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Debris Removal from Catch Basins
|Applicant||City of Lake Charles|
|PW ID#||Project 2635|
2. Should FEMA approve a unit rate of $300 per catch basin for the work performed, along with an additional amount of $359,068 for work the contactor performed after FEMA prepared the PW?
2. Yes. The Applicant provided sufficient documentation to support its claim that the cost for catch basin cleaning at a unit rate of $300 per catch basin was reasonable at the time and that the additional costs are eligible.
Colonel Thomas Kirkpatrick (Ret.)
State Coordinating Officer
Governors Office of Homeland Security and Emergency Preparedness
415 North 15th Street
Baton Rouge, LA 70802
Re: Second AppealCity of Lake Charles, PA ID 019-41155-00, Debris Removal from Catch Basins, FEMA-1607-DR-LA, Project Worksheet (PW) 2635
Dear Colonel Kirkpatrick:
This is in response to your letter dated April 16, 2008, which transmitted the referenced second appeal for the City of Lake Charles (Applicant). The Applicant is appealing the Department of Homeland Securitys Federal Emergency Management Agencys (FEMA) decisions regarding debris removal from storm water catch basins in the aftermath of Hurricane Rita.
As explained in the enclosed analysis, with regard to the first issue of reasonable cost, the Applicant provided sufficient documentation to support the claim that the cost of $300 per catch basin cleaned was reasonable at the time. The Applicant also provided sufficient documentation to support its request for $359,068 in additional funds for cleaning catch basins and power washing the gutters. Therefore, I am partially granting the Applicants appeal by granting the request for a change to the unit cost for catch basin cleaning, but not for the total number of catch basins requested by the Applicant. By this letter, I am requesting the Regional Administrator prepare a version of PW 2635 for $1,594,780 in additional funding.
Please inform the Applicant of my decision. My determination constitutes the final decision on this matter as set forth in 44 CFR §206.206.
Elizabeth A. Zimmerman
Disaster Assistance Directorate
cc: Gary Jones
Acting Regional Administrator
FEMA Region VI
On September 23, 2005, Hurricane Rita brought heavy winds and severe rainfall to the City of Lake Charles (Applicant) resulting in the accumulation of debris in storm water catch basins throughout the City. The Applicant solicited bids from four contractors, only two of whom responded. The Applicant entered into a contract with Unified Recovery Group (URG) to remove debris from the Citys catch basins at a unit price of $300 per catch basin. URG requested payment from the Applicant for cleaning 9,481 catch basins from October 25, 2005, through December 30, 2005. In February 2006, FEMA prepared Project Worksheet (PW) 2635 to fund the removal of debris from catch basins and power washing of street gutters. However, FEMA considered the unit price of $300 per catch basin unreasonably high and also disputed the number of catch basins eligible for cleaning. FEMA observed that in general, the contractors crews cleaned up to 40 catch basins per 10 hour day, or a maximum rate of one catch basin about every 15 minutes. However, in a significant number of instances the contractor claimed it cleaned well in excess of 40, and up to as many as 100 catch basins per day using a single crew, or a maximum rate of one catch basin about every 6 minutes. In preparing the PW, FEMA adopted the position that, if a catch basin could be cleaned in less than about 9 minutes, there was not a sufficient quantity of debris in the catch basin to justify removal under the category of emergency work. Because the regulations require that the costs be reasonable and the work be necessary, FEMA reduced the unit price to $148.75 per catch basin to reflect what it considered a more reasonable unit price, and reduced the number of catch basins by 1,311 to 8,170 eligible catch basins. Consequently, FEMA wrote PW 2635 for $1,215,288 for catch basin cleaning and $429,860 for power washing of street gutters, for a total amount of $1,645,148.
The Applicant submitted its first appeal to the Governors Office of Homeland Security and Emergency Preparedness (GOHSEP) on June 26, 2006. GOHSEP supported the Applicants appeal and forwarded it to FEMA on September 18, 2006. On March 17, 2007, GOHSEP sent a follow-up letter to Region VI supporting the appeal. The Applicant questioned the rationale FEMA used to arrive at the unit cost of $148.75 per catch basin. The Applicant referred to several other similar operations in Louisiana where FEMA funded cleaning catch basins at unit rates varying from $200 to $500 per catch basin. The Applicant requested that FEMA fund the project for $3,274,160, which is the full amount paid to the contractor. FEMA did not provide any rationale for reducing the unit price in the PW. The Regional Administrator denied the Applicants appeal on November 20, 2007. In that letter FEMA pointed out that, despite the fact that the Applicant solicited and received competitive bids in October 2005 for the work, on a unit cost basis, the Applicant issued a lump sum contract on December 2, 2005, to URG for $100,000. While the contract stipulated that the Applicant required written approval for any additional amount, URG invoiced the applicant for $3,274,160, and the Applicant did not provide any documentation approving any costs in excess of the original contract amount. Furthermore, the Applicant did not provide any evidence that it monitored any of the work the contractor claimed. FEMA further noted that it would base funding on its assessment of reasonable eligible costs for the work at project closeout.
The Applicant submitted its second appeal to the GOHSEP on February 7, 2008, with a supplement dated February 29, 2008. GOHSEP supported and forwarded the appeal to FEMA on April 16, 2008. The Applicant argues that it met federal procurement requirements in the award of a unit price contract to URG. The Applicant again disputes the rationale FEMA used to reduce the unit cost to $148.75 per catch basin and provides a document the Applicants Engineer prepared and reportedly made available to FEMA prior to preparing the PW. The document identifies several other similar operations in Louisiana where catch basins were cleaned at unit rates varying from $200 to $500 per catch basin. The Applicant also disputes FEMAs decision to reduce the eligible number of catch basins from 9,481 to 8,170 and provides several hundred pages of documentation URG prepared to support its invoices for catch basin cleaning. The Applicant also requests funding for $359,068 in additional costs URG invoiced to the Applicant after FEMA prepared PW 2635. Consequently, the Applicant requested that FEMA fund the project for $3,633,228.
The first issue in this appeal is whether or not the unit price of $300 is reasonable for catch basin cleaning. The basic objective of the federal procurement guidelines is to obtain the best cost possible under the conditions that exist at the time. In reference to contract cost and price,
44 CFR 13.36(f)(1) requires that, Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications.
Donald Brinkman, City Engineer, prepared a memorandum dated February 16, 2006, to Charles Eastland, FEMA Debris Specialist, with information on unit costs ranging from $200 to $500 for catch basin cleaning paid by several municipalities and/or Parishes in Louisiana and one city in Georgia. In the second appeal, the Applicant states that it provided this information to FEMA prior to FEMA preparing PW 2635. Neither the PW nor the first appeal response explained why some unit costs were considered in arriving at the value of $148.75 per catch basin, while unit costs paid elsewhere in Louisiana were excluded from the analysis. A review of FEMA records (FEMA-1603-DR-LA) confirms that in April 2006, as a result of Hurricane Katrina, FEMA funded the cleaning of catch basins in the City of Harahan, LA, (PW 8596) at a unit cost of $425 per catch basin for work completed in December 2005. The Applicant referenced PW 8596 in the second appeal and is consistent with the information provided in the memo of
February 16, 2006, from the City Engineer referencing unit costs for catch basin cleaning and serves to confirm the Applicants position that the rate of $300 per catch basin paid to URG was a reasonable cost at the time.
Secondly, in the second appeal, the Applicant disputes the decision made by FEMA in the PW to reduce the eligible number of catch basins from 9,481 to 8,170 based on production rates for a single crew varying from 40 to 100 catch basins cleaned per day. FEMA determined that on average it would take 15 minutes for a two-man crew to clean a single catch basin. One crew member would operate the truck while the other crew member would loosen the packed debris with a steel rod and then use a vacuum to remove the debris. The Project Officer noted that if a catch basin took less than 9 minutes to clean, then there was not enough debris to justify removing the debris under the category of emergency work. Cleaning 70 to100 catch basins in 10 hours equates to a rate of one catch basin every 6 to 9 minutes, with no consideration to emptying or refueling the vacuum truck. Included in the Applicants documentation for the second appeal was a three-inch binder filled with records for routine storm sewer and catch basin maintenance; however, there was no information readily apparent, or specifically identified by the Applicant, in the Citys maintenance records to support the higher production rates that URG claims to have achieved. Furthermore, there were no records of monitoring performed by the City that verified the higher production rates that URG claims to have achieved. The Applicants documentatieaincluding 65 catch basins in a 10-hour day. At this rate, the Applicant would clean a catch basin approximately every 10 minutes.
Confirmation of the number of catch basins that were cleaned is made more difficult by the fact that the Applicant did not have a database of its infrastructure and apparently did not know the exact number of catch basins within the Citys jurisdiction at the time of the disaster, despite the Applicants indication that it routinely maintains the catch basins. The Applicant indicated that it did not know the number of catch basins that existed in a letter dated July 13, 2007, from the City of Lake Charles to GOHSEP. Consequently the Applicant relied on URG to provide the number of catch basins located in the City of Lake Charles. The Applicant states in the second appeal that, No rationale was provided to explain why the daily maps/logs/records presented by URG/the City lacked the necessary credibility.
In a memo dated February 15, 2006, to the file from Donald Brinkman, City Engineer and two inspectors pre-marked catch basins the contractor needed to clean. However, this process apparently limited the number of trucks that the contractor could operate and did not allow the clean-up process to proceed fast enough. Therefore, to expedite the process the City authorized the contractor to operate 12 trucks in four (4) different areas of the City with inspectors only performing windshield surveys. The Applicant failed to provide any documentation recording any observations made and/or number of catch basins verified during the windshield surveys conducted by the City inspectors. Maps were provided with the second appeal that depicted the streets on which the work was performed, but the maps did not illustrate the locations or number of catch basins.
The Applicant states that its personnel performed a random check of catch basins cleaned. The documentation the Applicant provided includes a sworn affidavit, in which Tim Molbert attests to performing random checks of catch basins; however, the affidavit does not provide the number of catch basins inspected. The Applicant provided only one document dated
February 23, 2006, with the second appeal, which appears to indicate that 37 catch basins/drains, that were cleaned on November 15, December 12, and December 28, 2005, had been checked by city inspectors. This is less than one-half of one percent of the total number of catch basins that URG claims to have cleaned. It was the Applicants responsibility to confirm the work performed by their contractor, part of which would be a verification of the actual number of catch basins cleaned, particularly since the Applicant apparently did not know how many catch basins were located within its jurisdiction. The Applicant contends that it met that responsibility; however, it failed to provide documentation prepared by City inspectors during the contractors operations to support that contention.
The Applicant requested an additional amount of $359,068 for catch basin cleaning URG invoiced to the City after FEMA prepared PW 2635. After reviewing the supporting documentation, this amount is eligible for funding, The number of catch basins and associated costs claimed are reasonable.
The Applicant provided sufficient documentation to support its position that the cost for catch basin cleaning at a unit rate of $300 per catch basin was reasonable at the time and for the $359,068 in additional funding. Therefore, FEMA should prepare a version to the PW to revise the cost from $148.75 to $300.00 per catch basin and include the additional funds. The Applicant, however, failed to provide sufficient documentation to support its request for funding all of the 10,333 catch basins that the contractor (URG) claims to have cleaned. Therefore, the second appeal is partially granted for $1,594,780 for the adjustment to the unit cost for catch basin cleaning and power washing of the gutters.