Support Documentation

Appeal Brief

Authorities and Second Appeals

• Stafford Act § 406 (a)(1)(A), 42 U.S.C. § 5172.

• 44 C.F.R. § 13.22.

• OMB Circular A-87 Attachment A (C)(1)(a),(j), 2 C.F.R. § 225 Appendix A (C)(1)(a),(j)

• PA Digest, at 48.

• PA Guide, at 40, 59.

Headnotes

• OMB Circular A-87 provides that allowable costs must meet the cost principles of being necessary; allocable to Federal awards; and adequately documented.

  • The Applicant provided documentation to demonstrate that the resident engineering costs are necessary, allocable, and adequately documented for PW 5586.

• PA Digest, at 48, provides that “[s]pecial services[,] which are not required on every restoration project, include engineering surveys, soil investigations, services of a resident engineer, and feasibility studies. These services must be specifically described and must be shown to be necessary for completing the eligible scope of work.”

  • This project is part of 19 separate PWs associated with flood recovery efforts of a complex nature, and could require the use of resident engineering services.

Appeal Letter

Appeal Analysis

Background

Between April 30, 2010 and May 18, 2010, severe rainstorms, tornados, and straight-line winds,  impacted Nashville-Davidson County (Applicant).  The rainstorms caused the Cumberland River to overflow and submerge portions of the Applicant’s Central Waste Water Treatment Plant as well as the Applicant’s Metropolitan Water Services Biosolids Facility (Biosolids Facility).  The Biosolids facility, a multi-building and multi-component facility, processes solids generated at both the Central Waste Water Treatment Plant as well as Applicant’s Whites Creek Waste Water Treatment Plant.  The fats, oils, and greases (FOG) building and regenerative thermal oxidizer (RTO) are both located at the Biosolids Facility.

At the time of the weather event, floodwaters submerged the FOG building and RTO facility causing damage to equipment and components associated with both.  To document needed repairs, FEMA prepared PW 5567 for the FOG facility and PW 5575 for the RTO system. 

First Appeal

The Applicant filed two first appeals in letters dated June 3, 2011.  Regarding PW 5567, the Applicant requested $38,736.14 for direct administrative costs (DAC), additional contract labor costs, construction management costs, and resident engineering costs.  Regarding PW 5567, the Applicant requested $113,820.22 for repair costs of the RTO facility, construction management costs, and resident engineering costs.  The Applicant asserted resident engineering funding was for activities needed to complete the project and DAC funding was for costs incurred in completing tasks associated with the PW and those that would occur at project closeout.

The FEMA Region IV Regional Administrator (RA), in two letters dated May 11, 2012, partially granted the appeals, approving reimbursement for facility repairs, construction management costs and contract labor costs but denying reimbursement of resident engineering costs and DAC.  The RA stated that the activities claimed as DAC actually involved procurement and payment activities, making them project management costs not DAC.  The RA acknowledged the appropriateness of special engineering services for this project and concluded it met the “large and complex” requirement.  However, he denied the request stating the documents provided did not highlight specific tasks on daily reports, nor specific daily hours of the personnel attributed to oversight of the facility.

Second Appeal

On July 24, 2012, the Applicant submitted two second appeals through the Grantee requesting only resident engineering costs—$16,172.00 for PW 5567 and $15,369.00 for PW 5575.  The Grantee transmitted the appeals to FEMA on September 18, 2012.  As the Applicant’s two second appeals share the same substantive issue—whether the Applicant provided adequate documentation to support reimbursement of costs associated with resident engineering services—FEMA has combined its analysis and response to the issue.  

Through its appeals, the Applicant argues that the lack of adequate documentation resulted from FEMA’s delay in completing the PWs and decision to prepare individual PWs for each building at the facility.  The Applicant indicated that it verified and supported each employee’s activities with daily timesheets.  Through its second appeal submissions as well as subsequent responses to FEMA’s requests for additional information, the Applicant provided more detailed summary sheets reflecting the work performed by resident engineers.

Discussion

Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406, FEMA is authorized to provide reimbursement for the associated expenses incurred by a local government during the repair, restoration, reconstruction, or replacement of a facility damaged as the result of a declared disaster.[1]  FEMA determines allowable costs in accordance with the Office of Management and Budget (OMB) cost principles.[2]  As a local government, the Applicant must follow the OMB Circular A-87[3] requirement that costs must be necessary for proper and efficient performance and administration of the Federal award.[4]  It also mandates that costs are adequately documented and allocable to the specific project completed with Public Assistance funds.[5]   Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[6]  Further, FEMA policy provides that services of a resident engineer may be required for some projects, and that such services are estimated separately from standard engineering and design service costs.[7]

Adequately Documented and Allocable

As acknowledged earlier, FEMA does not dispute that this project meets the complexity requirement necessary to reimburse costs associated with resident engineering services.[8]  Consequently, the only issue presented in this appeal is whether the Applicant provided adequate documentation to show the costs are allocable to PW 5567 and 5575.

Before FEMA can agree to reimburse resident engineering costs, any provided documentation must adequately show necessary work within the eligible scope of work.[9]  Submitted with its second appeal, the Applicant has provided additional information associated with the daily activities performed by resident engineers.  Specifically, detailed time sheet reports clearly demonstrate hours worked on various parts of the facility, the date the work was performed, the number of hours worked, and the rate billed for the work performed.  These daily time sheet reports also show task codes that provide a description of resident engineering services performed, which include the following: evaluating damaged equipment; tagging-out equipment for inspection, repair, and startup; inspecting equipment for cause of malfunction; preparing scope of work for facility repairs; monitoring contractor and vendors repair work for compliance with scope of work; coordinating contractor work schedules; assisting with testing and re-commissioning of the facility; and monitoring the installation of repaired equipment. 

The information submitted in conjunction with this second appeal adequately documents resident engineering services performed on the components and equipment in question at the FOG building and RTO.  Therefore, the costs are eligible for reimbursement.    

Conclusion

The Applicant provided adequate documentation to support the incurred costs associated with resident engineering services.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement.  Further, final costs must be reconciled during the closeout process.