Pilot Program – Scope of Work

Appeal Brief

Appeal Letter

Appeal Analysis

Background

Between April 28 and May 3, 2014, severe storms, tornadoes, and straight-line winds impacted the State of Mississippi.  Widespread damage to property and infrastructure occurred, including that owned by the Winston County Board of Supervisors (Applicant).  The President declared a major disaster for the incident on April 30, 2014.  

As a result of the incident, FEMA prepared Project Worksheets (PWs) 102, 106, and 127, to repair and replace buildings owned by the Applicant.  On January 26, 2015, the Applicant submitted a request for an Alternate Procedures project in accordance with the Public Assistance Alternative Procedures Pilot Program Guide for Permanent Work (PAAP Pilot Program Guide for Permanent Work).  The Applicant sought to combine the three PWs into one consolidated Alternate Procedures project, which FEMA granted in a letter dated February 20, 2015.  On April 4, 2016, the Applicant submitted a request to use excess funds from the consolidated project for new projects not covered by the scope of work (SOW) for any of the existing PWs.  Specifically, the Applicant requested to use excess funds to repair three roads and acquire a building to serve as an emergency command center.  FEMA denied this request on January 18, 2017, stating that the Applicant’s request to expand the SOW must occur within one year of the disaster declaration date and that the Applicant’s request was nearly two years removed from the declaration.  Additionally, FEMA noted that the projects proposed to use excess funds did not fall into any of the eligible categories of work, and consequently denied the Applicant’s request to use $1,615,670.00 in excess funds for the proposed projects.

First Appeal

The Applicant appealed FEMA’s denial of its request to the Mississippi Emergency Management Agency (Grantee) in a letter dated March 24, 2017.[1]  In its appeal, the Applicant asserted that it did not seek to amend the SOW for its consolidated project, but rather to use the excess funds from the consolidated PW for new projects not previously covered by any PW.  The Applicant stressed that under the PAAP Pilot Program Guide for Permanent Work, it could use excess funds from its subaward for projects that met the definition of hazard mitigation or improved future Public Assistance disaster-related operations.  In addition to the PAAP Pilot Program Guide for Permanent Work, the Applicant also cited to sections of the Stafford Act and the Public Assistance Program and Policy Guide (PAPPG) for support.  Along with its appeal, the Applicant submitted engineering designs displaying the proposed work for the road repair and a narrative outlining the need for the new projects.  The Grantee forwarded the appeal to FEMA in a letter dated April 10, 2017, clarifying the Applicant’s appeal position.[2]  The Grantee explained that the Applicant intended to request designation of and utilization of excess funds in advance of the closeout of the consolidated project.[3] 

On October 16, 2017, after reviewing the appeal and record, FEMA sent a Final Request for Information (RFI) to the Applicant, soliciting:

1. A description of the completed scope of work, including invoices and proof of payment to demonstrate that all the work funded under the consolidated grant was complete.
2. A detailed description of the proposed road repair projects and how they met the PAAP definition of hazard mitigation.
3. A detailed description of the proposed acquisition of the command center building and how the command center would meet the PAAP definition of an activity that improves future Public Assistance permanent work operations.[4]

The Applicant responded to the Final RFI citing several sections of the PAPPG generally, before providing a breakdown of each item requested by FEMA.[5]  In response to the request for the completed scope of work and costs to demonstrate project completion, the Applicant submitted several attachments including invoices and checks, along with other accounting documents associated with the original PW 127.  With regards to the roads, the Applicant reattached the road engineering plans included in its first appeal, in addition to citations to the PAPPG.  Additionally, for the command center, the Applicant provided a narrative discussing the issues it encountered during the last disaster without a command center and the continuing need for such a facility.  Finally, the Applicant noted that at the time of the request, only the original PW 127 SOW was at or near completion.  

On May 21, 2018, the Regional Administrator (RA) denied the appeal, stating that excess funds are only available once the approved work for the entire consolidated project is at or near completion, and that because all of the approved work for the Applicant’s consolidated project was not at or near completion, the excess funds were not available for use.[6]  Secondly, the RA noted that even if the excess funds were available, the Applicant’s proposed use of such funds would not qualify as hazard mitigation nor activities that improve future PA permanent work operations, and therefore, would not be eligible for completion with excess funds.

Second Appeal

In its second appeal, dated July 13, 2018, the Applicant again cites to sections of the Stafford Act, the PAPPG, and the PAAP Pilot Program Guide for Permanent Work to support its claim that FEMA should allow it to use the excess funds.[7]  However, in this letter the Applicant states that it submits its appeal seeking a “determination that if the excess funds were available for use . . . that the funds would not be permitted in the requested manner due to the eligibility of the requested use of the excess funds.”[8]  Additionally, the Grantee requests in its transmittal letter that FEMA allow the Applicant to use the funds in advance of the policy timeline.[9]  The Applicant noted that it would submit a final report with project costs at closeout of the consolidated project, citing its election to use the excess funds for hazard mitigation or other activities related to improving future Public Assistance operations.[10]  

Discussion

Availability of Excess Funds

In accordance with the PAAP Pilot Program Guide for Permanent Work, when actual costs of work for a consolidated project are less than the fixed estimate, an applicant may use excess funds for other Public Assistance related projects.[11]  However, the excess funds are not available for use until the applicant has completed all work on the consolidated project.[12]  An applicant “must certify final costs within 90 days of project completion”[13] and submit a SOW and project timeline for intended use of the excess funds.[14]  

The Applicant concedes in its Final RFI response that “PW 127 is the only PW at or near completion.”[15]  Therefore, because the work has not yet been completed, the Applicant’s request does not satisfy the requirement that it certify final costs.  Additionally, the PAAP Pilot Program Guide for Permanent Work requires the Applicant to request use of excess funds once all work is complete.[16]  Because the Applicant has not completed all work under its grant at the time of the appeal, the excess funds are not available. 

The Applicant also concedes that, “at the time of this appeal the 90 days from cost-certified completion of the subaward had not yet vested.”[17]  While the Applicant acknowledges on second appeal that there was no closeout of the consolidated project before it appealed, the Grantee and Applicant request use of excess funds in advance of the PAAP Pilot Program Guide for Permanent Work timeline.  This request is untimely because the Applicant must first complete all work described in the consolidated grant and then, within 90 days, certify the final costs and request use of the excess funds for other Public Assistance eligible projects.

The Applicant did not complete all the work under the consolidated project before requesting to use excess funds on new projects.  Therefore, the Applicant could not certify final project costs and determine the final amount of excess funds.  As a result, the request was premature and any excess funds are not yet available. 

Eligibility of Excess Funds

As discussed in the prior subsection, the excess funds were not available because the Applicant did not finish all work associated with the consolidated PW before submitting its request.  As a result, the issue of whether the Applicant’s proposed work is eligible for reimbursement with excess funds is not yet ripe for decision.  However, upon review of the documentation submitted by the Applicant at this point, it is unlikely that the proposed work would be eligible for funding with the requested excess funds if they do become available.

Conclusion

The Applicant did not complete all work described in the consolidated PW before requesting to use excess funds.  As a result, the Applicant was unable to certify final project costs and demonstrate the amount of excess funds remaining.  As such, the Applicant also did not request use of the excess funds within the prescribed timeframe.  Consequently, the Applicant’s appeal to use excess funds in advance of project completion is denied.  Additionally, because the Applicant did not request use of the excess funds within the prescribed timeframe, the question of whether the proposed projects are eligible is not yet ripe for