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  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Lewis and Clark Rural Water System
    Disaster Number: 
    1984-DR-SD
    DSR: 
    2373
    Date Signed: 
    Tuesday, October 21, 2014
    PA ID: 
    000-UMD4Z-00
    Summary/Brief: 

    Conclusion: The bank stabilization system at Mulberry Point is a single facility with multiple location reference points, including Sites B and C.  Notification of new damage in a previously inspected facility is required pursuant to 44 C.F.R. § 206.204(e).  The Applicant adequately documented that the newly discovered damage at Site C was disaster-related; therefore, the change in the scope of work is eligible.

    Summary Paragraph

    During the declared flooding event, rising floodwaters and high river flow caused extensive erosion to the Applicant’s engineered bank stabilization system.  FEMA conducted a site visit while the water flow was still high, and observed disaster-related damage at Site B of the bank stabilization system.  After the water flow dropped, the Applicant discovered additional damage at Sites B and C of the bank stabilization system, and proceeded with the repairs.  The Applicant requested a change in the scope of work to include additional funding for the repair of the newly discovered damage at Sites B and C, as well as hazard mitigation funding.  FEMA denied the requests and obligated PW 2373 Version 0 for $459,744.00 to repair the original damage inspected at Site B.  In its first appeal, the Applicant claimed that additional damage at Sites B and C were under high river flows and not visible during the FEMA site visit.  The Applicant also argued that hazard mitigation was necessary to prevent future embankment erosion. Upon review, the Regional Administrator partially approved the first appeal and obligated an additional $393,940.35 for the additional damage at Site B.  In its second appeal, the Applicant requests $402,641.52 associated with Site C, arguing additional notification for the new damage at Site C should not have been required because the entire bank stabilization system is a single facility. 

    Authorities and Second Appeals

    • 44 C.F.R. § 206.201(c).
    • 44 C.F.R. § 206.201(i).
    • 44 C.F.R. § 206.202(d)(ii).
    • 44 C.F.R. § 206.204(e).
    • PA Guide, at 96.
    • PA Guide, at 140.

    Headnotes

    • 44 C.F.R. § 206.201(c) defines facility as any publicly or privately owned building, works, system, or equipment, built or manufactured, or an improved and maintained natural feature. 
    • The bank stabilization system at Mulberry Point is a single continuous system; therefore, it is a single facility with multiple location reference points. 
    • 44 C.F.R. § 206.202(d)(ii) requires an applicant to identify and report all damage within 60 days following its first substantive meeting with FEMA.  Public Assistance Guide further clarifies that this requirement applies to any newly discovered damaged facilities.  44 C.F.R. § 206.204(e) requires an applicant to evaluate and report cost overruns for reasons including a change in the scope of eligible work.
      • As a single facility already reported as damaged, the 60-day timeframe does not apply to any newly discovered damage. 
      • However, the Applicant is still required to report new damage within a timely manner pursuant to 44 C.F.R. § 206.204(e).

     

    Letter: 

    October 21, 2014

    Kristi Turman
    Director
    South Dakota Office of Emergency Management
    118 West Capitol Avenue
    Pierre, South Dakota 57501

    Re:  Second Appeal – Lewis and Clark Rural Water System, PA ID 000-UMD4Z-00, FEMA-1984-DR-SD, Project Worksheet (PW) 2373, Scope of Work

    Dear Ms. Turman:

    This is in response to your letter dated August 2, 2013, which transmitted the referenced second appeal on behalf of Lewis and Clark Rural Water System (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of additional funding of $402,641.52 associated with a change in scope of work request for PW 2373. 

    As explained in the enclosed analysis, I have determined that the bank stabilization system (facility) is a single facility, and the requirement to report new damaged facilities within a 60-day timeframe is not applicable.  Although not reported until after the repair, the Applicant did document that the newly identified damage at Site C was caused by the disaster.  Therefore, I am granting this appeal for $402,641.52, contingent upon a formal FEMA environmental and historic review.  By this letter, I am requesting that the Regional Administrator take appropriate action to implement my determination.

    Please inform the Applicant of my decision.  This determination constitutes the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    Brad J. Kieserman
    Assistant Administrator
    Recovery Directorate

    Enclosure

    cc:  Tony Russell
           Acting Regional Administrator
           FEMA Region VIII

    Analysis: 

    Background

    An above-normal level of snow fall in South Dakota during the winter of 2010–2011 resulted in significant water run-off and flooding as the temperatures warmed up in March 2011.  A major disaster for flooding was declared on May 13, 2011 with the incident period of March 11, 2011 to July 22, 2011.  Along Mulberry Point on the Missouri River, rising floodwaters with high velocity river flow redirected the main river channel and caused extensive erosion to portions of the engineered bank stabilization system, owned and operated by Lewis and Clark Rural Water System (Applicant).[1]  Flood damage included partial to complete washout of portions of the bank stabilization system comprised of various engineered components—a combination of a stone toe base, bank stabilization material, locked logs, and planted vegetation.  Completed in 2008, the bank stabilization system was designed to stabilize and strengthen the embankment, which in turn protects the Applicant’s water system that provides potable water to over 300,000 people in three states along the Missouri River.     

    The Applicant provided documentation to show that the normal high water level (NHW) at this site was set as being equal to the Construction Reference Plane (CRP) for the bank stabilization system site design, which was determined by the U.S. Army Corp of Engineers (USACE) to be 29,000 cubic feet per second (cfs). The ordinary high water level (OHW) was set two feet above the NHW, corresponding to the start of willow plantings on the bank stabilization system.  The 100-year flood level corresponded to the top of the bank stabilization system, equivalent to a river flow of about 100,000 cfs.  During the flood event of 2011, the maximum river flow exceeded 160,000 cfs.

    The upper (north) end of the embankment failure was noted only after the river flow had dropped to approximately 90,000 cfs around September 2011.  The river flow then dropped to 40,000 cfs around the beginning of October 2011 and maintained that level until mid-December 2011.

    On October 4, 2011,[2] FEMA conducted a site visit to observe the area of the bank stabilization system failure and identified extensive embankment damage at a location identified by the Applicant as Site B at Mulberry Point[3].  Due to the above-average water flows covering the entire shoreline, the full extent of the damage to the embankment was not visible at this time.  FEMA prepared Project Worksheet (PW) 2373 with an estimated cost of $459,744.00 to repair the visible damage.  The PW scope of work (SOW) included in-kind replacement of the engineered embankment material eroded by floodwaters and high velocity river flow along 877 linear feet (LF) of the bank stabilization system at Site B.  The recent completion of the construction of the bank stabilization system (less than three years prior to the flooding disaster) allowed for the use of the original engineering plans as a baseline for takeoff measurements for estimating lost quantities of material necessary for the repair.

    After the river flows decreased and the water level receded closer to the NHW, the Applicant conducted a full evaluation of all flood damage to the bank stabilization system on December 27, 2011.  During this evaluation, the Applicant identified additional damage at Site B, increasing the total length of the damaged section from 877 feet to 1,500 feet.  The Applicant also discovered another damaged section about 410 feet in length located approximately 200 feet downstream at Site C; this damaged section was under water at the time of the previous FEMA site visit due to it being further downstream at a lower elevation.

    In early 2012, the Applicant made several inquiries regarding the status of its PW.  During the spring of 2012, the Applicant proceeded with the repair of all damages at the bank stabilization system in consideration of past environmental restrictions that limited construction activity to winter and early spring, as well as relatively low river flows which aided in the construction.[4]

    The Applicant reported the newly identified damage to the South Dakota Department of Public Safety (Grantee) on June 11, 2012; the Grantee notified FEMA immediately.  On June 20, 2012, FEMA conducted a second site visit to view the additional damage.  On July 26, 2012, the Applicant submitted two requests for additional funding for the work required to repair the bank stabilization system: 1) a change in SOW to include additional embankment material needed to repair the damage previously unseen under the high water level ($393,940.45) and hazard mitigation completed ($264,544.43) at Site B; and 2) a new PW to address the newly identified damage ($402,641.52) at Site C.

    On August 10, 2012, FEMA obligated PW 2373 Version 0 for $459,744.00 for the original SOW.  The PW noted the additional costs associated with newly discovered damage and hazard mitigation requested by the Applicant were not included.  Regarding the Applicant’s funding request for the repair of the newly identified damaged section, FEMA indicated the PW repair estimate based on the bank stabilization system’s original design specification did not deduct for any undamaged useable material, which should provide the Applicant with a surplus of materials.  On August 20, 2012, FEMA issued responses to the Applicant’s July 26, 2012 requests, denying both requests.  Hazard mitigation funding for Site B was denied because the Applicant completed work beyond the pre-disaster configuration without FEMA approval prior to construction.  Funding for Site C was denied because the Applicant did not identify nor report the new damage within the 60-day period following the Kickoff Meeting, which FEMA considered to have taken place on the same date as the site visit on the October 4, 2011.

    First Appeal

    On October 17, 2012, the Applicant sent its first appeal to the Grantee, requesting that FEMA obligate an additional $1,061.126.40.  The Grantee transmitted the Applicant’s first appeal to FEMA Region VIII, indicating its partial support of the appeal, on December 7, 2012. 

    First, the Applicant claimed that the additional quantities of engineered embankment material were necessary to fully repair the flood damage at Site B.  The Applicant reasoned that FEMA’s initial estimate was based on only a part of the entire damaged section visible above the high river level at the time of the site inspection. 

    Second, the Applicant argued that hazard mitigation was necessary and designed in cooperation with a USACE river bank restoration expert to prevent further embankment erosion and future damage to the well fields.  The Grantee did not support this portion of the appeal.

    Finally, the Applicant asserted that the damage at Site C could not be assessed during FEMA’s initial site visit as it was underwater below the continued high flows in the Missouri River.  The Applicant further contended that it was not aware of the requirement to report additional damage within 60 days of the Kickoff Meeting, because this was not explained by FEMA during the October 4, 2011 site inspection that also served as the Kickoff Meeting.  The Applicant indicated that it would have reported the newly identified damage as soon as it could after the discovery in late December 2011, had it understood the damage reporting requirement.

    The FEMA Region VIII Regional Administrator (RA) partially granted the first appeal on May 13, 2013.  The RA determined that the Applicant adequately demonstrated the additional embankment material required at Site B was needed to repair the damage that was a direct result of the disaster, and approved an additional $393,940.35.  However, the RA denied funding for the damage at Site C due to the Applicant’s failure to report the additional damage in a timely manner.  The RA also denied funding for Section 406 mitigation because the Applicant consulted with neither the Grantee nor FEMA prior to completing the mitigation measures for the bank stabilization system beyond the pre-disaster footprint.  On June 3, 2013, FEMA approved PW2373 Version 1 for an additional $393,940.35.

    Second Appeal

    On August 2, 2013, the Grantee transmitted the Applicant’s second appeal letter dated July 11, 2013, indicating its support of the appeal.  In its second appeal, the Applicant requests reconsideration of the unreported cost of $402,641.52 associated with Site C.  The Applicant indicates that it accepts FEMA’s ineligibility determination for the Section 406 mitigation. 

    The Applicant contends that additional notification for the newly identified damage at Site C should not have been required because the entire bank stabilization system at Mulberry Point is a single continuous system; it provides detailed descriptions and technical drawings[5] to demonstrate this point.  The Applicant also reiterates its first appeal argument that the notification requirement of 60 days could not be met because the newly identified damage was under the continued high river flows and not visible well beyond the 60-day deadline to report additional damage.

    Discussion

    Mulberry Point Bank Stabilization System as a Single Facility

    Title 44 Code of Federal Regulations (C.F.R.) § 206.201(c) defines facility as any publicly or privately owned building, works, system, or equipment, built or manufactured, or an improved and maintained natural feature.[6]  Regulations further define project as a logical grouping of work required as a result of the declared major disaster or emergency, whereby the SOW and cost estimate for a project are documented on a PW; a project may include eligible work at several sites.[7]  The Applicant asserted that the bank stabilization system at Mulberry Point is a single continuous system, and therefore, a single facility with multiple sites including Sites B and C.  As a single facility, the Applicant argued that an additional notification for the newly identified damage at Site C should not have been required.

    The Applicant provided extensive details regarding its genesis as a Private Nonprofit organization with a mission to provide safe and reliable drinking water to its member municipalities and rural water systems.  The water delivery system consists of many components including: a traditional lime treatment facility, along with multiple pump stations and reservoirs; a series of well fields located on the Missouri River, including a site known as Mulberry Point; and a bank stabilization system to protect the embankment from erosion, which in turn protects the Mulberry Point well field.  The Applicant explained that the Mulberry Point well field consists of well locations referred to as Sites A through E, lettered from north to south.

    Near the Mulberry Point well field, the bank stabilization system in question was constructed as a single continuous system over 5,000 feet in length.  There are no separate and distinct sections of the bank stabilization system, the Applicant explained, as it was constructed as a single system to protect the entire well field at Mulberry Point.  The Applicant clarified that the reference to a location of the bank stabilization system, such as Site B, refers to the closest Mulberry well field site location.  This naming convention is easier to use, rather than referring to a specific location along the bank stabilization system by its original station designation, ranging from station 0+00 at the south end of the bank stabilization system to station 52+20 at the north end.  The Applicant stated that the new damage discovered at Site C is located about 200 feet downstream (south) of Site B.  As the elevation of the bank stabilization system decreased from north to south due to the river gradient, it is logical that most of the embankment at Site C was still under the high water flows when some of the damage at Site B was visible during the initial FEMA site visit.

    Based on a thorough review of the documentation, including technical drawings and photographs, FEMA agrees with the Applicant that the bank stabilization system should be considered a single facility.  However, FEMA disputes the Applicant’s claim that additional notification for the newly identified damage at Site C is not required because Site C is part of the same facility as Site B.  FEMA guidance specifies that when additional damage to a facility is found after the PW is completed, the Applicant must document the damage, show that it is disaster-related, and request a re-inspection by FEMA.[8]

    Timeliness of Reporting New Damage

    Regulations provide that an applicant has 60 days following its first substantive meeting with FEMA to identify and to report damage to FEMA.[9]  The Public Assistance Guide further clarifies that an applicant must request assistance for any newly discovered damaged facilities within 60 days of the first substantive meeting, which is typically the Kickoff Meeting.[10]  However, there is a distinction between newly discovered damaged facility versus newly discovered damage at a facility already reported as damaged (i.e., hidden damage).

    Here, the newly discovered damage at Site C is located at a facility already reported as damaged.  FEMA previously inspected the disaster-caused damage at Site B within the same facility (i.e., the bank stabilization system).  As Site C damage is not considered damage at a newly discovered damaged facility, the 60-day requirement to report newly discovered damaged facilities as outlined in FEMA regulations and guidance[11] does not apply.

    Notwithstanding the inapplicability of the above-mentioned 60-day requirement, the Applicant is still required to report any newly discovered damage in a timely manner, even at a facility previously identified as damaged and already inspected by FEMA, pursuant to requirements outlined in regulations.[12]  Although regulations do not establish a specific deadline to report newly discovered damage at an already-inspected facility, FEMA guidance clearly states that to determine eligibility of any additional damage, FEMA may conduct another site visit, which should be timed to allow an inspection of the newly discovered damage before it is covered up or repaired.[13]

    In this case, the Applicant completed all repair work at the bank stabilization system facility at both Sites B and C, before it reported the additional damage to the State and FEMA.  The Applicant and the Grantee both claimed the Applicant was not aware of any requirement to report additional damage to FEMA, and that it would have done so in a timelier manner otherwise. 

    The Applicant’s limited level of awareness or knowledge of the federal requirements and guidelines for Public Assistance funding is not a justification for FEMA to grant time extensions or exceptions for reporting new damage.  Nevertheless, FEMA recognizes the time frame of the Applicant’s construction activities at the bank stabilization facility was limited by various environmental requirements and restrictions, and the original version of PW 2373 (which included specific language regarding the requirement to report any additional damage) was not processed and approved until ten months after the initial site inspection.  The Applicant also presented information (e.g., summary of site inspection notes and photographs) to document the newly identified damage at Site C was disaster-related.

    In partially granting the first appeal, the RA approved extra funding to repair additional disaster-related damage at Site B, which was not reported to FEMA until after the project completion.  Under the circumstances discussed above, FEMA finds that the RA was correct to grant funding to repair the newly discovered disaster-caused damage at Site B.  Accordingly, additional funding for the disaster-caused damage at Site C of the same facility should also be eligible.

    The Applicant stated that all construction activities at Sites B and C were conducted in accordance with previous environmental requirements, and the approval of PW 2373 Versions 0 and 1 did not modify any of the environmental requirements.  During the review of the Applicant’s second appeal, FEMA conducted a preliminary environmental and historic preservation (EHP) compliance review of the project at Site C.  FEMA anticipates that the formal EHP review will find the project compliant with applicable law, regulation, and policy, as long as the SOW completed at Site C is in line with the SOW submitted in the environmental consultation documents and the Applicant complied with all the conditions outlined in the agency responses. For a complete EHP review, the Applicant will need to submit any necessary documentation to verify compliance with project conditions when PW 2373 Version 2 is prepared to fund the work already completed at Site C.

    Conclusion

    The Applicant has adequately demonstrated that the bank stabilization system is a single continuous system, and hence, a single facility.  As a single facility that was already identified as disaster-damaged (at Site B) and inspected by FEMA, the newly identified damage at Site C of the same facility is not subject to the 60-day requirement after the first substantive meeting with FEMA to report new damaged facilities.  However, the Applicant is still required to report any new damage to facilities already identified as damaged.  Although the Applicant did not report the newly identified damage at Site C until after it was repaired, the Applicant documented that it was disaster-related.  Therefore, the request for a change in SOW to include its repair is approved, contingent upon successful completion of a formal EHP review.  FEMA will prepare PW 2373 Version 2 to obligate an additional $402,641.52.


    [1] The Applicant’s Request for Public Assistance (RPA) was approved under the name Lewis and Clark Rural Water System, Inc.  However, it appears that the Applicant is also referred to as Lewis and Clark Regional Water System, Inc, according to its current letterhead and website.  For the purposes of this second appeal analysis, the two names are interchangeable and refer to the same Applicant.

    [2] The Applicant’s second appeal states the FEMA inspection occurred on October 4, 2011.  PW 2373 incorrectly states it occurred on October 7, 2011.

    [3] The Applicant explained that the water well fields are known as Sites A through E—collectively referred to as Mulberry Point well fields.  The different locations along the bank stabilization system are also commonly referred to as Sites A through E, corresponding to the closest water well field Site marker.

    [4] The Applicant stated all of the work done at the Mulberry Point well field was subject to several environmental restrictions.  The preferred unrestricted time for construction was from September through December, followed by the period from January through April.  The most restrictive time is from mid-April through August due to nesting birds and presence of raptors.

    [5] Much of the documentation was also previously submitted with the SOW change request and the first appeal request.

    [6] 44 C.F.R. § 206.201(c) (2010).

    [7] See 44 C.F.R. § 206.201(i).

    [8] See Public Assistance Guide, FEMA 322, at 101 (June 2007) [hereinafter PA Guide].

    [9] See 44 C.F.R. § 206.202 (d)(ii).

    [10] See PA Guide, at  96 and at 140.

    [11] See 44 C.F.R. § 206.202 (d)(ii); see also id.

    [12] See 44 C.F.R. § 206.204(e) (discussing the Applicant requirement to evaluate and report cost overruns for reasons including a change in the scope of eligible work).

    [13] See PA Guide, at 140.

     



  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Nashville-Davidson County
    Disaster Number: 
    1909-DR-TN
    DSR: 
    5595
    Date Signed: 
    Tuesday, October 14, 2014
    PA ID: 
    037-52004-00
    Summary/Brief: 

    Conclusion:  Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5595 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $1,455,739.93 in additional PA funding.

    Summary Paragraph

    In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA prepared Project Worksheet (PW) 5595 to document disaster-related damage to various electrical, mechanical, and building infrastructure components in the Filter Building of the Facility.  FEMA obligated PW 5595 for $64,895.81 based on a Cost Estimating Format (CEF).  In the first appeal, the Applicant asserted that FEMA failed to include funding for replacement of wiring and cables throughout the Filter Building and labor and other materials associated with the restoration of the building.  The Regional Administrator (RA) partially approved PW 5595 for $139,766.59 for resident engineering costs, pipe insulation, metal door replacement, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In addition, the RA concluded that the Applicant failed to demonstrate that some of the excluded work items were the result of the disaster.  In the second appeal, the Applicant again asserts that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5595. 

    Authorities and Second Appeals

    • Stafford Act § 406, 42 U.S.C. § 5172.
    • 44 C.F.R. § 206.223(a).
    • OMB Circular A-87, 2 C.F.R. § 225.
    • FEMA P-348, at 2-27, 2-28, and 3.3-2.
    • FEMA 543, at 2-50.
    • FEMA P-936, at 4-22.
    • FEMA P-942, at 5-26.

    Headnotes

    • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
      • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5595 are eligible under the PA Program as they were required as a result of the disaster.   
    • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
      • The Applicant provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 
    Letter: 

    October 14, 2014

    David Purkey
    Interim Director
    Tennessee Emergency Management Agency
    3041 Sidco Drive, P.O. Box 41502
    Nashville, TN 37204-1502

    Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5595 – Scope of Work

    Dear Mr. Purkey:

    This is in response to a letter from your office dated February 20, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $1,455,739.93 in Public Assistance (PA) funding for various items excluded from PW 5595.

    As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5595 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $1,455,739.93 in additional PA funding.  Therefore, I am granting the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator take appropriate action to implement this determination. 

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Andrew Velasquez, III
          Regional Administrator
          FEMA Region IV

    Analysis: 

    Background

    In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA prepared Project Worksheet (PW) 5595 to document disaster-related damage to various electrical, mechanical, and building infrastructure components in the Filter Building of the Facility.  FEMA obligated PW 5595 for $64,895.81 based on a Cost Estimating Format (CEF).

    First Appeal

    In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5595.  In that appeal the Applicant presented six distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5595.  Second, the Applicant requested that FEMA revise PW 5595 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for removal, disposal, and replacement of contaminated pipe insulation because such action complied with FEMA policy and guidance regarding mold remediation.  Fourth, the Applicant asserted that FEMA should authorize the replacement of all metal doors at the Filter Building because the doors were inundated with contaminated waters.  Fifth, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]   Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5595.[2]    

    In a letter dated December 6, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $139,766.59 for the second, third, and fourth issues presented by the Applicant (i.e., resident engineering costs, pipe insulation, replacement of metal doors, and associated construction management costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or the costs for other items that were excluded from the PW (first, fifth, and sixth issues, respectively). With specific regard to issue five, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5595 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.  Regarding issue six, the RA concurred with the Applicant that accidental damage caused by one of its contractors was a consequence of emergency response efforts.  Therefore, the RA agreed with a scope increase to address the damage; however, he could not determine eligible costs.  The RA determined that these costs would be captured during the final reconciliation of PW 5595. 

    Second Appeal

    In the second appeal, dated February 12, 2014, the Applicant requests reimbursement for issue five (i.e., excluded work described above), in the amount of $1,455,739.93.  The second appeal  includes $415,739.35 for wire and conduit replacement, $76,855.58 for lighting and receptacle replacement, and $963,145.00 for replacement of damaged instrumentation—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

    The Applicant also asserts that it used and submitted to FEMA bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

    Discussion

    Work Eligibility

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

    As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5595 and additional scope or cost increases not previously included in PW 5595.

    It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment asserts that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

    Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

    FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

    In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

    Based upon the Applicant’s supporting documents, and FEMA policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5595 are eligible for Public Assistance funding.

    Allowable Costs

    Pursuant to the 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.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

    As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement. 

    Conclusion

    Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5595 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  Final costs for PW 5595 will be reconciled by FEMA during the closeout process. 


    [1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

    [2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

    [4] 44 C.F.R. § 206.223(a) (2009).

    [5] See generally Technical Memorandum 1.

    [6] Id.

    [7] Id.

    [8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 2-3 (Feb. 12, 2014).

    [9] Id.

    [10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

    [11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

    [12] FEMA P-348, at 2-27. 

    [13] Id., at 2-28.

    [14] Id., at 3.3-2.

    [15] Id., at 2-28. 

    [16] FEMA 543, at 2-50.

    [17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

    [18] FEMA 543, at 2-50.

    [19] Id.

    [20] See FEMA P-936, at 4-22.

    [21] Id.

    [22] Id.

    [23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

    [24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5595.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

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

    [26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

    [27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

    [28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

     



  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Nashville-Davidson County
    Disaster Number: 
    1909-DR-TN
    DSR: 
    5591
    Date Signed: 
    Tuesday, October 14, 2014
    PA ID: 
    037-52004-00
    Summary/Brief: 

    Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5591 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $196,315.79 in additional PA funding.

    Summary Paragraph

    In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5591 to address damage to the Main Blower Building of the Facility.  FEMA obligated PW 5591 for $78,883.38. The Applicant prepared, and attached to the PW, a statement explaining that they were “signing this PW without proper review of scope and/or damage description elements due to FEMA’s self-imposed February 25, 2011 deadline for closing the Joint Field Office.”  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5591.  The Regional Administrator (RA) partially approved PW 5591 for $64,218.72 for resident engineering costs, pipe insulation, metal door replacement, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In the second appeal, the Applicant asserts that FEMA failed to include funding for lighting and receptacle replacements, HVAC replacement, and other miscellaneous electrical and mechanical work items.

    Authorities and Second Appeals

    • Stafford Act § 406, 42 U.S.C. § 5172.
    • 44 C.F.R. § 206.223(a).
    • OMB Circular A-87, 2 C.F.R. § 225.
    • FEMA P-348, at 2-27, 2-28, and 3.3-2.
    • FEMA 543, at 2-50.
    • FEMA P-936, at 4-22.
    • FEMA P-942, at 5-26.

    Headnotes

    • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
      • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5591 are eligible under the PA Program as they were required as a result of the disaster.   
    • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
      • The Applicant provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 
    Letter: 

    October 14, 2014

    David Purkey
    Interim Director
    Tennessee Emergency Management Agency
    3041 Sidco Drive, P.O. Box 41502
    Nashville, TN 37204-1502

    Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5591 – Scope of Work

    Dear Mr. Purkey:

    This is in response to a letter from your office dated February 20, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $196,315.79 in Public Assistance (PA) funding for various items excluded from PW 5591.

    As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5591 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $196,315.79 in additional PA funding.  Therefore, I am granting the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator take appropriate action to implement this determination. 

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc: Andrew Velasquez, III
         Regional Administrator
         FEMA Region IV

    Analysis: 

    Background

    In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA prepared PW 5591 to address damage to the Main Blower Building of the Facility.  FEMA obligated PW 5591 for $78,883.38 based on a Cost Estimating Format (CEF). 

    First Appeal

    In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5591.  In that appeal the Applicant presented six distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5591.  Second, the Applicant requested that FEMA revise PW 5591 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for removal, disposal, and replacement of contaminated pipe insulation because such action complied with FEMA policy and guidance regarding mold remediation.  Fourth, the Applicant asserted that FEMA should authorize the replacement of all metal doors at the Main Blower Building because the doors were inundated with contaminated waters.  Fifth, the Applicant asserted that pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5591.[2]    

    In a letter dated November 25, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $64,218.72 for the second, third, and fourth issues presented by the Applicant (i.e., resident engineering costs, pipe insulation, replacement of metal doors, and associated construction management costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or the costs for other items that were excluded from the PW (first, fifth, and sixth issues, respectively). With specific regard to issues five and six, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5591 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

    Second Appeal

    In the second appeal, dated February 12, 2014, the Applicant requests reimbursement for issues five and six (i.e., excluded work described above), in the amount of $196,315.79.  The second appeal includes $141,346.85 for lighting and receptacle replacement and $54,968.94 for the actual costs of a HVAC system and other miscellaneous electrical and mechanical equipment—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

    The Applicant also asserts that it used and submitted to FEMA bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

    Discussion

    Work Eligibility

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

    As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5591 and additional scope or cost increases not previously included in PW 5591.

    It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment asserts that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

    Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

    FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

    In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

    Based upon the Applicant’s supporting documents, and FEMA policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5591 are eligible for Public Assistance funding.

    Allowable Costs

    Pursuant to the 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.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

    As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement. 

    Conclusion

    Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5591 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  Final costs for PW 5591 will be reconciled by FEMA during the closeout process.


    [1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

    [2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

    [4] 44 C.F.R. § 206.223(a) (2009).

    [5] See generally Technical Memorandum 1.

    [6] Id.

    [7] Id.

    [8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 3 (Feb. 12, 2014).

    [9] Id.

    [10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

    [11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

    [12] FEMA P-348, at 2-27. 

    [13] Id., at 2-28.

    [14] Id., at 3.3-2.

    [15] Id., at 2-28. 

    [16] FEMA 543, at 2-50.

    [17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

    [18] FEMA 543, at 2-50.

    [19] Id.

    [20] See FEMA P-936, at 4-22.

    [21] Id.

    [22] Id.

    [23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

    [24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5591.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

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

    [26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

    [27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

    [28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

     



  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Nashville-Davidson County
    Disaster Number: 
    1909-DR-TN
    DSR: 
    5590
    Date Signed: 
    Tuesday, October 14, 2014
    PA ID: 
    037-52004-00
    Summary/Brief: 

    Conclusion:  Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5590 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $503,424.04 in additional PA funding.

    Summary Paragraph

    In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5590 to address damage to the Primary Treatment System building of the Facility.  FEMA obligated PW 5590 for $83,699.09. The Applicant prepared, and attached to the PW, a statement explaining that they were “signing this PW without proper review of scope and/or damage description elements due to FEMA’s self-imposed February 25, 2011 deadline for closing the Joint Field Office.”  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5590.  The Regional Administrator (RA) partially approved PW 5590 for $56,828.48 for resident engineering costs, pipe insulation, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In the second appeal, the Applicant asserts that FEMA failed to include funding for electrical wiring and cable replacement and various electrical system components that were inundated by contaminated floodwaters. 

    Authorities and Second Appeals

    • Stafford Act § 406, 42 U.S.C. § 5172.
    • 44 C.F.R. § 206.223(a).
    • OMB Circular A-87, 2 C.F.R. § 225.
    • FEMA P-348, at 2-27, 2-28, and 3.3-2.
    • FEMA 543, at 2-50.
    • FEMA P-936, at 4-22.
    • FEMA P-942, at 5-26.

    Headnotes

    • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
      • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5590 are eligible under the PA Program as they were required as a result of the disaster.   
    • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented.
      • The Applicant provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 


     

    Letter: 

    October 14, 2014

    David Purkey
    Interim Director
    Tennessee Emergency Management Agency
    3041 Sidco Drive, P.O. Box 41502
    Nashville, TN 37204-1502

    Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5590 – Scope of Work

    Dear Mr. Purkey:

    This is in response to a letter from your office dated January 22, 2014, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $503,424.04 in Public Assistance (PA) funding for various items excluded from PW 5590.

    As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5590 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $503,424.04 in additional PA funding.  Therefore, I am approving the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator take appropriate action to implement this determination. 

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Andrew Velasquez, III
          Regional Administrator
          FEMA Region IV

    Analysis: 

    Background

    In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5590 to address damage to the Primary Treatment System building of the Facility, including below grade equipment galleries and tunnels.  FEMA obligated PW 5590 for $83,699.09 based on a Cost Estimating Format (CEF). 

    First Appeal

    In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5590.  In that appeal the Applicant presented five distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5590.  Second, the Applicant requested that FEMA revise PW 5590 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for removal, disposal, and replacement of contaminated pipe insulation because such action complied with FEMA policy and guidance regarding mold remediation.  Fourth, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5590.[2]   

    In a letter dated November 8, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $56,828.48 for the second and third issues presented by the Applicant (i.e., resident engineering costs, pipe insulation, and associated construction management costs).  In addition, the RA approved an amendment to the scope of PW 5590 to include below-grade electrical testing and replacement and associated construction management costs.  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, fourth, and fifth issues, respectively). With specific regard to issues four and five, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5590 (i.e., the FEMA generated CEF) and the appealed scope addition or cost increases.

    Second Appeal

    In the second appeal, dated January 17, 2014, the Applicant requests reimbursement for issues four and five (i.e., excluded work described above), in the amount of $503,424.04.  The second appeal includes $101,602.50 for damaged electrical wire and cable replacement, and $401,821.54 for replacement of electrical system components inundated by floodwaters, including switches, fuse boxes, control panels, and lighting receptacles—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

    The Applicant also asserts that it used and submitted to FEMA bid documents to establish the cost to restore the Facility to predisaster condition; whereas, as mentioned earlier, FEMA used a CEF.  In the Applicant’s second appeal, it challenges FEMA’s cost methodology, stating the CEF is not reflective of the work completed or scheduled to be completed because it does not include the Contractor’s general requirements.  In addition, the Applicant asserts that the costs identified in the CEF were lower than the actual costs.  The Applicant further argues that it is not realistic to compare actual costs to each CEF line item and cites the FEMA Public Assistance Guide as evidence that actual cost of eligible repairs is the preferred methodology in determining costs for large projects.

    Discussion

    Work Eligibility

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

    As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5590 and additional scope or cost increases not previously included in PW 5590.

    It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment asserts that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

    Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

    FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

    In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

    Based upon the Applicant’s supporting documents, and FEMA policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5590 are eligible for Public Assistance funding.

    Allowable Costs

    Pursuant to the 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.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

    As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement. 

    Conclusion

    Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5590 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  Final costs for PW 5590 will be reconciled by FEMA during the closeout process.  


    [1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

    [2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

    [4] 44 C.F.R. § 206.223(a) (2009).

    [5] See generally Technical Memorandum 1.

    [6] Id.

    [7] Id.

    [8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 4 (Jan. 17, 2014).

    [9] Id.

    [10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

    [11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

    [12] FEMA P-348, at 2-27. 

    [13] Id., at 2-28.

    [14] Id., at 3.3-2.

    [15] Id., at 2-28. 

    [16] FEMA 543, at 2-50.

    [17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

    [18] FEMA 543, at 2-50.

    [19] Id.

    [20] See FEMA P-936, at 4-22.

    [21] Id.

    [22] Id.

    [23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

    [24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5590.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

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

    [26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

    [27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

    [28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

     



  • Scope of Work
    Appeal Type: 
    2nd
    Report Type: 
    PW
    Appeal Categories: 
    Applicant Name: 
    Nashville-Davidson County
    Disaster Number: 
    1909-DR-TN
    DSR: 
    5533
    Date Signed: 
    Tuesday, October 14, 2014
    PA ID: 
    037-52004-00
    Summary/Brief: 

    Conclusion:  Pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5533 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $189,355.06 in additional PA funding.

    Summary Paragraph

    In May 2010, extensive flooding throughout Nashville-Davidson County caused damage to the Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5533 to address damage to the Digester Building of the Facility.  FEMA obligated PW 5533 for $45,644.11.  In the first appeal, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its pre-disaster condition for PW 5533.  The Regional Administrator (RA) partially approved PW 5533 for $33,689.67 for resident engineering costs, pipe insulation, and associated construction management costs.  However, the RA determined that the first appeal did not provide the level of information necessary to make eligibility determinations on the other excluded items.  In the second appeal, the Applicant asserts that FEMA failed to include funding for pumps and motors, lighting instrumentation, an air compressor, actuators, and wiring throughout the building. 

    Authorities and Second Appeals

    • Stafford Act § 406, 42 U.S.C. § 5172.
    • 44 C.F.R. § 206.223(a).
    • OMB Circular A-87, 2 C.F.R. § 225.
    • FEMA P-348, at 2-27, 2-28, and 3.3-2.
    • FEMA 543, at 2-50.
    • FEMA P-936, at 4-22.
    • FEMA P-942, at 5-26.

    Headnotes

    • Pursuant to 44 C.F.R. § 206.223(a), an eligible item of work must be required as the result of the disaster event.
      • Based on FEMA P-348, FEMA 543, FEMA P-936, and FEMA P-942, and substantiated by analysis from a Professional Engineer, FEMA determined that the work items excluded from the original version of PW 5533 are eligible under the PA Program as they were required as a result of the disaster.   
    • Pursuant to OMB Circular A-87, allowable procurement costs must, among other things, be adequately documented. 

    The Applicant provided adequate documentation, such as bid documents, invoices, and cancelled checks, to demonstrate actual costs for the requested work items. 

    Letter: 

    October 14, 2014

    David Purkey
    Interim Director
    Tennessee Emergency Management Agency
    3041 Sidco Drive, P.O. Box 41502
    Nashville, TN 37204-1502

    Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheet (PW) 5533 – Scope of Work

    Dear Mr. Purkey:

    This is in response to a letter from your office dated December 11, 2013, which transmitted the referenced second appeal on behalf of the Metropolitan Government of Nashville and Davidson County (Applicant).  The Applicant is appealing the U.S. Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $189,355.06 in Public Assistance (PA) funding for various items excluded from PW 5533.

    As explained in the enclosed analysis, I have determined that, pursuant to 44 C.F.R. § 206.223, the work items excluded in the original version of PW 5533 are eligible under the PA Program.  In addition, the Applicant provided sufficient documentation to substantiate $189,355.06 in additional PA funding.  Therefore, I am granting the appeal contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  By copy of this letter, I am requesting the Acting Regional Administrator take appropriate action to implement this determination. 

    Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.

    Sincerely,

    /s/

    William W. Roche
    Director
    Public Assistance Division

    Enclosure

    cc:  Andrew Velasquez, III
          Regional Administrator
          FEMA Region IV

    Analysis: 

    Background

    In May 2010, extensive flooding throughout Nashville and Davidson County caused damage to the Metropolitan Government of Nashville and Davidson County’s (Nashville-Davidson or Applicant) Dry Creek Wastewater Treatment Plant (Facility).  The Facility is the sole source of wastewater treatment for the northeast area of Nashville-Davidson County.  FEMA drafted PW 5533 to address damage to the Digester Building of the Facility, including the building’s Accumulator Room, Equipment Gallery, and a stairwell leading to the basement.  FEMA obligated PW 5533 for $45,644.11 based on a project cost estimate using RS Means and other sources.   

    First Appeal

    In the first appeal letter, dated June 8, 2011, the Applicant asserted that FEMA made several errors concerning the scope of work and associated funding necessary to restore the Facility to its predisaster condition for PW 5533.  In that appeal the Applicant presented five distinct issues.  First, the Applicant disagreed with FEMA’s decision to reclassify the Direct Administrative Costs (DAC) as indirect costs, thereby reducing the eligible amount in PW 5533.  Second, the Applicant requested that FEMA revise PW 5533 to reflect the actual effort expended for on-site resident engineering tasks associated with the recovery of the Facility.  Third, the Applicant asserted that it should be reimbursed for removal, disposal, and replacement of contaminated pipe insulation because such action complied with FEMA policy and guidance regarding mold remediation.  Fourth, the Applicant asserted that, pursuant to FEMA Publication 348, Protecting Building Utilities from Flood Damage (FEMA P-348), FEMA should authorize the complete replacement of all electrical wires and cables because the Facility was submerged in nine feet of contaminated floodwaters and the electrical equipment was not salvageable.[1]  Finally, the Applicant asserted that a Technical Memorandum, prepared by Brown and Caldwell Engineers (Consulting Engineers), identified several areas where damaged items were missed and should have been included in PW 5533.[2]    

    In a letter dated September 27, 2013, the Region IV Regional Administrator (RA) partially granted the appeal, approving $33,689.67 for the second and third issues presented by the Applicant (i.e., resident engineering costs, pipe insulation, and associated construction management costs).  However, the RA determined that Nashville-Davidson had not provided sufficient information to substantiate additional direct administrative costs, complete replacement of all electrical wires and cables, or other items that were excluded from the PW (first, fourth, and fifth issues, respectively). With specific regard to issues four and five, the RA determined that the format in which the Applicant documented costs made no distinction between existing line item costs included in PW 5533 and the appealed scope addition or cost increases.

    Second Appeal

    In the second appeal, dated December 5, 2013, the Applicant requests reimbursement for issues four and five (i.e., excluded work described above), in the amount of $189,355.06.  The second appeal  includes $80,973.69 for replacement of wires, conduits, flow tubes, sump pump panels, and other mechanical items, $15,426.67 for lighting and receptacle replacement, $69,583.60 for other lighting instrumentation, and $23,317.10 for an air compressor, actuators, and wiring—all of which the applicant claims were excluded in the original PW.  The Applicant raises no issue with regard to the Direct Administrative Costs.

    The Applicant also asserts that the original PW only includes sensing or primary elements while the bid documents provided to FEMA list all damaged components.  In addition, the Applicant explains it used these bid documents to establish the cost to restore the Facility to predisaster condition.  In the Applicant’s second appeal, it contends that, had FEMA used its bid documents during the preparation of PW 5533, the excluded work items that were damaged as the result of the disaster would have otherwise qualified for PA funding.  

    Discussion

    Work Eligibility

    The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), Section 406, authorizes FEMA to make contributions to a local government to restore eligible facilities on the basis of the design of such facilities as they existed immediately prior to the disaster.[3]  Pursuant to Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.223(a), which implements that provision, an eligible item of work must be required as the result of the disaster event, be located within a designated disaster area, and be the legal responsibility of the applicant.[4] The Applicant has fulfilled the latter two requirements of § 206.223(a); the issue on appeal is whether the work is required as a result of the disaster event.

    As stated earlier, in the first appeal determination, the RA noted that the items excluded from the scope of work may be eligible for Public Assistance (PA) funding.  However, the RA could neither determine whether all items were damaged by the disaster nor distinguish between line item costs already included in PW 5533 and additional scope or cost increases not previously included in PW 5533.

    It must be noted that, among other things, the Applicant’s Consulting Engineers conducted a detailed flood damage assessment of the Facility.[5]  The assessment included high water mark locations and an inventory of equipment that was reviewed by a licensed Professional Engineer.[6]  The inventory list is a detailed record that accounts for all of the Facility’s electrical equipment

    and distinguishes between disaster-damaged and non-damaged equipment.[7]  The inventory list was the basis for the scope of work in bid documents.[8]  In addition to the water mark locations and inventory list, the assessment asserts that the floodwater was contaminated and, therefore, likely had harmful impacts on electrical components.[9]  The Consulting Engineers substantiate this claim by providing laboratory reports that indicated the presence of contaminating factors, including pH and corrosivity levels above the Environmental Protection Agency’s recommended levels.[10]

    Generally, FEMA policy and guidance states that wet electrical components must be replaced.[11]  Specifically, FEMA P-348 recommends replacing any wire or cable that is listed for dry locations that has been submerged in water[12] and notes that “sediments and contaminants contained in water may find their way into the internal components of installed electrical products and may remain there even after the products have been dried or washed….”[13]  Furthermore, it explains that “[i]nundation of electrical equipment in a building creates the danger of short circuits, electrical shock, damage of electric components and appliances, injury, fire, or even death.”[14]  Accordingly, FEMA P-348 recommends replacing damaged electrical components with new undamaged products because the damaged components are not suitable for continued use.[15]

    FEMA 543, Design Guide for Improving Critical Facility Safety from Flooding and High Winds (FEMA 543), further explains that, in general, if electrical components get wet, they are likely to be damaged or destroyed.[16]  It provides that “electrical systems and components, and electrical controls of heating, ventilation, and air conditioning systems, are subject to damage simply by getting wet, even for short durations.”[17]  Additionally, unless specifically designed for wet locations, switches and other electrical components can short out due to deposits of sediment, or otherwise not function even when allowed to dry before operation.[18]  FEMA 543 also notes that wiring and components that have been submerged may be functional, although generally it is more cost-effective to discard flooded outlets, switches, and other less expensive components than to attempt thorough cleaning.[19]

    In addition to FEMA 543, FEMA Publication 936, Floodproofing Non-Residential Buildings (FEMA P-936), describes conditions under which wiring and cables should be considered damaged.[20]  Specifically, FEMA P-936 explains that cable systems cannot be cleaned if floodwaters have entered the exterior sheaths of the cables.[21]  However, conduits inundated with flooding may be cleaned, provided the floodwaters are not corrosive or otherwise damaging and the conduits are routed and installed to prevent water from accumulating inside them.[22]  Furthermore, after flooding it should be assumed that conductors are damaged unless it can be proven otherwise.[23]

    Based upon the Applicant’s supporting documents, and FEMA policy and guidance, FEMA has determined that contaminated floodwater inundated the Facility and, therefore, likely had detrimental impacts on its electrical components.[24]  As such, the items excluded from the original scope of work in PW 5533 are eligible for Public Assistance funding.

    Allowable Costs

    Pursuant to the 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.[25]  Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement.[26]  However, these costs must, among other things, be reasonable and necessary to accomplish the work, comply with applicable federal, state, and local laws, regulations and procurement requirements, and be adequately documented.[27]  Adequate documentation in this instance would include documents that validate actual costs for work items claimed in this appeal.

    As explained above, the work items requested by the Applicant are necessary to restore the Facility to predisaster condition, design, and function.  With the second appeal, the Applicant provided bid documents, invoices, order forms, accounting reports, and other documentation that validate the scope and actual costs for the work items requested in this appeal.[28]  The costs associated with the requested work items were adequately documented by the Applicant.  Accordingly, the costs are eligible for FEMA reimbursement.

    Conclusion

    Pursuant to 44 C.F.R. § 206.223(a), the work items excluded in the original version of PW 5533 are eligible under the PA Program.  In addition, pursuant to OMB Circular A-87, the Applicant provided sufficient documentation to substantiate its request for additional PA funding.  Accordingly, this appeal is granted contingent upon the Applicant’s ability to produce documents substantiating proper procurement and actual costs.  Final costs for PW 5533 will be reconciled by FEMA during the closeout process. 


    [1] See Protecting Building Utilities from Flood Damage, FEMA P-348, at 2-27 (Nov. 1999) [hereinafter FEMA 348].

    [2] See generally Technical Memorandum from Maintenance and Reliability Specialist, Brown and Caldwell, prepared for Nashville Metropolitan Water Services, (Sep. 7, 2010) [hereinafter Technical Memorandum 1].

    [3] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406, 42 U.S.C. § 5172 (2007).

    [4] 44 C.F.R. § 206.223(a) (2009).

    [5] See generally Technical Memorandum 1.

    [6] Id.

    [7] Id.

    [8] Second Appeal, Nashville-Davidson County, FEMA-1909-DR-TN, at 3-4 (Dec. 5, 2013).

    [9] Id.

    [10] Id.; see also Technical Memorandum from Professional Engineer, Brown and Caldwell, prepared for Metropolitan Water Services Nashville, at Attachment A (May 27, 2011) (referencing the National Electric Code (NEC) that forbids the use of electrical equipment and connections “…deteriorated by corrosion, chemical action, or overheating” as support for the Applicant’s assertion that various electrical components had to be replaced)    [hereinafter Technical Memorandum 2].

    [11] See Design Guide for Improving Critical Facility Safety from Flooding and High Winds, FEMA 543, (Jan. 2007) [hereinafter FEMA 543]; see also Floodproofing Non-Residential Buildings, FEMA P-936, (July 2013) [hereinafter FEMA P-936].

    [12] FEMA P-348, at 2-27. 

    [13] Id., at 2-28.

    [14] Id., at 3.3-2.

    [15] Id., at 2-28. 

    [16] FEMA 543, at 2-50.

    [17] Id.; see also FEMA Mitigation Assessment Team (MAT) Report: Hurricane Sandy in New Jersey and New York, FEMA P-942, at 5-26 (Nov. 2013) (providing, “[i]n general, all inundated electrical components had to be replaced, including electric controls and SCADA systems. Other equipment and systems damaged by floodwater included boilers, communication systems, fire protection systems, settling tanks, and biological systems for treatment.”) [hereinafter FEMA P-942].

    [18] FEMA 543, at 2-50.

    [19] Id.

    [20] See FEMA P-936, at 4-22.

    [21] Id.

    [22] Id.

    [23] Id. (providing that, “conductors should be replaced after flooding unless it can be confirmed that they have not been damaged from inundation”).

    [24]During evaluation of the second appeal, FEMA consulted a professional engineer (PE) regarding the validity of the Applicant’s assertions regarding the excluded work items.  The PE reviewed the Applicant’s appeal documentation submitted on first and second appeal, FEMA policy, and FEMA guidance to form a professional opinion regarding the eligibility of work items the Applicant claims were improperly excluded in PW 5533.  The PE concluded that the Applicant’s documentation was sufficient to establish that the excluded items were damaged by the flood.  See generally Email from Professional Engineer, FEMA to PA Appeals Analyst, FEMA (Aug. 15, 2014, 5:24 pm) (on file with FEMA).

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

    [26] Public Assistance Guide, FEMA 322, at 40 (June 2007).

    [27] See Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, at Attachment A  (2004) (codified at 2 C.F.R. § 225).

    [28] Nashville-Davidson County, FEMA-1909-DR-TN, Attachments.

     



 

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