Immediate Threat, Procurement & Contracting Requirements, Force Account Labor & Equipment Costs, Debris Disposal and Monitoring

Appeal Brief

Summary Paragraph – From September 17 to November 15, 2017, Hurricane María caused significant damage to Puerto Rico. The Universidad Central del Caribe, Inc. (Applicant), a private nonprofit educational institution, sought funding for its employees’ straight-time and overtime labor costs to clean and stage debris, and for contract costs to remove it. The Applicant submitted contract, invoices, payment receipts, timesheets, and photographs. FEMA documented the claim in Grants Manager Project 52601 and authorized funding for debris removal. The Government of Puerto Rico’s Central Office for Recovery, Reconstruction and Resiliency submitted the Applicant’s Closeout Cost Validation Report (CCVR), detailing the total project costs. FEMA requested the Applicant submit load tickets for debris removed and the final disposal site. The Applicant provided statements from the Municipality of Bayamon’s Environmental Protection Office confirming the debris was temporarily stockpiled at its facilities and no load tickets were provided. FEMA denied funding determining that the Applicant’s CCVR lacked documentation to verify the work. The Applicant appealed, claiming that it documented the entire process from debris collection to disposal. The FEMA Region 2 Administrator denied the appeal, stating the Applicant did not demonstrate that the claimed labor costs related to eligible work or and did not verify debris collection amounts. On second appeal, the Applicant asserts the claimed costs results from the performance of eligible work.

Authorities

• Stafford Act §§ 403(a)(3), 407(a), 428(e)(2)(D).
• 2 C.F.R. § 200.320(f).
• 44 C.F.R. §§ 206.223(a)(1), 206.224(a).
• PAPPG, at 21, 24, 30, 44, 57.

Headnotes

• FEMA is authorized to provide PA funding for debris removal, clearance, and disposal when it is in the public interest because it is necessary to eliminate immediate threats to lives, public health and safety, eliminate immediate threats of damage to improved public or private property as a result of the disaster. Contract costs may be eligible based on the terms of the contract if the applicant meets Federal procurement and contracting requirements.
  • The Applicant’s documentation demonstrates that the requested work was necessary to reduce an immediate threat and completed in accordance with contract terms.
• Additionally, under the alternative procedures authorized by Section 428 of the Stafford Act, if an applicant opts to participate in the straight-time procedure for debris removal, straight-time labor costs are eligible for budgeted employees conducting eligible debris removal activities.
  • The Applicant has thus demonstrated that its employees were engaged in eligible work. As a result, the claimed labor costs are eligible for PA funding. 

Conclusion 

FEMA finds the Applicant’s documentation demonstrates that the costs were incurred in the performance of eligible work and adequately documented. Therefore, the appeal is granted.  

Appeal Letter

Appeal Analysis

Background

From September 17 through November 15, 2017, Hurricane María caused significant damage to Puerto Rico.^[1] Universidad Central del Caribe, Inc. (Applicant), a private nonprofit (PNP) educational institution, requested $128,760.83 in Public Assistance (PA) funding for the actual costs of completed debris cleanup and removal. This included $92,451.40 in contract costs with C&R Contractor (Contractor), and $36,309.43 for employee labor costs. The work was performed from September 21 to November 1, 2017. To support its claim, the Applicant provided: a lump-sum contract detailing the scope of work, costs, quantity, and type of debris hauled; three estimates for the debris removal work; invoices for completed work; 2018 certifications from the Contractor explaining the invoices in further detail and specifying the number of trips and cubic yards of hauled material; and force account labor timesheets. The timesheets show employee names, titles, hours, dates worked, tasks performed, hourly and fringe benefit rates, and total costs. FEMA documented the claim in Grants Manager Project 52601 and authorized funding in 2018 for the total project cost of $128,760.83.  

On December 22, 2021, the Government of Puerto Rico’s Central Office for Recovery, Reconstruction and Resiliency (Recipient) submitted the Applicant’s Closeout Cost Validation Report (CCVR) to account for the total project cost.

On July 12, 2022, FEMA asked the Applicant to submit load tickets for the debris removed, hauled, and delivered to the final disposal site. The Applicant responded on August 18, 2022, providing a statement from the Municipality of Bayamon’s Environmental Protection Office stating that the debris was temporarily stockpiled at its facilities. The Applicant did not provide the requested load tickets from the Bayamon Municipal Collection Center. 

On July 20, 2023, FEMA issued a determination letter denying all the Applicant’s CCVR final claimed costs for employees and contracted labor to remove and dispose of debris because it did not provide load tickets, certifications, or documentation to verify the work. FEMA stated it would subsequently reduce all funding in the project.

First Appeal

On September 14, 2023, the Applicant appealed FEMA’s denial. The Applicant argued it had sufficiently documented the process from debris collection to disposal and stated that employees collected the debris within their campus and established pickup areas. The Applicant asserted it procured the Contractor’s services to remove and transport debris from the Applicant’s campus pick-up areas to the temporary site in the Municipality of Bayamón. The Applicant stated that the Bayamon Municipal Collection Center provided free services to its municipality, and did not generate load tickets for debris disposal. The Applicant requested that FEMA consider other documentation to determine eligibility. To support its claim, the Applicant submitted a copy of the contract with the Contractor, the Contractor’s certification of trips for removal of debris, and payments showing removal method. The Applicant also submitted debris work summaries detailing the Contractor’s name, truck specifications, capacity, total hauling cycles (175), pick-up and disposal site along with their Global Positioning System (GPS) coordinates, and estimated debris collected based on hauling cycles and truck capacity. Additionally, the Applicant provided photographs showing vegetative debris, pickup areas, workers clearing debris, and a map of the collection routes. The Applicant also submitted a 2023 Certification from its Dean of Administration regarding debris removal monitoring from point of collection to final disposal, along with information about employees who performed monitoring activities on specific dates. The Applicant stated that due to exigent circumstances after Hurricane Maria, it had to procure materials and contract services to resume activities and services.[2] The Applicant clarified that non-competitive procurement was utilized until the emergency ceased, and mentioned that FEMA determined the disaster period extended until June 1, 2018.[3] On November 16, 2023, the Recipient forwarded the appeal to FEMA with its support.  

On July 11, 2024, the FEMA Region 2 Regional Administrator denied the appeal, finding that the Applicant did not prove that the claimed labor costs related to eligible work, did not document oversight/monitoring activities, and did not verify debris collection type and amounts through load tickets.

Second Appeal

In a letter dated September 12, 2024, the Applicant submitted its second appeal.[4]The Applicant claims that upon reviewing the Administrative Record, FEMA did not consider the response to a previous request for information dated September 28, 2018, in which the Applicant responded stating that its staff “[g]athered the debris around the campus, and placed the debris in the designated vegetative debris pick-up sites within the University, so that the [C]ontractor was able to take the vegetative debris to the final di[s]position landfill.”[5] In a letter dated November 8, 2024, the Recipient forwarded the appeal to FEMA recommending approval.

Discussion

Debris Removal Contract

FEMA is authorized to provide PA funding for debris removal, clearance, and disposal if the removal is in the public interest because it is necessary to eliminate immediate threats to lives, public health and safety, to eliminate immediate threats of damage to improved public or private property; or ensure economic recovery, as a result of the disaster.[6] To determine the eligibility of debris removal operations, the Applicant must provide debris types, quantities, reduction methods, and pickup and disposal locations.[7] FEMA requires the Applicant to monitor all contracted debris operations to document this information and ensure that the contractor removes eligible debris.[8] The Applicant may use force account resources, contractors, or a combination of these for monitoring.[9] FEMA provides PA funding for contract costs based on the terms of the contract if the applicant meets Federal procurement and contracting requirements.[10] 

The Applicant requests $92,451.40 in contract costs for debris removal. After the work was complete, FEMA initially approved funding for these costs based on the documentation in the record. This included a fixed price contract that specified the work, costs, quantity and type of debris hauled; documentation showing that the contract was properly procured; and Contractor invoices and certifications documenting the completed work. The contract’s scope of work includes the handling, collection, transportation, and disposal of general and vegetative debris and specifies the work was to be completed between September 21 and November 1, 2017.[11] The Applicant substantiated that the Contractor performed the work as specified, including the transportation of debris to the final disposal site within the agreed upon timeframe, through the Contractor invoices and certifications, photographs documenting debris cleanup and staging, and a map depicting the campus single entrance and the route taken by the Contractor for debris removal and transport. 

FEMA denied funding at closeout and on first appeal because the Applicant did not submit load tickets from the landfill and did not document oversight/monitoring activities. However, unlike a time-and-materials contract or a unit price contract based on cubic yards or tonnage, where load tickets may be necessary to monitor contractor efficiency, the Applicant’s lump-sum contract contained a set price for a well-defined scope of work during a finite amount of time.[12] Given the facts of this appeal, the Applicant provided sufficient documentation to support its contract costs. In addition to the documentation that FEMA initially relied on to approve funding for this project, the Applicant also produced a certification of its employees’ monitoring activities, including employee names and dates that correspond with the timesheets it provided for its labor costs claim. The certifications include debris types, quantities, reduction methods, and pickup and disposal locations. Therefore, based on the totality of the record, the contract cost of $92,451.40 is eligible.

Force Account Labor 

Force account labor overtime costs for budgeted and unbudgeted employees performing emergency work may be eligible based on the applicant’s predisaster labor policy.[13] Additionally, under the alternative procedures authorized by Section 428 of the Stafford Act, if an applicant opts to participate in the straight-time procedure for debris removal, straight-time labor costs are eligible for budgeted employees conducting eligible debris removal activities.[14] Costs must be directly tied to the performance of eligible work and adequately documented.[15]

The Applicant is requesting employee labor costs in the amount of $36,309.43. This includes $33,532.08 for straight-time labor costs under the alternative procedures authorized by Section 428 of the Stafford Act and $2,777.35 for overtime labor costs. The Applicant provided documentation including invoices and force account labor tables outlining the time spent by employees and the work performed, such as gathering and staging debris along with photographs documenting the debris cleanup and staging. The record shows that employees engaged in cleaning and staging debris separately from the Contractor, but in support of the debris removal contract. Specifically, the Applicant’s employees were responsible for gathering and staging the debris, while the Contractor was responsible for removing the debris and transporting it to the temporary landfill of the Municipality of Bayamón. The Applicant has thus demonstrated that its employees were engaged in eligible work. As a result, the claimed labor costs are eligible for PA funding. 

Conclusion

FEMA finds the Applicant’s documentation demonstrates that the costs were incurred in the performance of eligible work and adequately documented. Therefore, the appeal is granted.