Immediate Threat; Procurement & Contracting Requirements; Force Account Labor & Equipment Costs; Application Procedures

Appeal Brief

Appeal Letter

Appeal Analysis

Background

The Coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the State of Iowa on March 23, 2020, with an incident period of January 20, 2020, to May 11, 2023. As a result of COVID-19, the Iowa Commission on Volunteer Service (Applicant), an Iowa state agency, requested $60,234.26 from FEMA’s Public Assistance (PA) program. The Applicant requested reimbursement for costs related to the Feeding Iowans Task Force. The Applicant administers federally funded AmeriCorps projects in Iowa and coordinates deployments of AmeriCorps personnel for disaster response.[1] The Applicant stated that for the COVID-19 incident, it contracted with Habitat for Humanity of Iowa (Habitat) and Conservation Corps of Minnesota and Iowa (CCMI) (collectively “independent entities”) to deploy AmeriCorps personnel for COVID-19-related food distribution activities. The Applicant explained that the AmeriCorps personnel incurred expenses (e.g., meals, transportation, supplies, and lodging) during their deployment[2] in April and May 2020 and that the Applicant incurred other related contract costs.

On May 7, 2021, FEMA issued a Request for Information asking the Applicant to describe the work performed. In its response, the Applicant stated that the contracted costs were related to AmeriCorps personnel packing and distributing food at the Northeast Iowa Food Bank and the Riverbend Food Bank (food banks). The Applicant also stated that it contracted a backfill employee from April 29, 2020, to June 30, 2020, to address the duties normally performed by an employee who was reassigned to the COVID-19 incident at the State Emergency Operation Center (EOC).

FEMA issued a Determination Memorandum on March 11, 2022, denying most of the expenses (transportation, lodging, and meals) because they were incurred by independent entities sending personnel to assist at food banks and represented increased operating costs of continuing to provide services in a COVID-19 environment, rather than costs tied to the performance of eligible emergency work. FEMA also considered the backfill labor cost ineligible for PA funding because the work performed by both the backfill employee and the replaced FAL employee was not eligible emergency work. Finally, FEMA stated that the cost of requested disinfectant supplies ($30.47)  fell below the minimum project threshold, and therefore was also ineligible.

First Appeal 

In a letter dated March 11, 2022, the Applicant submitted an appeal for $52,709.26.[3] The Applicant explained that it was tasked by the State EOC and the Governor to deploy AmeriCorps personnel to the food banks to assist in food packing and distribution. The Applicant clarified that the costs requested on appeal were incurred by the independent entities and submitted to the Applicant for reimbursement, based on contractual agreements between the Applicant and the independent entities. In support, the Applicant attached a grant agreement (Agreement) between itself and CCMI.[4] The Agreement and its attachments: 1) identified the government agency, Corporation for National and Community Services (CNCS), as the source of federal grant funding;[5] 2) stated that CCMI’s AmeriCorps personnel would focus on areas of Environment Stewardship and Disaster Services;[6] and 3) provided that meals, lodging and transportation expenses incurred for deployment would be allowable under the Agreement and eligible for reimbursement.[7]  Finally, the Applicant submitted invoices, receipts, and mileage logs related to the costs incurred. 

The Iowa Department of Homeland Security and Emergency Management (Recipient) transmitted the Applicant’s appeal to FEMA, arguing that the expenses should be reimbursed because FEMA’s COVID-19 policies allow legally responsible government entities to contract with Private Nonprofits (PNPs) to perform eligible food distribution activities and then use PA funding to reimburse those PNPs for their costs. The Recipient stated that the DM failed to address whether the straight-time cost of a contracted or temporary employee who backfills a force account employee was eligible. 

The FEMA Region 7 Regional Administrator denied the appeal in a letter dated September 30, 2022. FEMA stated that the food banks where the work was performed were not legally responsible for emergency protective measures, and the record did not contain any formal agreement between the Applicant and those food banks. Also, FEMA found that the work at the food banks did not meet the requirements under FEMA’s COVID-19 Food Policy.[8] Further, FEMA stated that the documentation did not support the conclusion that the contracted backfill employee or the Applicant’s employee who was being replaced were performing eligible emergency protective measures. Finally, FEMA stated that the costs for the supplies remained below the minimum project threshold.[9]

Second Appeal

In a letter dated November 14, 2022, the Applicant submitted a second appeal requesting $52,709.26 and arguing that the work performed in the food banks is an eligible emergency protective measure.[10]In response to FEMA’s findings about the PNP food bank entities not having legal responsibility for the work through a formal agreement, the Applicant claims that the State of Iowa, acting through the Recipient, signed an agreement with the food banks (28E agreement) providing them legal responsibility for the food distribution work.[11] Regarding the backfill labor cost, the Applicant argues that the documentation provided shows that the replaced employee worked almost daily in the State EOC performing work related to the 28E agreement and other COVID-19 related operations. On January 3, 2023, the Recipient transmitted the Applicant’s second appeal to FEMA, along with its supporting letter which reiterates most of its previous arguments. Additionally, the Recipient explains that FEMA has approved other COVID-19 projects for work performed at the same PNP food banks based on the same agreement (28E agreement) that the Applicant cites for legal responsibility in this appeal.[12]

Discussion

Immediate Threat

Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, FEMA may provide assistance for emergency protective measures to save lives or to protect public health and safety.[13] To be eligible for PA, the work must be required due to an immediate threat resulting from the declared incident.[14]Under the COVID-19 declarations, FEMA may provide assistance for the purchase, packing and distribution of food in response to COVID-19.[15] To be eligible, costs must be directly tied to the performance of eligible work and be adequately documented.[16]

Here, the Applicant requested reimbursement for expenses incurred during April and May 2020 by the AmeriCorps personnel during their deployment to the food banks. On first appeal, FEMA questioned the eligibility of the food distribution work performed at the food banks. On second appeal, the Applicant submitted agreements between the Recipient and the food banks to provide services such as purchasing, packing, and delivering food, and the Recipient noted that FEMA had already found this work eligible and approved funding in other projects based on the aforementioned agreements. However, the 28E agreements were not in effect during the time the work currently on appeal was performed, and they did not go into effect until June and July 2020. Consequently, the Applicant did not tie any of its incurred expenses to the eligible work performed under those agreements, and it did not demonstrate that the independent entities performed eligible food distribution work at the food banks outside of the effective dates of those agreements. Therefore, the Applicant has not demonstrated the costs the independent entities incurred for AmeriCorps personnel are directly tied to eligible emergency protective measures. 

Procurement & Contracting Requirements

Legally responsible governments may enter into formal agreements or contracts with private organizations to purchase and distribute food when necessary as a response to COVID-19, and they may reimburse the private organizations for the cost of providing those services under the agreement or contract.[17] FEMA provides PA funding for reasonable contract costs based on the terms of the contract if the applicant meets Federal procurement and contracting standards.[18] To be eligible, costs must be directly tied to the performance of eligible work and adequately documented.[19]

Here, the Applicant claims that the costs were eligible as contract costs pursuant to its agreements with the independent entities. However, the administrative record does not contain any documentation of any such agreements. Specifically, the Applicant has not submitted any written agreement between it and Habitat, and the Agreement between the Applicant and CCMI only includes general dispositions regarding future deployments of the AmeriCorps personnel and broad categories of allowable costs eligible for reimbursement.[20] The Applicant has not cited to any specific, contractual obligations regarding the COVID-19 deployments to the food banks, and their associated costs. In sum, the Applicant has not produced any agreement or contract between the Applicant and the independent entities that bind the Applicant to reimburse the costs associated with the AmeriCorps personnel deployment at issue in this appeal. Therefore, the expenses claimed for AmeriCorps personnel while deployed are ineligible.[21]    

Force Account Labor & Equipment Costs / Application Procedures

For emergency work, when an applicant needs to temporarily replace an employee responding to the incident, the backfill employee’s overtime costs are eligible even if the backfill employee is not performing eligible work, but only if the employee replaced is performing eligible emergency work.[22] Straight-time may also be eligible if the backfill employee is a contracted or temporary employee.[23] If the Applicant does not provide sufficient documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[24]FEMA establishes a minimum project threshold for each federal fiscal year.[25] A project is not eligible if the total dollar value is less than the minimum threshold.[26] The threshold for fiscal year 2020, applicable to COVID-19 declarations, is $3,300.00.[27]

Here, the Applicant contracted a backfill employee between April to June 2020 and submitted documentation showing that the replaced employee performed a mix of potentially eligible and ineligible work for the COVID-19 incident. FEMA has determined that the documentation in the record shows 15 hours of potentially eligible work related to the distribution of food in the food banks during June 2020. However, the descriptions in the record for the remaining 64.25 hours either involve activities that are not directly related to eligible protective measures related to the COVID-19 incident or are too general to allow FEMA to determine the eligibility of the work. Therefore, applying the contracted backfill employee’s hourly rate to the maximum number of hours associated with the replaced employee’s potentially eligible work, FEMA finds that $1,125.00 is potentially eligible. However, this cost does not meet the minimum project threshold applicable to the COVID-19 declaration and therefore, all FAL costs remain ineligible.[28]

Conclusion

FEMA finds that the Applicant did not provide an agreement that shows the Applicant would reimburse the independent entities for the claimed expenses incurred. Additionally, FEMA finds that the Applicant did not demonstrate that the cost related to the deployment of the AmeriCorps personnel was incurred during the performance of eligible emergency work at the food banks. Therefore, the associated contract costs totaling $46,859.26 are ineligible for PA reimbursement. Regarding the backfill labor costs, FEMA finds that any potentially eligible costs do not meet the minimum project threshold and therefore the total project cost is denied. Therefore, this appeal is denied.