Frequently Asked Questions & Fast Track Answers

Actions Needed before Events & FEMA Grants

FEMA is authorized to provide PA funding for Emergency Work,including emergency protective measures and debris removal under Sections 403 & 407 of the Stafford Act.

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Emergency Work & Debris Removal  

Emergency work, as authorized by Sections 403, 407, and 502 of the Stafford Act, which provide for the removal of debris and emergency protective measures,such as the establishment of temporary shelters and emergency power generation regulations define emergency work as “work which must be done immediately to save lives and to protect improved property and public health and safety, or to avert or lessen the threat-of a major disaster.” Debris can have immediate impacts such as blocking emergency routes, and can also inhibit a community's overall recovery and prevent the safe return of residents to their homes if they were evacuated. Managing the debris removal process is a fundamental challenge in responding to any disaster, and is guided by a number of regulatory requirements

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Debris Removal

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

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FEMA Public Assistance Grant (Project) Processes

FEMA new delivery model xxxxxxxxxxxxthorized to provide PA funding for Emergency Work,including emergency protective measures and debris removal under Sections 403 & 407 of the Stafford Act.

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Roles and Responsibilities

Multiple layers of government work in partnership to administer the PA Grant Program once a disaster has been declared. Each entity must work together to meet the overall objective of a quick, efficient, and effective program delivery.

FEMA's primary responsibilities are to determine the amount of funding, participate in educating the applicant on specific program issues and procedures, assist the applicant with the development of projects, and review the projects for compliance.

  • FEMA: The federal awarding agency authorized to manage the program.
  • Recipients: The State, Territorial, or Tribal government that receives funding under the disaster declaration and disburses funding to approved subrecipients.
  • Applicants: Entities submitting a request for assistance under the recipient's federal award.
  • Subrecipients: Applicants who have received a subaward from the Recipient and is then bound by the conditions of the award and subaward.

The Life of a PA Grant

The PA Program follows FEMA's common set of phases known as the Grants Management Life Cycle:

Pre-Award: Applicants work with the Recipient and FEMA to develop the award package for a grant.
Award: FEMA approves the award package and allocates funding.
Post-Award: Funds are released to the Recipients who must maintain, monitor, and report upon.
Closeout: FEMA administers performance evaluation, financial and appeal reconciliation, final reporting activities, appeal resolution and debt actions.
Post-Closeout: As necessary, FEMA performs debt collection actions, audit, and other adjustments may continue after grant closeout.

FEMA Public Assistance Eligibility Issues

FEMA new delivery model xxxxxxxxxxxxthorized to provide PA funding for Emergency Work,including emergency protective measures and debris removal under Sections 403 & 407 of the Stafford Act.

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What are the Top 10 Procurement under Grant Mistakes

Top 10 Procurement under Grant Mistakes that Can Lead to Loss of FEMA Public Assistance Funding are:

1. Restricting full and open competition (i.e., placing unreasonable requirements on firms, requiring unnecessary experience, specifying only a “brand name” product,givi ng an advantage to local firms, etc.).

2. Not performing a detailed price or cost analysis for procurements above $250,000.

3. Engaging in a sole-sourcing (non-competitive) procurement without carefully documenting how the situation has created an urgent need to perform the work sooner than a competitive procurement process would allow.

4. Continuing work under a sole-source contract after the urgent need (see # 3) has ended, instead of transitioning to a competitively procured contract.

5. Not making and documenting efforts to take all “affirmative” steps to solicit small businesses, minority businesses, and woman’s business enterprises.

6. Awarding a “time-and-materials” contract without a ceiling price and without documenting why no other contract type is suitable.

7. Not including the required contract clauses (template is available here or on the PDAT website).

8. Awarding a “cost-plus-percentage-of-cost” or “percentage-of-construction cost” contract.

9. Awarding a contract to contractors that were suspended or debarred (visit www.sam.gov).

10. Not properly documenting all steps of a procurement to maintain a record sufficient to answer questions that could arise months or years later.

What are the the four basic components of eligibility

  • An Applicant must be a state, territory, tribe, local government, private nonprofit organization.
  • A Facility must be a building, public works, system, equipment, or natural feature.
  • Work is categorized as either Emergency or Permanent. It must be required as a result of the declared incident, located within the designated disaster area, and the legal responsibility of the Applicant.
  • Cost is the funding tied directly to eligible work, and must be adequately documented, authorized, necessary and reasonable. Eligible costs include labor, equipment, materials, contract work, as well as direct and indirect administrative costs.

Special Considerations

Applicants may not duplicate benefits with insurance and must comply with Environmental, Historic Preservation, and Floodplain Management laws as part of the eligibility conditions. Procurement standards in the use of contracts for acquiring disaster-related goods and services must meet certain guidelines in order to receive funding.

Cost-share

The federal share of assistance is not less than 75 percent of the eligible cost. The Recipient determines how the non-federal share (up to 25 percent) is split with the sub-recipients (i.e. eligible applicants).

Roles and Responsibilities

Multiple layers of government work in partnership to administer the PA Grant Program once a disaster has been declared. Each entity must work together to meet the overall objective of a quick, efficient, and effective program delivery.

FEMA's primary responsibilities are to determine the amount of funding, participate in educating the applicant on specific program issues and procedures, assist the applicant with the development of projects, and review the projects for compliance.

  • FEMA: The federal awarding agency authorized to manage the program.
  • Recipients: The State, Territorial, or Tribal government that receives funding under the disaster declaration and disburses funding to approved subrecipients.
  • Applicants: Entities submitting a request for assistance under the recipient's federal award.
  • Subrecipients: Applicants who have received a subaward from the Recipient and is then bound by the conditions of the award and subaward.

The Life of a PA Grant

The PA Program follows FEMA's common set of phases known as the Grants Management Life Cycle:

Pre-Award: Applicants work with the Recipient and FEMA to develop the award package for a grant.
Award: FEMA approves the award package and allocates funding.
Post-Award: Funds are released to the Recipients who must maintain, monitor, and report upon.
Closeout: FEMA administers performance evaluation, financial and appeal reconciliation, final reporting activities, appeal resolution and debt actions.
Post-Closeout: As necessary, FEMA performs debt collection actions, audit, and other adjustments may continue after grant closeout.

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Grant Conditions - Procurement

Federal assistance comes with laws, rules and regulations that must be followed to maximize opportunities for eligible reimbursements. Following the laws, rules and meeting regulatory requirements help to expedite needed funding and speed the delivery of preparedness, prevention, response, recovery and mitigation initiatives and programs for emergency management professionals, citizens and communities. For this reason, GOHSEP created several informational tools to educate our subrecipients in the various laws, rules, regulations and policies that apply to them.

It is important that when procuring any materials, goods or services with Federal funding that the Code of Federal Regulations (CFR) be followed. This applies to all disaster and non disaster grants funded by FEMA – Preparedness, Hazard Mitigation (HM) and Public Assistance (PA) Grants. Failure to comply with Federal regulations when procuring with Federal funds has been the biggest reason the U.S. Department of Homeland Security Office of Inspector General (DHS – OIG) has recommendations for deobligation of funding.

General Rule

A Subrecipient (Applicant) is allowed to use its own procurement process as long as that process conforms to the Federal procurement requirements as stated above. When the Subrecipient’s (Applicant’s) process is not as stringent as the above, the Subrecipient (Applicant) must comply with the requirements of Federal regulations. Many times State law is more stringent than Federal regulations, in which case, the Subrecipient is required to apply State law to the procurement transaction.

Costs eligibility

Generally, costs that can be directly tied to the performance of eligible work are eligible. Costs must be:

Reasonable and necessary to accomplish the work.

Compliant with Federal, State and local requirements for procurement.

Reduced by all applicable credits, such as insurance proceeds and salvage values.

Cost is reasonable if it is a cost that is both fair and equitable for the type of work being performed.

he cost of eligible work is typically a shared cost. The Federal share of assistance is generally not less than 75 percent of the eligible cost for Emergency Measures and Permanent Work. The grant recipient is usually the State. The Recipient determines how the non-Federal share – up to 25 percent – is split with eligible Subrecipients  (Applicants). There are exceptions.

Under certain circumstances the Federal share may be 90 percent or even 100 percent.

Work eligibility

To be eligible for PA funding, disaster recovery work performed on an eligible facility must be:

Required as a direct result of a major disaster event.

Located within a designated disaster area.

The legal responsibility of an eligible Applicant.

Facility eligibility

The facility must be:

The legal responsibility of an eligible Applicant and not under the specific authority of another Federal agency.

Located in the designated disaster area.

Damaged by the declared disaster or emergency.

In active use and open to the general public at the time of the disaster.

What happens if an applicant doesn't follow the procurement rules?

If an applicant fails to comply with any term of an award (including the contracting requirements discussed in this Fact Sheet), whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, FEMA may:

• Temporarily withhold payment, or take more severe enforcement action;

• Disallow all or part of the cost of the activity or action not incompliance;

• Wholly or partly suspend or terminate the applicant's current award;

• Withhold further awards; or

• Take other remedies that may be legally available.

Are there any procurement actions that are prohibited by FEMA?

Noncompetitive contracts. Given the Federal contracting requirements or full and open competition, applicants must avoid awarding noncompetitive contracts unless the exceptions in FAQ #4 above apply.

Cost plus percentage of cost contracts. Cost plus percentage of cost contracts are strictly prohibited. Such contracts have four elements:

3. Payment is based on a pre-determined percentage rate;

4. Percentage rate is applied to actual performance costs;

5. Contractor entitlement is uncertain at the time of contracting, and;

6. Contractor entitlement increases commensurately with increased performance costs.17

Debarred or suspended contractors. Applicants must not employ disbarred or suspended contractors. In addition, applicants must report contractors who demonstrate a lack of integrity, ethical lapses, or perform inadequately. Applicants should check against the General Services Administration list of debarred and suspended contractors

at: https://www.epls.gov/.

Conflicts of interest. The procurement regulations forbid awarding contracts "if a conflict of interest, real or apparent, would be involved." 18Conflicts of interest arise when an applicant's employee, officer, or agent (or their immediate families or partners) has a financial or other interest in who receives the contract award. FEMA will also find a conflict of interest when an organization that employs (or is about to employ) any of the above parties has a financial or other interest in the award.

Duplicative costs. The Stafford Act and its implementing regulations forbid FEMA from reimbursing duplicative costs.

Contingency clauses. When procuring property and services under a grant, an applicant must follow the same policies and procedures it uses for procurements from its non-Federal funds. Therefore, while it is acceptable if the contract scope of work indicates that activities will be carried out consistent with FEMA laws, regulations, and eligibility guidelines, contracts may not be contingent upon the issuance of a Presidential declaration or FEMA's approval or obligation of funds.

Excessive Costs. To be eligible for reimbursement, costs incurred must be reasonable, allocable, and allowable.19Further, applicants must perform a cost or price analysis in connection with every procurement action including contract modifications.

17

Grantee or subgrantee profit. It is acceptable for applicants to pay reasonable fees or profit to cost- type contractors. However, no applicant can ever be in a position to receive a profit or fee itself for work procured pursuant to a Federal grant. FEMA will not fund any fee or profit to the applicant.

Are there any procurement actions that are discouraged by FEMA?

Time and materials contracts. Applicants should avoid using time and materials contracts in their procurement actions. This contract type creates the risk that costs could go beyond what the parties anticipated, so applicants should only use it when no other contract type is suitable. In light of this risk, time and materials contracts must include a ceiling amount on the price of the contract.13Including a ceiling shifts the risk to the contractor for any overages. For Public Assistance, such contracts should be limited for work that is necessary immediately after a disaster and should not exceed 70 hours.14

"Piggyback" contracts. "Piggybacking" occurs when an applicant has disaster-related work performed by another jurisdiction' s contractor.15 Because the competitive process for the existing contract could not have included the full scope of the new work, the new work has not been competitively bid. The resulting costs may therefore be higher than if the work had been bid out separately. FEMA therefore discourages such contracts and will use the reasonableness of eligible work as a basis to determine reimbursable costs.

Are there any other recommendations FEMA has for procurement actions?

Use sealed bids. For construction contracts, FEMA prefers sealed bids. After a public invitation and solicitation to bid, the applicant should award a firm-fixed-price contract, in writing, to the lowest responsible offeror. Applicants may also use the sealed bid method for non-construction contracts if appropriate.

When the sealed bid method is not appropriate, the applicant may use competitive proposals to award a fixed-price contract or a cost-reimbursement contract. With competitive proposals, awards are made in accordance with evaluation and award criteria set forth in the solicitation. The solicitation must set out all evaluation factors and their relative importance; solicit proposals from an adequate number of qualified sources; and have a method to conduct technical evaluations and select awardees. The competitive proposals method allows

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applicants to make their decision on more factors than price alone. When an applicant procures professional architecture or engineering services, this method permits eliminating price as a selection factor entirely.11

Keep detailed records. Keep detailed records of any decision points in the procurement process, and document the rationale for the decision. A contemporary accounting of the decision will help the applicant in the event of an appeal or challenge at a later time.

Team up. To foster greater economy and efficiency, applicants are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

Lease vs. purchase. Applicants should compare the costs associated with leasing and those associated with purchasing over an applicable time frame to determine which option provides the greatest cost savings.

Use value engineering. Put value engineering clauses in sizeable construction contracts. Value engineering systematically reviews contract items and tasks to ensure that the "essential function is provided at the overall lower cost.

Is there a time when full and open competition is not required?

A procurement action that does not meet the requirement for full and open competition, such as a sole source contracts, constitutes a violation of regulation and is unauthorized unless the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals AND one of the following circumstances applies:

• The item is available only from a single source;

• The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;

• FEMA authorizes noncompetitive proposals; or

• After solicitation of a number of sources, competition is determined inadequate.

If an applicant takes a noncompetitive procurement action, the applicant must complete a cost analysis and may be required to submit the proposed procurement to FEMA for pre-a ward review. 10

What do applicants have to do to provide full and open competition?

Full and open competition means a contract action in which responsible sources are permitted to compete. Fair and open competition occurs when a complete, adequate and realistic specification or purchase description is publicly solicited and multiple responsible bidders are allowed to compete effectively for the business.9

When procuring goods or services at or below the simplified acquisition amount, the applicant must consider an adequate number of qualified sources. FEMA considers three to be the minimum adequate number of qualified sources.

This Fact Sheet as well as 44 CFR 13.36, 2 CFR Pa rts215, 220, 225, and 230, as appropriate, provide the necessary requirements and processes to follow in order to ensure that an applicant satisfies the full and open competition requirements.

What are the procurement actions required for reimbursement by FEMA?

Full and Open Competition. The procurement rules require full and open competition, with limited exceptions.

Cost or price analysis. The specific facts of the procurement will dictate the method and degree of analysis, but at a minimum, applicants must always make an independent estimate before receiving bids or proposals. A price analysis will be used to determine the reasonableness of the proposed contract price. Further, a cost or price analysis should be

completed to evaluate the bids or proposals received.

What are the procurement requirements that must be followed by grantees and subgrantees?

Applicants must use their own procurement procedures which reflect applicable State and local laws and regulations. They must also, however, meet the minimum Federal procurement standards1 where those standard s are more onerous (including but not limited to those discussed in this Fact Sheet}, or the contract will be deemed in violation of the procurement rules, and the request for reimbursement could be subject to the enforcement provisions

Contractor ownership preferences.2 Full and open competition also involves the adherence to procurement rules covering contractor ownership preferences. The applicant must take positive actions to involve and use "small and minority firms, women's business enterprise and labor surplus area firms."3 The applicant's process should give potential contractors in these categories a full and open opportunity to compete .4 FEMA will reimburse the applicant if, after a full and open competition, the applicant selects a contractor who provides the lowest price but does not meet one of these categories. When the applicant hires a prime contractor, the applicant must also require the prime contractor to utilize the same approach towards these categories when hiring sub-contractors.

System for managing procurement. Applicants must employ a system that governs contracts and purchase orders. This system must include a means of enforcing agreements, written procedures governing procurement actions, and a written code of standards for contract and purchase order administration. This code of standards must provide ethical rules and the penalties for violating these rules.5 The system must also include a process to handle protests involving contracts and purchase order awards.6

Required provisions in procurement actions. The applicant must include certain provisions in its procurement actions. These provisions vary depending on the type and dollar amount of the contract, and are provided in 44 CFR part 13or 2 CFR part 215, 220, 225, or 230, as applicable. Note that the Uniform Administrative Requirements for Federal Gran t Assistance require applicant contracts to con tab1a provision requiring compliance with the Davis-Bacon Act when required by grant program legislation. The Stafford Act requires preparedness grantees to comply with Davis- Bacon provisions.7 The Stafford Act does not require compliance with Davis-Bacon for any other grants. Therefore, applicant contracts to execute eligible work under the Public Assistance program are not required to contain a Davis-Bacon provision.

Guarantees and bonds. For construction contracts and facility improvements above the simplified acquisition threshold , the applicant must require a bid guarantee from each bidder equivalent to 5 percent of the bid price, a performance bond on the part of the contractor for 100 percent of the contract price, and a payment bond on the part of the contractor for 100% of the contract. In lieu of these requirements, if FEMA (with respect to a grant) or the state (with respect to a subgrant), has made a determination that FEMA or the state’s interest is adequately protected through other means, they may accept the bonding policy and requirements of the applicant.

What are Federal Procurement Methods for FEMA PA Grants?

Method #1: Micro-Purchase

Micro-purchases are the simplest and most informal of the procurement methods in the new grant guidance.

Here are the main points:

  • Purchases are not to exceed was $3500 Now $10,000
  • No quotations required if the price is reasonable
  • To the extent practicable, distribute purchases equitably among qualified suppliers

Method #2: Small Purchase

With purchases under the simplified acquisition rules (was $150,000 NOW $250,000) the process is still relatively simple and there are not extensive bidding requirements.

  • Purchases are up to $150,000 NOW $250,000 (the limit for the simplified acquisition rules)
  • Get rate quotations from an adequate number of qualified sources (Note, your writtenprocurement procedures should define what is meant by “adequate” for example; more than one.)
  • No cost or price analysis is required for purchases under the simplified acquisition limit

Method #3: Sealed Bid

Once you start making purchases over was $150,000 NOW $250,000. the process gets morecomplicated and formalized.

  • Purchases are over was $150,000 NOW $250,000
  • Primarily used in construction projects, such as a firm fixed price contract
  • Price is a major factor and a formal process for bidding is generally required

Method #4: Competitive Proposals

Just like the sealed bid method, competitive proposals mean more requirements and documentation.

  • Purchases are over was $150,000 NOW $250,000
  • Use contracts such as fixed price or cost reimbursement
  • Formal Request for Proposal (RFP) with pre-determined evaluation methods for an adequate number of qualified sources

Method #5: Sole Source

Sometimes because of the uniqueness of the goods or services or the immediacy of the need, competition is NOT as open as we would wish in the procurement process.  If these cases, the sole-source method must be followed.

  • This non-competitive method is available for procurements of any dollar amount
  • Because there is no competition it must be authorized by the agency (or Pass-through entity-for sub-recipients)

There are exceptions to pre-approval such as certain unique circumstances or a public emergency.

One-Size-Fits-All Procurement Rules

Regardless of the size of the purchase, these 5 characteristics must be still be met:

#1: The purchase must comply with the non-Federal entity’s documented procurement procedures

#2: The purchase must be necessary to carry out the Federal award.

#3: The purchase must be made with open competition to the extent required.

#4: The organization is in compliance with their conflict of interest policy.

#5: The purchase documentation contains a sufficient and proper history of the purchase.

This memorandum from OMB clarified several points regarding the new procurement rules as part of the implementation of 2 CFR Part 200also known as the “Uniform Guidance.”

What are FEMA Mission Assignments

There are two categories of Mission Assignments (MA): 1.) Federal Operational Support (FOS) and 2.) Direct Federal Assistance (DFA) .  

1. Federal Operational Support:

MAs categorized as FOS task Federal agencies to provide Federal to Federal support allowing FEMA to execute its response and recovery missions (44 C.F.R. §§ 206.5, 206.7, 206.8). FOS MAs can be issued before or after a declaration. The Cost Share: FOS assistance is internal to the Federal Government and related costs are not appropriately passed on to a State or tribal government, therefore there is no State or tribal cost share. FOS is 100 percent federally funded.

2.) Direct Federal Assistance: (Requires Cost-Share & State/Local Request)

MAs categorized as DFA task Federal agencies to provide eligible emergency work and/or debris removal services to State, local, tribal, and territorial governments following an Emergency or Major Disaster Declaration. FEMA may not issue DFA MAs prior to an Emergency or Major Disaster Declaration. DFA MAs are issued as a result of a request from a State, local, tribal, or territorial government for Federal assistance (44 C.F.R. § 206.208(a)). DFA MAs must be signed by the State, tribal, or territorial Authorizing Representative and is subject to the eligibility criteria contained in Subpart H – Public Assistance Eligibility (44 C.F.R. §§ 206.220-228). Cost Share: The Stafford Act requires a State or tribal government to share the costs associated with requests for Federal assistance pursuant to the terms provided for in the President’s declaration. Pursuant to the Stafford Act, the Federal share of DFA shall not be less than 75 percent of the cost of eligible work (42 U.S.C. §§ 5170b(b)), 5193(a); 44 C.F.R. § 206.208(a).

Debris Removal

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Legal Responsibility

Legal

How do I identify hazard mitigation on my projects?

Hazard mitigation measures are identified by preparing a Hazard Mitigation Proposal (HMP). The HMP is not a form, it is simply a written description and cost of what it will take to repair this damage in such a way as to prevent this damage from happening again. FEMA, the State, or the applicant may identify and propose hazard mitigation measures on any project. The HMP is submitted with the Project Worksheet and describes in detail the additional work and cost associated with completing the mitigation measure.

When approved, the additional work is a change in the scope of work, and is described in a separate paragraph within the scope of work. The cost of the proposed mitigation measure should be provided on the Project Worksheet.

Hazard mitigation opportunities usually present themselves at sites where damages are repetitive and a simple repair will solve the problem, such as the previous culvert example. However, some mitigation opportunities are technically complex and must be thoroughly documented for feasibility. If you would like technical assistance in preparing a HMP or in identifying hazard mitigation measures contact your PAC.

How do I apply for Public Assistance?

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Do all contracts have to be competitively bid?

All contract procurement should be conducted in a manner providing full and open competition in compliance with State and local procurement regulations. Contracts will normally be competitively bid unless one of the following instances apply:

• The item is available only from a single source;

• The awarding agency authorizes noncompetitive proposals;

• After solicitation of a number of sources, competition is determined inadequate; or

• The contract will eliminate or reduce an immediate threat to life, public health or safety.

Is there a way to get money fast?

Immediate Needs Funding (INF) is money earmarked for the most urgent work in the initial aftermath of a disaster. The funds may be provided to any eligible applicant for eligible emergency work that must be performed immediately and paid for within the first 60 days following declaration. Eligible work typically includes debris removal, emergency protective measures, and removal of health and safety hazards. Immediate needs funds can be used for expenses resulting from this eligible work, such as temporary labor costs, overtime payroll, equipment, and material fees.

During the PDA, immediate needs are noted for each area surveyed. If a disaster is declared, and the State thinks damage costs warrant the need for immediate cash flow, the State may INF on your behalf. Up to 50% of the Federal share estimate of emergency monies will then be placed in the State's account. Because this money can be made available in advance of normal procedures once a disaster has been declared, paperwork and processing times are reduced and you can receive emergency funds sooner. Even though your facilities may have been included in the PDA, INF will not be available unless your county/city has been included in the presidential declaration.

Who is eligible for Public Assistance funding?

Applicants

What are four basic components of eligibility for a FEMA Public Assistance Grant

An Applicant must     be a state, territory, tribe, local government, private nonprofit     organization.

A Facility must     be a building, public works, system, equipment, or natural feature.

Work is categorized as either Emergency or Permanent.     It must be required as a result of the declared incident, located within     the designated disaster area, and the legal responsibility of the     Applicant.

Cost is     the funding tied directly to eligible work, and must be adequately     documented, authorized, necessary and reasonable. Eligible costs include     labor, equipment, materials, contract work, as well as direct and indirect     administrative costs.‍

Reimbursement Documentation Requirements

FEMA new delivery model xxxxxxxxxxxxthorized to provide PA funding for Emergency Work,including emergency protective measures and debris removal under Sections 403 & 407 of the Stafford Act.

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What are the Top 10 Procurement under Grant Mistakes

Top 10 Procurement under Grant Mistakes that Can Lead to Loss of FEMA Public Assistance Funding are:

1. Restricting full and open competition (i.e., placing unreasonable requirements on firms, requiring unnecessary experience, specifying only a “brand name” product,givi ng an advantage to local firms, etc.).

2. Not performing a detailed price or cost analysis for procurements above $250,000.

3. Engaging in a sole-sourcing (non-competitive) procurement without carefully documenting how the situation has created an urgent need to perform the work sooner than a competitive procurement process would allow.

4. Continuing work under a sole-source contract after the urgent need (see # 3) has ended, instead of transitioning to a competitively procured contract.

5. Not making and documenting efforts to take all “affirmative” steps to solicit small businesses, minority businesses, and woman’s business enterprises.

6. Awarding a “time-and-materials” contract without a ceiling price and without documenting why no other contract type is suitable.

7. Not including the required contract clauses (template is available here or on the PDAT website).

8. Awarding a “cost-plus-percentage-of-cost” or “percentage-of-construction cost” contract.

9. Awarding a contract to contractors that were suspended or debarred (visit www.sam.gov).

10. Not properly documenting all steps of a procurement to maintain a record sufficient to answer questions that could arise months or years later.

What are the the four basic components of eligibility

  • An Applicant must be a state, territory, tribe, local government, private nonprofit organization.
  • A Facility must be a building, public works, system, equipment, or natural feature.
  • Work is categorized as either Emergency or Permanent. It must be required as a result of the declared incident, located within the designated disaster area, and the legal responsibility of the Applicant.
  • Cost is the funding tied directly to eligible work, and must be adequately documented, authorized, necessary and reasonable. Eligible costs include labor, equipment, materials, contract work, as well as direct and indirect administrative costs.

Special Considerations

Applicants may not duplicate benefits with insurance and must comply with Environmental, Historic Preservation, and Floodplain Management laws as part of the eligibility conditions. Procurement standards in the use of contracts for acquiring disaster-related goods and services must meet certain guidelines in order to receive funding.

Cost-share

The federal share of assistance is not less than 75 percent of the eligible cost. The Recipient determines how the non-federal share (up to 25 percent) is split with the sub-recipients (i.e. eligible applicants).

Roles and Responsibilities

Multiple layers of government work in partnership to administer the PA Grant Program once a disaster has been declared. Each entity must work together to meet the overall objective of a quick, efficient, and effective program delivery.

FEMA's primary responsibilities are to determine the amount of funding, participate in educating the applicant on specific program issues and procedures, assist the applicant with the development of projects, and review the projects for compliance.

  • FEMA: The federal awarding agency authorized to manage the program.
  • Recipients: The State, Territorial, or Tribal government that receives funding under the disaster declaration and disburses funding to approved subrecipients.
  • Applicants: Entities submitting a request for assistance under the recipient's federal award.
  • Subrecipients: Applicants who have received a subaward from the Recipient and is then bound by the conditions of the award and subaward.

The Life of a PA Grant

The PA Program follows FEMA's common set of phases known as the Grants Management Life Cycle:

Pre-Award: Applicants work with the Recipient and FEMA to develop the award package for a grant.
Award: FEMA approves the award package and allocates funding.
Post-Award: Funds are released to the Recipients who must maintain, monitor, and report upon.
Closeout: FEMA administers performance evaluation, financial and appeal reconciliation, final reporting activities, appeal resolution and debt actions.
Post-Closeout: As necessary, FEMA performs debt collection actions, audit, and other adjustments may continue after grant closeout.

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Grant Conditions - Procurement

Federal assistance comes with laws, rules and regulations that must be followed to maximize opportunities for eligible reimbursements. Following the laws, rules and meeting regulatory requirements help to expedite needed funding and speed the delivery of preparedness, prevention, response, recovery and mitigation initiatives and programs for emergency management professionals, citizens and communities. For this reason, GOHSEP created several informational tools to educate our subrecipients in the various laws, rules, regulations and policies that apply to them.

It is important that when procuring any materials, goods or services with Federal funding that the Code of Federal Regulations (CFR) be followed. This applies to all disaster and non disaster grants funded by FEMA – Preparedness, Hazard Mitigation (HM) and Public Assistance (PA) Grants. Failure to comply with Federal regulations when procuring with Federal funds has been the biggest reason the U.S. Department of Homeland Security Office of Inspector General (DHS – OIG) has recommendations for deobligation of funding.

General Rule

A Subrecipient (Applicant) is allowed to use its own procurement process as long as that process conforms to the Federal procurement requirements as stated above. When the Subrecipient’s (Applicant’s) process is not as stringent as the above, the Subrecipient (Applicant) must comply with the requirements of Federal regulations. Many times State law is more stringent than Federal regulations, in which case, the Subrecipient is required to apply State law to the procurement transaction.

Costs eligibility

Generally, costs that can be directly tied to the performance of eligible work are eligible. Costs must be:

Reasonable and necessary to accomplish the work.

Compliant with Federal, State and local requirements for procurement.

Reduced by all applicable credits, such as insurance proceeds and salvage values.

Cost is reasonable if it is a cost that is both fair and equitable for the type of work being performed.

he cost of eligible work is typically a shared cost. The Federal share of assistance is generally not less than 75 percent of the eligible cost for Emergency Measures and Permanent Work. The grant recipient is usually the State. The Recipient determines how the non-Federal share – up to 25 percent – is split with eligible Subrecipients  (Applicants). There are exceptions.

Under certain circumstances the Federal share may be 90 percent or even 100 percent.

Work eligibility

To be eligible for PA funding, disaster recovery work performed on an eligible facility must be:

Required as a direct result of a major disaster event.

Located within a designated disaster area.

The legal responsibility of an eligible Applicant.

Facility eligibility

The facility must be:

The legal responsibility of an eligible Applicant and not under the specific authority of another Federal agency.

Located in the designated disaster area.

Damaged by the declared disaster or emergency.

In active use and open to the general public at the time of the disaster.

What happens if an applicant doesn't follow the procurement rules?

If an applicant fails to comply with any term of an award (including the contracting requirements discussed in this Fact Sheet), whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, FEMA may:

• Temporarily withhold payment, or take more severe enforcement action;

• Disallow all or part of the cost of the activity or action not incompliance;

• Wholly or partly suspend or terminate the applicant's current award;

• Withhold further awards; or

• Take other remedies that may be legally available.

Are there any procurement actions that are prohibited by FEMA?

Noncompetitive contracts. Given the Federal contracting requirements or full and open competition, applicants must avoid awarding noncompetitive contracts unless the exceptions in FAQ #4 above apply.

Cost plus percentage of cost contracts. Cost plus percentage of cost contracts are strictly prohibited. Such contracts have four elements:

3. Payment is based on a pre-determined percentage rate;

4. Percentage rate is applied to actual performance costs;

5. Contractor entitlement is uncertain at the time of contracting, and;

6. Contractor entitlement increases commensurately with increased performance costs.17

Debarred or suspended contractors. Applicants must not employ disbarred or suspended contractors. In addition, applicants must report contractors who demonstrate a lack of integrity, ethical lapses, or perform inadequately. Applicants should check against the General Services Administration list of debarred and suspended contractors

at: https://www.epls.gov/.

Conflicts of interest. The procurement regulations forbid awarding contracts "if a conflict of interest, real or apparent, would be involved." 18Conflicts of interest arise when an applicant's employee, officer, or agent (or their immediate families or partners) has a financial or other interest in who receives the contract award. FEMA will also find a conflict of interest when an organization that employs (or is about to employ) any of the above parties has a financial or other interest in the award.

Duplicative costs. The Stafford Act and its implementing regulations forbid FEMA from reimbursing duplicative costs.

Contingency clauses. When procuring property and services under a grant, an applicant must follow the same policies and procedures it uses for procurements from its non-Federal funds. Therefore, while it is acceptable if the contract scope of work indicates that activities will be carried out consistent with FEMA laws, regulations, and eligibility guidelines, contracts may not be contingent upon the issuance of a Presidential declaration or FEMA's approval or obligation of funds.

Excessive Costs. To be eligible for reimbursement, costs incurred must be reasonable, allocable, and allowable.19Further, applicants must perform a cost or price analysis in connection with every procurement action including contract modifications.

17

Grantee or subgrantee profit. It is acceptable for applicants to pay reasonable fees or profit to cost- type contractors. However, no applicant can ever be in a position to receive a profit or fee itself for work procured pursuant to a Federal grant. FEMA will not fund any fee or profit to the applicant.

Are there any procurement actions that are discouraged by FEMA?

Time and materials contracts. Applicants should avoid using time and materials contracts in their procurement actions. This contract type creates the risk that costs could go beyond what the parties anticipated, so applicants should only use it when no other contract type is suitable. In light of this risk, time and materials contracts must include a ceiling amount on the price of the contract.13Including a ceiling shifts the risk to the contractor for any overages. For Public Assistance, such contracts should be limited for work that is necessary immediately after a disaster and should not exceed 70 hours.14

"Piggyback" contracts. "Piggybacking" occurs when an applicant has disaster-related work performed by another jurisdiction' s contractor.15 Because the competitive process for the existing contract could not have included the full scope of the new work, the new work has not been competitively bid. The resulting costs may therefore be higher than if the work had been bid out separately. FEMA therefore discourages such contracts and will use the reasonableness of eligible work as a basis to determine reimbursable costs.

Are there any other recommendations FEMA has for procurement actions?

Use sealed bids. For construction contracts, FEMA prefers sealed bids. After a public invitation and solicitation to bid, the applicant should award a firm-fixed-price contract, in writing, to the lowest responsible offeror. Applicants may also use the sealed bid method for non-construction contracts if appropriate.

When the sealed bid method is not appropriate, the applicant may use competitive proposals to award a fixed-price contract or a cost-reimbursement contract. With competitive proposals, awards are made in accordance with evaluation and award criteria set forth in the solicitation. The solicitation must set out all evaluation factors and their relative importance; solicit proposals from an adequate number of qualified sources; and have a method to conduct technical evaluations and select awardees. The competitive proposals method allows

9

applicants to make their decision on more factors than price alone. When an applicant procures professional architecture or engineering services, this method permits eliminating price as a selection factor entirely.11

Keep detailed records. Keep detailed records of any decision points in the procurement process, and document the rationale for the decision. A contemporary accounting of the decision will help the applicant in the event of an appeal or challenge at a later time.

Team up. To foster greater economy and efficiency, applicants are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

Lease vs. purchase. Applicants should compare the costs associated with leasing and those associated with purchasing over an applicable time frame to determine which option provides the greatest cost savings.

Use value engineering. Put value engineering clauses in sizeable construction contracts. Value engineering systematically reviews contract items and tasks to ensure that the "essential function is provided at the overall lower cost.

Is there a time when full and open competition is not required?

A procurement action that does not meet the requirement for full and open competition, such as a sole source contracts, constitutes a violation of regulation and is unauthorized unless the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals AND one of the following circumstances applies:

• The item is available only from a single source;

• The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;

• FEMA authorizes noncompetitive proposals; or

• After solicitation of a number of sources, competition is determined inadequate.

If an applicant takes a noncompetitive procurement action, the applicant must complete a cost analysis and may be required to submit the proposed procurement to FEMA for pre-a ward review. 10

What do applicants have to do to provide full and open competition?

Full and open competition means a contract action in which responsible sources are permitted to compete. Fair and open competition occurs when a complete, adequate and realistic specification or purchase description is publicly solicited and multiple responsible bidders are allowed to compete effectively for the business.9

When procuring goods or services at or below the simplified acquisition amount, the applicant must consider an adequate number of qualified sources. FEMA considers three to be the minimum adequate number of qualified sources.

This Fact Sheet as well as 44 CFR 13.36, 2 CFR Pa rts215, 220, 225, and 230, as appropriate, provide the necessary requirements and processes to follow in order to ensure that an applicant satisfies the full and open competition requirements.

What are the procurement actions required for reimbursement by FEMA?

Full and Open Competition. The procurement rules require full and open competition, with limited exceptions.

Cost or price analysis. The specific facts of the procurement will dictate the method and degree of analysis, but at a minimum, applicants must always make an independent estimate before receiving bids or proposals. A price analysis will be used to determine the reasonableness of the proposed contract price. Further, a cost or price analysis should be

completed to evaluate the bids or proposals received.

What are the procurement requirements that must be followed by grantees and subgrantees?

Applicants must use their own procurement procedures which reflect applicable State and local laws and regulations. They must also, however, meet the minimum Federal procurement standards1 where those standard s are more onerous (including but not limited to those discussed in this Fact Sheet}, or the contract will be deemed in violation of the procurement rules, and the request for reimbursement could be subject to the enforcement provisions

Contractor ownership preferences.2 Full and open competition also involves the adherence to procurement rules covering contractor ownership preferences. The applicant must take positive actions to involve and use "small and minority firms, women's business enterprise and labor surplus area firms."3 The applicant's process should give potential contractors in these categories a full and open opportunity to compete .4 FEMA will reimburse the applicant if, after a full and open competition, the applicant selects a contractor who provides the lowest price but does not meet one of these categories. When the applicant hires a prime contractor, the applicant must also require the prime contractor to utilize the same approach towards these categories when hiring sub-contractors.

System for managing procurement. Applicants must employ a system that governs contracts and purchase orders. This system must include a means of enforcing agreements, written procedures governing procurement actions, and a written code of standards for contract and purchase order administration. This code of standards must provide ethical rules and the penalties for violating these rules.5 The system must also include a process to handle protests involving contracts and purchase order awards.6

Required provisions in procurement actions. The applicant must include certain provisions in its procurement actions. These provisions vary depending on the type and dollar amount of the contract, and are provided in 44 CFR part 13or 2 CFR part 215, 220, 225, or 230, as applicable. Note that the Uniform Administrative Requirements for Federal Gran t Assistance require applicant contracts to con tab1a provision requiring compliance with the Davis-Bacon Act when required by grant program legislation. The Stafford Act requires preparedness grantees to comply with Davis- Bacon provisions.7 The Stafford Act does not require compliance with Davis-Bacon for any other grants. Therefore, applicant contracts to execute eligible work under the Public Assistance program are not required to contain a Davis-Bacon provision.

Guarantees and bonds. For construction contracts and facility improvements above the simplified acquisition threshold , the applicant must require a bid guarantee from each bidder equivalent to 5 percent of the bid price, a performance bond on the part of the contractor for 100 percent of the contract price, and a payment bond on the part of the contractor for 100% of the contract. In lieu of these requirements, if FEMA (with respect to a grant) or the state (with respect to a subgrant), has made a determination that FEMA or the state’s interest is adequately protected through other means, they may accept the bonding policy and requirements of the applicant.

What are Federal Procurement Methods for FEMA PA Grants?

Method #1: Micro-Purchase

Micro-purchases are the simplest and most informal of the procurement methods in the new grant guidance.

Here are the main points:

  • Purchases are not to exceed was $3500 Now $10,000
  • No quotations required if the price is reasonable
  • To the extent practicable, distribute purchases equitably among qualified suppliers

Method #2: Small Purchase

With purchases under the simplified acquisition rules (was $150,000 NOW $250,000) the process is still relatively simple and there are not extensive bidding requirements.

  • Purchases are up to $150,000 NOW $250,000 (the limit for the simplified acquisition rules)
  • Get rate quotations from an adequate number of qualified sources (Note, your writtenprocurement procedures should define what is meant by “adequate” for example; more than one.)
  • No cost or price analysis is required for purchases under the simplified acquisition limit

Method #3: Sealed Bid

Once you start making purchases over was $150,000 NOW $250,000. the process gets morecomplicated and formalized.

  • Purchases are over was $150,000 NOW $250,000
  • Primarily used in construction projects, such as a firm fixed price contract
  • Price is a major factor and a formal process for bidding is generally required

Method #4: Competitive Proposals

Just like the sealed bid method, competitive proposals mean more requirements and documentation.

  • Purchases are over was $150,000 NOW $250,000
  • Use contracts such as fixed price or cost reimbursement
  • Formal Request for Proposal (RFP) with pre-determined evaluation methods for an adequate number of qualified sources

Method #5: Sole Source

Sometimes because of the uniqueness of the goods or services or the immediacy of the need, competition is NOT as open as we would wish in the procurement process.  If these cases, the sole-source method must be followed.

  • This non-competitive method is available for procurements of any dollar amount
  • Because there is no competition it must be authorized by the agency (or Pass-through entity-for sub-recipients)

There are exceptions to pre-approval such as certain unique circumstances or a public emergency.

One-Size-Fits-All Procurement Rules

Regardless of the size of the purchase, these 5 characteristics must be still be met:

#1: The purchase must comply with the non-Federal entity’s documented procurement procedures

#2: The purchase must be necessary to carry out the Federal award.

#3: The purchase must be made with open competition to the extent required.

#4: The organization is in compliance with their conflict of interest policy.

#5: The purchase documentation contains a sufficient and proper history of the purchase.

This memorandum from OMB clarified several points regarding the new procurement rules as part of the implementation of 2 CFR Part 200also known as the “Uniform Guidance.”

What are FEMA Mission Assignments

There are two categories of Mission Assignments (MA): 1.) Federal Operational Support (FOS) and 2.) Direct Federal Assistance (DFA) .  

1. Federal Operational Support:

MAs categorized as FOS task Federal agencies to provide Federal to Federal support allowing FEMA to execute its response and recovery missions (44 C.F.R. §§ 206.5, 206.7, 206.8). FOS MAs can be issued before or after a declaration. The Cost Share: FOS assistance is internal to the Federal Government and related costs are not appropriately passed on to a State or tribal government, therefore there is no State or tribal cost share. FOS is 100 percent federally funded.

2.) Direct Federal Assistance: (Requires Cost-Share & State/Local Request)

MAs categorized as DFA task Federal agencies to provide eligible emergency work and/or debris removal services to State, local, tribal, and territorial governments following an Emergency or Major Disaster Declaration. FEMA may not issue DFA MAs prior to an Emergency or Major Disaster Declaration. DFA MAs are issued as a result of a request from a State, local, tribal, or territorial government for Federal assistance (44 C.F.R. § 206.208(a)). DFA MAs must be signed by the State, tribal, or territorial Authorizing Representative and is subject to the eligibility criteria contained in Subpart H – Public Assistance Eligibility (44 C.F.R. §§ 206.220-228). Cost Share: The Stafford Act requires a State or tribal government to share the costs associated with requests for Federal assistance pursuant to the terms provided for in the President’s declaration. Pursuant to the Stafford Act, the Federal share of DFA shall not be less than 75 percent of the cost of eligible work (42 U.S.C. §§ 5170b(b)), 5193(a); 44 C.F.R. § 206.208(a).

Debris Removal

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Legal Responsibility

Legal

How do I identify hazard mitigation on my projects?

Hazard mitigation measures are identified by preparing a Hazard Mitigation Proposal (HMP). The HMP is not a form, it is simply a written description and cost of what it will take to repair this damage in such a way as to prevent this damage from happening again. FEMA, the State, or the applicant may identify and propose hazard mitigation measures on any project. The HMP is submitted with the Project Worksheet and describes in detail the additional work and cost associated with completing the mitigation measure.

When approved, the additional work is a change in the scope of work, and is described in a separate paragraph within the scope of work. The cost of the proposed mitigation measure should be provided on the Project Worksheet.

Hazard mitigation opportunities usually present themselves at sites where damages are repetitive and a simple repair will solve the problem, such as the previous culvert example. However, some mitigation opportunities are technically complex and must be thoroughly documented for feasibility. If you would like technical assistance in preparing a HMP or in identifying hazard mitigation measures contact your PAC.

How do I apply for Public Assistance?

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Do all contracts have to be competitively bid?

All contract procurement should be conducted in a manner providing full and open competition in compliance with State and local procurement regulations. Contracts will normally be competitively bid unless one of the following instances apply:

• The item is available only from a single source;

• The awarding agency authorizes noncompetitive proposals;

• After solicitation of a number of sources, competition is determined inadequate; or

• The contract will eliminate or reduce an immediate threat to life, public health or safety.

Is there a way to get money fast?

Immediate Needs Funding (INF) is money earmarked for the most urgent work in the initial aftermath of a disaster. The funds may be provided to any eligible applicant for eligible emergency work that must be performed immediately and paid for within the first 60 days following declaration. Eligible work typically includes debris removal, emergency protective measures, and removal of health and safety hazards. Immediate needs funds can be used for expenses resulting from this eligible work, such as temporary labor costs, overtime payroll, equipment, and material fees.

During the PDA, immediate needs are noted for each area surveyed. If a disaster is declared, and the State thinks damage costs warrant the need for immediate cash flow, the State may INF on your behalf. Up to 50% of the Federal share estimate of emergency monies will then be placed in the State's account. Because this money can be made available in advance of normal procedures once a disaster has been declared, paperwork and processing times are reduced and you can receive emergency funds sooner. Even though your facilities may have been included in the PDA, INF will not be available unless your county/city has been included in the presidential declaration.

Who is eligible for Public Assistance funding?

Applicants

What are four basic components of eligibility for a FEMA Public Assistance Grant

An Applicant must     be a state, territory, tribe, local government, private nonprofit     organization.

A Facility must     be a building, public works, system, equipment, or natural feature.

Work is categorized as either Emergency or Permanent.     It must be required as a result of the declared incident, located within     the designated disaster area, and the legal responsibility of the     Applicant.

Cost is     the funding tied directly to eligible work, and must be adequately     documented, authorized, necessary and reasonable. Eligible costs include     labor, equipment, materials, contract work, as well as direct and indirect     administrative costs.‍

Grant Compliance - Regulations & Policy

FEMA new delivery model xxxxxxxxxxxxthorized to provide PA funding for Emergency Work,including emergency protective measures and debris removal under Sections 403 & 407 of the Stafford Act.

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What are the Top 10 Procurement under Grant Mistakes

Top 10 Procurement under Grant Mistakes that Can Lead to Loss of FEMA Public Assistance Funding are:

1. Restricting full and open competition (i.e., placing unreasonable requirements on firms, requiring unnecessary experience, specifying only a “brand name” product,givi ng an advantage to local firms, etc.).

2. Not performing a detailed price or cost analysis for procurements above $250,000.

3. Engaging in a sole-sourcing (non-competitive) procurement without carefully documenting how the situation has created an urgent need to perform the work sooner than a competitive procurement process would allow.

4. Continuing work under a sole-source contract after the urgent need (see # 3) has ended, instead of transitioning to a competitively procured contract.

5. Not making and documenting efforts to take all “affirmative” steps to solicit small businesses, minority businesses, and woman’s business enterprises.

6. Awarding a “time-and-materials” contract without a ceiling price and without documenting why no other contract type is suitable.

7. Not including the required contract clauses (template is available here or on the PDAT website).

8. Awarding a “cost-plus-percentage-of-cost” or “percentage-of-construction cost” contract.

9. Awarding a contract to contractors that were suspended or debarred (visit www.sam.gov).

10. Not properly documenting all steps of a procurement to maintain a record sufficient to answer questions that could arise months or years later.

What are the the four basic components of eligibility

  • An Applicant must be a state, territory, tribe, local government, private nonprofit organization.
  • A Facility must be a building, public works, system, equipment, or natural feature.
  • Work is categorized as either Emergency or Permanent. It must be required as a result of the declared incident, located within the designated disaster area, and the legal responsibility of the Applicant.
  • Cost is the funding tied directly to eligible work, and must be adequately documented, authorized, necessary and reasonable. Eligible costs include labor, equipment, materials, contract work, as well as direct and indirect administrative costs.

Special Considerations

Applicants may not duplicate benefits with insurance and must comply with Environmental, Historic Preservation, and Floodplain Management laws as part of the eligibility conditions. Procurement standards in the use of contracts for acquiring disaster-related goods and services must meet certain guidelines in order to receive funding.

Cost-share

The federal share of assistance is not less than 75 percent of the eligible cost. The Recipient determines how the non-federal share (up to 25 percent) is split with the sub-recipients (i.e. eligible applicants).

Roles and Responsibilities

Multiple layers of government work in partnership to administer the PA Grant Program once a disaster has been declared. Each entity must work together to meet the overall objective of a quick, efficient, and effective program delivery.

FEMA's primary responsibilities are to determine the amount of funding, participate in educating the applicant on specific program issues and procedures, assist the applicant with the development of projects, and review the projects for compliance.

  • FEMA: The federal awarding agency authorized to manage the program.
  • Recipients: The State, Territorial, or Tribal government that receives funding under the disaster declaration and disburses funding to approved subrecipients.
  • Applicants: Entities submitting a request for assistance under the recipient's federal award.
  • Subrecipients: Applicants who have received a subaward from the Recipient and is then bound by the conditions of the award and subaward.

The Life of a PA Grant

The PA Program follows FEMA's common set of phases known as the Grants Management Life Cycle:

Pre-Award: Applicants work with the Recipient and FEMA to develop the award package for a grant.
Award: FEMA approves the award package and allocates funding.
Post-Award: Funds are released to the Recipients who must maintain, monitor, and report upon.
Closeout: FEMA administers performance evaluation, financial and appeal reconciliation, final reporting activities, appeal resolution and debt actions.
Post-Closeout: As necessary, FEMA performs debt collection actions, audit, and other adjustments may continue after grant closeout.

Troubleshoot viewing PDF files on the web

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Browser and browser-settings solutions

Use a different web browser

Certain conditions on your computer, such as security settings or browser cookies, can prevent you from viewing a PDF. Often, the fastest solution is to try to open the page using a different browser. Try any of the following browsers that you have not already tried:

Google Chrome

Mozilla Firefox

Microsoft Internet Explorer

Apple Safari

For a list of compatible browsers for Reader and Acrobat, see Compatible web browsers.

Switch to Compatibility View (Internet Explorer)

Some websites display better in the Compatibility View of Internet Explorer. The Compatibility View displays a page as if it were in an earlier version of the browser.

For instructions on how to switch to this view, see Fix site display problems with Compatibility View.

Grant Conditions - Procurement

Federal assistance comes with laws, rules and regulations that must be followed to maximize opportunities for eligible reimbursements. Following the laws, rules and meeting regulatory requirements help to expedite needed funding and speed the delivery of preparedness, prevention, response, recovery and mitigation initiatives and programs for emergency management professionals, citizens and communities. For this reason, GOHSEP created several informational tools to educate our subrecipients in the various laws, rules, regulations and policies that apply to them.

It is important that when procuring any materials, goods or services with Federal funding that the Code of Federal Regulations (CFR) be followed. This applies to all disaster and non disaster grants funded by FEMA – Preparedness, Hazard Mitigation (HM) and Public Assistance (PA) Grants. Failure to comply with Federal regulations when procuring with Federal funds has been the biggest reason the U.S. Department of Homeland Security Office of Inspector General (DHS – OIG) has recommendations for deobligation of funding.

General Rule

A Subrecipient (Applicant) is allowed to use its own procurement process as long as that process conforms to the Federal procurement requirements as stated above. When the Subrecipient’s (Applicant’s) process is not as stringent as the above, the Subrecipient (Applicant) must comply with the requirements of Federal regulations. Many times State law is more stringent than Federal regulations, in which case, the Subrecipient is required to apply State law to the procurement transaction.

Costs eligibility

Generally, costs that can be directly tied to the performance of eligible work are eligible. Costs must be:

Reasonable and necessary to accomplish the work.

Compliant with Federal, State and local requirements for procurement.

Reduced by all applicable credits, such as insurance proceeds and salvage values.

Cost is reasonable if it is a cost that is both fair and equitable for the type of work being performed.

he cost of eligible work is typically a shared cost. The Federal share of assistance is generally not less than 75 percent of the eligible cost for Emergency Measures and Permanent Work. The grant recipient is usually the State. The Recipient determines how the non-Federal share – up to 25 percent – is split with eligible Subrecipients  (Applicants). There are exceptions.

Under certain circumstances the Federal share may be 90 percent or even 100 percent.

Work eligibility

To be eligible for PA funding, disaster recovery work performed on an eligible facility must be:

Required as a direct result of a major disaster event.

Located within a designated disaster area.

The legal responsibility of an eligible Applicant.

Facility eligibility

The facility must be:

The legal responsibility of an eligible Applicant and not under the specific authority of another Federal agency.

Located in the designated disaster area.

Damaged by the declared disaster or emergency.

In active use and open to the general public at the time of the disaster.

What happens if an applicant doesn't follow the procurement rules?

If an applicant fails to comply with any term of an award (including the contracting requirements discussed in this Fact Sheet), whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, FEMA may:

• Temporarily withhold payment, or take more severe enforcement action;

• Disallow all or part of the cost of the activity or action not incompliance;

• Wholly or partly suspend or terminate the applicant's current award;

• Withhold further awards; or

• Take other remedies that may be legally available.

Are there any procurement actions that are prohibited by FEMA?

Noncompetitive contracts. Given the Federal contracting requirements or full and open competition, applicants must avoid awarding noncompetitive contracts unless the exceptions in FAQ #4 above apply.

Cost plus percentage of cost contracts. Cost plus percentage of cost contracts are strictly prohibited. Such contracts have four elements:

3. Payment is based on a pre-determined percentage rate;

4. Percentage rate is applied to actual performance costs;

5. Contractor entitlement is uncertain at the time of contracting, and;

6. Contractor entitlement increases commensurately with increased performance costs.17

Debarred or suspended contractors. Applicants must not employ disbarred or suspended contractors. In addition, applicants must report contractors who demonstrate a lack of integrity, ethical lapses, or perform inadequately. Applicants should check against the General Services Administration list of debarred and suspended contractors

at: https://www.epls.gov/.

Conflicts of interest. The procurement regulations forbid awarding contracts "if a conflict of interest, real or apparent, would be involved." 18Conflicts of interest arise when an applicant's employee, officer, or agent (or their immediate families or partners) has a financial or other interest in who receives the contract award. FEMA will also find a conflict of interest when an organization that employs (or is about to employ) any of the above parties has a financial or other interest in the award.

Duplicative costs. The Stafford Act and its implementing regulations forbid FEMA from reimbursing duplicative costs.

Contingency clauses. When procuring property and services under a grant, an applicant must follow the same policies and procedures it uses for procurements from its non-Federal funds. Therefore, while it is acceptable if the contract scope of work indicates that activities will be carried out consistent with FEMA laws, regulations, and eligibility guidelines, contracts may not be contingent upon the issuance of a Presidential declaration or FEMA's approval or obligation of funds.

Excessive Costs. To be eligible for reimbursement, costs incurred must be reasonable, allocable, and allowable.19Further, applicants must perform a cost or price analysis in connection with every procurement action including contract modifications.

17

Grantee or subgrantee profit. It is acceptable for applicants to pay reasonable fees or profit to cost- type contractors. However, no applicant can ever be in a position to receive a profit or fee itself for work procured pursuant to a Federal grant. FEMA will not fund any fee or profit to the applicant.

Are there any procurement actions that are discouraged by FEMA?

Time and materials contracts. Applicants should avoid using time and materials contracts in their procurement actions. This contract type creates the risk that costs could go beyond what the parties anticipated, so applicants should only use it when no other contract type is suitable. In light of this risk, time and materials contracts must include a ceiling amount on the price of the contract.13Including a ceiling shifts the risk to the contractor for any overages. For Public Assistance, such contracts should be limited for work that is necessary immediately after a disaster and should not exceed 70 hours.14

"Piggyback" contracts. "Piggybacking" occurs when an applicant has disaster-related work performed by another jurisdiction' s contractor.15 Because the competitive process for the existing contract could not have included the full scope of the new work, the new work has not been competitively bid. The resulting costs may therefore be higher than if the work had been bid out separately. FEMA therefore discourages such contracts and will use the reasonableness of eligible work as a basis to determine reimbursable costs.

Are there any other recommendations FEMA has for procurement actions?

Use sealed bids. For construction contracts, FEMA prefers sealed bids. After a public invitation and solicitation to bid, the applicant should award a firm-fixed-price contract, in writing, to the lowest responsible offeror. Applicants may also use the sealed bid method for non-construction contracts if appropriate.

When the sealed bid method is not appropriate, the applicant may use competitive proposals to award a fixed-price contract or a cost-reimbursement contract. With competitive proposals, awards are made in accordance with evaluation and award criteria set forth in the solicitation. The solicitation must set out all evaluation factors and their relative importance; solicit proposals from an adequate number of qualified sources; and have a method to conduct technical evaluations and select awardees. The competitive proposals method allows

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applicants to make their decision on more factors than price alone. When an applicant procures professional architecture or engineering services, this method permits eliminating price as a selection factor entirely.11

Keep detailed records. Keep detailed records of any decision points in the procurement process, and document the rationale for the decision. A contemporary accounting of the decision will help the applicant in the event of an appeal or challenge at a later time.

Team up. To foster greater economy and efficiency, applicants are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.

Lease vs. purchase. Applicants should compare the costs associated with leasing and those associated with purchasing over an applicable time frame to determine which option provides the greatest cost savings.

Use value engineering. Put value engineering clauses in sizeable construction contracts. Value engineering systematically reviews contract items and tasks to ensure that the "essential function is provided at the overall lower cost.

Is there a time when full and open competition is not required?

A procurement action that does not meet the requirement for full and open competition, such as a sole source contracts, constitutes a violation of regulation and is unauthorized unless the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals AND one of the following circumstances applies:

• The item is available only from a single source;

• The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation;

• FEMA authorizes noncompetitive proposals; or

• After solicitation of a number of sources, competition is determined inadequate.

If an applicant takes a noncompetitive procurement action, the applicant must complete a cost analysis and may be required to submit the proposed procurement to FEMA for pre-a ward review. 10

What do applicants have to do to provide full and open competition?

Full and open competition means a contract action in which responsible sources are permitted to compete. Fair and open competition occurs when a complete, adequate and realistic specification or purchase description is publicly solicited and multiple responsible bidders are allowed to compete effectively for the business.9

When procuring goods or services at or below the simplified acquisition amount, the applicant must consider an adequate number of qualified sources. FEMA considers three to be the minimum adequate number of qualified sources.

This Fact Sheet as well as 44 CFR 13.36, 2 CFR Pa rts215, 220, 225, and 230, as appropriate, provide the necessary requirements and processes to follow in order to ensure that an applicant satisfies the full and open competition requirements.

What are the procurement actions required for reimbursement by FEMA?

Full and Open Competition. The procurement rules require full and open competition, with limited exceptions.

Cost or price analysis. The specific facts of the procurement will dictate the method and degree of analysis, but at a minimum, applicants must always make an independent estimate before receiving bids or proposals. A price analysis will be used to determine the reasonableness of the proposed contract price. Further, a cost or price analysis should be

completed to evaluate the bids or proposals received.

What are the procurement requirements that must be followed by grantees and subgrantees?

Applicants must use their own procurement procedures which reflect applicable State and local laws and regulations. They must also, however, meet the minimum Federal procurement standards1 where those standard s are more onerous (including but not limited to those discussed in this Fact Sheet}, or the contract will be deemed in violation of the procurement rules, and the request for reimbursement could be subject to the enforcement provisions

Contractor ownership preferences.2 Full and open competition also involves the adherence to procurement rules covering contractor ownership preferences. The applicant must take positive actions to involve and use "small and minority firms, women's business enterprise and labor surplus area firms."3 The applicant's process should give potential contractors in these categories a full and open opportunity to compete .4 FEMA will reimburse the applicant if, after a full and open competition, the applicant selects a contractor who provides the lowest price but does not meet one of these categories. When the applicant hires a prime contractor, the applicant must also require the prime contractor to utilize the same approach towards these categories when hiring sub-contractors.

System for managing procurement. Applicants must employ a system that governs contracts and purchase orders. This system must include a means of enforcing agreements, written procedures governing procurement actions, and a written code of standards for contract and purchase order administration. This code of standards must provide ethical rules and the penalties for violating these rules.5 The system must also include a process to handle protests involving contracts and purchase order awards.6

Required provisions in procurement actions. The applicant must include certain provisions in its procurement actions. These provisions vary depending on the type and dollar amount of the contract, and are provided in 44 CFR part 13or 2 CFR part 215, 220, 225, or 230, as applicable. Note that the Uniform Administrative Requirements for Federal Gran t Assistance require applicant contracts to con tab1a provision requiring compliance with the Davis-Bacon Act when required by grant program legislation. The Stafford Act requires preparedness grantees to comply with Davis- Bacon provisions.7 The Stafford Act does not require compliance with Davis-Bacon for any other grants. Therefore, applicant contracts to execute eligible work under the Public Assistance program are not required to contain a Davis-Bacon provision.

Guarantees and bonds. For construction contracts and facility improvements above the simplified acquisition threshold , the applicant must require a bid guarantee from each bidder equivalent to 5 percent of the bid price, a performance bond on the part of the contractor for 100 percent of the contract price, and a payment bond on the part of the contractor for 100% of the contract. In lieu of these requirements, if FEMA (with respect to a grant) or the state (with respect to a subgrant), has made a determination that FEMA or the state’s interest is adequately protected through other means, they may accept the bonding policy and requirements of the applicant.

What are Federal Procurement Methods for FEMA PA Grants?

Method #1: Micro-Purchase

Micro-purchases are the simplest and most informal of the procurement methods in the new grant guidance.

Here are the main points:

  • Purchases are not to exceed was $3500 Now $10,000
  • No quotations required if the price is reasonable
  • To the extent practicable, distribute purchases equitably among qualified suppliers

Method #2: Small Purchase

With purchases under the simplified acquisition rules (was $150,000 NOW $250,000) the process is still relatively simple and there are not extensive bidding requirements.

  • Purchases are up to $150,000 NOW $250,000 (the limit for the simplified acquisition rules)
  • Get rate quotations from an adequate number of qualified sources (Note, your writtenprocurement procedures should define what is meant by “adequate” for example; more than one.)
  • No cost or price analysis is required for purchases under the simplified acquisition limit

Method #3: Sealed Bid

Once you start making purchases over was $150,000 NOW $250,000. the process gets morecomplicated and formalized.

  • Purchases are over was $150,000 NOW $250,000
  • Primarily used in construction projects, such as a firm fixed price contract
  • Price is a major factor and a formal process for bidding is generally required

Method #4: Competitive Proposals

Just like the sealed bid method, competitive proposals mean more requirements and documentation.

  • Purchases are over was $150,000 NOW $250,000
  • Use contracts such as fixed price or cost reimbursement
  • Formal Request for Proposal (RFP) with pre-determined evaluation methods for an adequate number of qualified sources

Method #5: Sole Source

Sometimes because of the uniqueness of the goods or services or the immediacy of the need, competition is NOT as open as we would wish in the procurement process.  If these cases, the sole-source method must be followed.

  • This non-competitive method is available for procurements of any dollar amount
  • Because there is no competition it must be authorized by the agency (or Pass-through entity-for sub-recipients)

There are exceptions to pre-approval such as certain unique circumstances or a public emergency.

One-Size-Fits-All Procurement Rules

Regardless of the size of the purchase, these 5 characteristics must be still be met:

#1: The purchase must comply with the non-Federal entity’s documented procurement procedures

#2: The purchase must be necessary to carry out the Federal award.

#3: The purchase must be made with open competition to the extent required.

#4: The organization is in compliance with their conflict of interest policy.

#5: The purchase documentation contains a sufficient and proper history of the purchase.

This memorandum from OMB clarified several points regarding the new procurement rules as part of the implementation of 2 CFR Part 200also known as the “Uniform Guidance.”

What are FEMA Mission Assignments

There are two categories of Mission Assignments (MA): 1.) Federal Operational Support (FOS) and 2.) Direct Federal Assistance (DFA) .  

1. Federal Operational Support:

MAs categorized as FOS task Federal agencies to provide Federal to Federal support allowing FEMA to execute its response and recovery missions (44 C.F.R. §§ 206.5, 206.7, 206.8). FOS MAs can be issued before or after a declaration. The Cost Share: FOS assistance is internal to the Federal Government and related costs are not appropriately passed on to a State or tribal government, therefore there is no State or tribal cost share. FOS is 100 percent federally funded.

2.) Direct Federal Assistance: (Requires Cost-Share & State/Local Request)

MAs categorized as DFA task Federal agencies to provide eligible emergency work and/or debris removal services to State, local, tribal, and territorial governments following an Emergency or Major Disaster Declaration. FEMA may not issue DFA MAs prior to an Emergency or Major Disaster Declaration. DFA MAs are issued as a result of a request from a State, local, tribal, or territorial government for Federal assistance (44 C.F.R. § 206.208(a)). DFA MAs must be signed by the State, tribal, or territorial Authorizing Representative and is subject to the eligibility criteria contained in Subpart H – Public Assistance Eligibility (44 C.F.R. §§ 206.220-228). Cost Share: The Stafford Act requires a State or tribal government to share the costs associated with requests for Federal assistance pursuant to the terms provided for in the President’s declaration. Pursuant to the Stafford Act, the Federal share of DFA shall not be less than 75 percent of the cost of eligible work (42 U.S.C. §§ 5170b(b)), 5193(a); 44 C.F.R. § 206.208(a).

Debris Removal

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Legal Responsibility

Legal

How do I identify hazard mitigation on my projects?

Hazard mitigation measures are identified by preparing a Hazard Mitigation Proposal (HMP). The HMP is not a form, it is simply a written description and cost of what it will take to repair this damage in such a way as to prevent this damage from happening again. FEMA, the State, or the applicant may identify and propose hazard mitigation measures on any project. The HMP is submitted with the Project Worksheet and describes in detail the additional work and cost associated with completing the mitigation measure.

When approved, the additional work is a change in the scope of work, and is described in a separate paragraph within the scope of work. The cost of the proposed mitigation measure should be provided on the Project Worksheet.

Hazard mitigation opportunities usually present themselves at sites where damages are repetitive and a simple repair will solve the problem, such as the previous culvert example. However, some mitigation opportunities are technically complex and must be thoroughly documented for feasibility. If you would like technical assistance in preparing a HMP or in identifying hazard mitigation measures contact your PAC.

How do I apply for Public Assistance?

Debris removal activities, such as clearance, removal, and disposal, are eligible as Category A if the removal is in the public interest based on whether the work:

• Eliminates immediate threats to lives, public health, and safety;

• Eliminates immediate threats of significant damage to improved public or private property; or

• Ensures economic recovery of the affected community to the benefit of the community at large.

Do all contracts have to be competitively bid?

All contract procurement should be conducted in a manner providing full and open competition in compliance with State and local procurement regulations. Contracts will normally be competitively bid unless one of the following instances apply:

• The item is available only from a single source;

• The awarding agency authorizes noncompetitive proposals;

• After solicitation of a number of sources, competition is determined inadequate; or

• The contract will eliminate or reduce an immediate threat to life, public health or safety.

Is there a way to get money fast?

Immediate Needs Funding (INF) is money earmarked for the most urgent work in the initial aftermath of a disaster. The funds may be provided to any eligible applicant for eligible emergency work that must be performed immediately and paid for within the first 60 days following declaration. Eligible work typically includes debris removal, emergency protective measures, and removal of health and safety hazards. Immediate needs funds can be used for expenses resulting from this eligible work, such as temporary labor costs, overtime payroll, equipment, and material fees.

During the PDA, immediate needs are noted for each area surveyed. If a disaster is declared, and the State thinks damage costs warrant the need for immediate cash flow, the State may INF on your behalf. Up to 50% of the Federal share estimate of emergency monies will then be placed in the State's account. Because this money can be made available in advance of normal procedures once a disaster has been declared, paperwork and processing times are reduced and you can receive emergency funds sooner. Even though your facilities may have been included in the PDA, INF will not be available unless your county/city has been included in the presidential declaration.

Who is eligible for Public Assistance funding?

Applicants

What are four basic components of eligibility for a FEMA Public Assistance Grant

An Applicant must     be a state, territory, tribe, local government, private nonprofit     organization.

A Facility must     be a building, public works, system, equipment, or natural feature.

Work is categorized as either Emergency or Permanent.     It must be required as a result of the declared incident, located within     the designated disaster area, and the legal responsibility of the     Applicant.

Cost is     the funding tied directly to eligible work, and must be adequately     documented, authorized, necessary and reasonable. Eligible costs include     labor, equipment, materials, contract work, as well as direct and indirect     administrative costs.‍