Security Patrol Costs

May 12, 2010

David L. Smith

Chief

Disaster Assistance and Preparedness

Illinois Emergency Management Agency

1035 Outer Park Drive, Springfield, IL 62704-4462

Re:  Second Appeal–Village of Gulfport, PA ID 071-31999-00, Security Patrol Costs,

        FEMA-1771-DR-IL, Project Worksheets (PW) 1012

Dear Mr. Smith:

This is in response to your letter dated October 1, 2009, which transmitted the referenced second appeal on behalf of the Village of Gulfport (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of additional funding for security patrol costs.

Many homes were destroyed or uninhabitable after heavy rains and flooding from June 1, 2008, through July 22, 2008, breached a levee south of the Village of Gulfport.  After evacuating the city, the Applicant entered into a non-competitively procured contract with Henry and Mamie’s Security Company (HMSC) to provide patrol service to restrict access to the area on August 25, 2008.  HMSC agreed to provide security guards at three locations for six months at $75 per hour and a patrol car at $18 per hour.  Because of concerns FEMA raised about the contract cost, the Applicant terminated HMSC’s contract October 31, 2008.  Pursuant to Title 44 Code of Federal Regulations (CFR) §13.36(f), Contract Cost and Price, FEMA conducted a price analysis because adequate price competition was lacking.  FEMA used the State of Illinois’ Department of Labor’s prevailing wage rates, RS Means Costworks and four other data points to develop a reasonable hourly rate of $23.90 per employee and a monthly rate of $1,500 for the patrol car.  Since HMSC subcontracted the work to other firms, FEMA’s estimate included overhead and profit for HMSC.  On October 9, 2008, FEMA obligated $120,749 for 4,864 employee hours and three month’s use of the patrol car.  FEMA subsequently increased the obligated amount to $173,011.

The Applicant submitted its first appeal on February 2, 2009.  The Applicant stated that it should be reimbursed between $250,000 and $398,209 for the security services that HMSC provided.  The Applicant claimed that it solicited bids from two to four companies that chose not to bid.  The Applicant did not provide documentation to support its claim.  On May 28, 2009, the Acting Regional Administrator denied the Applicant’s appeal due to a lack of documentation.

The Applicant reiterated its position in its second appeal submitted on October 1, 2009.  The Applicant did not present new information to support its second appeal.

Title 44 CFR Part 13 requires FEMA to perform a price analysis to determine reasonable cost of eligible work when applicants award non-competitive contracts.  I have reviewed the all information submitted with the appeal and have determined that the FEMA regional staff price analysis was reasonable.  The Acting 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/

Elizabeth A. Zimmerman

Assistant Administrator

Recovery Directorate

cc:   Janet Odeshoo

       Acting Regional Administrator

       FEMA Region V