Conclusion: On second appeal, Nashville-Davidson County (Applicant) provided adequate documentation to support reimbursement of costs associated with resident engineering services.
Between April 30, 2010 and May 18, 2010, severe rainstorms, tornadoes, and straight-line winds impacted Nashville-Davidson County (Applicant). The rainstorms caused the Cumberland River to overflow and subsequently floodwaters damaged electrical and mechanical components in the generator building located at Applicant’s K.R. Harrington Water Treatment Plant. FEMA subsequently prepared Project Worksheet (PW) 5523 documenting necessary repairs to these electrical and mechanical components. The PW did not document resident engineering costs and disallowed direct administrative costs (DAC). In a June 1, 2011 letter, the Applicant submitted its first appeal requesting $25,920.38 and arguing that FEMA made numerous scope and cost estimate errors. More specifically, the Applicant argued that FEMA made errors in estimating the following costs: DAC, resident engineering costs, construction management costs, and costs to replace metal doors. In a letter dated June 1, 2012, the FEMA Region IV Regional Administrator (RA) partially approved the appeal, granting the construction management costs and the costs to replace the metal doors but denying the request for DAC and resident engineering costs. The RA based the denial of resident engineering costs on a lack of adequate documentation. On August 10, 2012, the Applicant submitted its second appeal, requesting only resident engineering costs totaling $13,691.00. Upon FEMA’s subsequent request for additional information, the Applicant provided additional documents describing resident engineer’s services.
Authorities and Second Appeals
Stafford Act § 406 (a)(1)(A), 42 U.S.C. § 5172.
44 C.F.R. § 13.22.
OMB Circular A-87 Attachment A (C)(1)(a),(j), 2 C.F.R. § 225 Appendix A (C)(1)(a),(j)
PA Digest, at 48.
PA Guide, at 40, 59.
OMB Circular A-87 provides that allowable costs must meet the cost principles of being necessary; allocable to Federal awards; and adequately documented.
The Applicant provided documentation to demonstrate that the resident engineering costs are necessary, allocable, and adequately documented for PW 5523.
PA Digest, at 48, provides that “[s]pecial services[,] which are not required on every restoration project, include engineering surveys, soil investigations, services of a resident engineer, and feasibility studies. These services must be specifically described and must be shown to be necessary for completing the eligible scope of work.”
This project is part of 19 separate PWs associated with flood recovery efforts of a complex nature, and could require the use of resident engineering services.
Tennessee Emergency Management Agency
3041 Sidco Drive, P.O. Box 41502
Nashville, Tennessee 37204-1502
Re: Second Appeal – Nashville-Davidson County, PA ID 037-52004-00, FEMA-1909-DR-TN, Project Worksheets (PW) 5523 – Support Documentation
Dear Mr. Purkey:
This is in response to a letter from your office dated September 18, 2012, which transmitted the referenced second appeal on behalf of Nashville-Davidson County (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) denial of $13,691.00 for costs associated with resident engineering services.
As explained in the enclosed analysis, I have determined that the Applicant provided adequate documentation to substantiate reimbursement of costs associated with resident engineering services. Accordingly, I am granting this appeal. By copy of this letter, I am requesting the 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.
William W. Roche
Public Assistance Division
cc: Gracia Szczech
FEMA Region IV
Between April 30, 2010 and May 18, 2010, severe rainstorms, tornadoes, and straight-line winds impacted Nashville-Davidson County (Applicant). The rainstorms caused the Cumberland River to overflow and submerge portions of the generator building located at the Applicant’s K.R. Harrington Water Treatment Plant, damaging electrical and mechanical components located inside. FEMA subsequently prepared Project Worksheet (PW) 5523 documenting necessary repairs to these components.
The Applicant submitted a first appeal in a letter dated June 1, 2011, arguing that FEMA made numerous scope and cost estimate errors and requesting a total reimbursement of $25,920.38: $290.37 in direct administrative costs (DAC), $13,691.00 in costs associated with resident engineering services, $746.51 in construction management costs, and $11,192.50 to replace damaged metal doors.
In a letter dated June 1, 2012, the Region IV Regional Administrator (RA) partially approved the appeal and granted $11,192.50 to replace metal doors and $335.78 for construction management costs but denied DAC and resident engineering costs. The RA found the activities claimed as DAC actually involved procurement and payment activities, making them project management costs not DAC. The RA acknowledged the appropriateness of special engineering services for this project and concluded it met the “large and complex” requirement. However, he denied the request stating the documents provided did not highlight specific tasks on daily reports, nor specific daily hours of the personnel attributed to oversight of the facility.
On August 10, 2012, the Applicant submitted its second appeal through the Tennessee Emergency Management Agency (Grantee) requesting only $13,691.00 in costs associated with resident engineering services. The Grantee transmitted the appeal to FEMA on September 18, 2012. The Applicant argues that it verified and supported each employee’s activities through daily timesheets. Through its second appeal submission as well as a subsequent response to FEMA’s request for additional information, the Applicant provided more detailed summary sheets reflecting the work performed by resident engineers.
Pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (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. FEMA determines allowable costs in accordance with the Office of Management and Budget (OMB) cost principles. As a local government, the Applicant must follow the OMB Circular A-87 requirement that costs must be necessary for proper and efficient performance and administration of the Federal award. It also mandates that costs are adequately documented and allocable to the specific project completed with Public Assistance funds. Generally, costs that can be directly tied to the performance of eligible work are eligible for FEMA reimbursement. Further, FEMA policy provides that services of a resident engineer may be required for some projects, and that such services are estimated separately from standard engineering and design service costs.
Adequately Documented and Allocable
As acknowledged previously, FEMA does not dispute that this project meets the complexity requirement necessary to reimburse costs associated with resident engineering services. Consequently, the only issue presented in this appeal is whether the Applicant provided adequate documentation to show the costs are allocable to PW 5523.
Before FEMA can reimburse resident engineering costs, any provided documentation must adequately show necessary work within the eligible scope of work. Submitted with its second appeal, the Applicant has sufficiently documented the daily activities performed by resident engineers. Reports clearly demonstrate hours worked on various parts of the facility, the date the work was performed, the number of hours worked, and the rate billed for the work performed. These reports also reference task codes describing the resident engineering services performed, which include the following: evaluating damaged equipment; tagging-out equipment for inspection, repair, and startup; inspecting equipment for cause of malfunction; preparing scope of work for facility repairs; monitoring contractor and vendors repair work for compliance with scope of work; coordinating contractor work schedules; assisting with testing and re-commissioning of the facility; and monitoring the installation of repaired equipment.
The information submitted in conjunction with the second appeal adequately documents resident engineering services performed on the components and equipment in question at the K.R. Harrington Water Treatment Plant. Therefore, the costs are eligible for reimbursement.
The Applicant provided adequate documentation to support the incurred costs associated with resident engineering services. Accordingly, this appeal is granted.
 The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, § 406(a)(1)(A), 42 U.S.C. § 5172 (2007).
 Office of Mgmt. & Budget, Exec. Office of the President, OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, Attachment A (C)(1)(j) (2004) (codified at 2 C.F.R. § 225, Appendix A (C)(1)(j)) [hereinafter OMB Circular A-87].
 44 C.F.R. § 13.22 (2010).
 OMB Circular A-87, Attachment (C)(1)(a) (codified at 2 C.F.R. Appendix A (C)(1)(a)).
 Id.; see also Public Assistance Digest, FEMA 321, at 48 (Jan. 2008).
 Public Assistance Guide, FEMA 322, at 40 (June 2007) [hereinafter PA Guide].
 Id. at 59.
 See id. at 57 (stating water treatment plants are projects of above-average complexity).
 OMB Circular A-87, Attachment A (C)(1)(j) (2004) (codified at 2 C.F.R. § 225, Appendix A (C)(1)(j)); see also Public Assistance Digest, FEMA 321, at 48 (Jan. 2008).