of Fin. Servs., City of Cape Coral, to Dir. Fla. Div. of Emergency Mgmt. (FDEM), at 2 (Nov. 20, 2019).

[3] The Applicant confirmed receipt of the RFI with FEMA Region IV via email on June 25, 2020, shortly after the RFI was issued; Email from Fin. Projects Mgr., City of Cape Coral, to Pub. Assistance Appeals, FEMA Region IV, at 1 (June 25, 2020, 1303 EDT).  On second appeal, the Applicant states that the individual responding to FEMA’s RFIs was no longer employed by the City of Cape Coral, and it was unable to locate the RFI.

[4] The Applicant received FEMA’s first appeal determination on December 29, 2020.

[5] See Robert T. Stafford Disaster Relief and Emergency Assistance Act § 403(a), Title 42 United States Code  § 5170b(a) (2012); Title 44 Code of Federal Regulations (44 C.F.R.) § 206.225(a) (2016).

[6] Public Assistance Program and Policy Guide, FP 104-009-2, at 19 (Apr. 2018) [hereinafter PAPPG]

[7] 44 C.F.R. § 206.228(a)(2)(iii) (stating the straight- or regular-time salaries and benefits of a grantee's or applicant's permanently employed personnel are not eligible in calculating the cost of eligible emergency protective measures, except for those costs associated with host state evacuation and sheltering); PAPPG, at 24.

[8] PAPPG, at 23.  The policy cannot include a contingency clause that payment is subject to Federal funding; be applied uniformly regardless of a Presidential declaration; and include non-discretionary criteria for when the applicant activates various pay types.

[9] E.g., Letter from Dep. Dir. of Fin. Servs., City of Cape Coral, to Bureau of Recovery, FDEM, at 2 (Feb. 19, 2021) (asserting that “FEMA only considered the matching pay and removed the two times rate and half-time overtime rate for staff that was onsite during the storm that was not scheduled [sic]”).

[10] The pay policy provided with the appeal states only that non-exempt employees “will be compensated … at two times their normal rate of pay” for all hours worked during an emergency; City of Cape Coral, Section 4 – Emergency Pay (Extract), at 1 (Undated).

[11] City of Cape Coral, Project #4606, Emergency Protective Measures (Apr. 2019).  The spreadsheet reflects the Applicant’s “Revised Submission” as of April 2019.

[12] See generally, FEMA Second Appeal Analysis, Grand Strand Water & Sewer, FEMA-4286-DR-SC, at 3 (Oct. 19, 2020) (“The burden to substantiate appeals with documented justification falls exclusively to the applicant and hinges upon the applicant's ability to produce not only its own records, but to clearly explain how those records support the appeal.”).

[13] See, e.g., City of Cape Coral, Force Account Labor Record, FEMA-4337-DR-FL, at 1 (Undated) (documenting several examples wherein the Applicant claims hourly labor costs at the “OT1” (double-time), “OT2” (half-time), and “OT3” (matching) hourly rates for a given employee, for the entire 24-hour period of September 11, 2017).

[14] Supra note 10.

[15] Pursuant to 44 C.F.R. § 206.206, the Applicant was provided the opportunity to submit documentation with its first and second appeals, further substantiating its claim.  Additionally, in the RFI, FEMA specifically requested information clarifying the hours, hourly rates, and the amount requested for Police Department labor costs.  The Applicant did not respond to the RFI.  Thus, FEMA does not approve the Applicant’s second appeal request for additional time to calculate the amount of its claim.

[16] PAPPG, at 26.

[17] Id. at 28.

Last updated July 8, 2021