Public Works Officers Institute League of California Cities Disaster Recovery Procurement Challenges

Transcription

1 Public Works Officers Institute League of California Cities Disaster Recovery Procurement Challenges March 10, 2016 Jerry Quinn Copyright Gerard J. Quinn & Associates Not a work for hire. Use & distribution limited to registered participants of the PWOI_LOCC May only be used by or with bona fide governmental employees. No sharing authorized

2 Good Day, Bad Day Public Works as First Responder keeps the City safe and productive everyday and in major emergencies and disasters The Department of Homeland Security Office of Inspector General shows up during response operations or years after work completed.

3 Why is this important?

4 By the Numbers On average it takes 46 days to obtain a Presidential Major Disaster Declaration City EOC or DOC staff very busy. Customary resources insufficient to the circumstances Golden rule applies. City wants gold from state and federal treasuries. City responds with employees and contracted resources

5 The City is a subrecipient

6 El Nino or El Ninny

7 Why is the important? Congress, FEMA and DHS OIG are on federally compliant procurement warpath 3 Years+ published audits with Procurement targets and findings FEMA Chief Counsel Publishes 248 page procurement manual. 2 CFR 200 in effect

8 Here's another nice mess you've gotten me into! December 27, 2015 a day that shall haunt you. Federal government issues Uniform Administrative Requirements, Cost Principles and Audit Requirements for federal awards. Poof you are a subrecipient! Also known as Super Circular or Omni Circular. AKA Title 2 CFR 200. Supersedes parts of 44 CFR see Part 13. New PA Guidance (Link Provided)

9 Why is the important? Minimum compliance standard is now exact compliance Intent of Congress is to save the federal government money. Locals beware FEMA agreeing with 94% of OIG audit recommendations. FEMA has statutory unilateral deobligation authority

10 Why is the important? FEMA delays obligations with detailed procurement challenges Most DHS OIG audit reports challenge one or more procurement compliance items I expect significant procurement deobligations taken by FEMA in the near future Cal OES using FEMA deobligations to take CDAA deobligations

11 Your last declared disaster event? California has 11 Major Disasters, 3 Major Emergencies & 92 Fire Management Assistance Grants in past 10 years Of the 11 majors only 1 involved 30 counties (DR1628). 10 counties were in DR1952 (12/2010). Most recent 4 majors were for 1, 2, or 3 counties. Lack of disaster recovery practice is costly

12 Cal OES serves two masters Support and advocate for the City. Cal OES has full time staff. Live cordially with FEMA and other federal agencies; according to federal rules. Cal OES Director indicated on 10/30/12 his unwillingness to fight with FEMA on behalf of subrecipients

13 Procurement Compliance My fiduciary responsibility is to my employer. Not going to jail for my employer All efforts, in City s, self interest to optimize eligibility and retain grant proceeds Documented compliance reduce risks, avoids audit and avoids published monitoring corrective actions

14 City is a subrecipient High target items in financial disaster recovery: Federally compliant procurement and contract administration, Assurances compliance NEPA and NHPA Cost documentation and support. Correct Accounting Duplication of Benefits Insurance, Other federal $$, Contractor credits

15 Procurement Compliance Is your everyday procurement methodology federally complaint can you prove it will purchasing agent and city counsel so opine and defend? Who has emergency procurement authority in your jurisdiction? Prove source of that authority. Has a local emergency been proclaimed ratified? What are the ongoing imminent threats to public health, safety and undamaged property? FEMA & OIG challenging duration of imminent threats

16 Procurement Compliance Document legal right to use exigent provisions of the California Public Contract Code. (just because a disaster incident period is extended does not mean imminent threats are present. A closed road may not be an imminent threat.) Document affirmative outreach even under noncompetitive procurement. Simplified Acquisition procurement needs to demonstrate at least informal competitive efforts. Document nonresponsive or unresponsive contacts

17 Procurement Compliance Simplified Acquisition Procurement Threshold is $150,000; has limited exceptions (See OCC link) Pre-Disaster Solicitation: General Contracting: Emergency Procurement, Availability? Likely many providers. License, Insurance and bonding may apply, Price competition expected. Overhead & Profit at rates below Caltrans (21%)? Equipment rates below FEMA rate schedule? Professional Services: Technical Specialty, Availabity. Qualifications competition, Price negotiation, Final Best Offer Extend List of Assurances and minority outreach compliance to contractors

18 Permitted Non-Competitive Procurement Assistance from other government units California Conservation Corps Cal Recycle Debris Removal Pre-disaster Mutual Aid Agreements (Public Works for compensation; EMMA limited free some for compensation Post disaster compensated law enforcement mutual aid

19 Procurement challenges Broad and documented open competition Proper use of exigent contracting Minority Outreach and pass through List of Assurances in each contract Close Project management Document cost reasonableness including overhead and profit

20 Procurement challenges FEMA & OIG enforce Time & Materials contract 70 hour limit without a statutory or regulatory basis. T & M to FEMA means work assigned without a scope of work defined and limited T & M to FEMA means unsupervised, un managed work T & M to FEMA means de-facto unreasonable costs without limits on overhead and profit T & M to FEMA means the contractors decides the scope of work/change orders

21 Procurement challenges If your fixed fee, fixed scope contract is time & materials billed to assert and prove you have: authorized a fixed scope of work, at a reasonable fixed price, inclusive of overhead & profit & prove it Have a formal contract document. Staff actively manages scope and contractor & prove it Control change orders. Document increases & decreases Caltrans force account contracting, rates and Dept of Industrial Relations rates likely meet these requirements

22 Procurement challenges Cost Reasonableness Demonstrate analysis & basis Caltrans & DIR rates include overhead & profit are periodically surveyed & published Prevailing wages for construction now statutorily (Labor Code Section 1782, Chapter 794) required. DIR includes debris removal in construction definition. Higher rates in your City? Local cost history of similar work, prove it Current 3 rd Party Estimating guides localized Other federal agency reasonableness determinations

23 Procurement challenges FEMA and or State List of Assurances must be in every contract. Contractor must prove compliance if requested Duplication of Benefits Eligibility in Other Federal Programs Insurance: Flood, Property, prior grant requirement Leased facilities prove legal obligation to perform repairs

24 Successful Procurement Challenges 3 Appeals successful, 1 resolution before appeal. Over $5 Million successfully defended. Appeals are expensive and time consuming. Formal written, signed Purchasing Agent and/or Counsel opinions Signed Legislative Counsel opinion obtained to convince Cal OES of authorized and proper use of emergency provisions of Public Contract Code

25 Resource Links Federal 44 CFR: browse/title44/44tab_02.tpl 2 CFR Super Circular (see 225): 2tab_02.tpl Federal Highway Administration Emergency Relief: fm Natural Conservation Resource Service:

26 Resource Links Federal FEMA Required Contract Clauses: b1dbb4d55dbd50388e12d38e187775fa/200cfrappendix508.pdf FEMA Procurement Checklist: FEMA Chief Counsel Procurement Guide: FEMA Public Assistance Guidance 1/1/16

27 Resource Links USACE and State US Army Corps of Engineers: Cal OES Monitoring: California Department of Transportation Force Account (Fixed Scope Fixed Price) contracting:

28 Resource Links State and Assurances California Department of Industrial Relations (Prevailing Wages): FEMA Assurances construction_.pdf CDAA Assurances Cal%20EMA%20126%20CDAA%20Application%20(Rev% )%20(7).pdf

29 FEMA Small Projects Effective 10/1/15 the small project upper limit is $121,800; minimum PW is $3,050 Small Projects may reduce the number of Project Worksheets Do not combine projects with insurance or Special Considerations with those free of such considerations Small projects final claim deadline. 60 days Small project net cost overrun filed as an appeal

30 Contact Information Jerry Quinn, Principal Gerard J Quinn & Associates jerryquinn@gjquinnassociates.com