Immediate Threat, Force Account Labor & Equipment Costs

Appeal Brief

Summary Paragraph

The COVID-19 pandemic resulted in a major disaster declaration for the State of Florida on March 25, 2020, with an incident period of January 20, 2020, to May 11, 2023. The Water's Edge of Lake Wales (Applicant), a Private Nonprofit (PNP), requested Public Assistance funding for personal protective equipment; supplies (e.g., face tissue, disposable cutlery, foam container, bowl foam, paper placemat, cup foam, plastic lids for containers) to distribute food within the population it served, and overtime and hazard Force Account Labor (FAL) pay. In a Determination Memorandum, FEMA partially denied the project stating that the supplies were preventative measures and did not address an immediate threat, and additionally, that the hazard FAL was ineligible because the Applicant’s hazard pay policy was not a predisaster labor policy. The Applicant appealed, stating: (1) the supply costs were eligible because t it served senior citizens and the supplies were necessary to decrease contact and provide the food in a non-congregated space; and (2) its hazard pay policy was in effect prior to the disaster declaration date. The FEMA Regional Administrator denied the appeal. FEMA determined that the food distribution supplies represented an ineligible increased operating cost. Also, FEMA stated that hazard FAL was ineligible because the hazard pay policy was placed after the beginning of the incident period. The Applicant filed a second appeal reiterating previously raised arguments. 

Authorities and Second Appeals

• Stafford Act § 403(a)(3).
• 44 C.F.R. §§ 206.223(a)(1); 206.225(a).
• PAPPG, at 23, 42, 57, 60-61, 63.
• Fact Sheet: Private Nonprofit Organizations, at 2.
• Union Springs Central Sch. Dist., FEMA-4480-DR-NY, at 3. Seneca Falls Central Sch. Dist., FEMA-4480-DR-NY, at 2-3

Headnotes

• For PNPs, operating costs are generally not eligible even if the services are emergency services, unless the PNP performs an emergency service at the request of and certified by the legally responsible government entity.
  • Here, the Applicant used the food distribution supplies as part of its normal operations of providing food to the senior citizens it normally served. The administrative record does not include documentation demonstrating that the Applicant purchased those supplies, or provided non-congregate dining, at the request of and certified by a legally responsible government entity.
• FEMA determines the eligibility of OT, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy. 
  • Here, the Applicant issued a hazard pay policy after the March 13, 2020 emergency declaration. In addition, documentation provided by the Applicant does not adequately distinguish between hours that employees were conducting their normal duties and those spent performing potentially eligible work to tie the claimed FAL hazard pay costs to the performance of eligible emergency protective measures.

Conclusion

The Applicant has not demonstrated that the costs pertaining to food distribution supplies are tied the performance of eligible emergency protective measures. Rather, they are ineligible increased operating costs. Further, the claimed FAL hazard pay costs are not associated with a predisaster written labor policy, nor the performance of eligible work. 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 Florida on March 25, 2020, with an incident period of January 20, 2020 to May 11, 2023. Preceding the major disaster declaration, the President issued a nationwide emergency declaration for the COVID-19 pandemic on March 13, 2020. Water’s Edge of Lake Wales (Applicant), a Private Nonprofit (PNP) assisted living facility for the elderly, requested $135,200.12 in Public Assistance (PA) funding for emergency protective measures taken in response to the pandemic. The Applicant requested PA for personal protective equipment (PPE), disinfecting supplies, and food distribution supplies (e.g., face tissue, disposable cutlery, foam container, bowl foam, paper placemat, cup foam, plastic lids for containers) it claimed were necessary to eliminate congregate dining in its facilities.[1] The Applicant also claimed costs for overtime (OT) force account labor (FAL), as well as reimbursement for stipends and supplemental pay per hour, referred to by the Applicant as hazard FAL costs, that it provided to its employees for hours worked in its facilities during the pandemic. In support of the FAL costs, the Applicant submitted its Employee Information Guide, last revised on January 1, 2020; and a hazard pay policy effective as of March 16, 2020, among other documentation. 

FEMA issued a Determination Memorandum signed on January 4, 2022, partially granting costs.[2] FEMA approved costs for PPE, disinfection supplies, and OT FAL. However, FEMA denied $127,138.41 for food distribution supplies and hazard FAL. FEMA stated the food distribution supplies were a preventative measure that did not address an immediate threat and were ineligible as an increased operating cost. Regarding the claimed hazard FAL, FEMA stated that the costs were ineligible because the hazard pay policy was not a predisaster labor policy.

First Appeal 

In a letter dated March 31, 2022, the Applicant submitted its first appeal, requesting the previously denied $127,138.41. The Applicant first stated its food distribution supplies were eligible because the Applicant served senior citizens, a population at higher risk from 

COVID-19, and that it followed guidance from the Centers for Disease Control and Prevention (CDC) to implement prudent measures to protect its senior population. Next, the Applicant asserted that its hazard pay policy was predisaster because although it was issued after the start of the incident period, it was issued before the disaster declaration date. In a letter dated May 20, 2022, the Florida Division of Emergency Management (Recipient) transmitted the appeal with its support.

The FEMA Region 4 Regional Administrator denied the appeal in a letter dated February 24, 2023. FEMA first found that the purchase of food distribution supplies represented an increased operating cost not eligible under PA. FEMA observed that the Applicant’s predisaster services included the provision of meals to its senior citizens. FEMA found therefore, that while the supplies were used to continue normal operations and did not constitute an eligible emergency protective measure. Lastly, FEMA found the Applicant did not demonstrate it had a predisaster labor policy that justified reimbursement for the claimed hazard FAL costs. FEMA stated that even though the hazard pay policy was in effect before the major disaster declaration date, the applicable regulation and policies require that a pay policy be in effect prior to the beginning of the incident period, not the declaration date.

Second Appeal

The Applicant filed a second appeal dated April 21, 2023, reiterating previously raised arguments. It also expands on prior arguments concerning the eligibility of the claimed hazard pay. Specifically, the Applicant argues that FEMA has a longstanding policy that the term “predisaster” encompasses events which occur prior to the declaration date, rather than the incident period.[3] Furthermore, the Applicant notes that its employees received their first hazard pay on March 20, 2020, prior to this disaster’s declaration. The Recipient transmitted the Applicant’s second appeal with its support in a letter dated June 12, 2023. In support of the Applicant’s position, the Recipient argues that because a predisaster pay policy must apply “uniformly regardless of a Presidential declaration,” the declaration date is the relevant time point.[4]

Discussion

Immediate Threat

FEMA is authorized to provide emergency protective measures to save lives and protect public health and safety.[5] To be eligible for PA, the work must be required due to an immediate threat resulting from the declared incident.[6]In response to COVID-19, eligible emergency protective measures may include the purchase and distribution of supplies and, in limited circumstances, food.[7] When essential components of a PNP facility are urgently needed to save lives and protect public health and safety under the COVID-19 declaration, PNPs that own or operate an eligible facility and perform eligible work for which they are legally responsible in response to the COVID-19 incident, may be eligible for reimbursement of costs as a PA applicant.[8] Increased costs of operating a facility or providing a service are generally not eligible, even when directly related to the incident.[9]

Here, the Applicant used the food distribution supplies as part of its normal operations of providing food to the senior citizens it normally served. In this case, the Applicant provided meals to its senior population prior to the onset of the COVID-19 public health emergency and continued this provision of meals during the COVID-19 public health emergency. The Applicant stated it incurred additional costs to avoid the congregation of the senior citizens. However, PA funding for additional costs related to operating a facility is only available if the services in question that the facility provided are specifically related to otherwise eligible emergency actions.[10] Here, the Applicant has not demonstrated that the claimed costs are tied to the performance of eligible emergency protective measures required to eliminate or lessen an immediate threat to life, public health, or safety. As such, the Applicant’s increased costs related to the distribution of food supplies among the population in its assisted living facility are not eligible for PA.[11]

Force Account Labor & Equipment Costs

FEMA determines the eligibility of OT, premium pay, and compensatory time costs based on the applicant’s predisaster written labor policy, provided the policy does not include a contingency clause that payment is subject to federal funding, is applied uniformly regardless of a Presidential declaration, and has set non-discretionary criteria for when the applicant activates various pay types.[12] Costs must be directly tied to the performance of eligible work and adequately documented.[13]

Here, the Applicant states that hazard pay was a stipend, coupled with a per-hour supplement, provided to its employees during the COVID-19 public health emergency. It claimed the hazard pay was provided in accordance with a predisaster written pay policy because it issued the pay policy before the March 25, 2020 major disaster declaration date. However, for COVID-19 incident, the disaster declaration date followed the March 13, 2020 emergency declaration.[14] Therefore, the Applicant’s March 16, 2020 labor policy was not “predisaster” based on the emergency declaration date of March 13, 2020 for the COVID-19 incident.[15] The requirement that a labor pay policy be applied uniformly regardless of a Presidential declaration, demonstrates that the intent of the FEMA policy is to ensure an applicant’s pay policy is not only applied in situations where federal assistance is anticipated. In addition, documentation provided by the Applicant does not adequately distinguish between hours that employees were conducting their normal duties and those spent performing potentially eligible work to tie the claimed FAL hazard pay costs to the performance of eligible emergency protective measures.  

Accordingly, because the Applicant did not incur the claimed hazard FAL costs in accordance with a predisaster written pay policy, nor tie costs to the performance of eligible work, the costs are not eligible for PA funding. 

Conclusion

The Applicant has not demonstrated that the costs pertaining to food distribution supplies are tied the performance of eligible emergency protective measures. Rather, they are ineligible increased operating costs. Furthermore, the claimed FAL hazard pay costs are not associated with a predisaster written labor policy or the performance of eligible work. Therefore, this appeal is denied.