Time Extension - Appeal

Appeal Brief

Appeal Letter

Appeal Analysis

Background

In August 2008, Tropical Storm Fay brought high winds and torrential rain to the State of Florida.  On August 16, 2008, Florida’s Governor signed Executive Order No. 08-170, which declared a state of emergency and implemented the State’s Comprehensive Emergency Management Plan.[1]  As a result, the lead agency, Florida Division of Emergency Management (FDEM), activated the State Emergency Operations Center (EOC) to manage and monitor the overall response to the event.  FDEM tasked state agencies, including the Applicant, Florida Department of Transportation (FDOT), with carrying out emergency support functions, fulfilling resource and supply requests, and other critical mission assignments.  Tropical Storm Fay was declared a major disaster on August 24, 2008.

FEMA prepared Project Worksheet (PW) 1939 to document emergency protective measures undertaken by the Applicant in FDOT District 2.  The work consisted of emergency measures performed to execute its primary function as Florida’s Department of Transportation and to complete other tasks as assigned by the State EOC.  The Applicant hired a contractor to extract water from its Jacksonville Maintenance Office to prevent further damage to the building.  In completing State EOC mission assignments, the Applicant expended force account labor, equipment, materials, and supplies to assist county governments in FDOT District 2 with emergency traffic control and flooding.  Along with using resources from inventory, the Applicant purchased additional traffic cones, traffic barricades, and sandbags which it then delivered to the local governments for immediate use.  During PW review, FEMA reduced the Applicant’s original estimate of $79,264.22 by $22,450.00 to offset the estimated salvage value of the purchased items and obligated PW 1939 for a total of $56,814.22. 

First Appeal

In a letter dated June 2, 2009, the Applicant appealed FEMA’s decision to deduct salvage value and obligate PW 1939 at a reduced cost.  The Applicant contended that FEMA erred in deducting salvage value from the purchased items.  The Applicant stated that Title 44 Code of Federal Regulations (C.F.R.) § 13.3 defines equipment as tangible, non-expendable property with a cost of $5,000.00 or more, and supplies as tangible property other than equipment.  Additionally, the Applicant contended that the provisions of Disaster Assistance Policy DAP9525.12, Disposition of Equipment, Supplies and Salvageable Materials, require compensation on equipment or unused supplies valued at $5,000.00 or more, and concurrence from an applicant when estimating and deducting salvage value from the original project.[2]

In addition, the Applicant noted that the purchased items did not meet the State’s definition of equipment, defined as “non-consumable and non-expendable in nature,” pursuant to Florida Statute § 273.02[3] and incorporated into the Office of the Comptroller General Accounting Topic No. 350-090-310-j.[4]  As a state agency, it must dispose of property in accordance with Florida law, which does not “recognize depreciation” on tangible property (i.e., equipment) valued under $1,000.00 and with a useful life of less than 1 year.[5]

The Applicant argued that the purchased items were expendable, used immediately, and retained no salvageable value after use.  Moreover, each item cost less than $1,000.00 per unit.  As the items were expendable, used, and the value per unit was under the State’s $1,000.00 threshold and significantly less than the $5,000.00 threshold pursuant to 44 C.F.R. § 13.3, no salvage value was owed on the purchased items.  Finally, the Applicant also asserted that FEMA reduced salvage value from previously-agreed upon costs without its consent or input and failed to explain how it calculated the estimate.[6]

The Florida Division of Emergency Management (Grantee) forwarded the Applicant’s first appeal along with a recommendation letter on November 1, 2011.  The Grantee recommended approval and stated that the Applicant’s arguments provided sufficient justification for FEMA to approve the appeal. 

In a letter dated May 11, 2012, the FEMA Region IV Regional Administrator (RA) denied the first appeal.  In its decision, the RA confirmed that the disputed amount of $22,450.00 was deducted to offset the estimated salvage value of the cost of the purchased items, and that FEMA made the reduction during the PW review process.  The RA did not address the validity of deducting the estimated salvage value from the original project costs as the RA determined that all of the work items and costs tied to the assistance provided to the local governments were ineligible pursuant to the provisions of Disaster Assistance Policy DAP9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance.^[7]  The RA concluded that the Applicant’s actions performed in its role as the responding agency (i.e., providing entity) to support other local entities (i.e., requesting entity) meant that the Applicant was not “the legally responsible entity to provide these items.”^[8]   However, the RA explained that if the claimed costs for the work provided to the local governments are submitted to and paid by the legally responsible entity, FEMA may then evaluate the costs for eligibility.^[9]  Accordingly, the RA limited eligible funding to the contract costs for the work performed at the Applicant’s maintenance office and Direct Administrative Costs for a total of $4,237.00.  On December 18, 2012, as a result of the first appeal decision, FEMA processed Version 1 which deobligated $52,577.22 from PW 1939. 

Second Appeal

In its undated second appeal, the Applicant appeals the total amount of $75,027.22 denied by FEMA.  In challenging FEMA’s decision to deduct the estimated salvage value from the cost of the purchased items, the Applicant reiterates the same arguments from its first appeal.  In answering FEMA’s assertion that it was not legally responsible to provide the items to the local governments (i.e., perform the work) under the provisions of DAP 9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance, the Applicant contends that Florida law authorizes the Governor to make use of all available State resources and all political subdivisions of the State in dealing with an emergency.[10]  The Applicant argues, by statute, as the Florida Department of Transportation, it had legal responsibility to perform mission assignments as tasked by the State EOC in directly responding to the emergency created by Tropical Storm Fay.  The local governments requested assistance through the State EOC, which generated the mission assignments for the Applicant.  It expended force account labor, equipment, supplies and materials in completing the State EOC assignments.  Moreover, the Applicant asserts that it did not provide any of the assistance in question as a result of a mutual aid agreement as it did not have an agreement with the local governments during the event.  Thus, DAP 9523.6, Mutual Aid Agreements for Public Assistance and Fire Management Assistance does not apply to the scope of the Applicant’s claim.[11] 

In a letter dated October 24, 2014, the Grantee forwarded the second appeal to FEMA.  Again, the Grantee recommends approval and indicates that the Applicant submitted the second appeal within the regulatory timeframe.  The Grantee notes the reduction of salvage value taken against “disposable items” and does not discuss the RA’s assertion that the Applicant was not legally responsible for the work performed in support of the local governments.[12] 

Discussion

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 423,[13] as implemented by 44 C.F.R. § 206.206, allows an eligible applicant to appeal any Public Assistance eligibility determination.  An applicant must file an appeal within 60 days of receiving notice of the appealable action.[14]  Following receipt of an applicant’s appeal, the Grantee has 60 days to forward it together with a written recommendation to FEMA.[15]  Neither the Stafford Act nor 44 C.F.R. provide FEMA with the authority to grant time extensions for filing appeals.[16] 

In total, the Applicant and Grantee had 120 days from receiving the RA’s first appeal decision to submit the second appeal to FEMA.  The Grantee asserts that the Applicant submitted the second appeal within the regulatory timeframe but does not offer any explanation or specify dates to support its assertion that the Applicant complied with the requirement.[17]  Although the Applicant’s second appeal letter is undated, FEMA can establish the expiration of the regulatory timeframe using the known dates.  The RA denied the Applicant’s first appeal on May 11, 2012.  The Grantee’s second appeal letter is dated October 24, 2014.  More than 29 months passed from the date of the first appeal determination before the Grantee forwarded the Applicant’s second appeal together with its written recommendation to FEMA for final consideration.^[18]  As such, FEMA finds that the Applicant’s second appeal is untimely and therefore is denied.

Conclusion

The Applicant did not file its second appeal within the required timeframe established by Stafford Act § 423(a) and 44 C.F.R. § 206.206(c).  Consequently, the second appeal is denied.