Immediate Threat, Force Account Labor and Equipment

Appeal Brief

Summary Paragraph

In response to the coronavirus (COVID-19) pandemic, the New Mexico Department of Homeland Security and Emergency Management (Recipient) sought Public Assistance for force account labor costs incurred while operating its Emergency Operation Center (EOC). FEMA asked the Recipient to describe the emergency protective activities conducted by its employees. The Recipient replied by uploading a timesheet describing the duties. FEMA issued a Determination Memorandum denying force account labor costs because of discrepancies in the summary timesheets and pay stubs. The Recipient appealed, revising its total project amount upwards to $372,085.90. FEMA requested the Recipient describe the specific task performed by the employees. The Recipient replied by submitting an updated spreadsheet which includes the same description of duties for all its employees. FEMA’s Region 6 Regional Administrator denied the appeal stating that the Recipient did not demonstrate the work performed was an eligible emergency protective measure due to an immediate threat. The Recipient submitted a second appeal, asserting that FEMA approved material, contract, and rental costs under this project, and its employees coordinated, purchased, delivered, operated, and monitored those goods and services. 

Authorities

• Stafford Act §§ 403, 502.
• 44 C.F.R. §§ 206.206, 206.223(a), 206.225(a).
• PAPPG, 19, 21, 24, 57-58, 62-63, 133.
• City of Long Beach, FEMA-4482-DR-CA, at 3.

Headnotes

• In response to COVID-19, eligible emergency protective measures may include the operation of Emergency Operations Centers to manage, control, and reduce immediate threats to public health and safety. For budgeted employees performing emergency work, only overtime labor is eligible.
  • The Recipient provided documentation establishing that force account labor overtime costs for its employees working at the EOC are associated with eligible measures in response to COVID-19, such as purchasing and distributing medical PPE and recruiting and assigning employees to work at the EOC. However, the Applicant has not demonstrated that any of its employees are unbudgeted or that the claimed straight-time costs are eligible.

Conclusion

FEMA finds that $218,241.27 in force account labor overtime costs is eligible for reimbursement under Public Assistance. However, the documentation submitted does not support the Recipient’s claim for straight time costs. Therefore, this appeal is partially granted. 

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of New Mexico on April 5, 2020, with an incident period beginning January 20, 2020, through May 11, 2023. The New Mexico Department of Homeland Security and Emergency Management (Recipient) sought Public Assistance (PA) reimbursement for costs incurred operating its Emergency Operations Center (EOC) to respond to COVID-19 from March 9, 2020, to June 26, 2020. FEMA prepared Grants Manager Project 138043 to document the Recipient’s claim, including for force account labor costs.[1]

To support the force account labor costs, the Recipient provided a timesheet including the hours worked by each employee and the total amount paid.[2] FEMA issued multiple requests for information (RFIs), asking the Recipient to describe the emergency protective activities conducted by its employees. FEMA compared the Recipient’s force account labor summary and its timesheets and stated that it found discrepancies in the labor hours worked, and as a result it could not validate the costs. The Recipient responded on March 24, 2022, by uploading an updated force account labor summary spreadsheet showing the hours worked, explaining the duties of employees, and describing the work performed.[3]

FEMA issued a Determination Memorandum (DM) on February 29, 2024, denying $361,120.23 in force account labor costs based on a lack of documentation. FEMA stated that it was unable to validate the costs because of the discrepancies in the hours and days worked, as reflected in the timesheets and pay stubs.[4]

First Appeal

In a letter dated April 27, 2024, the Recipient submitted its first appeal, revising the amount in dispute upwards to $372,085.90 and submitting an updated force account labor spreadsheet describing the revised cost. The spreadsheet includes each employee’s name, budgeted or unbudgeted status, job title, pay type (e.g., overtime or straight time), hours worked each day and in total, and total amount paid. The Recipient also submitted time sheets, paystubs, and a payroll policy. 

On June 5, 2024, FEMA requested additional information, including the specific tasks of the employees working at the EOC, pay code clarifications, classification of employees between exempt and non-exempt, overtime policy for exempt employees, and grant-funded employees. The Recipient replied by submitting an updated spreadsheet including a description of the duties performed by its employees (e.g., providing a non-emergency COVID-19 hotline, purchasing and distributing medical personal protective equipment, and recruiting and assigning employees to work at the EOC), and identifying if the employees were funded by a grant and the name of the grant.[5]

In a letter dated January 2, 2025, FEMA’s Region 6 Regional Administrator denied the appeal.[6] FEMA found that the Recipient did not demonstrate the work performed is an emergency protective measure due to an immediate threat resulting from the declared incident, and therefore, the requested costs were not eligible for PA reimbursement. FEMA stated that the Recipient did not specify each employee’s tasks, and that the generic description provided for each employee did not allow FEMA to determine whether the requested cost was for routine work or eligible emergency work. Additionally, FEMA found that the Recipient did not reconcile the submitted timesheets and paystubs.

Second Appeal

In a letter dated February 28, 2025, the Recipient submitted a second appeal requesting $372,085.90 and asserted that because FEMA approved material, contract and rental costs under GMP 138043, and its employees coordinated, purchased, delivered, operated and monitored those goods and services, the force account labor costs at issue are eligible. Also, the Recipient explained that the tasks were not routine because they were not part of its employee’s normal job description or responsibilities. Moreover, the Recipient explained its request includes straight time and overtime for the unbudgeted employees and overtime for the budgeted employees. The Recipient resubmitted the force account labor spreadsheet, adding statistics dividing the requested cost into percentages of total straight time and overtime for each employee type.[7]

Discussion

FEMA is authorized to provide assistance for emergency protective measures to save lives or to protect public health and safety.[8] For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[9] In response to COVID-19, eligible emergency protective measures include using EOCs to direct and coordinate resources and response activities and the purchase and distribution of personal protective equipment (PPE).[10] 

FEMA may provide assistance for force account labor costs that are directly tied to the performance of eligible emergency work and adequately documented.[11] For budgeted employees performing emergency work, only overtime labor is eligible.[12] For unbudgeted employees performing emergency work, both straight-time and overtime labor costs are eligible.[13] An applicant’s permanent employees are considered to be budgeted employees, while temporary employees hired to perform eligible work are unbudgeted employees.[14] Straight-time of a permanent employee funded from an external source (such as a grant from a Federal agency or statutorily dedicated funds) is eligible if the employee is reassigned to perform eligible emergency work that the external source does not fund.[15] It is the applicant’s responsibility to provide documentation to substantiate its claim as eligible and to clearly explain how those records support the appeal.[16]

Here, the Recipient requests reimbursement for employees working at its EOC. The Recipient states that the work conducted by its employees is related to previously approved material, contract, and rental costs under this project, which supports that the EOC was operating in response to the COVID-19 event. Additionally, to support the force account labor costs, the Recipient describes the activities performed by its employees in the EOC from March 2020 through June 2020 as follows: purchasing and distributing medical PPE; providing supplies and commodities for individuals working at the EOC; and coordinating resources and response activities, such as recruiting and assigning employees to work at the EOC. The Recipient-provided documentation demonstrates that the EOC was operating in response to the COVID-19 event, and that the requested force account labor costs were tied to EOC-related work. 

The Recipient requests $372,085.90 in force account labor for overtime and straight time and submitted information about the employees, including status (e.g., regular, sponsor term, temporary), exempt or non-exempt classification, whether they were grant-funded and the grant sources.[17] FEMA finds that the claimed overtime costs, totaling $218,241.27, are eligible for employees performing eligible EOC work. However, the Recipient has not supported its claim for straight-time costs, as it has not demonstrated that the employees for which it is claiming straight time are unbudgeted. The Recipient identifies one of these employees as temporary, but it has not shown that this was a temporary employee hired to perform eligible work. In addition, the Recipient claims several employees were funded from an external source, but it has not substantiated that their external grant does not fund the EOC work claimed. Finally, the Recipient has provided no explanation for how the remaining two employees included in its request qualify as unbudgeted. As a result, these straight-time costs are also ineligible.

Conclusion

FEMA finds that $218,241.27 in force account labor overtime costs is eligible for reimbursement under Public Assistance. However, the documentation submitted does not support the Recipient’s claim for straight time costs. Therefore, this appeal is partially granted.