Procurement and Contracting Requirements – Project Documentation and Closeout – Public Interest

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4337
Applicant	Village Center Community Development District
Appeal Type	Second
PA ID#	000-UCCM7-00
PW ID#	GMP 26119, 26195, 26197, and 26199
Date Signed	2002-09-16T17:00:00

Summary Paragraph

Hurricane Irma deposited vegetative debris throughout the Village Center Community Development District (Applicant).  The Applicant maintained prepositioned contracts with Crowder Gulf Joint Ventures, Inc. (Crowder) for debris removal and Volkert, Inc. (Volkert) for debris monitoring services.  However, Crowder was late to fully mobilize and the Applicant hired landscape contractors to perform debris cleanup for later removal by Crowder.  The Applicant directly oversaw the contractors removing debris.  FEMA denied funding for Grants Manager Projects 26119, 26195, 26197, and 26199, determining that the Applicant failed to provide documentation demonstrating that the work was: (1) performed on eligible facilities; (2) performed in response to an immediate threat; and (3) properly procured.  The Applicant appealed, disputing each finding.  The FEMA Region IV Regional Administrator denied the appeal.  FEMA found: the Applicant had not demonstrated that its facilities were accessible to the general public; the work performed was not documented in accordance with FEMA policy; and the Applicant did not comply with federal procurement regulations.  On second appeal, the Applicant reiterates its previously raised arguments that its facilities were open to the public, states that debris removal was documented by Crowder once it mobilized, and asserts that procurement requirements were satisfied.

Authorities and Second Appeals

• Stafford Act §§ 102(8), 403, 407.
• 44 C.F.R. 206.224(a).
• 2 C.F.R. §§ 200.317-200.326.
• PAPPG, at 10-11, 15, 30, 32, 133-134, 161.
• Town of Franklin, FEMA-4028-DR-MA, at 5.

Headnotes

• A Community Development District (CDD) must be legally responsible for ownership, maintenance, and operation of an eligible facility that is accessible to the general public.
  • The Applicant’s facilities do not serve the general public, as they are generally limited to the use of its residents and have facility access policies restricting non-residents.
• It is the Applicant’s responsibility to substantiate its claim as eligible. 
  • The documentation fails to demonstrate that debris removal was due to an immediate threat.
  • FEMA is unable to substantiate the origin and eligibility of the debris removal work of the landscape contractors, and, in turn, Crowder or Volkert.
• Applicants must comply with federal procurement regulations as a condition of receiving Public Assistance (PA) funding for contract costs for eligible work.
  • The Applicant did not comply with the federal procurement regulations when hiring the landscape contractors for debris removal work.

Conclusion

The Applicant failed to demonstrate its eligibility for PA funding that as a CDD it is accessible to the general public.  Additionally, the debris removal work is ineligible because it was not documented in accordance with FEMA policy and because the Applicant did not comply with federal procurement regulations.

 

Appeal Letter

Appeal Analysis

Background

Hurricane Irma’s high winds and heavy rain deposited vegetative debris throughout the Village Center Community Development District (Applicant) in Florida.  The President issued a major disaster declaration on September 10, 2017, with an incident period extending from September 4 to October 18, 2017, which authorized Public Assistance (PA) in all Florida counties.

The Applicant utilized contractors to perform debris removal work, including tree cutting and hauling, stump removal and grinding, tree branch cutting and hauling, and roadway and right-of-way cleanup.  The Applicant maintained a prepositioned contract for debris removal with Crowder Gulf Joint Venture, Inc. (Crowder), but Crowder was late to fully mobilize in response to Hurricane Irma.  As a result, the Applicant hired seven landscape contractors, with which it had previous working relationships,[1] to perform debris stacking and removal activities.  Upon mobilization, Crowder subcontracted with several of the landscape contractors to continue the work while others continued limited operations until Crowder could assume control.  FEMA prepared Grants Manager (GM) Projects 26119, 26195, 26197, and 26199 to document the costs associated with debris removal activities, which altogether totaled $252,211.29.

On January 24, 2019, FEMA issued a Determination Memorandum (DM) denying funding for the projects.  FEMA found that the Applicant did not provide documentation necessary to effectively analyze whether the debris removal scope of work was performed on eligible facilities; was necessary to eliminate an immediate threat to lives, public health, safety, or improved property; or was properly procured.

 

First Appeal

The Applicant appealed FEMA’s denial through a March 15, 2019 letter, asserting that its facilities were eligible; its contractors removed all debris from roadways, rights-of-way, or facilities owned by the Applicant that it deemed to be an immediate threat to public health, safety, or improved property; and, it properly procured the contracts associated with the debris removal work.  The Applicant stated that it directed and supervised the pickup and cleanup of debris pursuant to its authority under Florida law.  The landscape contractors were tasked with gathering and piling debris, and all debris piles picked up by Crowder were identified in load tickets with GPS coordinates.  The Applicant asserted that the prepositioned contracts with Crowder for debris removal and with Volkert, Inc. (Volkert) for debris monitoring accounted for $157,662.02 of the claimed costs and were properly procured, while the remaining $94,549.27 in costs for the landscape contractors were allowed under the Applicant’s emergency authority granted by Florida law[2] and also because these direct orders fell below its procurement policy threshold for formal procurement.  In a transmittal letter dated May 13, 2019, the Florida Division of Emergency Management (Grantee) expressed support for the appeal.

FEMA issued an August 6, 2019 Request for Information (RFI) advising the Applicant that the documentation in the administrative record did not substantiate eligibility for the claimed work and costs.  FEMA requested that the Applicant provide additional documentation demonstrating that: (1) the debris removed posed an immediate threat and was eligible work; (2) the debris was removed from eligible facilities; (3) the Applicant’s facilities served the general public without exclusion to membership and facility access was not prohibited by gates or other security features; (4) all contracts were procured in accordance with federal regulations; and (5) eligibility of the work was substantiated, as required by the scopes of work in the prepositioned debris removal and debris monitoring contracts.  

In its September 4, 2019 RFI response, the Applicant acknowledged that documentation of exact origination demonstrating an immediate threat, including photographs and locations, for debris picked up by the landscape contractors was not available.  The Applicant attributed this oversight to the landscape contractors not being experienced disaster debris removal firms.  However, the Applicant maintained that the debris originated from public roads and rights-of-way for which it had ownership and legal responsibility, was picked up at its direction by the landscape contractors and taken to temporary debris management site (TDMS) facilities, and the costs incurred by Crowder and Volkert were fully documented.  The Applicant argued that section 407 of the Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act and Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.224 do not require coordinating addresses, coordinates, sites, or photos to sustain debris removal eligibility.  Additionally, the Applicant stated that the general public may access its facilities by obtaining a guest pass, and the gates at its facilities were in place to control traffic and did not prohibit access in any way.  In addition to reasserting its authority under Florida law to waive procurement procedures and formalities, the Applicant stated that noncompetitive procurement of the landscape contractors was permitted under federal regulations due to a public exigency or emergency.  The Applicant asserted that, “there was simply no opportunity to execute new contracts and take all the formal steps discussed in the FEMA Fact Sheet on Procurements Conducted under Exigent or Emergency Circumstances.”[3]

On November 21, 2019, the FEMA Region IV Regional Administrator (RA) denied the appeal.  FEMA determined that: (1) the Applicant’s facilities were not open to nor served the general public as required for PA eligibility as a Community Development District (CDD);[4] (2) the eligibility of the debris removal operation was not substantiated with supporting documentation; and (3) the Applicant did not comply with federal procurement regulations.

 

Second Appeal

The Applicant submitted its second appeal by letter dated January 20, 2020, requesting funding in the amount of $252,211.29.  The Applicant maintains that FEMA should not require a CDD to be open to or provide a service to the general public in order to be eligible for PA funding.  It also contends that, in any event, its facilities are open to the public because its more than 130,000 residents and their guests are the general public.  Additionally, the Applicant states that there are no gates to any of the associated facilities, the guard houses are only on high-speed thoroughfares to slow traffic, and the gates at all guard houses can be accessed by anyone pressing a button.  The Applicant also notes that it uses its recreational facilities to host public events such as softball, archery, and Senior Olympics tournaments.

The Applicant also maintains that it properly procured its contracts with Crowder and Volkert.  It states that work by Crowder and Volkert accounts for 62.5 percent of the costs and it submitted documentation for work by these contractors, so 62.5 percent of the costs should be awarded at a minimum.  The Applicant states that more than 95 percent of the debris brought to the TDMS facilities by landscape contractors originated from roads, rights-of-way, and entrances.  While photographs do not exist, the Applicant contends that debris locations are documented by location description; landscape contractors took debris to TDMS facilities, and from there it was documented by Crowder and Volkert.  The Applicant proposes that debris moved from the TDMS facilities can be determined by the GPS coordinates that match on the load ticket schedule and on the TDMS state permits, and any debris that does not match was taken directly from the roads, rights-of-way, and entrances.

The Applicant reiterates its belief that procurement rules were waived based on Florida law;[5] all landscape contracts were below the threshold for formal procurement; 2 C.F.R. § 200.320 allowed for noncompetitive procurement of the landscape contractors; the Applicant provided oversight as it supervised, monitored, and directed landscape contractors to only remove eligible debris as documented by force account labor logged in another project; and that no cost or price analysis was required by 2 C.F.R. § 200.323 because no landscape contractor’s services exceeded the simplified acquisition threshold.  The Applicant asserts that the landscape contractor costs were reasonable and more cost efficient than allowing its residents to be endangered by storm debris.  In response to the lack of a ceiling price for its time and materials contracts, the Applicant states that the landscape contractor contracts were not originally intended to be used for federal disaster reimbursement and it was unknown when Crowder would mobilize or how much debris was present.  In a transmittal letter dated March 13, 2020, the Grantee supports the appeal.

 

Discussion

Accessible to the General Public

FEMA may provide PA funding to a local government for emergency work, including emergency protective measures and debris removal.[6]  Eligible local governments include special districts,[7] such as a CDD.[8]  However, to be eligible, a CDD must be legally responsible for ownership, maintenance, and operation of an eligible facility that is accessible to the general public.[9]  Additionally, when a facility maintained by a CDD is not open to the general public or does not provide a service to the general public, the facility is not eligible.[10]

The Applicant’s facilities, including its streets and rights-of-way, utilize gates and guard houses that restrict access to the general public.  The Applicant asserts that the gates only exist to control traffic flow and can be opened by anyone, but its Guest Card ID policy[11] establishes restrictions on non-residents and requires that guest card requests come from residents.  Although the Applicant notes that its facilities host occasional public events, the facilities are not accessible to the general public.  The Applicant’s facilities are generally limited to the use of its residents and have access policies[12] restricting non-residents.[13]  Therefore, the Applicant’s facilities do not meet the requirement of serving the general public.  As such, the debris removal work is ineligible for PA funding.

 

Documentation of an Immediate Threat

FEMA may reimburse costs for debris removal when it is necessary to eliminate an immediate threat.[14]  It is the Applicant’s responsibility to substantiate its claim as eligible.[15]  If the Applicant does not provide sufficient documentation to support the eligibility of its claim, FEMA cannot provide PA funding for the work.[16]  Documentation to support immediate threats, debris impacts, or damage may include descriptions of the immediate threat, records demonstrating the presence of the immediate threat (e.g., technical reports, safety inspector reports, photographs), and documentation reflecting actual debris quantities by type.[17]

The Applicant asserts that it initiated debris removal work to address the public safety threat of debris in and around roadways, rights-of-way, and other public areas.  As acknowledged by the Applicant in its RFI response, documentation such as photographs and locations of debris picked up by the landscape contractors is not available.  In addition to the Applicant’s responsibility to provide documentation supporting its eligibility claim,[18] the Applicant is also charged with hiring responsible contractors with adequate financial and technical resources to complete a project.[19]  The scope of work for the prepositioned contracts with Crowder and Volkert included specific invoice and documentation requirements for emergency debris clearance, but the Applicant did not include such language in the landscape contractor work orders.  The Applicant elected to direct debris removal work under existing landscape contracts instead of adding any detailed disaster debris removal scope of work parameters that it had already developed and spelled out in its prepositioned debris removal contract with Crowder.

The debris documentation provided by Crowder and Volkert identifies debris removed from TDMS facilities.  However, without origination documentation, there is no way to substantiate that the debris located at TDMS facilities posed an immediate threat and was removed from roadways, rights-of-way, or other multi-modal paths.[20]  The Applicant has not provided documentation to support its assertion that the work performed by the landscape contractors was eligible and the limited documentation provided in the Applicant’s landscape contractor invoices describes debris removal from private property and private use areas.

The documentation provided by the Applicant does not demonstrate the eligibility of debris removal due to an immediate threat.  Therefore, FEMA is unable to substantiate the origin and eligibility of the debris removal work of the landscape contractors, and, in turn, Crowder and Volkert.

 

Procurement and Contracting Requirements

Applicants must comply with federal procurement regulations as a condition of receiving PA funding for contract costs for eligible work.[21]  The Applicant must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and standards.[22]

Generally, all procurement transactions must be conducted in a manner to ensure full and open competition.[23]  Noncompetitive procurement of an award may be used only in certain circumstances, such as when the public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitations.[24]  The applicant must maintain records sufficient to detail the history of procurement.[25]  These records will include, but are not necessarily limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.[26]  Applicants must include certain required provisions in all contracts awarded[27] and maintain oversight to ensure contractors perform according to the conditions and specifications of the contract and any purchase orders.[28]  For every procurement in excess of the simplified acquisition threshold, including contract modifications, the applicant must perform a cost or price analysis.[29]

FEMA may reimburse costs incurred under a time and materials contract only if all of the following apply: (1) no other contract was suitable; (2) the contract has a ceiling price that the contractor exceeds at its own risk; and, (3) the applicant provides a high degree of oversight to obtain reasonable assurance that the contractor is using efficient methods and effective cost controls.[30]

While a Florida Executive Order may allow the Applicant to bypass its own and any applicable state procurement requirements, the Applicant still must comply with the federal procurement regulations.[31]  If conducting a noncompetitive procurement under exigent or emergency circumstances, the Applicant should be prepared to demonstrate and provide justification for the use of the public exigency or emergency exception.  The Applicant’s documentation does not demonstrate that the noncompetitively procured landscape contractors only completed work during the actual exigent or emergency circumstances.  Moreover, while the federal procurement regulations account for situational infeasibility due to the burden of delay that full and open competition may pose during public exigency or emergency circumstances, the Applicant still must comply with other procurement requirements and ensure costs are reasonable.  The Applicant did not provide documentation demonstrating that it: satisfied the requirements for using time and materials contracts; included the required contract provisions; and maintained records sufficient to detail the history of procurement.  The Applicant did not provide documentation illustrating it performed a cost or price analysis or how it determined contract costs were reasonable.  The Applicant, by its own admission, did not comply with the federal procurement regulations when procuring the services of the landscape contractors.

 

Conclusion

The Applicant failed to demonstrate its eligibility for PA funding as a CDD that it is accessible to the general public.  Additionally, the debris removal work remains ineligible because it was not documented in accordance with FEMA policy and because the Applicant did not comply with federal procurement regulations.

 

 

[1] The Applicant’s existing contracts with its landscape contractors were all time and materials contracts.

[2] For support, the Applicant cited section 252.38(3) of the Florida Statutes and Florida Executive Order 17-235 as authorization to take actions necessary to protect the public health and safety.

[3] Response to FEMA’s Request for Information from the Vill. Ctr. Cmty. Dev. Dist., at 6 (Sept. 4, 2019).

[4] Public Assistance Program and Policy Guide, FP 104-009-2, at 10 (Apr. 1, 2018) [hereinafter PAPPG] (“Community Development Districts are special districts that finance, plan, establish, acquire, construct or reconstruct, operate, and maintain systems, facilities, and basic infrastructure within their respective jurisdictions.  To be eligible, a Community Development District must be legally responsible for ownership, maintenance, and operation of an eligible facility that is accessible to the general public.”).

[5] The Applicant cites section 252.38 of the Florida statutes and section (4)(C)(2) of Florida’s Executive Order 17-235.

[6] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act, as amended, §§ 403, 407, 42 U.S.C §§ 5170, 5173 (2017).

[7] Stafford Act § 102(8); PAPPG, at 161.

[8] PAPPG, at 10.

[9] Id.

[10] PAPPG, at 15.

[11] Villages Cmty. Dev. Dist. Guest ID Card Program Policy (June 2, 2014).

[12] Id.

[13] See PAPPG, at 11.  While not prescriptive for local governments, FEMA’s guidance on evaluating whether Private Nonprofit (PNP) facilities generally meet the requirement of serving the general public is informative in this analysis of a CDD.  PNP facilities generally meet the requirement of serving the general public if all of the following conditions are met: (1) facility use is not limited to a certain number of individuals, a defined group of individuals who have a financial interest in the facility (e.g., condominium associations), certain classes of individuals, or an unreasonably restrictive geographic area (e.g., a neighborhood within a community); (2) facility access is not prohibited with gates or other security systems; and, (3) any membership fees meet certain criteria.

[14] See Title 44 Code of Federal Regulations (44 C.F.R.) § 206.224(a) (2010) (allowing assistance for debris removal that is in the public interest, such as when the work is necessary to (1) eliminate immediate threats to life, public health and safety, (2) eliminate immediate threats of significant damage to improved public or private property, (3) ensure economic recovery of the affected community to the benefit of the community-at-large, or (4) mitigate the risk to life and property by removing substantially damaged structures).

[15] PAPPG, at 133.

[16] Id.

[17] Id., at 134.

[18] Id., at 133.

[19] Title 2 Code of Federal Regulations (2 C.F.R.) § 200.318(h) (2017).

[20] See FEMA Second Appeal Analysis, Town of Franklin, FEMA-4028-DR-MA, at 5 (Oct. 17, 2017) (finding that the Applicant failed to document specific debris removal work performed from points of collection to final disposal despite the Applicant’s assertion that it observed the debris removal work to ensure eligible work was completed).

[21] PAPPG, at 30.

[22] 2 C.F.R. § 200.318(a).

[23] Id., at § 200.319.

[24] Id., at § 200.320(f)(2).

[25] Id., at § 200.318(i).

[26] Id.

[27] 2 C.F.R. § 200.326; PAPPG, at 32.

[28] 2 C.F.R. § 200.318(b); PAPPG, at 32.

[29] 2 C.F.R. § 200.323(a).

[30] 2 C.F.R. § 200.318(j); PAPPG, at 32.

[31] See FEMA Second Appeal Analysis, Cent. Bradford Progress Auth., FEMA-4030-DR-PA, at 7 (Feb. 29, 2016).