Scope of Work

Conclusion:  Pursuant to the Stafford Act § 406(e) and 44 C.F.R. Parts 9 and 10, the requested scope of work is eligible for PA funding. 

Background

Beginning on April 30, 2010, severe storms, tornadoes, heavy rains, high winds, flooding, and flash flooding affected the City of Clarksville.  As a result, the bottom of Sycamore Creek eroded, exposing approximately 100 linear feet (LF) of steel pipe natural gas lines.  During the initial formulation of Project Worksheet (PW) 5451, FEMA drafted a scope of work that utilized a process known as directional boring to restore the gas pipes, for a total cost of $636,825.92.  This scope of work was reviewed and approved for environmental and historic preservation (EHP) compliance.  However, FEMA subsequently revised the scope of work and approved PW 5451 to restore the gas pipes using a process known as the “open cut” method because it determined that the steel gas mains were not damaged, directional boring was not the most cost effective method, and there was no regulatory requirement to use it.  As such, PW 5451 obligated $76,861.06 for the revised scope of work.   

First Appeal

In the first appeal letter, dated June 24, 2011, the Applicant asserted that there was no conclusive evidence that the pipes were not damaged.  The Applicant argued that, along portions of the pipes, the entire circumference of the pipes was unearthed, entirely exposing the pipes.  In addition, the Applicant claimed that the existing pipes could not have been reused.  Finally, the Applicant stated natural gas regulations require operators to bury pipes a minimum of 36 inches, but in a manner that would prevent the pipes from becoming uncovered.  The Applicant asserted that, due to winter weather and time constraints, directional boring was the only method that would prevent future exposure.         

In a letter dated May 23, 2014, the Region IV Regional Administrator (RA) determined that the Applicant failed to provide a regulatory justification for the additional work performed during the restoration of its gas pipes located below Sycamore Creek.  The RA did not find the Applicant’s argument that it was required to bury the gas pipes at a depth of eight feet which required a directional boring process compelling, nor was it a hazard mitigation project.  The RA noted that quarterly inspections, one just prior to the disaster, showed the pipes’ depth to be in compliance.  Accordingly, the RA denied $559,964.86 in additional funding to complete the project as it was not necessary or cost effective. 

Second Appeal

In an appeal, dated June 30, 2014, the Applicant disputes FEMA’s determination that the project it completed to restore its gas pipes, and associated costs, was not eligible for PA funding.  The Applicant argues that it relied on a FEMA employee’s approval of and expertise regarding directional boring at a depth of eight feet to restore its gas pipes.  The Applicant also argues that simply replacing the lost creek bed material to pre-disaster condition was not possible because this method would not comply with federal natural gas line regulations.  The Applicant asserts that replacing the lost material would have altered the creek bed from its previous condition and created a damming effect at the pipeline crossing point.  The Applicant also claims that this action is prohibited by Tennessee Department of Environment and Conservation requirements.  In addition, the Applicant claims that it would have violated its responsibilities and requirements mandated in 49 C.F.R. § 192.317 if it placed the pipes back to the same pre-disaster location and condition with only 36 inches of material over the pipes because federal code requires that pipes be protected against natural hazards, and a natural hazard clearly caused damage to the pipes when buried at 36 inches.  The Applicant claims that, as the sole provider to 120,000 residents, it had to quickly restore service and, due to time constraints and winter weather, the only available option to restore the gas pipes was directional boring because other methods required a 90-day public comment period before issuance. 

Discussion

Project Funding

The Stafford Act § 406(e)(1) authorizes FEMA to reimburse the costs to repair, restore, or replace a damaged facility to its predisaster design, function, and capacity.[1]  The PW explains the disaster-related damage in the Damage Description and Dimensions section and necessary repair work in the Scope of Work section.[2]  The scope of work must include the necessary repair work that corresponds directly to the cause of damage in quantifiable and descriptive terms.[3]  The costs for the approved scope of work are eligible for FEMA reimbursement if they are reasonable – meaning necessary and appropriate to accomplish the work.[4]  As the PW is reviewed, the scope of work and funding associated with it are subject to change for various reasons.[5]  The PW review process is complete and funds are obligated once the Regional Administrator, or designee, reviews and signs an approval of work and associated costs.[6]

While the initial PW scope of work was drafted to utilize the directional boring method of repair, FEMA is authorized to revise the scope of work throughout the PW process.  Both directional boring and open cut are accepted methods for restoring gas pipes.  Directional boring is less invasive and preferred by the state of Tennessee[7], but generally more costly.  Open cut causes greater ground disturbance, but generally results in less costs.  Accordingly, FEMA obligated funding for restoration work that utilized the open cut method.  While the Applicant argues it utilized directional boring to restore its gas pipes because of extenuating circumstances, FEMA funding was not approved for this method at the time of project completion, as a final review by the Regional Administrator’s designee had not occurred.  Therefore, FEMA was within its authority to revise the scope of PW 5451.   

Environmental Compliance

Special considerations—issues other than program eligibility that could affect the scope of work and funding for the project—are reviewed during the PW process.[8]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) Parts 9 and 10, FEMA must consider and comply with Federal laws, regulations, and Executive Orders that have EHP implications.[9]  EHP review must be completed before FEMA approves funding and before the project is started.[10] 

While FEMA acted within its authority when it revised the PW scope of work to utilize the open cut method, FEMA cannot fund any project that has not undergone an EHP review for compliance.[11]  As reflected in PW 5451, FEMA conducted an EHP review for the original scope of work that utilized directional boring and a FEMA EHP officer approved the scope of work for compliance.  The scope of work was later revised to utilize the open cut method after the EHP review was completed, and a new EHP review was not performed.[12]  Adhering to the regulatory requirements, especially in light of the more invasive nature of the open cut method, FEMA was not authorized to approve a revised scope of work that utilized the open cut method without conducting an EHP review.[13] 

It must be noted that, besides cost, FEMA determined that the scope of work utilizing directional boring was otherwise eligible.  Moreover, directional boring is an accepted technique for restoring gas pipes, is Tennessee’s preferred approach, and also is the less invasive method.  Finally, as the PW is written, the “open cut” scope of work does not accurately reflect the total cost for project completion.  Specifically, the open cut method would require channel diversion to comply with State regulations,[14] a mechanism to stop water flow at the work site, and additional environmental and regulatory permits.[15] None of these elements of completing the project were considered in the approved scope of work nor the estimated cost associated with it.