Scope of Work – Support Documentation – Procurement

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	FEMA-1607
Applicant	Cameron Parish School Board
Appeal Type	Second
PA ID#	023-00E84-00
PW ID#	PW 2375
Date Signed	2018-07-06T00:00:00

Conclusion:  The Cameron Parish School Board’s (Applicant) heating, ventilation, and air conditioning (HVAC) related costs are associated with work performed outside the approved scope of work (SOW) without the prior approval required for a SOW change.  Moreover, the Applicant has not demonstrated that the HVAC costs are allocable to Project Worksheet (PW) 2375, and has not produced documentation that it complied with Federal procurement requirements when it solicited the project management services.  Accordingly, the Applicant’s second appeal is denied.

 

Summary

In September 2005, strong winds, rain, flying debris and power surges from Hurricane Rita damaged a high school (Facility) operated by the Applicant.  On October 29, 2016, after FEMA had obligated multiple other versions of this project, FEMA approved PW 2375 (Version 7), deobligating all costs on the basis that they were associated with restoration performed by a contractor whose costs were already captured in another PW.  In response, the Applicant filed a first appeal, requesting FEMA reimburse additional costs not captured in PW 2375 (Version 7) that were associated with work performed by various contractors.  On first appeal, the Applicant submitted an HVAC invoice that documented less than one third of the costs on appeal, and service orders that referenced work completed at both the Facility and another high school, without breaking down the costs between them.  In addition, in response to a Final Request for Information seeking documentation demonstrating the procurement process had been properly followed, the Applicant provided a document that stated the contractor who provided project management services was the only entity to respond to the public solicitation.  The FEMA Region VI Regional Administrator (RA) partially granted the appeal, approving $1,945.00 in costs associated with work that was included in the original SOW in PW 2375, but denying $59,620.75 in requested costs associated with HVAC work and project management services that the RA determined were completed outside the approved SOW without prior approval.  In addition, the RA noted that the Applicant had only provided one invoice for the HVAC work, which documented only part of the total requested costs.  Lastly, the RA concluded that the Applicant did not provide documentation demonstrating that the solicitation of the project management services complied with Federal procurement rules.  On second appeal, the Applicant asserts project management services were performed at the request of the State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness and states that FEMA personnel repeatedly met with members of the project management team. 

     

Authorities and Second Appeals

• Stafford Act § 406(e).

• 2 C.F.R. § 225 app. A (C)(1)(b), (j).

• 44 C.F.R. §§ 13.30(c)(2), (d)(1), 13.36, 206.206(a).

• Port Arthur Indep. Sch. Dist., FEMA-1791-DR-TX, at 2; Clarksville Gas and Water, FEMA-1909-DR-TN, at 7; City of Sweetwater, FEMA-1345-DR-FL, at 3; Chambers Cty., FEMA-1791-DR-TX, at 7.

Headnotes

• Pursuant to 44 C.F.R. § 13.30(c)(2) and (d)(1), applicants must obtain prior approval from FEMA whenever there is a budget revision which would result in the need for additional funds or a revision to the scope of a project.

  • The HVAC work resulted in increased costs and was performed outside the approved SOW, without prior approval from FEMA.

• 2 C.F.R. § 225, Appendix A(C)(1)(b) and (j), requires that allowable costs be allocable to specific PWs and adequately documented. 

  • As the administrative record does not contain documentation substantiating the full requested Siemens’ costs, and the Applicant does not demonstrate that the claimed Siemens’ costs are allocable to PW 2375, they are denied.

• Per 44 C.F.R. § 13.36(d), applicants must follow proper procurement methods.

  • The Applicant did not provide documentation verifying it procured the project management services through the use of any of the procurement methods required by 44 C.F.R. § 13.36(d).

 

Appeal Letter

Appeal Analysis

Background

 In September 2005, strong winds and heavy rain from Hurricane Rita damaged Grand Lake High School (Facility), controlled and supervised by the Cameron Parish School Board (Applicant).  On April 22, 2006, FEMA obligated PW 2375 (Version 0), approving permanent work to restore the Facility to its predisaster condition, and noting that Belfor-Inrecon LLC (Belfor) had been contracted to complete the restoration work.  From 2007 through 2013, FEMA approved five additional versions of PW 2375: (1) adjusting the federal cost share; (2) adding in costs for a greenhouse; (3) removing costs for a temporary greenhouse; (4) reinstating funding previously reduced due to insurance; and (5) adjusting the obtain and maintain insurance requirements. 

 

Then, in a letter dated September 7, 2015, the State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (Grantee) requested FEMA take multiple actions regarding this project.  First, the Grantee requested FEMA apply appropriate insurance proceeds to the project.  Next, the Grantee requested FEMA formulate a new PW that combined the SOW Belfor performed at two high schools impacted by the disaster – the Facility and Hackberry High School (Hackberry).  Lastly, the Grantee recommended that FEMA address the additional work and costs submitted by the Applicant for work completed by other contractors at both schools.  FEMA responded to the Grantee by way of an October 19, 2015 letter, in which it stated it had only received SOW documentation for work completed by Belfor, not any other contractor.  FEMA requested the Grantee work with the Applicant to provide the documentation related to the other contractors in a new version request to FEMA within 30 days, otherwise, FEMA would proceed with obligating the PW to reflect the Belfor SOW and cost alignment.

 

On March 16, 2016, FEMA approved PW 2375 (Version 6), adjusting the obtain and maintain requirements pertaining to insurance.  Then, on October 29, 2016, FEMA approved PW 2375 (Version 7), deobligating all costs in their entirety, on the basis that the Belfor costs were captured in PW 4844, which included work performed by Belfor at both the Facility and Hackberry. 

 

By way of a November 15, 2016 letter, the Grantee notified the Applicant of the deobligation effectuated in PW 2375 (Version 7) and included language advising the Applicant of its appeal rights and appeal procedural requirements concerning the determination.

 

First Appeal

 

The Applicant appealed FEMA’s determination of PW 2375 (Version 7) in a letter dated January 20, 2017.  It argued FEMA did not include $55,362.00 in costs associated with eligible work that was completed by entities other than Belfor to the Facility, and additionally, sought project management costs in the amount of $51,841.00.[1]  Although the Applicant stated documentation pertaining to the expenses was previously provided to both the Grantee and FEMA, it proceeded to transmit various documents pertaining to the requested costs with its appeal.  It attached documentation related to Albert K. Newlin, Bessette Development, Service Master, Siemens Building Technologies, Inc. (Siemens), and Hoffpauir Architects, LLC (Hoffpauir). 

 

For Albert K. Newlin’s costs, the Applicant submitted a December 2005 invoice and accompanying description of work pertaining to electrical repairs completed at the Facility.  Concerning the costs for Bessette Development, the Applicant provided invoices and letters from late 2005, documenting emergency repairs the contractor completed to both the Facility and Hackberry.  Regarding Service Masters’ expenses, the Applicant transmitted an invoice dated August 30, 2006, that billed $1,945.00 for “[f]loorwork”[2] completed at the Facility; and a copy of a cancelled check, dated September 11, 2006, paid from the Applicant to the contractor, which referenced the invoice number of the corresponding August 30, 2006 invoice.  In support of the Siemens’ costs, the Applicant provided: (1) one invoice from 2005, generally documenting the survey of both the Facility and Hackberry, and replacement of damaged heating, ventilation, and air conditioning (HVAC) components and the recommissioning of HVAC systems; (2) a cancelled check in the amount of $12,430.45 that corresponded to the total billed in the invoice; and (3) three service orders from 2005, describing work completed at both the Facility and Hackberry, without specifically breaking down the time or costs relating to each school.  For the costs associated with Hoffpauir, the Applicant submitted a Reimbursement Request Form seeking $21,019.75, along with (1) a contract work summary record that described the work completed for each month as “project management,” (2) monthly billing totals for the project management for intermittent months ranging from July 2008 until November 2010, (3) daily billing spreadsheets for each month, which delineated each day billed per month, along with the corresponding employee name, task code entry (e.g., PS14), time worked, dollar amount billed, invoice, and check number, and (4) copies of checks paid to the contractor.

 

The Grantee transmitted the appeal to FEMA by way of a support letter dated April 3, 2017, with an accompanying concurrence memorandum.  The Grantee argued that by deobligating PW 2375 in its entirety, FEMA deobligated non-Belfor expenses that were not transferred to PW 4844.  It argued that due to the complexity of the project and the number of prior versions created for it, the deobligation of the non-Belfor expenses was a FEMA oversight.  In addition, the Grantee summarized the Applicant’s assertion that PW 2375 previously included non-Belfor work and costs that FEMA did not retain in Version 7, which meant that FEMA did not reimburse the Applicant for all repair costs incurred. 

 

While the Grantee supported the Applicant’s appeal, it noted the documentation provided by the Applicant indicated the total amount in dispute was $76,381.75, not $107,203.00.  The Grantee stated the supporting documentation for the project management costs of Hoffpauir totaled $21,019.75.  In sum, the Grantee supported the reinstatement of $76,381.75 in contract costs associated with work performed by Albert K. Newlin, Bessette Development, Service Master, Siemens, and Hoffpauir.  Furthermore, it requested that FEMA allow the Applicant to submit additional documentation to fully substantiate its request for funding in the amount of $107,203.00.

 

On June 20, 2017, FEMA transmitted a Final Request for Information (RFI) to the Applicant and the Grantee, notifying them that the record did not contain sufficient documentation to establish the work performed by the specific contractors was eligible for Public Assistance (PA) funding as the Applicant had not provided a detailed SOW associated with the costs at issue.  Accordingly, FEMA requested a detailed SOW description for each contractor, including the specific site locations and dates for where and when the work was performed, the corresponding costs associated with each item of work, and documentation demonstrating the work was required as a direct result of the disaster.  Moreover, FEMA sought copies of the contracts associated with each contractor and documentation demonstrating the procurement process had been followed.  Furthermore, FEMA noted that it previously obligated funding for work completed by Albert K. Newlin and Bessette Development in PW 407.  Consequently, it requested confirmation that the costs associated with those contractors had not been obligated previously in a separate PW, as well as the costs associated with Service Master, Siemens, and Hoffpauir.

 

The Applicant responded in a July 24, 2017 letter and documentation, which the Grantee transferred to FEMA by way of a letter dated June 28, 2017.  In its letter, the Applicant first withdrew its request for costs associated with Albert K. Newlin and Bessette Development, as it affirmed FEMA obligated those costs in PW 407.  It then restated its request for costs associated with Service Master, Siemens, and Hoffpauir.  In support, the Applicant provided a spreadsheet that included notations pertaining to some of the requested items sought in the Final RFI.  A condensed version of the Applicant’s spreadsheet is below:[3]

 

Contractor	Service Masters	Siemens	Hoffpauir
Total Cost	$1,945.00	$38,601.00	$21,019.75
SOW	Cleaned and Re-waxed Floors	HVAC controls
Location	Facility’s campus	Facility’s campus	Facility’s campus
Date	August 30, 2006	See each invoice	See each invoice
Individual Costs		See each invoice	See each invoice
Disaster Related	Floors needed cleaning and rewaxing after other disaster repairs and clean-up	Repaired item(s) functioned and/or were clean before the disaster
Contract		See attached	See attached
Procurement		On-going contract	See attached

 

As recorded in the above table, the Applicant re-submitted the previously transmitted documentation pertaining to Service Masters, Siemens, and Hoffpauir.  It also submitted new documentation.  For Siemens, the Applicant provided two contracts executed between the Applicant and Siemens for HVAC equipment monitoring and scheduling at both the Facility and Hackberry, dated April 2008 and May 2009.  With respect to Hoffpauir, the Applicant transmitted the contract for project management services, executed June 25, 2008, between the Applicant and James L. Hoffpauir, (JLH) Architect, of Hoffpauir.  The Applicant engaged JLH to provide project management and supervision services for recovery projects, as well as capital improvement projects relating to the disaster and Cameron Parish Schools.  Moreover, it attached an amendment to the original contract, dated July 1, 2010, outlining the addition of staff and changes in original hourly fees.  Next, the Applicant submitted an evaluation sheet signed by the Applicant’s superintendent, dated May 5, 2008.  In the sheet, Hoffpauir obtained a score of 100 out of 100.  Additionally, at the bottom of the sheet, there is a notation that Hoffpauir was the only entity to respond to the April 17 and April 24, 2008 public solicitation.  Finally, the Applicant provided a project task list that defined and explained the task codes, such as defining task code PS14 as “providing ongoing monitoring/reporting to the [A]pplicant.”[4]

 

On December 5, 2017, the FEMA Region VI Regional Administrator (RA) issued a first appeal decision partially approving the Applicant’s request for additional costs.[5]  The RA determined the requested $1,945.00 in costs associated with Service Masters were eligible for PA funding as the underlying work was included in the original SOW captured for PW 2375, i.e., cleaning carpets.  Consequently, the RA directed FEMA to amend PW 2375 to reinstate that funding.  However, the RA denied the remaining $59,620.75 in requested costs associated with Siemens and Hoffpauir. 

 

Regarding the work completed by Siemens, the RA noted that HVAC-related work was not previously included in the approved SOW for PW 2375, and there was no indication that the Applicant requested a change to the SOW to include such work.  Additionally, the RA pointed out that the Applicant did not provide evidence that corresponded to the costs claimed on appeal, as the Applicant only submitted one invoice concerning this cost in the amount of $12,430.45, not the requested $38,601.00.  Moreover, the RA stated the administrative record did not include documentation establishing the Applicant complied with FEMA’s Final RFI that asked the Applicant to demonstrate the work was required to restore the Facility to its predisaster condition.  Consequently, because the Applicant had not provided documentation demonstrating the Siemens’ work was included in the PW’s approved SOW, and had not explained how the costs were eligible and reasonable, the RA denied PA funding.

 

Lastly, concerning the work completed by Hoffpauir, the RA denied the costs because (1) project management services were not included in the approved SOW, (2) the Applicant did not provide documentation demonstrating it complied with Federal procurement rules, and (3) the requested costs, dating from 2008 to 2010, pertained to services performed after the period of performance to complete permanent work expired on March 24, 2007.  Accordingly, similar to the Siemens’ costs, because the Applicant did not obtain the prior approval required for a SOW change, the requested project management cost were not eligible for PA funding.

 

Second Appeal

 

The Applicant appeals FEMA’s denial of the costs associated with the work performed by Siemens and Hoffpauir in a letter dated February 16, 2018.  It requests PA reimbursement in the amount of $59,620.75,[6] stating that work completed by both Siemens and Hoffpauir was a direct result of the disaster.  First, the Applicant submits seven invoices from Siemens totaling $77,199.19, service orders, and proof of payments that correspond to the invoices.  The Applicant argues that the invoices describe work completed because of damages to the HVAC system, and asserts that because the invoices document that the work was completed as a result of the disaster, the costs are eligible for PA funding.

 

Second, the Applicant contends that the Hoffpauir project management services were performed at the request of the Grantee to verify the work and scope performed by Belfor, per PW 2375 (Version 0), as well as to document additional claims.  The Applicant provides a July 19, 2015 email from Hoffpauir to the Grantee, with an attached project memorandum from Hoffpuair dated July 20, 2015.  In the email, Hoffpauir notified the Grantee that the expenses totaled $107,203.00, stated that backup documentation was previously provided,[7] and asserted that the project memorandum was included in a prior version request.  In the project memorandum, Hoffpauir itemized the same contractor costs originally sought on first appeal.  Lastly, it states that FEMA personnel repeatedly met with members of the project management team during biweekly meetings and during visits to the Facility.  

 

The Grantee forwarded the appeal to FEMA by way of an April 12, 2018 letter and attached memorandum.  In its memorandum, the Grantee discusses the Siemens’ costs and notes that the request equals approximately 50 percent of the invoices submitted on second appeal, because the Applicant divided the total invoiced amount between this PW for the Facility, and PW 2869 for Hackberry.  However, the Grantee does not support PA funding for costs associated with work performed by Siemens as the Grantee states the requested Siemens’ costs are associated with an eligible SOW that was already addressed in PW 3138.[8]  Regarding the project management costs, it argues that although it appears the Applicant made multiple attempts to request additional non-Belfor expenses related to the restoration of the Facility between 2013 and 2015, it is not clear whether FEMA fully considered the request.  Consequently, the Grantee states it supports the Applicant’s request to create a new version of PW 2375 in order to add project management services provided by Hoffpauir. 

 

 Discussion

 

Scope of Work – Siemens

 

Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 406, FEMA may fund the cost of repairing, restoring, reconstructing, or replacing an eligible facility on the basis of the design, function, and capacity of the facility as it existed immediately prior to the major disaster.[9]  However, when an applicant changes the SOW or needs additional funding, it must obtain the prior approval of FEMA.[10] 

 

Moreover, an appeal must contain documented justification supporting the applicant’s position.[11]  The burden to substantiate appeals with “documented justification” falls exclusively to the applicant[12] and hinges upon the applicant’s ability to produce not only its own records, but to clearly explain how those records support the appeal.[13] 

 

On second appeal, the Applicant states that the Siemens’ costs are associated with work completed because of disaster related damages to the HVAC system, and in its response to the Final RFI, noted that the SOW pertained to HVAC controls.  However, HVAC system damages are not noted in any version of PW 2375 and HVAC control work is not included in the eligible SOW documented in any prior version of PW 2375.  Therefore, the Applicant completed work beyond the approved SOW.  Moreover, the Applicant does not contend it had prior approval to complete this work under PW 2375.  Additionally, the Applicant does not contest the RA’s determination of this issue on second appeal; it has not set forth any argument in its second appeal letter disputing the RA’s determination that these costs were associated with work that was performed outside the approved SOW and without the FEMA prior approval required for a SOW change.  For these reasons, the requested costs are not eligible for PA funding through PW 2375.

           

Support Documentation of Costs – Siemens

 

To be eligible for PA funding, costs must be, among other requirements, allocable to the Federal award and adequately documented.[14]  The administrative record closes after issuance of the first appeal decision, generally precluding the applicant from providing additional information on second appeal.[15]

 

Here, the Applicant requests $38,601.00 in PA funding for the work completed by Siemens, but only provided an invoice documenting $12,430.45 in costs before FEMA issued the first appeal decision and the administrative record closed.  In addition, the invoice and service orders the Applicant provided on first appeal reference work completed at both schools, but do not itemize the costs between this Facility and Hackberry.  Moreover, the Grantee acknowledges that the Applicant’s requested costs equal approximately 50 percent of the total invoices associated with HVAC work submitted on second appeal, because the Applicant simply divided the total invoiced amount, assigning 50 percent of the costs to this Facility and 50 percent to Hackberry.  However, the aforementioned Federal regulation only permits FEMA to award PA funding based on the adequate documentation of costs, allocable to a specific award.  Therefore, as the Applicant has neither substantiated its request for costs with accompanying invoices included in the administrative record, nor provided documentation that allows FEMA to determine which requested costs are specific to only PW 2375, costs associated with Siemens are not eligible for PA funding.

 

Procurement – Hoffpauir

 

Applicants must comply with a variety of grant administrative requirements to be eligible for and receive PA funding.[16]  When procuring services with PA funding, an applicant must comply with specific regulatory standards,[17] including the requirement to follow an appropriate procurement method.[18]

 

On first appeal, FEMA requested that the Applicant transmit documentation demonstrating that the procurement process had been followed.  In response, the Applicant submitted an evaluation sheet for Hoffpauir that included a notation stating Hoffpauir was the only entity to respond to the public solicitation.  However, it did not provide other documentation verifying the existence of the public solicitation, or that said solicitation satisfied any of the required procurement methods of Title 44 Code of Federal Regulations § 13.36(d).  Accordingly, the RA correctly determined that the Applicant did not establish that it complied with Federal procurement requirements.  Furthermore, the Applicant does not contest this determination on second appeal; it has not set forth any argument in its second appeal letter disputing the RA’s determination of this issue.  Therefore, FEMA finds the requested costs remain ineligible for PA funding.  

 

Conclusion

 

The work completed by Siemens was performed outside the approved SOW and without the prior approval required for a SOW change.  Moreover, the Applicant has not provided documentation demonstrating the costs associated with the work completed by Siemens are allocable to PW 2375.  Furthermore, the Applicant has not produced documentation establishing it complied with Federal procurement requirements prior to securing the services of Hoffpauir.  Consequently, the costs associated with the work completed by all the aforementioned contractors are not eligible for PA funding.

 

[1] In its first appeal letter, the Applicant requested a total of $107,203.00, then proceeded to itemize the costs as follows: (1) Albert K. Newlin - $363.75; (2) Bessette Development - $14,452.25; (3) Service Master - $1,945.00; (4) Siemens - $38,601.00.  Therefore, FEMA deducted $55,362.00 (the total of the amount requested for the four contractors) from $107,203.00, to derive the $51,841.00 as the amount requested for the project management costs.

[2] Invoice from ServiceMaster Bldg. Maint., to Cameron Par. Sch. Bd., No. 72105 (Aug. 30, 2006) (describing the work completed as “Floorwork – Grand Lake”).

[3] The boxes that are blank were blank in the Applicant’s original table submitted in its response to the Final RFI.

[4] Hoffpauir Architects, LLC, Project Task List (undated).

[5] Per USPS Article No. 7007 0710 0004 0834 7471, the Applicant received the first appeal decision on December 29, 2017.

 

[6] In its second appeal letter, the Applicant specifies that it requests $38,601.00 for the Siemens’ work and $21,019.75 for the work performed by Hoffpauir Architects, LLC.

[7] Email from Representative, Hoffpauir Architects, LLC, to Representative, State of La. Governor’s Office of Homeland Sec. and Emergency Preparedness (July 19, 2015, 03:09 PM) (“[b]ack-up for all these [e]xpenses were previously added to [Louisiana Public Assistance].”). 

[8] In its second appeal memorandum, the Grantee notes that FEMA previously approved more than 50 percent of the total invoiced amount of $77,199.19; the Grantee states that FEMA previously awarded $56,142.74 for the costs associated with Siemens, for this same disaster, in PW 3138.  Thereafter, FEMA reduced the eligible amount based on changes in the federal cost share allocation and actual insurance proceeds received.  See generally, Project Worksheet 3138, Cameron Par. Sch. Bd., Version 0, at 3-4 (June 2, 2006) (approving a SOW that included Siemens surveying the damage to the equipment at both the Facility and Hackberry, replacing the damaged components at both schools, recommissioning the schools’ control systems, and performing point to point testing).  

[9] Robert T. Stafford Disaster Relief and Emergency Assistance (Stafford) Act § 406(a), 42 U.S.C. § 5172(a) (2004).

[10] Title 44 Code of Federal Regulations (C.F.R.) § 13.30(c)(2), (d)(1) (2004).

[11] 44 C.F.R. § 206.206(a).

[12] FEMA Second Appeal Analysis, Chambers Cty., FEMA-1791-DR-TX, at 7 (May 26, 2017).

[13] FEMA Second Appeal Analysis, City of Sweetwater, FEMA-1345-DR-FL, at 3 (Aug. 15, 2017).

[14] 2 C.F.R. § 225 app. A (C)(1)(b), (j); see FEMA Second Appeal Analysis, Clarksville Gas and Water, FEMA-1909-DR-TN, at 7 (Nov. 20, 2017) (“Costs must be allocable to the subgrant [and] adequately documented . . . .”).

[15] Recovery Directorate Manual, Public Assistance Program Appeal Procedures, Version 4, at 14 (Mar. 29, 2016).

[16] 44 C.F.R. pt. 13; FEMA Second Appeal Analysis, Port Arthur Indep. Sch. Dist., FEMA-1791-DR-TX, at 2 (June 21, 2018).

[17] 44 C.F.R. § 13.36; Port Arthur Indep. Sch. Dist., FEMA-1791-DR-TX, at 2.

[18] 44 C.F.R. § 13.36(d) (describing the methods of procurement: (1) procurement by small purchase procedures; (2) procurement by sealed bids; (3) procurement by competitive proposals; and (4) procurement by noncompetitive proposals, i.e. procurement through solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate); Port Arthur Indep. Sch. Dist., FEMA-1791-DR-TX, at 2.