Force Account Labor & Equipment Costs, Immediate Threat

Appeal Brief

Summary Paragraph

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Mississippi, with an incident period of January 20, 2020, to May 11, 2023. Methodist Senior Services (Applicant) requested $423,195.20 for force account labor (FAL), contracts, resident and employee meals, and materials costs. FEMA created Grants Manager Project 169639 to document the claim, but denied $379,882.47. FEMA found that contract and materials costs were unrelated to eligible emergency work, and FAL costs were for ineligible straight time hours. The Applicant submitted a first appeal stating that it was required to provide resident meals due to lock-down requirements and that it provided meals to employees because restaurants were closed; other materials costs were for disinfection. Regarding contracts, the Applicant stated that it hired temporary employees when its permanent employees were quarantined with COVID-19. The FEMA Region 4 Regional Administrator denied $367,082.47. FEMA found that the Applicant had not demonstrated the claimed costs for FAL, contracts, meals, and materials were eligible under COVID-19 policy. The Applicant submits a second appeal reiterating many of its prior positions and providing further explanations for its claim.

Authorities

• Stafford Act §§ 403, 502, 42 U.S.C. §§ 5170b, 5192.
• 44 C.F.R. §§ 206.223(a)(1), 206.225(a), 206.228(a)(2)(iii).
• PAPPG, at 19, 21, 23-24, 42, 57, 60-61, 63, 133, and 158.
• Work Eligible for Public Assistance Policy, at 3-4; O&O Policy, at 4-5; Food Policy, at 2-4; FEMA Fact Sheet, Eligible Emergency Protective Measures, at 1-2.
• Anchorage Middletown Fire & EMS, FEMA-4497-DR-KY, at 3; City of Bergen, FEMA-4488-DR-NJ, at 3; Fla. Christian Homes Senior Housing, Inc., FEMA-4486-DR-FL, at 3-4; Williamson (Cnty.) Gov’t, FEMA-4489-DR-IL, at 2; Water's Edge of Lake Wales, FEMA-4486-DR-FL, at 2-3; Strycker's Bay Neighborhood Council, Inc., FEMA-4480-DR-NY, at 4.

Headnotes

• Costs must be directly tied to the performance of eligible work and adequately documented.
  • The claimed FAL costs were associated with employees quarantined due to COVID-19. Quarantined employees are not performing eligible emergency work.
  • The claimed contract costs are associated with work to backfill the quarantined employees and are therefore ineligible; the Applicant has not demonstrated that the temporary employees performed any eligible emergency work.
• For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.
  • The Applicant has not provided information demonstrating that the employees receiving meals were performing eligible work.
  • The Applicant has not demonstrated the claimed costs for resident meals, meal delivery supplies, or materials are tied to the performance of eligible emergency work.

Conclusion

The Applicant has not demonstrated the claimed costs for FAL, contract labor, employee and resident meals, or materials are associated with eligible emergency protective measures. Therefore, this appeal is denied.

Appeal Letter

Appeal Analysis

Background

The coronavirus (COVID-19) pandemic resulted in a major disaster declaration for the state of Mississippi on April 5, 2020, with an incident period of January 20, 2020, to May 11, 2023. Methodist Senior Services (Applicant), a Private Nonprofit (PNP) organization, requested $423,195.20 for emergency protective measures implemented in response to the pandemic at its elder care facilities. The Applicant’s claim included force account labor (FAL) costs; contract labor costs for nursing, facility maintenance, and disinfecting services; costs for employee and resident meals; and material costs for various items (e.g., disinfectant supplies, personal protective equipment, and various items used for elder care activities and facility operations). To support its claim, the Applicant submitted invoices and receipts for its claimed costs, employee timesheets, pre- and post-disaster employee pay policies, a cost tracking spreadsheet, and other documentation. The Applicant stated that all of the claimed costs were incurred between March and December 2020. FEMA created Grants Manager Project 169639 to document the Applicant’s claim.

In a Determination Memorandum signed on March 15, 2023, FEMA denied $379,882.47.[1] FEMA determined that claimed costs for contract nursing and facility maintenance services, as well as costs for meals, meal delivery supplies, and various materials were “unrelated to direct emergency care, medical sheltering, or other emergency services for the [COVID-19] event” and were therefore ineligible.[2] Further, FEMA stated that the Applicant’s FAL claim was associated with “straight time incurred by budgeted employees providing services while other employees were in quarantine.”[3] FEMA stated that only costs for overtime labor were eligible for budgeted employees performing emergency work. It also noted that the Applicant’s emergency pay policy did not predate the disaster and could not be considered in determining eligibility. As a result, FEMA found that the claimed FAL costs were considered ineligible increased operating costs and the Applicant had not demonstrated that the associated work was related to eligible emergency actions; consequently, FEMA determined the claimed FAL costs were ineligible.

First Appeal

The Applicant submitted a first appeal dated April 28, 2023, requesting FEMA reverse the denial of $379,882.47. The Applicant stated that it incurred the costs at issue as a result of the pandemic. Regarding costs for meals and meal delivery supplies, it stated that residents at its facilities were required to remain in their individual living spaces, “therefore requiring meals to be delivered in disposable clam shells three times daily.”[4] It also asserted that it was “forced to feed all employees” because local restaurants were closed due to the pandemic.[5] The Applicant stated that additional material costs were necessary for the daily disinfection of its facilities, including during outbreaks. Finally, regarding the claim for contracted nursing services, the Applicant stated it was forced to hire temporary staff when its regular employees were quarantined with COVID-19, or left employment “due to early retirement and burnout.”[6] In a June 13, 2023 transmittal letter, the Mississippi Emergency Management Agency (Recipient) expressed support for the appeal.

On May 1, 2024, the FEMA Region 4 Regional Administrator partially granted the appeal. FEMA found that the Applicant had demonstrated contracted disinfection services were an eligible emergency protective measure; the associated cost of $12,800.00 was therefore eligible. However, FEMA found that the Applicant had not demonstrated the remaining costs at issue were eligible and denied $367,082.47. FEMA stated that the Applicant’s FAL request was for straight-time labor performed by permanent employees that were quarantined with COVID-19. FEMA found that: (1) self-quarantining was not an eligible emergency protective measure; (2) the Applicant’s policy providing pay for quarantined employees did not pre-date the disaster; and (3) for emergency work, only overtime labor performed by budgeted employees was eligible. FEMA denied the Applicant’s claimed FAL costs. 

Regarding meal costs, FEMA determined that the Applicant had not demonstrated it met the eligibility criteria found in PA policy for the reimbursement of employee meal costs.[7] Therefore, FEMA denied the Applicant’s claimed meal costs. Next, FEMA stated that the Applicant’s claimed costs for contracted work included costs for nurses, certified nursing assistants (CNAs), and maintenance workers. However, FEMA determined that “[t]he Applicant’s documentation d[id] not separate costs” for the various types of contract work performed, therefore “FEMA [wa]s unable to differentiate between eligible and ineligible contract costs.”[8] Finally, FEMA determined that the costs for various materials and supplies were not associated with eligible emergency protective measures taken in response to the pandemic, nor did they represent measures implemented to facilitate the safe opening and operation of an eligible facility. FEMA denied the claimed materials costs.

Second Appeal

In a letter dated June 25, 2024, the Applicant submits a second appeal requesting FEMA approve $367,082.47, as itemized in the table to follow.

The Applicant reiterates many of its arguments from the first appeal. Additionally, the Applicant states that it instituted an emergency pay policy to provide paid leave for staff testing positive for COVID-19, or for those staying at home to care for a child with the virus. The Applicant clarifies this paid leave for the quarantined employees constitutes the claimed FAL costs. It states that the purpose of the emergency pay policy was to prevent transmission of the virus in its facilities, to provide for staff, and to ensure employees returned once their quarantine ended. The Applicant asserts that in this light, the policy should be viewed as “not a post-disaster measure but rather a proactive strategy to mitigate a long term, continuing disaster.”[9] 

The Applicant also states that it ceased communal dining for its residents and staff based on guidance from the Centers for Disease Control and Prevention (CDC) and the Mississippi Department of Health (DOH). It asserts that this change resulted in increased costs for meal preparation and delivery, but were “designed to more effectively manage infection rates within our facilities and to safeguard the public health for all.”[10] The Applicant attaches guidance documents from the Mississippi DOH and the Center for Medicare & Medicaid Services (CMS); its internal COVID-19 protocol; COVID-19 status reports; and a news article discussing the effects of COVID-19 in long-term care facilities. In a transmittal letter dated June 28, 2024, the Recipient expresses support for the appeal.

Discussion

Force Account Labor & Equipment Costs

FEMA is authorized to provide assistance for emergency protective measures to save lives and protect public health and safety.[11] FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy.[12] For emergency work, except in limited circumstances, the straight-time of an applicant’s budgeted employees performing emergency work is not eligible.[13] FEMA policy defines a backfill employee as a replacement employee who performs the regular duties of other personnel.[14] FAL overtime costs for the backfill employee may be eligible even if the backfill employee is not performing eligible work as long as the employee that he/she is replacing is performing eligible emergency work.[15] FEMA may also provide assistance for costs that are directly tied to the performance of eligible work and adequately documented.[16] It is the applicant’s responsibility to substantiate its claim as eligible; if the applicant does not provide documentation to support its claim as eligible, FEMA cannot provide PA funding for the work.[17]

Here, the Applicant appeals FEMA’s denial of $84,632.31 in claimed FAL costs for budgeted employees. It acknowledges that the claimed FAL costs are for the time these employees were quarantined (or caring for a person that was quarantined) due to COVID-19.[18] Here, the FAL costs constitute straight-time costs[19] paid to budgeted employees, the quarantined employees were not performing eligible emergency work,[20] and the Applicant’s emergency pay policy did not predate the COVID-19 incident period.[21] For all of these reasons, the claimed FAL costs are not eligible for PA funding.

The Applicant also requests $39,775.29 for contracted nurses and a maintenance supervisor it states were necessary to fill vacancies created by the employees quarantined with COVID-19, or that left employment due to the pandemic.[22] The Applicant states that it hired temporary nursing staff to comply with staffing ratios mandated by Mississippi DOH and CMS regulations, and that all costs for temporary staff were unbudgeted due to the unpredictability of the pandemic. FEMA notes that its policy applicable to backfill employees relates to FAL, not contract costs. Nonetheless, as stated above, the replaced quarantined employees were not performing eligible emergency work. Therefore, any claimed costs for temporary staff hired as backfill for quarantined employees are not eligible under FEMA’s backfill policy. Similarly, the Applicant has not provided documentation to demonstrate the temporary employees (i.e., the temporary nurses, CNAs, or the maintenance supervisor) who replaced the quarantined employees were themselves performing eligible emergency work related to COVID-19. For example, the invoices for temporary nursing staff do not record the type of work performed.[23] Consequently, the Applicant has not demonstrated these costs are directly tied to the performance of eligible work. Therefore, the claimed costs for contracted labor are ineligible for PA funding.

Immediate Threat

For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident.[24] The provision of meals, including meal supplies, for employees engaged in eligible emergency work may be eligible provided the individuals are not receiving per diem, and one of the following conditions apply: (1) meals are required based on a labor policy or written agreement that meets certain policy requirements; (2) conditions constitute a level of severity that requires employees work abnormal, extended work hours without a reasonable amount of time to provide their own meals; or (3) food and water is not reasonably available for employees to use.[25] Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.[26] The additional costs are only eligible if: (1) the services are specifically related to eligible emergency actions to save lives or protect public health and safety or improved property; (2) the costs are for a limited time based on the exigency of the circumstances; and (3) the applicant tracks and documents the additional costs.[27]

In response to COVID-19, eligible emergency protective measures may include the purchase and distribution of supplies, and, in limited circumstances, food.[28] FEMA may also provide assistance for eligible emergency protective measures that include certain measures implemented to facilitate the safe opening and operation of an eligible facility.[29] Such assistance is limited to the purchase and distribution of face masks and personal protective equipment, cleaning and disinfection including the purchase and provision of necessary supplies and equipment in excess of the applicant’s regularly budgeted costs, COVID-19 diagnostic testing, screening and temperature scanning, and the purchase and installation of temporary physical barriers.[30] All safe opening and operation work must be done in accordance with CDC guidance or that of an appropriate public health official available at the time the work was completed.[31]

Here, the Applicant requests $20,163.93 for employee meal costs. It states that it was required to provide meals to its employees because “most local restaurants were not open … when the pandemic broke out,” and “[s]taff no longer had access to external food sources because of the virus.”[32] In support, the Applicant provides invoices and its emergency pay policy that contains a provision for employee meals. However, the Applicant has not provided documentation demonstrating that the associated employees were performing eligible work. Additionally, the Applicant’s emergency pay policy leaves the decision to provide employee meals to the discretion of its Executive Director, stating that the Applicant “may” offer meals for employees.[33] Thus, the Applicant has not shown that the meals were required based on a labor policy or written agreement. Likewise, the available documentation (e.g., employee timesheets) does not demonstrate, and the Applicant did not claim, that employees were required to work abnormal, extended work hours without a reasonable amount of time to provide their own meals. Finally, the documentation in the record does not substantiate the Applicant’s claim that local restaurants were closed or that its employees could not otherwise purchase food. Rather, receipts submitted with the project documentation show that meals and groceries were available for purchase.[34] The costs incurred in providing these meals are therefore ineligible.

The Applicant also requests $135,729.40 for resident meals and $69,809.71 for meal delivery supplies. It states that it ceased providing communal dining in accordance with guidance from the Mississippi DOH and CDC, delivering meals to its residents in their rooms.[35] However, PA funding for additional costs related to operating a facility is only available if the services in question are specifically related to otherwise eligible emergency actions. Here, the Applicant provided meals to its residents prior to the onset of the COVID-19 public health emergency. The Applicant has not demonstrated that the claimed costs are directly tied to the performance of eligible emergency protective measures required to eliminate or lessen an immediate threat to life, public health, or safety.[36]

Finally, the Applicant requests $16,971.83 for various materials and supplies, such as cleaning supplies, trash bins, laundry detergent, meal carts, and materials for activities, among many others. However, the Applicant has not demonstrated that costs for any of the claimed items are directly tied to the performance of eligible emergency protective measures implemented in response to an immediate threat under FEMA’s COVID-19 policies.[37] For example, the Applicant has not shown that the cleaning supplies were in excess of the applicant’s regularly budgeted costs or that the purchase of other materials and supplies was done in accordance with CDC guidance or that of an appropriate public health official available at the time the work was completed. Therefore, the costs for materials and supplies are ineligible.

Conclusion

The Applicant has not demonstrated the claimed costs for FAL, contract labor, employee and resident meals, or materials are associated with eligible emergency protective measures. Therefore, this appeal is denied.