Direct Administrative Costs
PA ID# 113-12000-00; City of Cedar Rapids
PW ID# 5574; Direct Administrative Costs
07/25/2013
Citation: FEMA-1763-DR-IA, City of Cedar Rapids, Direct Administrative Costs, Project Worksheet (PW) 5574
Cross- Reference: Administrative Costs, Reasonable Cost
Summary: Heavy rainfall beginning in May 2008 resulted in severe flooding that caused extensive damage in the City of Cedar Rapids (Applicant). FEMA prepared PW 5574 in the amount of $260,460 for the estimated cost of repairing damage to a parking lot that the Applicant used as a staging area for transportation and debris removal vehicles during the recovery effort. Included in the cost estimate was $3,393 in actual Direct Administrative Costs (DAC). Based on the pavement repair contractor’s invoices, FEMA adjusted the total project cost to $348,810 and the actual DAC to $4,313 with version 1 of PW 5574. After the Iowa Homeland Security and Emergency Management Division (Grantee) reviewed the Applicant’s documentation of actual costs, FEMA closed out PW 5574 and increased the total eligible project cost to $350,334 based on the Grantee’s recommendation. The closeout total reduced the eligible DAC to $305 ($4,008 less than previously approved and obligated) and included a new contract item of $5,338 for Project Management costs. The Applicant requested an additional $413 in DAC; however, FEMA determined that the Applicant’s documentation did not support the eligibility of 1) $224 in DAC associated with a consultant’s hourly rate that exceeded $155, and 2) $189 in DAC claimed for work completed 90 days after project completion. In the first appeal, the Applicant asserted that both categories of DAC were eligible for reimbursement and included an additional claim of $349 for Project Management costs reportedly omitted at closeout. In the appeal response, the Regional Administrator noted that the Applicant did not justify the hourly rate above $155 and determined that the claim for $224 was ineligible. The Regional Administrator also determined that a portion of the DAC incurred for closeout activities were eligible for reimbursement and obligated $169 with version 3 of PW 5574. The Regional Administrator did not respond to the omitted Project Management costs. In the second appeal, the Applicant reiterates that the DAC charged at an hourly rate above $155, and omitted Project Management costs are eligible because the protocol used to procure the contract established the rate as a reasonable cost and justified the rate as appropriate for a program manager’s skill level/expertise. The Applicant cites 44 CFR §13.36(b), Procurement, Procurement standards, and OMB Circular A-87, Attachment A, section C, and Attachment B paragraph 32 as supporting its claim regarding the reasonableness of the consultant’s hourly rate. After reviewing the second appeal, FEMA requested additional information detailing the specific administrative tasks performed by the contractor that were associated with the claimed DAC. The Applicant submitted documentation including general tasks, but did not provide specific descriptions of the administrative tasks that were explicitly requested by FEMA.
Issue: Has the Applicant provided sufficient documentation identifying specific administrative tasks that would enable FEMA to determine whether the claimed Direct Administrative and Project Management Costs are eligible for reimbursement?
Finding: No.
Rationale: 44 CFR §13.36 Procurement, Disaster Assistance Policy 9525.9, Section 324 Management Costs and Direct Administrative Costs