Appeals, Financial Accounting & Reconciliation, Force Account Labor & Equipment Costs, Procurement & Contracting Requirements

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4308
Applicant	University of California, Santa Cruz
Appeal Type	Second
PA ID#	000-UBBJB-00
PW ID#	1430
Date Signed	2022-12-21T17:00:00

Summary Paragraph

From February 1-23, 2017, severe winter storms caused damage throughout California.  The University of California, Santa Cruz (Applicant) reported damage to roads and a wooden foot bridge.  FEMA prepared Project Worksheet (PW) 1430 to document the Applicant’s force account labor, force account equipment, materials, and contract costs.  However, FEMA denied funding in a Determination Memorandum (DM), finding that the Applicant had not submitted documentation substantiating its claim.  FEMA forwarded the DM to the California Governor’s Office of Emergency Services (Recipient) on June 18, 2019.  However, the Recipient subsequently expressed its understanding to FEMA that the DM had not been sent.  The Applicant received the DM from FEMA through the Recipient on June 3, 2021.  On July 30, 2021, the Applicant submitted a first appeal.  In a letter to FEMA, the Recipient stated that it had no record of FEMA’s June 18, 2019, DM transmittal.  The FEMA Region IX Regional Administrator denied the appeal as untimely.  The Applicant submitted a second appeal asserting that it did not receive the DM until June 3, 2021.

Authorities and Second Appeals

• Stafford Act §§ 406(a)(2)(C), 423(a).
• 2 C.F.R. § 200.317.
• 44 C.F.R. §§ 206.206(c), 206.228(a)(2)(i).
• PAPPG, at 21-23, 25-26, 28, 30, 140.
• Univ. Sys. of Ga. Bd. of Regents, FEMA-4284-DR-GA, at 4.

Headnotes

• Any decision regarding eligibility for assistance may be appealed within 60 days after the date on which the applicant is notified of the award or denial of assistance.
  • The 60-day timeframe for the Applicant to submit its first appeal began on June 3, 2021.  It submitted the first appeal to the Recipient 57 days later, on July 30, 2021.
• To be eligible, costs must be directly tied to the performance of eligible work, among other criteria.  FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits.
  • The Applicant’s force account labor costs are associated with work performed before the incident period, work not included in the scope of work (SOW), or are not substantiated by the available documentation.
• FEMA is authorized to provide funding for the use of applicant-owned equipment (force account equipment) based on FEMA, state, or local hourly equipment rates.
  • The Applicant’s force account equipment costs are associated with work performed before the incident period, work not included in the SOW, or are not substantiated by the available documentation.
• The cost of materials is eligible if purchased and justifiably needed to respond to and/or recover from the incident, or taken from the applicant’s stock and used for the incident.
  • The available documentation does not demonstrate that the materials claimed were used in the performance of eligible work; associated costs are therefore ineligible.
• FEMA provides funding for contract costs based on the terms of the contract if the applicant meets federal procurement and contracting requirements.
  • The Applicant’s contract procurement policy was not included in the administrative record.  Therefore, it has not demonstrated compliance with federal contract procurement standards.

Conclusion

The Applicant’s first appeal was timely submitted, however, it has not demonstrated that its force account labor, force account equipment, materials, and contract costs are eligible.  Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

From February 1-23, 2017, severe winter storms, flooding, and mudslides caused damage throughout central and northern California.[1]  The University of California, Santa Cruz (Applicant) requested Public Assistance (PA) and reported erosion, mudslide, and slip damage to access roads and a wooden foot bridge in its Big Creek Ecological Reserve.  FEMA conducted a site visit on September 22, 2017, and subsequently prepared Project Worksheet (PW) 1430 to document the Applicant’s use of force account labor, force account equipment, materials, and contracted work to repair the roads and bridge.  The scope of work (SOW) for PW 1430 describes completed work to restore a wooden foot bridge and roads at 12 separate sites. 

In a June 3, 2019, email to the California Governor’s Office of Emergency Services (Recipient), FEMA requested supporting documentation for the project, including: (1) timesheets, timecards, payroll information, or other documents supporting the force account labor claim; (2) invoices or receipts supporting the force account materials and contract claims; (3) information related to the materials the Applicant used; and (4) the Applicant’s pay and procurement policies.[2]  The Recipient acknowledged receiving the request.  It provided material purchase invoices and emails related to the project, and stated that it would send a request to the Applicant for the remaining documentation.[3]  In a follow-up email to the Recipient on June 6, 2019, FEMA again requested the supporting documentation.[4]

In a Determination Memorandum (DM), FEMA denied $62,727.14 in PA funding for PW 1430.  FEMA acknowledged that the work performed was necessary as a result of the disaster, however, it found that the Applicant had not submitted documentation supporting the costs claimed.  FEMA forwarded the DM to the Recipient via email dated June 18, 2019.[5]  However, in a July 30, 2019 email to FEMA, the Recipient expressed its understanding that the DM was still in the approval process and had not been sent.[6]  It requested FEMA reconsider issuing the DM, as additional project documentation was available.  It attached documentation from the Applicant, which it asserted would support project eligibility.  The Recipient continued to request updates on the project on several occasions between December 2019 and November 2020, again expressing its understanding that the DM for PW 1430 was on hold pending the submission of additional documentation, which it attached to its requests.

In a November 23, 2020, email to the Applicant, the Recipient stated that the DM for PW 1430 remained on hold.  It recommended the Applicant send a formal request for FEMA to either “reinstate eligibility” of the project “based on the cost-supporting documentation provided to FEMA electronically,” or issue the DM.[7]  The Applicant submitted a request to issue the DM on May 14, 2021.  In forwarding the request to FEMA, the Recipient acknowledged that project records in FEMA’s Emergency Management Mission Integrated Environment (EMMIE)[8] indicated the DM had been previously issued but stated that it “doesn’t have any correspondence to show that the DM was ever transmitted from [FEMA] Region IX.”[9]  FEMA responded, attaching the DM and a document it referred to as “the [Recipient] notification” to the email.[10]  The Recipient forwarded the DM to the Applicant on June 3, 2021.

First Appeal

The Applicant submitted a first appeal via letter dated July 30, 2021.  It requested FEMA reverse its earlier decision and approve $63,558.86[11] in PA funding for PW 1430.  The Applicant noted that in the DM, FEMA determined that the work at issue was necessary as a result of the disaster.  It provided explanations of each element of its claim and attached supporting documentation.  In a transmittal letter dated September 16, 2021, the Recipient expressed support for the appeal.  It reiterated that it had no record of FEMA’s initial transmittal of the DM, and noted the Applicant’s belief that the first appeal was timely submitted.  The Recipient noted that both it and the Applicant provided documentation supporting project eligibility to FEMA on several occasions beginning in July 2019.  Finally, the Recipient stated that it had requested evidence that the DM was transmitted directly to the Applicant, but that FEMA had not responded.

On April 12, 2022, the FEMA Region IX Regional Administrator denied the appeal.  FEMA stated that it notified the Recipient of the eligibility determination at issue on June 18, 2019, but that the Applicant had not submitted the first appeal until July 30, 2021.  FEMA found that “[t]his was 713 days after the 60-day timeframe required by FEMA’s regulations,” and therefore the appeal was untimely.[12]

Second Appeal

The Applicant submitted a second appeal via letter dated June 15, 2022.  It asserts that the first appeal was timely submitted, and requests FEMA reconsider the eligibility of $63,558.86 in PA funding under PW 1430 for items of Category C permanent work including force account labor, force account equipment, materials, and contracted work.  The Applicant asserts that it did not receive the DM until the Recipient forwarded it on June 3, 2021.  It states that, like the Recipient, it believed FEMA had not issued the DM, but was instead “working toward the obligation of PW 1430” between 2019 and 2021.[13]  The Applicant lists the dates and subjects of various correspondence between it, the Recipient, and FEMA.  It asserts that the Recipient provided some of the supporting documentation FEMA requested as early as June 3, 2019, and that all of the requested documentation had been submitted by July 30, 2019.

In a transmittal letter dated July 14, 2022, the Recipient expresses support for the appeal.  It asserts that on six occasions between July 2019 and November 2020, it indicated to FEMA that it had not received the DM for PW 1430.  Additionally, the Recipient notes that it was required to notify the Applicant of all adverse eligibility decisions via certified mail and provide proof of such notification to FEMA; however, if proof was not provided, FEMA was to notify the Applicant directly.  The Recipient states that FEMA established the 60-day timeframe for submitting the first appeal without providing proof of notification to the Applicant.

 

Discussion

Appeals

Section 423(a) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act provides that any decision regarding eligibility for assistance may be appealed within 60 days after the date on which the applicant is notified of the award or denial of assistance.[14]  Implementing this provision, Title 44 of the Code of Federal Regulations (C.F.R.), section 206.206(c) requires that applicants must file appeals within 60 days after receipt of a notice of the action that is being appealed.[15]  Recipients must then review and forward appeals within 60 days after receipt of the appeal from the applicant.[16]  FEMA policy specifies that the timeframe to submit an appeal begins when the Applicant receives written notice of the eligibility determination.[17]

FEMA based the timeliness determination in the first appeal response on an email transmitting the DM to the Recipient on June 18, 2019.  However, there is nothing in the record to indicate that the Recipient or the Applicant received this notice.  Based on the available information, the 60-day timeframe for the Applicant to submit its first appeal began on June 3, 2021, when it received the DM from the Recipient. [18]  The Applicant submitted the first appeal to the Recipient 57 days later, on July 30, 2021.  Therefore, FEMA determines that the first appeal was timely submitted.

Force Account Labor & Equipment Costs

To be eligible for PA funding, costs must be directly tied to the performance of eligible work, among other criteria.[19]  FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits.[20]  For permanent work, both straight-time and overtime labor costs are eligible for both budgeted and unbudgeted employees.[21]  FEMA is authorized to provide PA funding for the use of applicant-owned equipment (force account equipment) based on FEMA, state, or local hourly equipment rates.[22]  The cost of supplies, including materials, is eligible if purchased and justifiably needed to respond to and/or recover from the incident, or taken from the applicant’s stock and used for the incident.[23]

i.  Force Account Labor

The Applicant claims 528 hours of force account labor with associated costs totaling $25,650.66.  On first appeal, it provided tracking spreadsheets itemizing the dates, hours, hourly rates, and work performed for each of its employees.[24]  The tracking spreadsheets present aggregate force account data and are not accompanied by documentation (e.g., pay policies, work logs, or employee timesheets) that might substantiate the claim.  In its June 2019 emails to the Recipient, FEMA requested information, such as timecards or payroll information, that would support the force account labor claim.  However, the administrative record does not include documentation of this type.  Further, FEMA notes that on first appeal the Applicant stated that its employees “did not log specific increments for work on roads, slides, etc. in a timesheet as would an hourly contractor.”[25]

Additionally, within the aggregate data provided, the claim includes 56 hours of “road repair/slide removal” work that was performed in January 2017, prior to the incident period for the disaster; another 98 hours is for work (water line and retaining wall repairs) that is not in the SOW.  In both cases, the associated costs are ineligible under PW 1430.  Likewise, 24 labor hours are described only as “Terrace Camp Bridge.”  It does not appear that this work took place at the same site listed in the SOW, which references the “Big Creek Wooden Foot Bridge.”[26]  As FEMA is unable to verify the location, the associated costs are ineligible.  The claim includes costs for 22 hours that could be associated with project development tasks.[27]  Such costs could be categorized as Direct Administrative Costs (DAC); however, the record contains no further information which might enable appropriate categorization and verification, and information in the SOW indicates that the Applicant did not intend to claim DAC under PW 1430.[28]

The Applicant describes the remaining 328 hours as “road repair/slide removal” work, which it completed during the incident period.  Such work may comport with the work listed in the SOW, however, nothing in the documentation associates this work with the sites listed in PW 1430.  The force account labor summary sheets included with the project record in EMMIE do not assist in verifying eligibility.[29]  Therefore, FEMA determines that the Applicant has not substantiated its claim for costs related to force account labor.

 ii.  Force Account Equipment

Regarding force account equipment, the Applicant claims costs totaling $8,319.30 associated with the use of a flatbed truck, a tractor, and a chainsaw.  The tracking spreadsheets provided on first appeal include the dates, type of work, number of hours used, and the hourly rates claimed for each piece of equipment.  However, as with the force account labor claim, the tracking spreadsheets present aggregate force account equipment data only.  The Applicant did not provide supporting documentation (e.g., work or equipment logs) to substantiate the claim.  Additionally, though the Applicant provided brief descriptions of the equipment (i.e., “3500 Flatbed Truck,” “Kubota Tractor,” and “Chainsaw”), there is no accompanying information that precisely identifies the equipment for the purpose of evaluating the hourly rates claimed, nor did the Applicant provide an explanation of how it determined the hourly rates it used.  The rates depicted do not comport with the equipment rates published by FEMA in 2017.[30]

Furthermore, FEMA noted issues similar to those associated with the force account labor claim above.  The Applicant claims a total of 324 hours of equipment use.  However, the claim includes 42 hours associated with work the Applicant completed in January 2017, before the incident period; an additional 60 hours of equipment use is associated with water line and retaining wall repairs that are not in the SOW.  In both cases, the associated costs are ineligible under PW 1430.

The remaining 222 hours of equipment use are associated with the “road repair/slide removal” work completed during or after the incident period.  As with the force account labor claim, this work could comport with the SOW, however, nothing in the available documentation associates the work with the sites listed in PW 1430.  For reasons similar to those given in the preceding section, the force account equipment summary sheets included with the project record in EMMIE do not assist in verifying eligibility.  Therefore, FEMA determines that the Applicant has not substantiated its claim for costs related to force account equipment.

The Applicant also claims materials costs totaling $4,588.90 for the purchase of a replacement blade and bucket clamp for its tractor.  On first appeal, it stated that the purchases were necessary due to “wear caused by use of the equipment in recovery efforts” and that the original items “were broken while moving the slide material from the roads.”[31]  Among other information related to the purchase, it provided a price quote for the blade, a purchase order and invoice for both items, and a cancelled check.

The costs for the replacement blade and bucket clamp were written into the SOW for the project.  However, the issues with the force account labor and equipment claims above also bear on the eligibility of these items.  The Applicant has not demonstrated that the replacement blade and bucket clamp were used in the performance of eligible work, and thus has not substantiated the eligibility of the materials costs claimed.

Procurement & Contracting Requirements

FEMA provides PA funding for contract costs based on the terms of the contract if the applicant meets federal procurement and contracting requirements.[32]  State and territorial government applicants must follow the same policies and procedures they would use for procurements with non-federal funds; comply with 2 C.F.R. § 200.322, “Procurement of recovered materials;” and ensure that every purchase order or other contract includes any clauses required by 2 C.F.R. § 200.326, Contract provisions.[33]

The Applicant claims $25,000.00 for contracted work performed to remove a rockslide and restore an access road at a site on its property.  In support, it provides the contract it signed with Blaze Engineering, Inc., as well as a work proposal and price quote, an invoice for the completed work, and copies of two cancelled checks.

Here, the SOW includes contracted work to remove and dispose of large rock debris at a site on the Applicant’s property (Site 2).[34]  The SOW also includes a statement that the Applicant followed its own policy in procuring the contract with Blaze Engineering.[35]  However, the statement in the SOW is insufficient.  In order to demonstrate compliance with federal procurement and contracting standards, the Applicant must provide supporting information establishing compliance with its own procurement policies and procedures.[36]  FEMA requested the Applicant’s predisaster procurement policy in its emails to the Recipient in June 2019, prior to issuing the DM.  However, the policy was not included in the administrative record.  Therefore, FEMA determines that the Applicant has not demonstrated compliance with federal contract procurement standards.  Consequently, the contract costs claimed are ineligible.

 

Conclusion

The Applicant’s first appeal was timely submitted, however, it has not demonstrated that its force account labor, force account equipment, materials, and contract costs are eligible.  Therefore, this appeal is denied.

 

[1] The President issued a major disaster declaration on April 1, 2017.

[2] Email from Emergency Mgmt. Specialist, FEMA Region IX, to Disaster Assistance Specialist, Cal. Governor’s Office of Emergency Servs. (Cal. OES), at 1 (June 3, 2019, 1540 PDT).

[3] Email from Disaster Assistance Specialist, Cal. OES, to Emergency Mgmt. Specialist, FEMA Region IX, at 1 (June 3, 2019, 1623 PDT).

[4] Email from Emergency Mgmt. Specialist, FEMA Region IX, to Disaster Assistance Specialist, Cal. Governor’s Office of Emergency Servs. (Cal. OES), at 1 (June 6, 2019, 1705 PDT).  The administrative record does not contain a reply from the Recipient to FEMA’s June 6, 2017 email.

[5] Email from FEMA Region IX, to Cal. Governor’s Office of Emergency Servs. (Cal. OES), at 1 (June 18, 2019, 2012 PDT).  The administrative record does not contain documentation (e.g., read receipt, return email, etc.) from the Recipient confirming receipt of the Determination Memorandum.

[6] Email from State Agency Liaison, Cal. OES, to FEMA Region IX, at 1 (July 30, 2019, 1344 PDT) (“[t]he DM has not been sent yet, and if we can intercept it by overcoming the small hurdle of a couple of timesheets, we can save Cal OES [and] FEMA the trouble of the appeal process for a small project”).

[7] Email from Pub. Assistance Officer, Cal. OES, to Assoc. Dir., Risk Servs., Univ. of Cal., Santa Cruz, at 1 (Nov. 23, 2020, 1031 PST).

[8] The Emergency Management Mission Integrated Environment (EMMIE) is FEMA’s web-based grants management database.

[9] Email from Disaster Assistance Program Specialist, Cal. OES, to Training, Analytics, and Reporting Team, Recovery Div., FEMA Region IX, at 1 (May 27, 2021, 1114 PDT).

[10] Email from Training, Analytics, and Reporting Team, Recovery Div., FEMA Region IX, to Disaster Assistance Program Specialist, Cal. OES, at 1 (May 27, 2021, 1554 PDT).  The attachments to FEMA’s response were not included in the administrative record.

[11] FEMA denied $62,727.14 in the DM, using the costs submitted for the project at the time. On appeal, the Applicant bases the amount in dispute ($63,558.86) on differing claims for force account labor, equipment, and materials costs, discussed in the analysis below.

[12] Letter from Reg’l Adm’r, FEMA Region IX, to Governor’s Authorized Representative, Cal. OES and Assoc. Vice Chancellor and Campus Controller, Univ. of Cal. Santa Cruz, at 2 (Apr. 12, 2022).

[13] Letter from Assoc. Vice Chancellor and Campus Controller, Univ. of Cal. Santa Cruz, to State Pub. Assistance Officer, Cal. OES, at 2 (June 15, 2022).

[14] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 423(a), Title 42, United States Code (U.S.C.) § 5189a (2012).

[15] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.206(c) (2016).

[16] Id.

[17] Public Assistance Program and Policy Guide, FP 104-009-2, at 140 (Jan. 1, 2016) [hereinafter PAPPG] (“[t]he Applicant must submit a written appeal to the Recipient within 60 days of receiving written notification of FEMA’s determination”).

[18] There is no indication in the administrative record that either FEMA or the Recipient transmitted the Determination Memorandum to the Applicant before the June 3, 2021, transmittal from the Recipient.

[19] PAPPG, at 21.

[20] Id. at 22.

[21] Stafford Act § 406(a)(2)(C), 42 U.S.C. § 5172(a)(2)(C); 44 C.F.R. § 206.228(a)(2)(i); PAPPG, at 23.

[22] PAPPG, at 25-26.

[23] Id. at 28.

[24] Univ. of Cal. Santa Cruz, Daily Force Account Labor and Force Account Equipment by Day, at 1 (Undated) [hereinafter Force Account Daily Hours Spreadsheet] (submitted with the Applicant’s first appeal as Exhibit 3) and Univ. of Cal. Santa Cruz, Daily Force Account Labor and Force Account Equipment by Work Performed, at 1 (Undated) (submitted with the Applicant’s first appeal as Exhibit 4).

[25] Letter from Assoc. Vice Chancellor and Campus Controller, Univ. of Cal. Santa Cruz, to State Pub. Assistance Officer, Cal. OES, at 3 (July 30, 2021) [hereinafter Applicant First Appeal].

[26] A materials summary spreadsheet uploaded to EMMIE lists materials costs associated with work to replace bridges at three separate locations, the “Terrace Camp Bridge,” the “Confluence Bridge,” and the “Big Creek Bridge”; see Univ. of Cal. Santa Cruz, Big Creek Materials Summary, at 1 (Undated). Thus, the Terrace Camp Bridge listed in the claim and the Big Creek Wooden Foot Bridge listed in the SOW appear to be different bridges.  The Applicant’s explanations in the first appeal letter do not further clarify this matter.

[27] Force Account Daily Hours Spreadsheet, at 1. The Applicant described the tasks as “tour with FEMA” and “prepare reports.”

[28] Project Worksheet 1430, Univ. of Cal., Santa Cruz, Version 0 (June 11, 2019) (stating in the SOW that the “Applicant is not claiming Direct Administrative Costs”). 

[29] This is because: (1) the hourly rates and costs recorded in the force account labor summaries do not comport with the rates and costs claimed on appeal; (2) several of the employees listed by name on the summary sheets are not the same as those listed in the Applicant’s tracking spreadsheets; (3) in contrast, an employee listed by name in the tracking spreadsheets is not included in the summary sheets; and (4) as with the tracking spreadsheets, the summary sheets include work completed before the incident period, and do not associate the work and costs with the sites listed in the SOW.

[30] See FEMA, 2017 Schedule of Equipment Rates, https://www.fema.gov/assistance/public/tools-resources/schedule-equipment-rates (last visited Dec. 1, 2022).  For example, there are four different rates provided for a “Truck, Flatbed” in FEMA’s 2017 Schedule of Equipment Rates, none of which comport with the hourly rate provided by the Applicant.   

[31] Applicant First Appeal, at 4.

[32] PAPPG, at 30.

[33] 2 C.F.R. § 200.317 (2017); Id.

[34] See Project Worksheet 1430.  Beyond removal of large rock debris, the SOW does not provide specific details on additional work Blaze Engineering performed to restore the road; see Blaze Engineering, Inc., Invoice No. 24144, at 1 (Jan. 29, 2018) (describing work such as “build up road,” “armor edge of road,” and “load, haul, and spread dirt,” among others).  Though such work is not specified in PW 1430, the preparer of the SOW did briefly reference it; see Project Worksheet 1430 (stating that “[t]he contractor … proceeded to build up and armor the edge of the road”).

[35] Project Worksheet 1430 (“[f]ollowing UCSC’s [i.e., the Applicant’s] procurement policy and guidelines, the Applicant procured the services of Blaze Engineering”).

[36] See FEMA Second Appeal Analysis, Univ. Sys. of Ga. Bd. of Regents, FEMA-4284-DR-GA, at 4 (Mar. 12, 2019).