Force Account Labor – Emergency Labor

Appeal Brief

Summary Paragraph

From September 11 to 30, 2013, severe storms, flooding, landslides and mudslides caused floodwaters to overtop embankments along the Saint Vrain Creek.  The flooding damaged a large portion of the Town of Lyons’ (Applicant) critical infrastructure.  FEMA prepared Project Worksheet (PW) 552 to address labor, equipment and contract costs associated with various emergency protective measures performed by the Applicant, including sandbagging, search and rescue operations, sheltering and emergency mass care, emergency demolition, and providing food, water, ice, and other essential needs.  In version 2 of PW 552, FEMA deobligated $102,058.50 in costs associated with straight-time labor it deemed ineligible pursuant to Stafford Act § 406, 44 C.F.R. § 206.228(a)(2) and FEMA RP9525.7, Labor Costs - Emergency Work (Nov. 16, 2006).  The Applicant appealed FEMA’s determination to deny reimbursement of straight-time labor and benefits of its employees performing emergency protective measures following the disaster arguing that Stafford Act § 403, as amended by the Sandy Recovery Improvement Act (SRIA) of 2013, allows FEMA to reimburse applicants for “emergency and temporary labor.”  The Applicant stated that it did not have a local emergency operations plan in place at the time of the disaster, so it used permanent staff to perform emergency and essential tasks.  The Region VIII Regional Administrator denied the first appeal determining that neither the regulation nor FEMA policy permit reimbursement of the costs of basic pay of an applicant’s permanently employed personnel performing emergency protective measures.  In its second appeal, the Applicant reiterates that SRIA specifically authorizes reimbursement of basic pay of permanent employees doing disaster-related emergency work if not part of their normal duties.  The Applicant states that the amended Stafford Act supersedes the 2006 Recovery Policy used by FEMA to justify denying the costs. 

Authorities and Second Appeals

• Stafford Act §§ 305, 321, 403(d).
• 44 C.F.R. § 206.228(a)(2)(iii).
• California-Nevada Methodist Homes v. Fed. Emergency Mgmt. Agency, 152 F. Supp. 2d 1202, 1206-07 (N.D. Cal. 2001).
• RP 9525.7, Labor Costs – Emergency Work (Nov. 16, 2006).

Headnotes

• As of January 2013, Stafford Act § 403(d)(1)(A) allows FEMA to reimburse local governments for costs relating to basic pay and benefits for permanent employees conducting emergency protective measures, if the work is not typically performed by the employees and the type of work may otherwise be carried out by contract or agreement with private organizations, firms, or individuals.
• 44 C.F.R. § 206.228, which implements Stafford Act § 403, expressly prohibits reimbursement of basic pay for permanent employees performing emergency work. 
  • While Stafford Act § 403(d) may allow reimbursement of certain costs, FEMA has exercised its discretionary authority to limit such funding. 
  • Consequently, certain costs claimed in PW 552 are ineligible under the PA Program. 

Appeal Letter

Appeal Analysis

Background

From September 11 to 30, 2013, severe storms, flooding, landslides and mudslides caused floodwaters to overtop embankments along the Saint Vrain Creek.  The flooding damaged a large portion of the Town of Lyons’ (Applicant) critical infrastructure.  The Federal Emergency Management Agency (FEMA) prepared Project Worksheet (PW) 552 to address labor, equipment and contract costs associated with various emergency protective measures performed by the Applicant, including sandbagging, search and rescue operations, sheltering and emergency mass care, emergency demolition, and providing food, water, ice, and other essential needs.  In Version 2 of PW 552, FEMA deobligated $102,058.50 in costs associated with straight-time salaries (also called basic pay) it deemed ineligible pursuant to the Robert T. Stafford Disaster Relief and Emergency Act (Stafford Act) § 406,[1] Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.228(a)(2) and FEMA Recovery Policy (RP) 9525.7, Labor Costs – Emergency Work.[2]

First Appeal

On December 3, 2015, the Applicant appealed FEMA’s determination to deny reimbursement of straight-time salaries and benefits of its employees performing emergency protective measures following the disaster.  The Applicant argued that Stafford Act § 403, as amended by the Sandy Recovery Improvement Act (SRIA) of 2013,[3] allows FEMA to reimburse applicants for “emergency and temporary labor.”  The Applicant stated that it did not have a local emergency operations plan in place at the time of the disaster, so it used permanent staff to perform emergency and essential tasks. 

On March 31, 2016, FEMA Region VIII sent a Final Request for Information (RFI) to the Applicant stating:

SRIA amended the Stafford Act § 403(d) to authorize reimbursement of both the base and overtime pay and benefits of permanent employees of state, tribal, and local governments for emergency protective measures.  FEMA has not implemented this provision through rulemaking, however, and the current regulatory and policy language does not permit reimbursement of straight time.[4] 

Region VIII requested that the Applicant provide, within 30 days, any additional information that would merit consideration.  The Applicant responded on April 28, 2016 stating it should not be held accountable for FEMA’s failure to implement Stafford Act § 403(d) through rulemaking and reimbursement should not be denied. 

On June 20, 2016, the FEMA Region VIII Region Administrator (RA) denied the first appeal determining that neither regulation nor FEMA policy permit reimbursement of straight-time salaries and benefits of an applicant’s permanently employed personnel performing emergency protective measures.   

Second Appeal

In its second appeal, dated August 16, 2016, the Applicant reiterates that SRIA specifically authorizes reimbursement of straight-time pay and benefits costs in question and requests $114,877.29 in PA reimbursement.  The Applicant asserts that the Stafford Act supersedes FEMA’s basis for denial. 

Discussion

Pursuant to Stafford Act § 403, FEMA may reimburse costs for work and services to save lives, protect property or public health and safety.[5]  Prior to 2013, the Stafford Act did not explicitly address basic pay and benefits for permanent employees performing emergency work.[6]  SRIA § 1108[7] amended Section 403 of the Stafford Act by adding the following language:

If the President declares a major disaster . . . for an area within the jurisdiction of a . . . local government, the President may reimburse the . . . local government for costs relating to basic pay and benefits for permanent employees of the State, tribal, or local government conducting emergency protective measures under this section, if the work is not typically performed by the employees . . . and the type of work may otherwise be carried out by contract or agreement with private organizations, firms, or individuals . . . .[8]

However, 44 C.F.R. § 206.228, expressly prohibits reimbursement of straight-time salaries and benefits of an applicant’s permanently employed personnel performing eligible emergency protective measures under the Stafford Act.[9]  It is important to note that the Public Assistance Program is a discretionary program.[10]  While Section 403, as amended by SRIA § 1108, provides FEMA discretionary authority to reimburse certain costs incurred in furtherance of emergency work, it does not require it.  As such, 44 C.F.R. § 206.228(a)(2)(iii), which was in effect at the time of the disaster and still is, reflects the Agency’s decision to limit the exercise of its authority under Section 403.  Regarding the eligibility of basic pay for personnel performing emergency protective measures, FEMA’s decision[11] to not provide financial assistance under Stafford Act § 403(d) for straight-time salaries and benefits remains in force until such time as that limitation is changed through the issuance of new regulations.[12]  Consequently, reimbursement of these costs in PW 552 is ineligible under the PA Program. 

Conclusion

While FEMA is authorized to reimburse basic pay and benefits for an applicant’s permanent personnel performing emergency protective measures, the Agency’s discretionary determination through 44 C.F.R. § 206.228(a)(2)(iii) to not fund such costs is still in force.  As such, costs incurred by the Applicant for its employees performing emergency protective measures are not eligible.