Force Account Labor and Equipment Costs

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

Disaster	4471
Applicant	Pickwick Electric Co-op
Appeal Type	Second
PA ID#	000-U5F5S-00
PW ID#	PW68 / GMP 132258
Date Signed	2021-10-15T16:00:00

Summary Paragraph

Severe storms, flooding, and straight-line winds damaged Pickwick Electric Co-op’s (Applicant’s) power distribution system (Facility) on October 26, 2019.  The Applicant utilized Force Account Labor (FAL) and Force Account Equipment (FAE) to repair its Facility.  FEMA prepared Project Worksheet 68 to capture the costs associated with these repairs.  At closeout, FEMA reduced the Applicant’s claims for FAL and FAE costs, finding certain work ineligible as increased operating costs, routine clearing of the right-of-way (ROW), or mechanic’s labor.  FEMA also reduced FAE costs associated with the ineligible FAL tasks.  The Applicant appealed, stating that its entire workforce was engaged with repairs following the declared incident.  The FEMA Region IV Regional Administrator denied the Applicant’s appeal, finding that the record lacked documentation, such as work logs or activity logs, that tied the FAL and FAE to eligible work.  The Applicant filed a second appeal, reiterating its position that all submitted costs are eligible and submitting summaries of its FAL and FAE usage. 

Authorities and Second Appeals

• Stafford Act § 406.
• 44 C.F.R. § 206.223(a).
• PAPPG, at 19, 21, 26-27, 42, 123, 133.

Headnotes

• The PAPPG states that increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.
  • The Applicant’s utilized its FAL as “customer service representatives,” the job description for which does not match eligible tasks necessary to repair the Facility.
• The PAPPG states that FEMA may fund limited clearance of disaster-related debris from its ROW to enable access to a facility, but further clearance of debris in the ROW is ineligible.
  • The Applicant’s FAL costs for clearing the ROW are ineligible as the work was not limited to clearance necessary to access the facility.
• The PAPPG states that FEMA provides Public Assistance funding for the use of Applicant-owned equipment (i.e., FAE) based on hourly rates, but because the rates include maintenance costs, a mechanic’s labor costs to maintain FAE are not eligible.
  • The Applicant’s FAL costs for its mechanics are ineligible because those costs are included within FEMA’s FAE reimbursement rates.

Conclusion

The Applicant has not demonstrated that its FAL and FAE costs are directly tied to the performance of eligible work.  Therefore, the appeal is denied.

Appeal Letter

Appeal Analysis

Background

Severe storms, flooding, and straight-line winds on October 26, 2019 in Tennessee damaged Pickwick Electric Co-op’s (Applicant’s) power distribution system, including poles, transformers, fiber, and associated components of its electrical infrastructure (Facility).  The Applicant used its own force account labor (FAL) and force account equipment (FAE) in addition to contracting work to repair the Facility.  FEMA prepared Project Worksheet 68 to capture the costs associated with the permanent repairs.

On March 30, 2020, FEMA issued a Request for Information (RFI) seeking documentation to support certain FAL and FAE costs, material invoices, final disposal locations, and any mitigation plan.  On April 2, 2020, the Applicant responded that it did not maintain activity logs for unidentified labor activity or work force based on job descriptions.  On September 9, 2020, FEMA issued a Determination Memorandum (DM) obligating $2,190,482.14 in repair costs, but denying $233,617.14 of costs as inadequately documented.  FEMA attached to its DM a validation spreadsheet denying certain costs as being increased operating costs, routine clearing of right-of-way (ROW) not necessary to access the Facility for repairs, or mechanic’s labor. 

First Appeal

The Applicant appealed on September 24, 2020, with a letter explaining its approach to the repair work completed to its Facility.  The Applicant stated that it took an “all hands on deck” approach, using every available employee to the extent of their knowledge and ability to restore power to its customers as quickly as possible.[1]  The Applicant attached documentation showing individual Facility repair tasks, including the dates, times, and FAL personnel completing the repairs; spreadsheets documenting its FAL and FAE costs by date, which FEMA had used prior to the DM to validate (and invalidate) the Applicant’s claims; and 19 photographs depicting repairs being completed and some damage assessment field notes.  The Tennessee Emergency Management Agency (Grantee) forwarded the Applicant’s appeal with a letter expressing support on November 5, 2020.  The FEMA Region IV Regional Administrator denied the appeal on May 4, 2021, finding that the record lacked documentation, such as work logs or activity logs, tying the FAL and FAE to the performance of eligible work.

Second Appeal

The Applicant’s June 24, 2021 second appeal requests $288,539.36 in funding and reiterates its argument that all employees worked to hasten the end of the outage caused by the incident.[2]  The Applicant submits with its second appeal summaries of its FAE and FAL usage, broken down by piece of equipment, employee, and day.  The Grantee forwarded the appeal with a letter of support on July 15, 2021.

Discussion

FEMA may provide Public Assistance (PA) funding for repair, restoration, reconstruction, or replacement of eligible Private Nonprofit facilities damaged or destroyed by a major disaster.[3]  To be eligible, work must be required as a result of the declared incident.[4]  The applicant is responsible for providing documentation to support its claim as eligible and show that: (1) work is required to address damage caused by the disaster; and (2) costs are directly tied to the performance of eligible work.[5]  Increased costs of operating a facility or providing a service are generally ineligible, even when directly related to the incident.[6]  FEMA may fund limited clearance of disaster-related debris from a ROW to enable access to repair a utility or remove debris that causes an immediate threat of further damage to the facility, but any further clearance of debris from the ROW is ineligible.[7]  FEMA provides PA funding for the use of Applicant-owned equipment (i.e., FAE) based on hourly rates.[8]  Because the rates include maintenance costs, a mechanic’s labor costs to maintain FAE are not eligible.[9]

The Applicant submits on appeal spreadsheets detailing the FAL and FAE costs it claims are for work necessary to repair the Facility.  However, these documents do not distinguish between the costs initially approved at closeout and the costs denied by FEMA.  Unlike the $2,190,482.14 in costs previously approved by FEMA and associated with eligible work, the Applicant’s documentation does not tie the costs on appeal to the performance of eligible work. 

The FAL costs at issue were denied because they were associated with ineligible increased operating costs, clearance of debris from the ROW, or mechanic’s labor.  For example, the Applicant submits FAL costs for its “customer service representatives,” the job description for which does not match eligible tasks necessary to the repair of the Facility.  This FAL is, therefore, ineligible.  Likewise, the Applicant submits hundreds of hours of FAL costs for clearing the ROW, which is ineligible because the Applicant has not demonstrated the work was limited to clearance necessary to enable Facility access or to remove debris that caused an immediate threat of further damage to the Facility.  The Applicant also submits FAL costs for its mechanics, which are ineligible because those costs are included within FEMA’s FAE reimbursement rates.  As the FAE costs at issue on appeal are associated with the ineligible FAL, they are also ineligible. 

 

Conclusion

The Applicant has not demonstrated that its FAL and FAE costs are directly tied to the performance of eligible work.  Therefore, the appeal is denied.

 

[1] See Letter from Vice President of Operations, Pickwick Electric Co-op, to Governor’s Authorized Representative, Tennessee Emergency Management Agency, at 1 (Sept. 24, 2020) (first appeal for PW 68).

[2] The Applicant does not explain the discrepancy between this amount and the $233,617.14 denied by the DM or the $296,355.56 requested on first appeal.

[3] Robert T. Stafford Disaster Relief and Emergency Assistance Act § 406(a)(1)(B), Title 42, United States Code § 5172(a)(1)(B) (2018). 

[4] Title 44 Code of Federal Regulations (44 C.F.R.) § 206.223(a)(1) (2019); Public Assistance Program and Policy Guide, FP 104-009-2, at 19 (Apr. 1, 2018) [hereinafter PAPPG]. 

[5] 44 C.F.R. § 206.206(a); PAPPG, at 19, 21, 133. 

[6] PAPPG, at 42.

[7] Id. at 123.

[8] Id. at 26. 

[9] Id. at 27.