Damage Surveys – Engineering and Design Services
Appeal Brief
| Disaster | 4241 |
| Applicant | City of Columbia’s |
| Appeal Type | Second |
| PA ID# | 079-16000-00 |
| PW ID# | PW 1125 |
| Date Signed | 2019-12-16T00:00:00 |
Summary Paragraph
From October 1-23, 2015, South Carolina experienced prolonged heavy rainfall and flooding, resulting in damage to the Applicant’s sewer system, including its manholes. The Applicant observed increased wastewater flows in two basins and identified disaster related damage in some manholes and sewer lines along those basins. Based on this analysis and set of observations, the Applicant contracted with Michael Baker International (MBI), an engineering firm, to perform damage assessments on approximately 290 manholes in along two basins to determine the extent of flood-related damages. MBI found that 75 manholes were damaged by the disaster and it recommended repairs for each of them. The Applicant requested Public Assistance (PA) for repairs to the manholes and also requested $135,196.09 for MBI’s damage assessments identifying the 75 disaster-damaged manholes and recommending repairs. On August 15, 2018, FEMA issued a determination memorandum denying $135,196.09 in PW 1125 for damage assessments, finding they were general damage surveys which are ineligible for funding under PA policy. Shortly thereafter, FEMA obligated Version 0 of PW 1125 for a total of $938,350.58, approving costs for repairs and Direct Administrative Costs but not for damage assessments. The Applicant appealed claiming that the costs were eligible under PA policy guidance allowing reimbursement for inspections to determine the extent of damage and nature of repairs, when damage to an inaccessible structure is evident. Alternatively, the Applicant claimed that the costs may be eligible as engineering and design costs. The Applicant also clarified in a response to a Request for Information that it was only requesting reimbursement for costs associated with the 75 damaged manholes identified, rather than all 290 manholes inspected. On July 15, 2019, FEMA Region IV’s Regional Administrator (RA) denied the appeal, finding that the work appealed constituted ineligible damage surveys and that the limited repairs documented in the PW’s scope of work (SOW) did not appear to justify reimbursement for damage assessments. The Applicant submitted a second appeal reiterating prior arguments.
Authorities and Second Appeals
- PA Guide, at 40, 55-57.
Headnotes
- According to the PA Guide, the owner of a facility is responsible for determining the extent of damage. Surveys for damage are not eligible for PA funding. However, when damage to an inaccessible structure or structural component is evident based on other observations, FEMA may pay for inspections to determine the extent of damage and method of repair.
- The Applicant’s contractor inspected 290 manholes for damage and did not limit its assessment to determining the extent of damage or method of repairs for inaccessible structures where damage was evident. This assessment constitutes an ineligible damage survey.
- The PA Guide states that costs for an engineering evaluation to determine the type and extent of repairs necessary to return a facility to its predisaster condition and costs of basic engineering and design services normally performed by an architectural-engineering firm on complex constructions projects are eligible for reimbursement. All costs must be reasonable and necessary to perform the eligible work.
- The Applicant has not demonstrated that the appealed costs were required as part of an engineering evaluation to determine the type and extent of necessary repairs. This type of engineering evaluation would not have been reasonable or necessary for the complexity of repairs described in this PW’s SOW – cleaning and spraying damaged manholes without significant variation between repairs.
Conclusion
The costs associated with locating and assessing damaged manholes are ineligible as part of a general survey for damage and cannot be justified as eligible engineering and design costs based on the complexity of repairs in the PW’s approved SOW. Accordingly, the Applicant’s appeal is denied.
Appeal Letter
Kim Stenson
Director
South Carolina Emergency Management Division
2779 Fish Hatchery Road
West Columbia, SC 29172
Re: Second Appeal–City of Columba, PA ID 079-16000-00,
FEMA-4241-DR-SC, Project Worksheet (PW) 1125 – Damage Surveys – Engineering and Design Services
Dear Mr. Stenson:
This is in response to a letter from your office dated October 25, 2019, which transmitted the referenced second appeal on behalf of the City of Columbia (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $135,196.09 in costs pertaining to assessments of flood-damaged manholes.
As explained in the enclosed analysis, I have determined that the costs associated with locating and assessing damaged manholes are ineligible as part of a general survey for damage. Additionally, the costs cannot be justified as eligible engineering and design costs based on the complexity of repairs in the PW’s approved scope of work. Accordingly, the Applicant’s appeal is denied.
Please inform the Applicant of my decision. This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.
Sincerely,
/S/
Tod Wells
Acting Director
Public Assistance Division
Enclosure:
cc: Gracia B. Szczech
Regional Administrator
FEMA Region IV
Appeal Analysis
Background
The Applicant requested an analysis of flow monitoring data, which indicated that after the flood, wastewater flows increased approximately 21-30 percent for Crane Creek Basin and 118-122 percent for Smith Branch Basin. The Applicant also inspected some manholes and sewer lines at those basins and identified disaster related damage. Based on this analysis and set of observations, the Applicant contracted with Michael Baker International (MBI), an engineering firm, to perform damage assessments on approximately 290 manholes along the Crane Creek and Smith Branch basins to determine the extent of flood-related damages. MBI found that 75 manholes were damaged by the disaster and it recommended repairs for each of them.
FEMA prepared Project Worksheet (PW) 1125 to document repairs to its sewer collection system, including cleaning all surfaces of the 75 damaged manholes and spraying with cementitious or epoxy lining where necessary (plus Direct Administrative Costs (DAC)). The Applicant also requested $135,196.09 for MBI’s damage assessments identifying the 75 disaster-damaged manholes and recommending repairs.
On August 15, 2018, FEMA issued a determination memorandum denying $135,196.09 in PW 1125 for damage assessments, finding they were general damage surveys which are ineligible for funding under FEMA Public Assistance (PA) policy. Shortly thereafter, FEMA obligated Version 0 of PW 1125 for a total of $938,350.58, approving costs for repairs and DAC but not for damage assessments, per the rationale provided earlier.
First Appeal
On November 30, 2018, the Applicant submitted its first appeal letter to the Grantee, which the Grantee then transmitted to FEMA with a letter of recommendation. In its appeal, the Applicant cited to PA policy stating that when damage to an inaccessible structure is evident based on observations such as increased flow in a pipe, FEMA may pay for inspections to determine the extent of damage and method of repair. The Applicant believed its request to be consistent with this guidance since it first confirmed increased flows and then contracted with a professional engineering firm to determine the extent of the damage and repairs needed.
The Applicant also cited to language in PA policy stating that engineering and design services normally performed by an architectural-engineering firm on complex construction projects are eligible for reimbursement, with sanitary sewers, storm sewers and drains, and water distribution lines serving as examples of project sites where engineering and design services could be eligible. The Applicant believed its damage assessment costs could be justified as part of engineering and design services for sewer repairs.
On March 11, 2019, FEMA issued a Final Request for Information (RFI) asking why the Applicant was seeking reimbursement for inspections of manholes that were not damaged by the event and not included within PW 1125’s scope of work (SOW). The Applicant responded in a letter clarifying that it only requested assessment costs associated with the 75 damaged manholes included in PW 1125’s SOW, and not all 290 manholes inspected. The total cost of the assessments for all 290 manholes was $522,758.20.[1] The Applicant arrived at its requested cost of $135,196.09 by taking the cost per manhole ($1,802.61) and multiplying by the number of damaged manholes identified (75). The Applicant also reiterated that costs may be eligible for an engineering evaluation to determine the type and extent of repairs necessary.
On July 15, 2019, FEMA Region IV’s Regional Administrator (RA) denied the appeal, finding that the work appealed constituted damage surveys, which are ineligible for PA. The RA noted that the repairs documented in PW 1125 did not appear to justify reimbursement for damage assessments, given that the SOW for each manhole was limited to cleaning and spraying with cementitious or epoxy lining. The principal value of the work performed by MBI was in surveying 290 manholes for disaster-related damage.
Second Appeal
On September 6, 2019, the Applicant appealed and reiterated its first appeal arguments. The Grantee transmitted the Applicant’s second appeal with a letter of support on October 23, 2019.
Discussion
The owner of a facility is responsible for determining the extent of damage, and surveys for damage are not eligible for PA funding under a PW.[2] Costs related to assessing overall impacts of an incident or locating damage are indirect costs and eligible as management costs instead.[3] However, when damage to an inaccessible structure or structural component is evident based on other observations, FEMA may pay for inspections to determine the extent of damage and method of repair. Additionally, costs for an engineering evaluation to determine the type and extent of repairs necessary to return a facility to its predisaster condition and costs of basic engineering and design services normally performed by an architectural-engineering firm on complex construction projects are eligible for reimbursement.[4] All costs must be reasonable and necessary to perform the eligible work.[5]
The Applicant was able to verify for itself flood-related damage by inspecting some manholes and sewer lines, and it did not note any inaccessibility concerns. MBI then conducted a more comprehensive search throughout the Crane Creek and Smith Branch basins for damaged manholes.[6] The Applicant did not limit MBI’s assessment to determining the extent of damage or method of repairs for inaccessible structures where damage was evident. Therefore, regardless of whether the Applicant first confirmed increased flow in the pipes and limited its request to costs associated with the damaged manholes identified, the costs on appeal are ineligible as part of a general survey for damage.
The Applicant also has not demonstrated that the appealed costs were required as part of an engineering evaluation to determine the type and extent of necessary repairs. This type of engineering evaluation would not have been reasonable or necessary for the complexity of repairs described in this PW’s SOW – cleaning and spraying damaged manholes without significant variation between repairs.[7] Instead, the costs appear primarily related to identifying the damaged manholes.
Conclusion
The costs associated with locating and assessing damaged manholes are ineligible as part of a general survey for damage and cannot be justified as eligible engineering and design costs based on the complexity of repairs in the PW’s approved SOW. Therefore, the Applicant’s appeal is denied.
[1] In a letter dated one day prior to FEMA’s RFI, the Applicant requested $522,758.20 for costs related to assessments of both damaged and undamaged manholes. Letter from City Flood Recovery Manager, City of Columbia, to Recovery Dir., FEMA Region IV, at 3 (Mar. 10, 2019). That request is not at issue in this appeal.
[2] Public Assistance Guide, FEMA 322, at 55 (June 2007) [hereinafter PA Guide].
[3] See Robert T. Stafford Disaster Relief and Emergency Assistance Act § 324(a), 42 U.S.C. § 5165b (2012); Title 44 Code of Federal Regulations § 207.2 (2015).
[4] PA Guide, at 55-57.
[5] Id., at 40.
[6] Letter from Flood Recovery Manager, City of Columbia, to Representative, S.C. Emergency Mgmt. Div., at 1 (Nov. 30, 2018) (“The City inspected some of the manholes and sewer lines and determined they incurred flood related damage that was causing the substantially increased flows in the system. The City contracted [MBI] to perform a damage assessment on approximately 290 manholes throughout the Smith Branch and Crane Creek sewer collection systems to specifically determine the extent of the flood-related damages.”).
[7] See Project Worksheet 1125, City of Columbia, Version 0 (Sept. 17, 2018).