FEMA Reimbursement Will They or Won't They?

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1 FEMA Reimbursement Will They or Won't They? Presentation For: Presented By: Presentation Date: 1

2 2

3 Procurement Requirements Construction Construction Management Services Remodeling Architectural /Engineering Services Renovation Other Contracts Under The New Uniform Guidance 3

4 Learning Objectives Explain FEMA s Authority Procurement Requirements for Construction & Renovation Contracts Insulate Against Conflict of Interest Applicable Federal Regulations 4

5 US Executive Branch Organization Chart 5

6 DOHS Organization Chart 6

7 FEMA Regions 7

8 FEMA s Authority Robert T. Stafford Disaster Relief & Emergency Assistance Act Presidential disaster declaration Coordinating relief efforts Orderly and systemic means of assistance Encourages disaster preparedness Statutory authority for most federal disaster response activities 8

9 Background FEMA Procurement February 2014 OIG Audit of FEMA December 2014 National Grant Reform 9

10 OIG Audit of FEMA Training Materials Corrected 10

11 National Grant Reform Uniform Guidance 2 CFR Part 200 Super Circular 11

12 Current vs. Prior Standards Prior Standards Current Standards 12

13 Case Study #1 FEMA should disallow $2.0 million of $3.59 million in grant funds awarded to Stratford, Connecticut Town did not follow federal procurement standards in awarding $2.0 million for 13 contracts 13

14 Three Violations 1. Full and Open Competition 2. Affirmative Steps W/MBE 3. Contract Clauses 14

15 Case Study #1 (continued) 15

16 Case Study #1 (continued) 16

17 Case Study #1 (continued) 17

18 Case Study #1 (continued) 18

19 Case Study #2 FEMA Should Recover $1.8 Million of $5.5 Million in Public Assistance Grant Funds Awarded to Columbia County, Florida, for Tropical Storm Debby Damages Full and open competition Contract administration W/MBE Steps Contract Clauses Time and Materials contracts Unreasonable Equipment Costs Small Projects Not Completed 19

20 Case Study #2 (continued) 20

21 Case Study #2 (continued) 21

22 Case Study #3 FEMA Should Recover $25.4 Million in Grant Funds Awarded to Louisville, Mississippi, for an April 2014 Disaster Qualifications-based procurements, where price is not an evaluation factor, for non-a/e professional services Use of small and minority firms, women s business enterprises, and labor surplus area firms Full and open competition Cost or price analysis 22

23 Case Study #3 (continued) 23

24 Case Study #3 (continued) 24

25 Case Study #4 FEMA Should Disallow $1.5 Million in Grant Funds Awarded to Hays County, Texas Unreasonably restricted competition Small and W/MBEs and labor surplus area firms All affirmative steps Shared services agreement does not relieve them of the responsibility to comply with Federal procurement requirements 25

26 Case Study #4 (continued) 26

27 Case Study #4 (continued) 27

28 Example Project Timeline 28

29 Eligible Applicants & Subapplicants 29

30 YOUR IN-HOUSE TEAM Facilities Procurement Accounting 30

31 Applicable Federal Regulations 2 C.F.R NEW 2 C.F.R OLD 31

32 Acceptable Methods of Procurement Micro Purchases Small Purchases Sealed Bids Competitive Proposals Noncompetitive Proposals 32

33 Acceptable Methods of Procurement 33

34 Acceptable Methods of Procurement 34

35 Acceptable Methods of Procurement 35

36 Acceptable Methods of Procurement 36

37 Acceptable Methods of Procurement 37

38 Selection Criteria Written procedures for solicitations Clear and accurate description of the technical requirements Requirements and factors to be used in evaluation Prequalified lists current and include enough qualified sources Cannot preclude potential bidders during solicitation period 38

39 Selection Processes Architectural/ Engineering Services (A/E) Design-Bid- Build Construction Management At-Risk (CMAR) Design Build Contracts 39

40 A/E Professional Services FEMA considers the following to fall within the scope of architectural/engineering professional services: Professional services of an architectural or engineering nature, as defined by applicable state law, and which the state law requires to be performed or approved by a registered architect or engineer Professional services of an architectural or engineering nature associated with design or construction of real property Other professional services of an architectural or engineering nature or services incidental thereto that logically or justifiably require performance by registered architects or engineers or their employees Professional surveying and mapping services of an architectural or engineering nature, etc. 40

41 Pre-Awarded Contracts Procedures Pre-Positioned or Standby Contracts May still be used if certain conditions are met 41

42 Time-and-Materials (T&M) Contracts Procedures Used for a reasonable period when: No other contract is suitable Ceiling price Scope of work or duration nclear Considerable oversight Switch ASAP 42

43 Cost-Plus-Percentage-of-Cost Contracts Procedures Profit based on a percentage of the project s costs Explicitly prohibited Ineligible for FEMA grant funding Do not include 43

44 Piggybacking Contracts Procedures Pre-existing contract solicited and awarded by another entity FEMA closely reviews piggyback contracts 44

45 Restrictive Competition Unnecessary experience Excessive bonding Non-competitive pricing Specifying only a brand name Any arbitrary action State or local geographic preferences Nothing preempts state licensing laws 45

46 Written Employee Code of Conduct Officials with potential conflict must disqualify Gifts, entertainment, conduct of official rules Must be ethical and nonpreferential Non- Disclosure agreement 46

47 Conflict of Interest Partner The employee, officer, or agent, any member of the immediate family An organization which employs, or is about to employ, Has a financial interest or other interest in the firm selected for award 47

48 DO NOT ACCEPT Gratuities Anything of monetary value Favors 48

49 Small & Woman/Minority-Owned Business Enterprises Take all necessary affirmative steps to ensure minority firms, women s business enterprises, and labor surplus are firms are used Place qualified firms on solicitation lists Assure firms are solicited whenever they are potential sources Divide total requirements, when economically feasible, into smaller tasks Establish delivery schedules, where the requirement permits, to encourage participation Use SBA and MSDA Require the prime contractor, if subcontracts are to be 49 let, to take same affirmative steps

50 Procurement of Recovered Materials Comply with section 6002 of the Solid Waste Disposal Act as amended by the Resource Conservation & Recovery Act Items only designated in guidelines of EPA at 40 CFR Part 247 Where purchase price exceeds $10K or value of the quantity acquired the preceding fiscal year exceeded $10K Procuring solid waste management services in a manner that maximizes energy and resource recovery Establishing an affirmative procurement program for procurement of recovered materials identified 50 in the EPA guidelines

51 Contract Cost & Price Cost or price analysis for every procurement more than $150K Make independent estimates before receiving bids or proposals Must negotiate profit when there is no price competition In all cases where cost analysis is performed Considerations must be given to: Complexity of work Risk borne by contractor Contractor's investment Amount of subcontracting Quality of its record of past performance Industry profit rates 51

52 Contract Clauses Remedy Granting Clauses Appendix II Clauses FEMA Specific Clauses 52

53 Contract Clauses Changes Changed Conditions Suspension of Work Site Investigation & Conditions Affecting the Work Disputes 53

54 Contract Clauses Payments Inspection of Construction Commencement, Prosecution, & Completion of Work Liquidated Damages-Construction Default Termination for Convenience Equal Opportunity & Executive Order

55 Contract Clauses Affirmative Action Compliance Requirement for Construction Anti-Kickback Procedures Davis Bacon Act Contract Work Hours & Safety Standards Act Patent Rights Rights in Data 55

56 Common Pitfalls Full and Open Competition (at more restrictive $ amounts) All Six Steps for W/MBE Documentation/Maintaining Records Contract Administration Pre-Awarded/Standby Contracts Time and Materials Contracts Cost Plus a Percentage Of Cost Piggyback Contracts 56

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